Are we over-analysing whisky statistics?
For those who love getting their teeth into a juicy whisky industry statistic or report, the start of 2024 provided a veritable buffet. First, to our canapés: the release of financial results from three of the biggest names in global drinks.
Pernod Ricard’s half-year results for 2023/24 showed 3 per cent drops in both organic sales and organic profit, which it largely attributed to a €576 million hit from currency fluctuations in the US, Argentina, China, and Turkey. In its half-year results, Diageo reported an 11.1 per cent fall in operating profit and a drop in organic net sales of 0.6 per cent. While it also referenced an “unfavourable foreign exchange impact”, the fall was largely due to a 23 per cent decline in sales in Latin America and the Caribbean, equating to US$310 million.
Things were somewhat rosier for Beam Suntory, which reported its full-year results for 2023 in February: double-digit growth across its Japanese whisky brands, including Yamazaki and Hakushu, and increases in sales for leading American whiskey brands Jim Beam and Maker’s Mark, of 3 per cent and 10 per cent respectively. Overall, net sales were up 7 per cent year-on-year across the group’s diverse spirits portfolio — the only blip was in North America, where sales dropped by 2 per cent, blamed on a “post-Covid reset”.
Now, we come to the meaty entrée of industry commentary. At the Distilled Spirits Council of the United States’ (DISCUS) annual economic briefing in February, there was good news for spirits as the sector increased its share of the overall beverage alcohol market to 42.1 per cent — overtaking beer for the first time, whose share fell to 41.9 per cent. However, the trade organisation struck a cautious note on both American and Irish whiskey sales for 2023.
This briefing followed the release in January of sales data for 2022 from the American Craft Spirits Association, compiled in collaboration with analysts at Park Street, which found that the craft spirits market’s growth of 5.3 per cent in value and 6.1 per cent in volume in that year was ahead of the larger US spirits market.
But wait — there’s still room for dessert. The reams of data on whisky and broader spirits consumption continue to support the oft-quoted assertion that people are “drinking less but drinking better”. Premium and super-premium brands are holding their own in general sales, but what about whisky investment?
Analysis of February 2024 auction sales data by Whiskystats found an increase of 0.9 per cent in sales values for the 500 historically most-traded whiskies — hardly a jaw-dropping figure, but the Whiskystats boffins said it stood out given the “severe value losses” experienced in the 18 months to November 2023 (Rare Whisky 101’s Scotch-focused Icon 100 index estimated losses over this period at 22 per cent). The Whiskystats whisky index is about where it was in early 2021, a boom time for auction prices.
But, as you may have anticipated, it’s not quite that clear cut. While investment prices for Scotch whisky are stabilising, values for Japanese whisky are still slipping. In the first two months of 2024 alone, Whiskystats’ Japan index lost more than 9 per cent. Coincidentally, that’s the same percentage that Japan Customs figures showed Japanese whisky export volumes fell by in 2023 (as reported by Japanese whisky blog Nomunication in February).
The enticing smell of impending disaster is attracting commentators in other sectors, too. Men’s Journal reported in January that the market for collectibles including whisky and luxury watches was “cratering”. It was quoting from a Business Insider report which claimed “frothy markets” that swelled from 2020–2022 — including non-traditional assets such as whisky — were popping. These doomsaying reports must make pretty grim reading for the swathes of cask investment companies that set up in the past few years, attempting to capitalise on earlier reports about whisky trading values that painted the opposite picture.
Now for your digestif. In the second episode of British political comedy The Thick of It, the fictional Department of Social Affairs and Citizenship (around which the show is based) launches a policy to offer music and arts education to disadvantaged youths off the back of testimony from one member of a focus group — who turns out to be an actor saying what she thought the department’s communications team wanted to hear. Let this serve as a cautionary tale to be careful about which sources you listen to, and how carefully you interrogate their messaging.
This content was first published in Whisky Magazine in March 2024.