What Does Japanese Whisky Tell Us About Investing In Scotch?
When Yamazaki won the prestigious prize 'Best Whisky in the World' over Irish and Scottish competitors in 2014, the world of whiskey was in shock.
The win also set off a wave of international demand for Japanese whisky, leading to increased spirit exports.
Following the win, whisky exports nearly doubled and have been growing ever since. Since the historic win, Japanese whisky has gone from an exotic footnote to a well-known player in the world of fine whiskies, with experts praising the Japanese for their skill in the traditional blending of whiskies.
But, while there has been a massive increase in demand for Japanese whisky, we think it shows scotch's investment opportunities.
The Boom In Global Demand for Japanese Whisky
In 2020, the export value of domestically produced whisky from Japan amounted to over 27 billion Japanese yen, increasing from only 2.5 billion yen in 2012.
Within the Japanese whisky market, the first distillery in Japan, Yamazaki Distillery owned by Suntory, and the Tokyo-based Nikka Whisky Distilling established themselves as market leaders.
Export value of domestically produced whisky from Japan from 2012 to 2020
NTA (Japan). "Export Value of Domestically Produced Whisky from Japan from 2012 to 2020 (in Billion Japanese Yen)." Statista, 31 Mar 2021
The increase in global demand for Japanese whisky has led to a massive rise in prices. But looking at the market for Japanese whisky outside of Japan only tells half the story.
The Alcohol Market In Japan
The alcoholic beverage industry is a significant segment of the beverage manufacturing industry in Japan. Renowned for its manufacturing of high-quality rice wine (sake), the sector covers a broad spectrum of fermented and distilled drinks.
While sake and Japanese clear liquor (shochu) have a long history in the country, beer and whisky manufacturing procedures began in the last centuries. However, despite its short commercial history in Japan, the beer industry is one of the largest domestic liquor markets.
Along with liqueur, the brewed beverage makes up around half of the alcoholic beverage sales, relegating sake and shochu to a secondary position.
Drinking Imported Scotch Whisky in Japan
Alcoholic beverages play a significant role in social and business lives in Japan, with liquor consumed at social gatherings and business meetings with colleagues and customers.
Drinking parties (nomikai) with coworkers, fellow students or friends are recurring social events in Japan. The most elaborated ones are typically held in December towards the end of the year. The significance of the so-called bonenkai is to forget all the past year's troubles through the consumption of alcoholic beverages.
In 2020, Japan imported whisky valued at around 44.7 billion Japanese yen. This represented an increase by almost double the value imported in 2011. Whisky, along with fruit wine, are staples of the Japanese liquor import market.
And the Japanese drink a lot of whiskies.
Import value of whisky to Japan from 2011 to 2020 (in billion Japanese yen)
Japan Customs. "Import Value of Whisky to Japan from 2011 to 2020 (in Billion Japanese Yen)." Statista, 1 Feb 2021
In 2020, Japan imported whisky valued at around 44.7 billion Japanese yen. This represented an increase by almost double the value imported in 2011. Whisky, along with fruit wine, are staples of the Japanese liquor import market.
Whisky Investment Opportunities
There is a huge demand for Japanese whisky. But even in Japan, they still import imported 63% more whisky than they export. That represents a significant demand in Japan for whisky produced in other countries, mainly from Scotland.
Scotch is incredibly popular in Japan. And demand has been increasing.
The massive demand for scotch whisky is a fantastic investment opportunity.
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