Scotch Whisky Market Size, Share & Industry Analysis, By Type (Single Malt Scotch Whisky, Blended Scotch Whisky, and Others), By Distribution Channel (On-trade and Off-trade), and Regional Forecast, 2024 - 2032

The global scotch whisky market size was valued at USD 32.72 billion in 2023. The market is projected to grow from USD 34.70 billion in 2024 to USD 57.14 billion by 2032, exhibiting a CAGR of 6.43% during the forecast period. Europe dominated the scotch whisky market with a market share of 29.16% in 2023. Moreover, the scotch whisky market size in the U.S. is projected to grow significantly, reaching an estimated value of USD 7.31 billion by 2032, driven by the growing preference for scotch whisky and the rising number of distilleries.

Scotch whisky is a globally renowned distilled spirit made in Scotland from cereals, water, and yeast. The whisky has a distinctive smoky flavor due to the selection of ingredients and the distillation method. It must be distilled and aged for at least three years in Scotland, however it shouldn’t be necessarily bottled in Scotland. Some scotch whiskies are distilled and aged in Scotland and bottled in another country.

Scotch whisky is mainly available in five categories, namely single-grain, blended grain, blended malt, single malt, and blended scotch. The market is expected to experience substantial growth due to the growing consumer demand for premium products. According to the Scotch Whisky Association (SWA), global export sales of scotch whisky rose by more than 4%, reaching a total of USD 6.36 billion in 2019. The market is further gaining traction due to the wide availability of various unique flavors such as malt and honey, dry fruit and nut, elegant and floral notes, fresh fruit, and vanilla. This diversity of flavors continues to attract new customers every year.

Globally, the COVID-19 pandemic considerably affected the scotch whisky industry. Governments across the globe enforced strict containment measures, including national lockdowns, curfews, and social distancing mandates to control the spread of coronavirus. According to the SWA, the U.K. supply chain was disrupted due to the COVID-19 restriction and delays in food and drink exports. The whisky industry in the UAE, China, and other countries, highly depends on the hospitality industry. Thus, the closure of bars, pubs, restaurants, and clubs significantly impacted whisky consumption.

Moreover, industry players experienced numerous hurdles and challenges in managing sustainable business operations. Due to lockdown and restrictions on large public gatherings, companies reduced employee strength in production plants. Trade restrictions also impacted the supply of raw materials. To overcome these challenges, producers needed to restructure their strategies to achieve stability in business. Despite the sudden disruption of cash flows in raw material procurement and product distribution due to COVID-19, the prominent players and regional distilleries were inclined toward digital solutions. This allowed them to continue their operations and deliver whisky to consumers through e-commerce channels, thereby generating revenue.

Scotch Whisky Market Trends

Growth of Regional Brands and Premiumization are the Trends Emerging in the Market

Consumption of single malt scotch whisky beverages is more likely to be associated with consumers' affluent and lavish lifestyles. This association is a key driver behind the market's growth. Consumers in major developed economies exhibit a strong interest in buying premium alcoholic products. Manufacturers are trying to emphasize launching premium and palatable brands as consumers become ‘whisky connoisseurs’ and taste assessors. Luxury whisky is one of the current consumer trends, contributing to increased revenue on a global scale.

With the recent introduction of products by companies such as Royal Statue, Pernod Ricard, and Diageo Plc., millennials and less experienced consumers will have more opportunities to explore and enjoy these offerings. In March 2023, Pernod Ricard and The Glenlivet launched The Goonlivet, a unique whisky that blends the finest single malt Scotch with the cultural phenomenon of the goon bag. The Goonlivet contains 1.5 liters of Glenlivet premium 12-year-old single malt in a bag. This innovative product, built on The Glenlivet's longstanding brand foundation, 'Original by Tradition,' has successfully resonated with a younger audience, extending the reach of the brand that has been producing single malt since 1824.

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Scotch Whisky Market Growth Factors

Rising Demand for Organic Scotch Whisky to Stimulate Market Growth

The global market is expanding due to the rising demand for new products from emerging markets and the desire for organic whisky among health-conscious drinkers. Moreover, with the growing emphasis on adopting premium lifestyles worldwide, consumers are gravitating toward top brands. To cater the changing consumer behaviors, major market participants have started a trend in organic whiskys, which distinguishes themselves from conventional whisky by utilizing organic barley and malt grains, avoiding artificial additives, flavors, and colors. These organic whiskys adopt natural production methods and follow strict organic certification standards, resulting in a more authentic and sustainable whisky experience. The growing demand further encourages manufacturers to launch innovative products, ensuring market growth. For instance, Bainbridge Organic Distillers has developed artisan-distilled spirits from USDA-certified organic wheat barley specifically grown for their distillery. Considering another instance, in September 2022, Nc’nean launched its first organic single malt whisky, which comes in a 100% recycled clear glass bottle. The new product is certified organic and is made using 100% renewable energy.

Emergence of Online Platforms to Support Higher Revenue Generation to Drive Market Growth

E-commerce has become an increasingly popular choice for buying alcohol over the past few years and this trend is expected to grow over the forecast period. Online shopping offers consumer’s various benefits, such as on-time home delivery, convenient shopping experience, and access to various offers. The online sales channel is extremely important in major markets such as the U.S., the U.K., Italy, Spain, and other markets. According to the Dutch Ministry of Foreign Affairs, online sales of alcohol in developed regions such as North America and Europe are expected to grow annually by around 15%. Therefore, manufacturers are focusing on developing new e-commerce platforms and establishing collaborations to boost their sales in the market. The expansion of technology and improved distribution networks in e-commerce are further expected to propel the growth of the market.

RESTRAINING FACTORS

Increasing Consumer Inclination Toward Other Alcoholic Beverages May Hamper Market Growth

In recent years, a considerable percentage of the global population has turned its preference toward beer, wine, and other alcoholic beverages. This factor has negatively affected product sales in different regions of the globe. Increasing modernization and growing alcohol consumption worldwide have prompted alcohol industry producers to launch innovative and bold drink variations. The gradual change in consumer preference toward different types of alcoholic beverages, such as spirits, wine, beer, and others, due to their affordability and availability, could hamper market growth. According to the American Addiction Center (AAC), a major portion of alcohol consumption globally consists of beer, cider, wine, and spirits. According to Statistics Canada, wine sales in 2020/2021 saw a 2.1% year-on-year increase, reaching USD 8 billion. Hence, the trend toward other alcoholic beverages is likely to pose a challenge to the market forecast in the coming years, which may hamper market growth.

Scotch Whisky Market Segmentation Analysis

By Type Analysis

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Blended Scotch Segment Holds Major Share Due to its High Consumption and Availability

Based on type, the market is segmented into single malt, blended, and others. The blended scotch whisky segment holds the largest market share as it is the most widely consumed whisky variant due to its quality, authenticity, and rich taste. Blended scotch whisky is a blend of grain and single malt whisky, providing a delicate aroma that many consumers favor. Moreover, blended whisky is cheaper and has long been the preferred choice for millions of consumers.

The single malt scotch whisky is the fastest-growing segment in the market, primarily owing to increasing exports. Taiwan has been a significant whisky buyer for high-end single malt whisky. In 2021, Taiwan imported more than USD 553 million scotch whisky, becoming the U.K.’s third largest market after the U.S. and France. In Taiwan, single malt whisky consumption is on par with blended whisky, with a product breakdown ratio of 45% to 55%.

By Distribution Channel Analysis

Off-trade Segment to Dominate Due to Strong Sales of Scotch Whisky 

On the basis of the distribution channel, the market is segmented into off-trade and on-trade. The off–trade channel segment witnessed highest growth in 2022 and is expected to retain its dominance in the upcoming years. A trade distribution channel is one of the most effective sales channels for bringing products to the market. Off-trade channels include supermarkets, convenience stores, and specialty stores. It offers a wide range of products at low prices over pubs, bars, and other retail channels. This has increased the popularity of retail outlets worldwide. Investors are focusing on developing modern convenience stores, aiming to provide affordable and easy shopping options, thereby attracting high revenues. In 2021, William Grant & Son's annual report shows that the spirits sector off-trade sales increased by 14.3%. This is due to an increase in the availability of products in off-premises channels after the COVID restrictions re-opening.

The on-trade sales are also increasing due to Westernization and multiculturalism globally, which are expected to bolster the popularity of on-trade channels in the near future.

REGIONAL INSIGHTS

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Europe Dominated the Global Market Due to High Product Consumption 

Europe held the major market share in 2022. It has the largest whisky consumer base, supported by the robust economy, increased disposable income, and customer associations. In addition, France, Spain, and Poland are also experiencing strong demand for whisky, with varied flavors and alcohol content preferences. Scotland is the largest producer of scotch whisky worldwide, exporting to various countries. The Whisky production industry is one of the key industries in Europe, specifically in Scotland. With an annual output of more than 100 billion liters from more than 125 distilleries in Scotland, it constituted nearly 20% of the U.K.’s overall food and drink exports in 2019. The whisky industry employs 11,000 people in Scotland, with over 7,000 of them working in rural areas. In addition, it supports 42,000 jobs across the U.K., solidifying  Scotland’s status as the world's largest producer. In 2020, there were 131 Single Malt distilleries in Scotland, with a total production capacity of 400,950,000 liters. The industry is experiencing a diverse global expansion over the past decade, including the emergence of start-ups and innovation.

Asia Pacific is the fastest-growing market, with Taiwan, Singapore, India, and China witnessing growth due to changing consumer lifestyles and rapid urbanization. The increase in disposable income of consumers and the widespread adoption of Western culture have led to a growing preference for scotch whisky in these regions. These factors have driven the growth of this market in the region. For instance, India’s whisky consumption surged to 219 million bottles in 2022, representing a double-digit growth. This figure marked a substantial annual increase, with a 60% rise compared to the 136 million bottles consumed in 2021.

The sale of scotch whisky through online e-commerce in Asia Pacific has been gaining momentum rapidly over the last few years, with the penetration of internet and smartphones growing steadily. The evolution of the e-commerce industry is expected to boost the overall sales of scotch whiskey in the region owing to the convenience offered by e-commerce websites and the wide choice of whiskies. With the evolution of the changing economies and shifting buying behaviour in the region, the market potential offers a promising future for the growth of the global scotch whiskey market.

North America is expected to witness significant growth in the global market due to the growing popularity and preference of scotch whisky while being the largest importer globally. The U.S. became a significant whisky importer in 2019, and the growing number of distilleries has fueled the scotch whisky market share.

South Africa has the largest consumer food service sector in the Middle East & Africa. This region comprises various chain stores, including well-known franchises and independent food and beverage enterprises. The hotel and tourism industries are strongly related to the industry. The hospitality and tourism industry in South Africa is fiercely competitive and one of the fastest-growing economies, with a wide range of accommodations and a mix of business and leisure travelers.

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List of Key Companies in Scotch Whisky Market

Key Players Focus on New Product Development to Stay Competitive in the Market

The industry comprises both local and international players, with the number of local players exceeding that of international players. Due to the increasing demand for scotch whisky, market players are expanding their presence globally by diversifying their product portfolios and launching new offerings. For instance, in August 2023, Eden Mill launched a new blended scotch whisky, the Guard Bridge. This blend is centered around the St. Andrews-based distillery's single malt and other single malts from distilleries in the Highlands and Lowlands of Scotland. It is bottled at 46% alcohol by volume (ABV) and retains its natural color. This product launch helped the company to enhance its product portfolio globally.

LIST OF KEY COMPANIES PROFILED

• William Grant & Sons (U.K.)


• Pernod Ricard  (France)


• Diageo Plc  (U.K.)


• Beam Suntory, Inc. (U.S.)


• Aceo Ltd. (U.K.)


• La Martiniquaise (France)


• Edrington (U.K.)


• Asahi Group Holdings, Ltd. (Japan)


• Gordon & Macphail (U.K.)


• Bacardi & Company Limited (U.S.)

KEY INDUSTRY DEVELOPMENTS

• April 2023: Royal Salute launched two luxury blended scotch whiskies. The company announced the launch of a rare decanter, the Royal Salute Platinum Jubilee Edition and the Royal Salute House of Quinn decanter. This release would be available at the Duty-Free at the departures store of Chhatrapati Shivaji Maharaj International Airport, Mumbai. This launch helped the company to increase the company’s presence in the Indian market.


• September 2022: Thirstie, an e-commerce provider of liquor brands, partnered with Benriach single malt scotch whisky by launching a store that allows U.S. consumers to purchase whisky online. Benriach became the first brand in Brown-Forman's prestigious spirits portfolio to offer online shopping experience in the U.S. Through the Benriach's online store, powered by Thirstie, consumers enjoy a seamless digital experience through Thirstie retail partnerships and collaborations.


• April 2022: Chivas Brothers, Pernod Ricard's scotch whisky business, announced a USD 95.20 million investment in Aberlour and Miltonduff, two of the company's strategic single malt distilleries. This investment would improve sustainable distillation technology at Speyside distilleries and significantly expand production capacity to meet the growing global demand for scotch whisky.


• October 2019: Douglas Laing & Co. acquired Strathearn Distillery. The acquisition marked the first distillery in Douglas Laing's portfolio, although plans for the company's Glasgow distillery project continue underway. This acquisition allowed the company to invest more in the distillation of Scotch whisky.


• April 2019: Diageo plc, a British multinational beverage company, announced a joint venture with Jiangsu Yanghe distillery in China and began a partnership by launching a new whisky. The joint venture between the companies would help them expand geographically and strengthen their consumer base.

REPORT COVERAGE

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The market research report provides a comprehensive market analysis and focuses on key aspects such as key players, market share, competitive landscape, types, and distribution channels. Besides this, the report offers key insights into the scotch whisky market trends and highlights key industry developments. In addition to the abovementioned factors, the report encompasses several factors that have contributed to the market's growth over recent years.

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