Scotch Whisky Industry: Current State and Future Projections

History of Scotch Whisky: From Devastation to Dominance

A spot of luck also helped global expansion. In the 1880s, the phylloxera beetle devastated French vineyards, and within a few years, wine and brandy had virtually disappeared from cellars everywhere. By the time the French industry recovered, Scotch Whisky had replaced brandy as the preferred spirit of choice.

Five centuries after it all started, 1994 the Scotch Whisky industry celebrated the 500th anniversary of whisky production in Scotland – and did it in style! For the first time, global exports of Scotch Whisky broke through the £2 billion mark.

Today Scotch Whisky is enjoyed in 175 countries throughout the world. Each second, 42 bottles of Scotch are shipped from Scotland across the globe, helping to support tens of thousands of jobs in Scotland and ensuring that millions of consumers can enjoy a dram.

The long term forecast for the Global scotch whisky market seems favourably due to a growing demand for liquor among male population and increasing preference for more premium and super premium products. Growing population and rising disposable income are also expected to propel demand for scotch whisky market over the next five years.

The global scotch whiskey market is categorized based on product type, distribution channel and region. Based on product type, the market is segmented into bottle blended, bulk blended, single malt bottle, bottle single/blended grain and others.

Regionally, Europe dominated the global scotch whisky market in 2019 and is further expected to register highest share during the forecast period. European countries like Spain, France and Germany are the leading countries in terms of whiskey production and consumption. Asia Pacific is also emerging as a growing market with rising per capita income and changing lifestyle pattern of the people in the region.

However, the industry faces also quite big challenges ahead. The main problem is the 25% tariff loaded by President Trump on to Scotch single malts as part of his trade wars with everyone from China to the EU. An even bigger problem facing the Scotch industry is Brexit, once the Withdrawal Agreement ends on December 31.

Despite warnings from almost every UK industry and business, the British Government looks increasingly set on a hard Brexit which may bring everything from total gridlock in Kent to countless exports and imports brought to a halt as everyone tries to work out what “trading on WTO rules” actually means.

Ironically, it could mean 2020 eventually being a bumper year for whisky and other exports as importers around the world rush to bring forward orders under the existing system. But that may mean 2021 being a year of unalloyed disaster.

Prepare consulting report on the Scotch Whisky industry. The aim of the report should be identification of possible profit areas for independent firm originating from your country to engage in the industry.

The report among other should include the following issues;

1. Identify and describe the Scotch whisky industry current microeconomic and macroeconomic situation. In particular:

a) Identify the product and microeconomic and macroeconomic character of the market in which industry operates.

b) Identify the main market segments the industry operates. This should be supported by statistical data.

c) Identify main competitors on the market together with their relative strength supporting this with statistical data.

d) Critically analyse the demand factors behind different segments of the market.

e) Analyse the past and potential future demand trends on different markets using the information you collected in point b and c.

The practical analysis should be strongly supported by the economic theory

2. Identify and describe the Scotch whisky industry current international political and macroeconomic environment and its potential influence on the industry.

3. Indicate areas where profit can be made and draft a sketch of strategy to achieve it for a form originating from your country.