New standards herald a rising sun for Japanese whisky
As distillers in Japan digest the introduction of labelling standards for Japanese whisky, Amy Hopkins looks at what radical industry-wide changes could be in store.
fter years of speculation, an official definition of Japanese whisky has finally been agreed, imbuing the sector with a new sense of transparency and accountability. Last month, the Japan Spirits & Liqueurs Makers Association (JSLMA) issued new labelling standards for Japanese whisky in a bid to "clarify the confusing situation for consumers".
In accordance with the definition, products marketed as 'Japanese whisky' must be made from malted grains, although additional cereal grains are permitted.
Crucially, the main stages of production – malting, mashing, fermentation, distilling, and ageing – must take place domestically. The liquid must be matured in wooden casks for at least three years and bottled at no less than 40% abv, while the use of caramel colouring will be permitted.
Unlike Scotch and other whiskies that have geographical indication status, Japanese whisky's labelling standards are voluntary and as such will not be legally enforceable. However, most key players are expected to abide by the guidelines.
The main benefit of having an official definition for Japanese whisky, says the JSLMA, is to make "information available to the public in Japan and abroad". In other words: it allows consumers to make informed decisions about what they buy, whether thoroughbred or mixed-breed.
But, why unveil the regulations now, when global demand for Japanese whisky is on the rise anyway? And, what will they mean for the future of the industry?
In recent years, murmurs about the prolific use of imported liquid in Japanese whisky have grown louder.
The JSLMA acknowledges that this practice is an essential part of the sector's culture and history, which has a strong reverence for – and renowned expertise in – blending. "The products created through this process have enriched the Japanese drinking culture," the association argues.
A significant number of large and small brands import whisky from markets including the UK, Ireland and Canada to blend with their own liquid. This has the dual function of allowing them to combat domestic stock shortages and of experimenting with a wider pool of high-quality whisky for blending.
I first became aware of the category's reliance on foreign-made stocks when I first visited Japan in 2016. Producers coyly admitted the practice was rife and rooted in the very foundations of the category.
Unlike in Scotland, a highly competitive corporate culture in Japan means whisky producers do not exchange stocks with each other and so have had to find ways to become self-sufficient.
For larger producers such as Suntory and Asahi's Nikka Whisky Distilling Co, this means building giant distilleries that contain both column stills to create grain whisky, and pot stills (of all shapes and sizes) to produce different styles of malt whisky.
In contrast, malt distilleries in Scotland usually only feature one style of still to create a single, recognisable style of spirit.
A highly competitive corporate culture in Japan means whisky producers do not exchange stocks with each other.
Faced with limited options, smaller distilleries wanting to increase supply or create a new style of whisky – particularly in blended, since most do not have the equipment to distil grain whisky – have elected to source fully or partially-aged liquid from overseas.
Even Nikka, which has the capacity to produce both grain and malt whisky, uses imported stocks for a few of its blends.
In a statement last month, Nikka said it would "continue to offer a wide variety of whiskies with unique taste profiles". As a member of JSLMA, the unit will adhere to the new guidelines, though said the current labelling for its namesake brand is not affected.
The Asahi unit will, however, provide further information on its website to "clearly distinguish" between certified Japanese whiskies and those that don't meet the guidelines.
Standardisation could lead to innovation
While the JSLMA says it "take(s) pride" in Japanese whisky's culture of multi-origin blending, the association is more cutting when it comes to products that are made exclusively using imported liquid.
Indeed, before now, there were never any regulations that would preclude less scrupulous brands acquiring sourced whisky from anywhere in the world and labelling it as 'Japanese whisky'. Products made largely from a base of neutral spirit or rice have also become relatively commonplace.
Consumer awareness of Japanese whisky's nebulous practices is relatively low, but the longer the industry is left unanchored by an official definition, the greater the risk of a widespread publicity backlash – particularly as prices of Japanese whisky continue to skyrocket.
Of course, that's not to say the lack of enforceability of the new standards won't lead to wider criticism in the future.
It's also possible that the very structure of the Japanese whisky category will be altered by the new definition. Back in 2016, when I asked stakeholders if they thought Japan's whisky makers would be open to exchanging stocks in the future, they seemed doubtful to say the least.
That corporate competitiveness runs deep, particularly as the sector's founding father, Masataka Taketsuru, laid the groundwork for Suntory's whisky business before leaving to start up Nikka. In light of soaring domestic and international demand, it's also unlikely that any of these distilleries would prioritise selling stock to their competitors.
It's also possible that the very structure of the Japanese whisky category will be altered by the new definition.
It doesn't seem too far-fetched, however, to think it possible that a savvy entrepreneur would spot an opportunity to build a distillery and create a new third-party whisky production market in Japan. With more international investment being pumped into the Asian spirits sector, it could even be a foreign player that plugs the gap.
Another opportunity would be in the development of the 'world whisky blend' trend, pioneered by Suntory with the 2019 launch of Ao, a blend of whiskies from Japanese, Scottish, American, Irish, and Canadian distilleries.
While I'm sure Ao was released with the honourable intention of enhancing innovation, I couldn't help but feel at the time that the expression was poking fun at the open secret in Japanese whisky, since so many are technically world whisky blends.
From a cynical perspective, the new definition could mean some brands choose to repackage and reposition their liquid as a shiny new proposition, without changing a thing.
Somewhat counter-intuitively, Japanese whisky's push for standardisation could actually result in greater innovation. Since the definition states that Japanese whisky must have been aged in wooden casks for three years, this might encourage brands to experiment beyond oak, which Scotch is required to use exclusively.
Brands that choose to adhere to the new guidelines have a period of grace; if necessary, they will need to amend their labelling and/or production processes by 31 March 2024. It 's going to be fascinating to see what changes come to fruition in the industry in the meantime.