The Japanese Whisky Market 2019
Though Scotland holds international regard as the home of quality whisky, the desire for premium products has led to flourishing whisky markets across the world. With each country bringing its own style, production methods and flavour palates to the table, whisky lovers are spoilt for choice when choosing a dram.
More than just something to drink, whisky also has a reputation as a commodity to be invested in. While most investors stick to the safety of Scotland’s shores, the ambitious distillers of Japan are beginning to build their reputation as a source of premium, investable whisky.
The Japanese whisky market has shown unparalleled growth in the past decade, so much so that many of its distilleries can no longer meet the demand for some of their best-selling expressions. Though the extensive aging process of whisky means that predictions can be uncertain, Japan’s future looks fairly bright.
History of Japanese whisky
The Japanese whisky tradition is deeply inspired by the Scottish methods. The ‘father of Japanese whisky’ Masataka Taketsuru learned everything about Scottish distillation while studying in Glasgow. Leaving Scotland at the end of his studies with wife and ‘mother of Japanese whisky’ Rita Cowan, Taketsuru helped Suntory Drinks Company set up their first distillery in Yamazaki.
Following this, he left the company to start his own label, eventually producing Nikka Whisky. Taketsuru’s influence over two of the largest producers of whisky in Japan shows how his mastery of the Scottish tradition led the Japanese industry to where it stands today.
Growth over past 10 years
Thanks to a burst of interest in highball cocktails made with whisky in 2009, domestic sales of the spirit have seen unprecedented growth. From 2009, the market expanded for nine consecutive years and export shipments in 2017 stood around 160,000 kilolitres – double 2008 levels.
Almost all whisky produced in Japan is sold domestically, but investors from around the world are casting their gaze towards the country as expressions being produced by the three largest players gain more international recognition.
Comparisons with Scotch growth
Rare Whisky 101, a company that tracks the Scotch whisky market, also observed that the Japanese Icon 100 Index outperformed the Scotch Apex 1000 index in 2018. Not only that, but since its inception in 2014, Rare Whisky 101 has noted a growth of 226.51% for the Japanese Index. As more and more investors and enthusiast see the value in good quality Japanese whisky, the industry is buoyed by the successes of its most desirable drams.
Additionally, Rare Whisky 101 shows that the Japanese Icon 100 Index had a growth of 30.06% in 2018, while the Liv-ex Fine Wine 1000 showed a growth of 10% and the FTSE 100 and Brent crude oil indexes showed losses at the end of 2018.
Cost of the most expensive bottle
The growth of Japanese whisky can also be noted in its performance at auctions. The market for investor whisky has been growing globally in the past few years as stable returns have become an attractive prospect for savvy buyers.
For Japanese whisky, the record for most expensive bottle ever sold was broken in 2018 by a bottle of 50-year-old Yamazaki which sold for $343,000. This was nothing in comparison to the bottle of 60-year-old Macallan which sold for $1.2m last year but shows interest and passion surrounding Japanese whisky is on the incline.
Globally, bottles being sold for $12,000 or more has almost tripled as higher value bottles begin to outperform the rest of the market. As more whisky enthusiasts dig deep into their pockets to get their hands on premium bottles, Japanese distillers are riding the wave just as much as the giants of Scotch.
Value of biggest distilleries
Where Scotland is home to countless distilleries across its different regions, there are far fewer locations producing Japanese whisky. The three biggest players in the industry are Suntory, Asahi and Kirin. Suntory is the most decorated company with the highest consolidated revenue, which stood at just over $20bn in 2018.
Asahi, the company which now owns the Nikka brand of whiskies created by Masataka Taketsuru, follows Suntory with $19.4bn revenue, providing further evidence of just how influential Taketsuru was on the success of Japanese whisky.
Kirin holds third place with consolidated revenue of $17.7bn in 2018. The company owns the Fuji-Sanroku and Fuji-Gotemba distilleries, a 25-year-old expression from the latter earning World’s Best Grain Whisky at the World Whiskies Awards.
Unstoppable Japanese whisky
The Japanese whisky market was the top-performing region on the secondary market in 2018, growing faster than every Scottish region and showing a growth of 35% throughout the year. Though it has a long way to go before it reaches the acclaimed heights of Scotch, the market’s momentum is highly promising for the future.
This article was written by Damon Culbert from The Spirits Embassy, seller of rare and unique whiskies worldwide.
Check out the infographic below for more information on the Japanese whisky industry.