Will supply meet demand? The Glenmorangie case.

Cross posted from Sukasa Style
Single malt whiskey has gone from a largely fledgling product in the 1960s to one with exponential growth in the past decade. The story behind the demand is fairly well understood:

“In China and other booming South East Asian countries younger consumers are taking to single malts to show they have arrived in life.”  

“There is a need for such young consumers to show this much earlier than their predecessors.” 

Industry watchers foresee a much faster growth in single malt consumption in line with the rapid growth in economy as well as rising incomes and aspirations of Indian consumers.

(Source: Import of single malt scotch whisky doubles in first half of 2010)

The challenge is obvious to anyone with a modicum of knowledge about the nature of distilling single malt and the dynamic of markets: global demand will outstrip supply as growing affluence in low to middle income entails a shift from domestic blended scotches and traditional international blends such as Johnnie Walker Red Label to more refined fare like Glenmorangie 10-year (recently SukasaStyle #ScotchSunday review).

Publicly listed companies understand this: French luxury retailer LVMH is the owner of The Glenmorangie Company and single malt assets are a strategic bet on future growth in current emerging markets and developing economies.

Below is a video of Dr. Bill (William) Lumsden, Head of Distilling and Whisky Creation,  answering questions from Glenmorangie’s Facebook followers about the challenge of scaling up production. Dare I say it is of particular interest to engineers and single malt lovers.

The key takeaway is that scaling up production will only go so far. In my opinion, single malts will continue to go up in price and the trophy items will continue to be scooped up by the global plutocracy.

Posted by Arijit Banik for SukasaStyle.

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