Drinkers Rejoice! Whisky Is About to Get a Lot Cheaper
Whisky has become a core part of Hong Kong’s drinking culture. This intoxicating spirit is expected to generate a staggering HKD2.7 billion in sales revenue in Hong Kong by the end of 2019, supporting multiple industries such as consumer foodservice, retailing, as well as the travel industry. Hong Kong drinkers have come a long way from binge drinking green tea whisky mixers in karaoke parlours, to enjoying a neat single malt at a speakeasy bar.
An observable trend that is rapidly expanding in the Hong Kong market is the sheer number of whisky-themed events. In 2013 there was only one whisky festival in Hong Kong; this number has grown fourfold in 2019. Some higher-end wedding ceremonies now also include single malt as part of their menus. It is not difficult to find whisky tasting workshops almost every weekend; these events target young professionals with high disposable income. According to event hosts, attendees want to understand the background story as well as the science behind each bottle; they are interested in learning and getting more than just a drink out of the tasting experience. Consumers no longer want to simply neck the drink, but to savour this sophisticated experience.
Extraordinary drink, with an irresistible price
One might think that Hong Kong whisky savants’ pursuit of quality must come at a handsome cost; the good news is that quality whiskies are about to see a significant slash in price. With the global craze over whisky, distilleries are increasing their production capability to capitalise on this trend. According to industry experts, 17 new whisky distilleries opened between 2017 and 2020 in Scotland alone, while more than 20 distilleries have disclosed that their production capacity will be increased to capture the booming market. Since Scotch took up about 90% of the Hong Kong whisky market, it is expected that there will be a supply glut in supply by 2020. The organic growth of demand could not absorb the rapid supply push in the market. Although vintage whisky – aged 25-years and older – will continue to increase in price due to its rarity, the price of younger single malt is expected to encounter some significant headwind. Alongside this, retailers are facing growing competition from parallel imports, whereby consumers are looking to benefit from the avoidance of the 100% tax on spirits. In order to remain in business, retailers sourced from official channels will have to shave their sales margins to remain competitive in the future.
Hong Kong connoisseurs are becoming increasingly adventurous. Blended whisky has always been treated like the awkward uncle at family dinners; consumers acknowledged that they were present but gave them very little thought or attention. Although blended whiskies are thought to be sub-par products amongst drinkers in Hong Kong, with the growing number of tasting events, consumers are more accepting and appreciative of such products now. Especially with the scarcity of single malt Japanese whiskies, blended Japanese whiskies have become a great alternative should drinkers fancy an oriental flavour. In addition, broader region whiskies are strengthening their foothold in Hong Kong. Taiwanese, Indian, and Swedish versions are getting more shelf space compared to 2016, providing more options for consumers to experience. So, drink up! You will need all the shelf space you can find to store the plethora of new whiskies.