Economy brands to boost blended Scotch

Economy brands are predicted to drive the growth of blended Scotch whisky volumes by 3% over the next five years.

The blended Scotch whisky category is set to receive a boost to volumes over the next five years

According to a new report by Euromonitor International analyst Jeremy Cunnington, blended Scotch will grow by 125 million litres between 2013 and 2018.

Across the category’s five key markets – Mexico, Russia, Brazil, India and South Africa – Cunnington claimed that the most important growth driver were economy brands.

“Despite economy brands’ relatively low margins, this is generally encouraging news for both the long and short term,” said Cunnington. “It seems to show that more consumers in those markets are trading up to Scotch from local spirits, which should be the case with increased local prosperity.”

Meanwhile, the identified top-performing markets are expected to account for 60% of the category’s total growth over the five-year period.

Cunnington also claims that economy blended Scotch producers will find it easier to meet demand in the face of a whisky shortage due to their younger liquids.

He adds that it is therefore “essential” for blended Scotch producers to offer “at least one” economy brand in their portfolio and also target growth in the emerging markets, identifying Diageo as a strong player in the category and William Grant as a group which should seek to improve its exposure.

However, Cunnington warns that producers should still seek to success in terms of value and “push consumers further up the price ladder”.