The rich tapestry of whisky is woven from various histories, cultures and regional styles - from the rich malts of Scotland and the fruity pot stills of Ireland, to the sweet Bourbons of the US and the lighter varieties emerging from Scandinavia.
Japan’s whisky industry has long mirrored itself on Scotland, creating a similar style of drink using largely the same ingredients, equipment and processes (sometimes, even the very same liquid). Now, as Asia grows its whisky-making prowess, with acclaimed liquid hailing from the likes of India and Taiwan, there are signs that China could become a whisky powerhouse of the future.
Late last year, Diageo announced its intention to build a US$75m single malt whisky distillery in China’s Yunnan province, construction of which is expected to begin in early 2022. The news preceded Pernod Ricard’s official opening of the Chuan Malt Whisky Distillery in the country's Sichuan province - situated just below Yunnan and with an investment of up to US$150m over ten years.
The initial announcements from both Chuan and Diageo’s Eryuan Malt Whisky Distillery focused on local climate, terroir, sustainability and tourism. But, international whisky producers are not the only ones that spy the potential for Chinese whisky: domestic firms are making investments, too.
Mengtai Group has partnered with consultancy Valentine International to build a distillery in Inner Mongolia, transporting all of its distillery equipment from Forsyth’s in Scotland. There are also local reports that another whisky distillery is being built in Guangdong province with local backing.
A new whisky category is clearly coming into view. But, where will it sit on the flavour spectrum, and who is the intended consumer?
All current stakeholders in Chinese whisky seem to have their eyes firmly fixed on the domestic market. Diageo’s Sam Fischer, president of Asia Pacific & Travel Retail, expressed the group’s desire to “delight the next generation of Chinese whisky consumers”, while Pernod's Asia CEO, Philippe Guettat, highlighted “China’s burgeoning passion for the spirit”.
With its burgeoning middle class curious to try international products, China is a coveted market for whisky brand owners. For Scotch, the country is the tenth-largest export destination by value. For total whisky/whiskey. The IWSR forecast (pre-pandemic) a CAGR of +8% in China between 2018 and 2023.
While whisky was for a long time categorised merely as a status spirit in China, since the implementation of anti-corruption measures that hammered distillers almost a decade ago, there's an altogether more nuanced appreciation of the spirit. As such, domestic consumers are unlikely to be satisfied with mere Scotch replicas. Instead, they'll no doubt want a unique spirit that can rival the quality of Scottish whisky on its own terms.
This seems to be the train of thought at both Diageo and Pernod, with the latter appointing a Chinese master distiller who will employ an “innovative approach to malt whisky-making”. At the time of the announcement, Guettat said Emeishan would embrace “whisky history and heritage with a character unique to Chinese culture”. It's going to be fascinating to see how this plays out.
The nation’s love of homegrown drinks runs deep, however, and baijiu remains the foremost spirits category. While the spirit is largely associated with older consumers and boozed-up business meetings, producers are doing more to appeal to younger consumers, namely Millennials and Generation Z.
Both Diageo and Pernod have had front-row seats to witness the evolution of baijiu, which will benefit their endeavours in Chinese whisky. Diageo is the majority owner of Shui Jing Fang, while in 2019 its French rival entered into a distribution arrangement with Wuliangye International.
China’s ancient baijiu tradition means there is likely to be an inherent openness to - and understanding of - homegrown whisky. Baijiu is, after all, a complex spirit that takes years to produce: to create the popular strong-aroma style, grains are fermented in centuries-old solera-like pits, and can be aged for many years in ceramic pots. There are also numerous wood-influenced varieties of baijiu on the market that have obvious parallels with whisky.
Diageo directly blended the worlds of baijiu and whisky in 2019 by teaming up with Jiangsu Yanghe Distillery to launch Zhong Shi Ji. Created by Chinese baijiu master Zhou Xinhu and Scotch master blender Craig Wallace, the whisky is created using a “unique process” involving maturation in ceramic pots.
With such innovation already at play, and against a backdrop of favourable market dynamics, it’s a wonder Chinese malt whisky distilleries have taken so long to come to fruition (although the legislative hurdles to get such projects underway are probably significant).
In addition to a thirsty domestic market, whiskies from these yet-to-open distilleries will undoubtedly become coveted items among the international whisky community - particularly with those looking to expand their global whisky collections. These whiskies will also surely thrive in China’s Travel Retail channel, one of the biggest in the world that continues to grow as restrictions loosen. In 2020, the Chinese Government tripled Hainan island’s duty-free allowances and added liquor to the duty-free category list. The result? A 226% year-on-year sales increase for the domestic holiday destination.
At a category level, China’s new whisky industry would do well to take note of Japan’s successes and shortfalls. While the sector has an exalted global reputation, it has long been plagued by a lack of transparency and formal regulations. However, with the influence of large international and domestic groups, Chinese whisky has the opportunity to set a clear and honest intention from the outset.
The result, stakeholders hope, will be the start of an exciting new chapter in world whisky; the creation of something unique that draws on global distilling expertise and local traditions. And so, the tapestry continues to be spun.
The rich tapestry of whisky is woven from various histories, cultures and regional styles - from the rich malts of Scotland and the fruity pot stills of Ireland, to the sweet Bourbons of the US and the lighter varieties emerging from Scandinavia.
Japan’s whisky industry has long mirrored itself on Scotland, creating a similar style of drink using largely the same ingredients, equipment and processes (sometimes, even the very same liquid). Now, as Asia grows its whisky-making prowess, with acclaimed liquid hailing from the likes of India and Taiwan, there are signs that China could become a whisky powerhouse of the future.
Late last year, Diageo announced its intention to build a US$75m single malt whisky distillery in China’s Yunnan province, construction of which is expected to begin in early 2022. The news preceded Pernod Ricard’s official opening of the Chuan Malt Whisky Distillery in the country's Sichuan province - situated just below Yunnan and with an investment of up to US$150m over ten years.
The initial announcements from both Chuan and Diageo’s Eryuan Malt Whisky Distillery focused on local climate, terroir, sustainability and tourism. But, international whisky producers are not the only ones that spy the potential for Chinese whisky: domestic firms are making investments, too.
Mengtai Group has partnered with consultancy Valentine International to build a distillery in Inner Mongolia, transporting all of its distillery equipment from Forsyth’s in Scotland. There are also local reports that another whisky distillery is being built in Guangdong province with local backing.
A new whisky category is clearly coming into view. But, where will it sit on the flavour spectrum, and who is the intended consumer?
All current stakeholders in Chinese whisky seem to have their eyes firmly fixed on the domestic market. Diageo’s Sam Fischer, president of Asia Pacific & Travel Retail, expressed the group’s desire to “delight the next generation of Chinese whisky consumers”, while Pernod's Asia CEO, Philippe Guettat, highlighted “China’s burgeoning passion for the spirit”.
With its burgeoning middle class curious to try international products, China is a coveted market for whisky brand owners. For Scotch, the country is the tenth-largest export destination by value. For total whisky/whiskey. The IWSR forecast (pre-pandemic) a CAGR of +8% in China between 2018 and 2023.
While whisky was for a long time categorised merely as a status spirit in China, since the implementation of anti-corruption measures that hammered distillers almost a decade ago, there's an altogether more nuanced appreciation of the spirit. As such, domestic consumers are unlikely to be satisfied with mere Scotch replicas. Instead, they'll no doubt want a unique spirit that can rival the quality of Scottish whisky on its own terms.
This seems to be the train of thought at both Diageo and Pernod, with the latter appointing a Chinese master distiller who will employ an “innovative approach to malt whisky-making”. At the time of the announcement, Guettat said Emeishan would embrace “whisky history and heritage with a character unique to Chinese culture”. It's going to be fascinating to see how this plays out.
The nation’s love of homegrown drinks runs deep, however, and baijiu remains the foremost spirits category. While the spirit is largely associated with older consumers and boozed-up business meetings, producers are doing more to appeal to younger consumers, namely Millennials and Generation Z.
Both Diageo and Pernod have had front-row seats to witness the evolution of baijiu, which will benefit their endeavours in Chinese whisky. Diageo is the majority owner of Shui Jing Fang, while in 2019 its French rival entered into a distribution arrangement with Wuliangye International.
China’s ancient baijiu tradition means there is likely to be an inherent openness to - and understanding of - homegrown whisky. Baijiu is, after all, a complex spirit that takes years to produce: to create the popular strong-aroma style, grains are fermented in centuries-old solera-like pits, and can be aged for many years in ceramic pots. There are also numerous wood-influenced varieties of baijiu on the market that have obvious parallels with whisky.
Diageo directly blended the worlds of baijiu and whisky in 2019 by teaming up with Jiangsu Yanghe Distillery to launch Zhong Shi Ji. Created by Chinese baijiu master Zhou Xinhu and Scotch master blender Craig Wallace, the whisky is created using a “unique process” involving maturation in ceramic pots.
With such innovation already at play, and against a backdrop of favourable market dynamics, it’s a wonder Chinese malt whisky distilleries have taken so long to come to fruition (although the legislative hurdles to get such projects underway are probably significant).
In addition to a thirsty domestic market, whiskies from these yet-to-open distilleries will undoubtedly become coveted items among the international whisky community - particularly with those looking to expand their global whisky collections. These whiskies will also surely thrive in China’s Travel Retail channel, one of the biggest in the world that continues to grow as restrictions loosen. In 2020, the Chinese Government tripled Hainan island’s duty-free allowances and added liquor to the duty-free category list. The result? A 226% year-on-year sales increase for the domestic holiday destination.
At a category level, China’s new whisky industry would do well to take note of Japan’s successes and shortfalls. While the sector has an exalted global reputation, it has long been plagued by a lack of transparency and formal regulations. However, with the influence of large international and domestic groups, Chinese whisky has the opportunity to set a clear and honest intention from the outset.
The result, stakeholders hope, will be the start of an exciting new chapter in world whisky; the creation of something unique that draws on global distilling expertise and local traditions. And so, the tapestry continues to be spun.