Reporter of the Economic Business: Zhang Yun Reporter of the Economic Business Business: Wei Guanhong
As the performance of Scotch whiskey in the Chinese market becomes stronger, many whiskey distillers born in Scotland are also seeking more emerging markets to expand global business growth space.
In July this year, Emperador Inc, the parent company of WhyteMackay, the world's fifth largest scotch whiskey manufacturer, was listed on Singapore exchange . Emperador Inc. Bryan Donaghey, head of whisky business and CEO of WhyteMackay, said at the time that as the largest spirits company in the Philippines, the company is expected to use the financial advantages of Singapore to introduce more international investors and achieve the goal of 50% of its sales from abroad in 2025.
Photo provided by respondents
At present, Whitemakai's whiskey has been exported to more than 100 countries and regions around the world. In September, Bryan Donaghey accepted an interview with a reporter from " Daily Economic News " (hereinafter referred to as NBD) via email. He said that foreign whiskey brands entering the Chinese market will face challenges in commercial positioning, distribution networks and supply chains, and the huge demand in the Chinese market will continue to push up the potential growth of whiskey.
Limited production and demand growth, pushing up the annual whiskey price
NBD: Judging from the major global market layouts of Huangsheng Group and Whitemakai Group, what position does the Chinese market occupy? What opportunities and challenges do you think foreign brands face when entering the Chinese market?
Bryan: Huangsheng and Whitemakai regard the Chinese market as the top priority. Huangsheng's capital injection has accelerated the growth of Whitemakai's Greater China business, including several global best-selling single malt whiskey distillers such as The Dalmore and Jura.
We decided to focus our business on the Chinese market because we are attracted by its future growth potential. We will continue to develop local customer relationships, especially in Shenzhen, Guangzhou, Shanghai and Beijing. We decided to focus on investing in these major Chinese cities and have already occupied a place in the high-end catering and luxury retail sectors. In addition, we have also decided to develop e-commerce businesses in , JD.com, and Tmall.
For European manufacturers, entering the Chinese market will encounter many challenges. We believe that one of the factors of success is a unique positioning and a strong brand. However, marketing alone cannot win, and brand, commercial advertising and supply chain are indispensable.
Looking forward to the future, the environment faced by wine merchants will be more complex and changeable. Manufacturers will encounter many difficulties in entering a new market, especially in international trade and distributors. Only if they can find the right partners and the correct brand positioning can they discover the huge potential of the Chinese market.
NBD: What category is more popular among scotch whiskey exported to China? Why have the ex-factory prices of major wine merchants started to rise since the end of last year?
Bryan: In our opinion, the obvious price increase in 2021 does not mean that this is a special year, but is part of a long-term trend development process.
Since 1980, the global Scotch whiskey market has begun to accelerate its growth. Many distilleries with a long history have launched very rare high-year whiskeys, but not all distillers have the ability to produce 40, 50 or even 60 years of whiskey. Making aged whiskey requires manufacturers to take care of the wine for generations and wooden barrels used for the wine to mature.
For human reasons, the whiskey production is limited. When the output cannot meet the demand, it means that the wine merchant needs to screen the place of sales of the product, and the price of limited-edition Scotch whiskey will naturally increase.
In addition, since 2000, the demand for these aged whiskeys that are popular among collectors has also seen unprecedented growth. At the same time, old auction houses such as Christie's and Sosby have entered the market one after another, rushing to auction rare "priceless" whiskey collections. The commercial performance of this type of top whiskey has also driven the accelerated growth of the overall Scotch whiskey market.
In China, Scotch whiskey, as a popular imported liquor, is relatively expensive in mainstream retail channels. We expect whiskey to accelerate penetration of local liquor retail markets, and prices will also rise as demand increases.During the growing Scotch whiskey market, single malt whiskey beats the crowd and surpasses blended whiskey in one fell swoop to become the industry leader.
As a whiskey merchant, Whitemakai is committed to developing four single malt whiskey distillers led by Morgan Stanley, and Morgan Stanley, as our flagship product, has always been in short supply in the market. The reason for the continuous price adjustment is that we understand that due to its small and particularly private winery, Morgan Stanley's production will continue to be low. As demand continues to increase, we will naturally re-examine its selling price.
leverages e-commerce to develop whiskey and expand online and offline sales scenarios
NBD: In China, where are Scotch whiskey usually sold? How do you evaluate the penetration of whiskey?
Bryan: As we know, the best occasion to drink whiskey is to gather with relatives and friends during special seasons. The Chinese market is at the forefront of the industry in many ways, such as light bars, brand new catering concepts and e-commerce.
Scotch whiskey's strong performance is mainly due to the booming development of e-commerce and retail chain networks. E-commerce will play an increasingly important role in the next phase of growth in high-end spirits, but this will not change the basic qualities of single malt whiskey. Because people want to taste a single malt whiskey produced in the best locations by the best companies, the resurgence of contemporary high-end catering and hotels will continue to be an important factor in the growth of this category of spirits.
In the past few years, the demand for whiskey in China has been growing continuously, and various whiskey activities have emerged one after another. Experience stores provide us with a place to display products in a beautiful way. For example, recently we have cooperated with several boutique stores located in Hainan and Beijing.
, the key event that changes our overall evaluation of the Chinese market is the Dalmore Decades series we launched in 2021. It tells the 60-year history of brewing in Morgan Stanley. We not only sold this product in boutiques, but also set a sales benchmark for a single malt whiskey category on the Tmall e-commerce platform.
In October last year, Morgan Stanley Gilded Age 6 collection was auctioned at Sotheby's, Hong Kong, China for HK$8.75 million (US$1.124 million), setting a record of the highest price whiskey lots in Asia.
This makes us realize that Chinese consumers highly value bold, innovative and interesting brands. To this day, Whitemakai's Single Malt Scotch Whisky business hit an average annual compound growth rate of 89% in Greater China between 2015 and 2020, with the growth rate of the mainland Chinese market reaching 114%. The above performance proves that under the complex international trade and the continued global COVID-19 epidemic situation in recent years, trustworthy supply chain partners are fundamental. In addition, local infrastructure, resources and market insights are equally important.
International manufacturers build factories in China, which will benefit the local economy
NBD: The current sales environment is complex and changeable, and supply chain problems are particularly prominent. Will this affect the sales of whiskey?
Bryan: The global spirits industry has indeed been affected by supply chain problems. Strong logistics demand and global shortages such as wine bottles and bottle caps have brought many difficulties to whiskey manufacturers. However, for Whitemakai, although the production cycle has increased compared to before, the above problem has been solved quickly.
We look forward to a global recovery after the epidemic. The business environment is changing rapidly. What remains unchanged is that the demand for high-end spirits, especially single malt whiskey, continues to rise, and is even more vigorous than before. From the accelerated development of high-end consumer goods e-commerce and limited edition collector's edition businesses, it can be seen that the consumption trend that had begun to emerge before the epidemic has become more obvious.
NBD: In the Chinese market, liquor is still the mainstream consumption. Some people say that the consumer group of whiskey is still niche. What do you think are the growth opportunities for the whiskey category? How do you view some international manufacturers investing in and building factories in China?
Bryan: As a prestigious spirit, single malt whiskey has also attracted a group of unique consumers, most of whom prefer high-end catering or vibrant hotels and bars.At present, whiskey is deeply attracted to some young consumers who understand high-quality single malt whiskey and appreciate this high-end consumer product.
liquor is in high demand in China, and the rise of some leading brands in the ultra-high-end price band also proves that they are highly sought after by local consumers because of their "good bloodline". However, we still believe that whiskey will continue to be welcomed by more consumers who pursue the best consumer products.
International wine merchants have successively invested in and built factories in China, which is a phenomenon worthy of attention, which is also of great benefit to the local economy. China has very outstanding distilleries and blended whisky producers. We will continue to pay attention to the development of the local market, but our investment focus is still in Scotland.
The reason we focus on investing in and building factories in Scotland is because we think that we can make unique wines there, especially Morgan Stanley, and we cannot copy the quality single malt whiskey we produce anywhere else. The key to our products being lucky enough to rank among the top of similar spirits is that they have a winemaking process based in Scotland.
For Whitemakai, we are happy to see wine merchants increase their investment and build factories in local China to produce whiskey. Demand for Scotch whiskey has risen worldwide, especially in the Chinese market. If it can be put into production and bottled locally, consumers will undoubtedly have more choices and prices may also drop. Even so, the reason why Scotch whiskey is expensive is because it is produced in Scotland. The important reason consumers admire and love single malt whiskey is that it can only be brewed in one specific area.
Daily Economic News
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-