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The Scotch whisky brands to watch in 2016

As Scotch producers ramp up production and celebrate a normalisation of sales in the category, we predict which brands are worth keeping an eye on in 2016.

This is our selection of the Scotch whisky brands to watch in 2016

Scotch exports have faced notoriously challenging conditions over the past three years, so the SWA’s (Scotch Whisky Association) recent assertion that a return to growth is “on the horizon” was welcome news for the industry.

Exports dropped 3% in value terms to £1.7 billion for the first half of 2015, compared with an 11% decline over the same period in 2014. Volume also fell 3%, versus a 6% decline last year. Conversely, premium blends and single malts put in a strong performance, with value up 5% to £406m.

“We’re starting to see some strong signals for growth and we continue to believe the long-term prospects for Scotch whisky remain good,” said SWA chief executive, David Frost.

Diageo is feeling similarly positive. At a recent investors conference in New York, David Gates, head of premium core spirits, stated that it was important to recognise Scotch as a “hot” category. “Some spirits that we tend to think of as hot in our own back yards are hot locally, but not necessarily globally – like Bourbon. Gin is doing well in many places, but the one spirit that is hot everywhere is Scotch whisky.”

Innovation is driving growth

The keys to maintaining growth are premiumisation and innovation, such as the Special Releases programme (set to generate £15m in net sales this year, says Gates), and the recently launched Whiskey Union, which offers cross-category NPD, such as the Boxing Hares Scotch/beer spirit drink hybrid.

Beam Suntory is another Scotch producer in fine spirits. “YTD, we are seeing global volumes up over 15% year on year, which is significantly ahead of the category and a great platform from which to grow,” says Gareth Brown, senior director of international Scotch, Irish and Japanese whisky at Beam Suntory. Particular highlights for Brown include the US, Germany, UK, Australia and global travel retail. However, austerity measures in China continue to have an impact.

Current data show that peated malt is growing at twice the rate of single malt – a trend Brown sees developing for the year ahead as Beam Suntory’s share of all single malt sales gets closer to 20%. Factors driving the trend include a consumer propensity to try something new, according to Brown.

Nikki Burgess, single malts global brand director at Chivas Brothers sees a “bright outlook” for the sector, picking out the US, Germany and France as key markets.

“We envisage the growing trend of whisky fans demanding new and innovative styles of single malt will really come to the fore, with distillers crafting even more adventurous whiskies to enjoy.” As long as macroeconomic conditions allow, there’s every reason to expect a return to growth for Scotch in 2016.

Click through the following pages to discover which brands and trends we have predicted will dominate the Scotch whisky sector in 2016.

The Singleton

The-SingletonDiageo’s ambition to propel The Singleton to the heady heights of world’s best-selling single malt highlights the brand as one to watch in the coming year. David Gates, head of premium core spirits at Diageo, said: “We have a larger portfolio than any competitor, but at the end of the day there are a handful of mainstream malts that set the tone and ours isn’t one of them – yet – and this represents a shift of emphasis in our strategy.”

House of Hazelwood

House-of-HazelwoodUnveiled at this year’s TFWA World Exhibition & Conference in Cannes, House of Hazelwood is William Grant & Son’s new art deco-inspired brand of blended Scotch. Damien Heary, global planning and innovation director at William Grant, described its introduction as “an exciting new chapter” in the category. Initially a travel retail exclusive, House of Hazelwood will roll out to domestic markets during 2016.

Label 5

Label-5La Martiniquaise-owned blended Scotch brand Label 5 is already the ninth best-selling whisky globally, according to Brand Champions 2015 data, but a new “Whisky Confidential” multi-channel global marketing campaign, alongside significant production expansion, looks set to send the brand rocketing up the rankings.

Key trends

We predict that peat will be big in 2016
We predict that peat will be big in 2016

• 2015 has seen a number of brands return to age statement releases, especially within blended Scotch. Expect to see more emerge as suppliers race to keep up.

• Peated will prevail in 2016. Releases from traditionally non-peated brands – The Macallan Rare Cask Black, The Glenlivet Nàdurra Peated Whisky Cask Finish and Ballantine’s Hard Fired – point the way.

• As retailers like Aldi, Lidl and Waitrose continue to win acclaim for their private label Scotch releases consumer perceptions of own-brands being somehow “lesser” will wane.

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