Scotland Cashing In On Chinese Demand For Premium Scotch

Xiamen Spirit Empire To Buy Over £20 Million (US$31 Million) Of Single Malt This Year Commemorating the one-year anniversary of Beijing's move to give Geographical Indication of Origin (GI) status to Scotch whisky, this week Scottish First Minister Alex Salmond toasted the booming Chinese whisky trade on a trip to the Chinese capital. In town to promote one of Scotland's most famous products, Salmond took part in an event organized by the Beijing-based retailer Xiamen Spirit Empire, which plans to create China's largest Scotch whisky sales network -- 300 stores in three years. This year alone, Spirit Empire plans to beef up its inventory with over £20 million (US$31 million) worth of whisky from Scotland. Accompanied by David Kilshaw of the trade group Scotland Food & Drink, at the event Salmond met Spirit Empire Chairman Ding Wei and Stephen Notman, whom Spirit Empire recently pulled on as a "whisky ambassador" to represent Chinese sellers in Scotland. Said Salmond of his trip to China, "Over the next week I'll be working with our partners here in China to promote Scottish industry and further the trade links that exemplify the already close relationship between our two countries." Indeed, along with golf and cashmere, Scotch has become one of Scotland's trademark national products among China's upwardly mobile middle-class. In recent years, Scotch exports in particular have ballooned as more Chinese drinkers have become interested in premium single-malts and niche distilleries. In the 12 months leading up to June 2011, Scotch exports to China reached £57 million (US$89 million), up nearly 30 percent from £44 million (US$68.8 million) in 2009. Founded earlier this year, retailer Spirit Empire is already looking to secure deals with some of Scotland's most famous distilleries, and has to date purchased around £4 million ($6.2 million) worth of single malt to sell to the Chinese market. At the moment, Spirit Empire plans to first open a physical location in Shanghai and set up an office base within Scotland with the help of Scottish Development International. So far, the distilleries that have established relationships with Spirit Empire include larger names like Glenglassaugh, Benromach, Signatory, Bruichladdich and BenRiach, as well as more niche independent bottlers such as Gordon & Macphail and Wilson & Morgan. Since it's a new company, and one about which little information or background exists, we'd say it's too early to be overly bullish about Spirit Empire's ambitious plans to create a vast Scotch-selling network in China, particularly when the market for high-end single malt is still in in its infancy. But the company's plans to import an additional US$25 million worth of Scotch this year, over the $6.2 million it's already purchased, indicates that they themselves seem to be optimistic that more Chinese drinkers will continue to turn away from the Chivas Regal/green tea concoctions that have largely defined the whisky market in China for the last two decades. Still, this optimism is far from unfounded. As Lawrence Law, brand director at Moët Hennessy Diageo, told Jing Daily at the Johnnie Walker House -- which launched this past May in Shanghai to promote premium Scotch whisky to a high-end Chinese clientele -- a growing number of Chinese drinkers are gravitating towards the "culture" of Scotch, actively seeking to cultivate their understanding of the history, production and nuances of the spirit. As with French wine, which many middle-class Chinese equate with sophistication and "the good life," premium aged Scotch is developing a reputation (particularly among middle-aged men in China) as a drink that connotes history, heritage and cultivation. Said Law, the rate of change among Chinese Scotch drinkers has been astonishing, with these consumers moving from a fixation simply on packaging, name recognition and price tag to region, distillery, and pedigree: When we talk about Johnnie Walker in China, especially our luxury labels, we talk about the rarity of the liquids in the bottles, they’re over 50-60 years old, and we mention the three C’s — the character of the liquid, the cask, and the craftsmanship behind it. These are cues the Chinese consumers like to hear . Chinese consumers have accelerated very quickly. If you look at just five years ago it was still very bling. Now people are asking, “What’s inside?” and it’s not just the packaging, it’s much more discerning than before . With ties between Scotland and China becoming increasingly close, expect to see demand for not only premium Scotch but consumer products like cashmere and even salmon booming in the years ahead. For anyone flogging anything from golf clubs to tartans to China's new consumer class, apparently it's a good time to be Scottish.

Scotland Cashing In On Chinese Demand For Premium Scotch

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Scotland Cashing In On Chinese Demand For Premium Scotch

How Bottega Veneta weaved China’s forever it bag