Over the past couple of decades, the perennial mission for scotch whisky brands has been to remain relevant in an ever-evolving drinks market. 

Through the use of celebrity ambassadors, lifestyle marketing, cocktail advocacy, and mould-breaking NPD, the scotch category has worked hard to connect with a new generation of consumers, boasting a reasonable level of success. 

Of course, Covid-19 has bushwhacked the trajectory of many categories and brands across the entire drinks industry. 

In spirits, some segments have been hit particularly hard by the paralysis of the on-premise and Global Travel Retail; others, meanwhile, have come out fighting, establishing a superior position in these unprecedented market conditions. 

The belief among commentators is that those successes will not be short-lived, as the trends that have emerged from the crisis are set to last well beyond 2021.

As just-drinks reported in February, in 2020, spirits gained its biggest share of the total US beverage alcohol market for a decade, outperforming wine and beer.

Figures from the Distilled Spirits Council (DISCUS) show that in the US last year, tequila and mezcal sales were up 17.4%, RTDs/premix cocktails increased sales by 39.1%, and the American whiskey category grew by 8.2%.

Scotch, however, is struggling to fit into spirits' Covid-19 zeitgeist, which revolves around convenience, mixability, and health & wellness.

Nowhere is the misfortune of this venerable spirit more evident than in the recent performance of its star brand. In half-year results reported earlier this year, Diageo said Johnnie Walker had suffered from the steep drop-off in GTR, with sales declining by 12%. Indeed, the group's scotch portfolio as a whole experienced a sales slide of 8%. 

Unlike other spirits segments, scotch has not been able to compensate for losses in its traditional channels through a new focus on the home drinking occasion.

This is happening despite consumers' broad move upmarket – where much of scotch resides. "This has been unlike any other recession we've experienced," Brown-Forman CEO Lawson Whiting told The Wall Street Journal.

"In the US, ultra and super-premium spirits are gaining share at faster rates than in pre-Covid-19 time periods."

Rolling lockdowns have led consumers to want to treat themselves by spending money that would have otherwise been earmarked for overseas holidays or fancy meals on a nice bottle of wine or spirits.

This behaviour has a part to play in cognac's success in the US last year, when value sales rose by 21.3%, according to DISCUS.

The performance of cognac lies in stark contrast to weakness in scotch, and there's a very obvious reason for the dichotomy: the US's 25% import tax on single malt.

Since the tariff was implemented by the Trump administration in October 2019, scotch exports to the market have dropped by 35%, says the Scotch Whisky Association (SWA). In total, the industry has lost more than £500m ($687m) in US shipments.

Karen Betts, CEO of the SWA, believes the current situation is "being borne by large and small producers alike, who are losing sales and market share in what has been for decades the industry's largest and most valuable market, which they may never now recover".

The loss of market share is the single most damaging outcome of the dispute for scotch brand owners for, without market share, there cannot be profitability. 

Some brands have been forced to increase their prices in the US to compensate for the punitive tax, driving drinkers to better-value-for-money cognac or bourbon, or even tequila or rum. Others have had to steer their attention away from the market altogether, knowing that consumers will not remain faithful until their return.

The US is indeed the world's most valuable spirits market, seen as the holy grail by brand owners distillers with international ambitions. It is also one of the most fickle.

The pandemic has given rise to a plethora of new consumer behaviours and values, and single malt's restricted access to the US means it hasn't had the opportunity to fully align with – or adapt to – current trends. 

The category already faced the tough task of competing against other spirits segments that are in the throes of premiumisation, and the trade war will inevitably hasten scotch whisky's loss of consumer mindshare.

A similar fate awaits bourbon in the UK and EU, where a row over US tariffs on metal imports means American whiskey distillers must also pay a 25% import tax, which is set to automatically increase to 50% this summer.

Meanwhile, cognac's acceleration in the US could be thrown into reverse by last month's new tranche of tariffs relating to the aircraft subsidies dispute.  

"Hospitality businesses... have been decimated by the global pandemic, and these tariffs are a significant and unnecessary drag on their recovery," says DISCUS's chief of public policy, Christine LoCascio.

"We are hopeful the Biden administration will clearly recognise the widespread damage being caused by the escalation of these trade disputes."

Trade representatives on both sides of the Atlantic will be hoping the new US president is sympathetic to their plight. After a prolonged period of stymied market access, however, it could take scotch years – if not decades – to re-conquer lost ground.