Japanese battle Scotch and Irish in the World Cup of Whisky

CGA commercial director Graeme Loudon discusses the rise of Japanese Whisky and why it's giving Scotch and Irish whiskies a run for their money.

With the Rugby World Cup sparking interest in all things Japanese, this is a very good time to check in on the performance of Japanese Whisky in the on-trade.

As with its rugby team, the quality of Japan’s whisky is helping it compete very strongly with Ireland and Scotland, with more and more UK consumers choosing to drink the country’s brands. Data from CGA’s OPMS service shows that the category has grown in value by 45% year-on-year—albeit from a small base of fewer than 10,000 stockists.

This pace is considerably ahead of both the Whisky category as a whole and Imported Whisky. What’s more, rate of sale has increased by 10% against relatively flat distribution—showing that sales are being driven by consumers discovering the drink for the first time.

Whisky brands have been trying to attract a younger demographic for some time, and Japanese is doing just that. Only 6% of its consumers are aged 55 or over, compared to a quarter of consumers for whisky as a whole, while nearly half (45%) are aged under 35.

CGA’s MATCH segmentation research also shows that half (49%) of Japanese Whisky consumers fit into the ‘Trending Tastemakers’ category—people who are often the first to adopt new trends; are frequent visitors to the on-trade; and are big spenders. By comparison, only 29% of Whisky and 22% of Spirits drinkers fall into this category, which tells us that Japanese Whisky has a large following among on-trend, high-spending consumers.

Japanese Whisky consumers also over-index in London—unsurprising given the high proportion of both influential bars and consumers there. One in five (19%) London whisky drinkers now drink Japanese, and as a result 58% of the category’s volume is sold in the capital. CGA’s research shows that three quarters (75%) of ‘Influencer’ bars now stock whisky from beyond mainstream producing countries like Scotland and Ireland, with Japanese among the most popular choices. And with a fifth (20%) of influential bar leaders anticipating an increase in their whisky range over the next year, we should see more room for Japanese Whisky to flourish here.

While in double-digit growth, Japanese Whisky’s rate of sale isn’t yet comparable to the Scotch market, though it is reaching the rates of super-premium blends or malts, which keeps it firmly in the trade-up territory. The category also seems to have navigated some of the big headwinds of the Whisky market, with little emphasis on the distinction between blended or single malts, or on age as a marker of quality.

This is a place that the traditional Scotch market would love to reach, but shaking off established habits of its drinkers can be tough. It will be very interesting to see how Scotch responds to this challenge: its non-aged statements are starting to filter through, but more work remains to be done to drive home associations of quality on blends, and to speak to a younger demographic.

With the future looking bright for Japanese Whisky, the long-term question is whether the stock and demand is sufficient to push it into the drinking-out mainstream. For now, it continues to grow in the right areas of the market, retaining its premium, exclusive niche while winning award after award for its quality—and it is set to excel in the on-trade way beyond this Rugby World Cup.

For many more insights into the Whisky category and to learn how CGA’s on-trade research and consumer segmentation tools can help to optimise your ranging, pricing and marketing strategies, contact Graeme Loudon.

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