INTHEBLACK – In the trenches
Over a thousand years ago whisky was born in Asia. Only now is it experiencing a rebirth.
By Edward Charles.
Chinese youths are increasingly turning away from the nation’s traditional potent spirits, known as baijiu, in favour of whisky as their alcohol of choice.
In the bars and discos in Shanghai, Beijing and other cities, famous baijius like Maotai are nowhere to be found. But whisky is flowing in ever- greater volume for young party goers.
Rather just buying whisky by the glass, groups of friends can be seen sharing one or two bottles between them as they dance the night away. ‘While cognac is sold mainly in the south of the country, whisky is being drunk everywhere,’ says Philippe Guettat, China operations head of French group Pernod Ricard.
Whisky sales are booming in China. Over the past five years sales have increased by about 30 per cent annually, with Pernod Ricard’s Chivas Regal currently the top-selling brand. Although foreign brands represent less than 10 per cent of spirits sales in China, that is remarkably high considering Chinese labels are still by far and away the most popular across all alcohol sectors.
Although Pernod Ricard refuses to reveal its sales figures, a sharp rise in whisky consumption in general has made China a key market, not only for the world’s second major seller of wines and spirits, but also for its competitors.
According to the Edinburgh-based Scotch Whisky Association, China became a world top 10 whisky drinking nation in 2006, when total sales hit US$115m, an increase of 27 per cent over 2005. ‘People are drinking more and more, especially in night clubs,’ says Stefen Deng, a director at Maxxium, distributor of the American bourbon whisky Jim Beam, as well as Scotland’s Highland Distillers and Macallan.
As with many phenomena linked to the nouveau riche, wealthier Chinese youths are more attracted to brands, high-class fashions and the need to be seen than they are to taste.
In most nightclubs, a bottle of Chivas Regal sells for about 500 yuan (US$65). ‘(But) it is no more a question of money. Whisky and cognac are linked to a certain atmosphere, an ambiance,’ Deng says.
In Chinese bars and nightclubs, it is not uncommon to see young drinkers mixing their whisky with iced green tea, a cocktail that brings a local flavour to an imported drink.
But like many products that sell well in China, the new trend in drinking is also falling victim to counterfeiting with some fake whiskies capable of passing a taste test. Others are undrinkable. The most common way to counterfeit is for a nightclub manager, smuggler, gang member or anyone else so-inclined, to simply take an empty bottle of expensive whisky and refill it with an ordinary one.
Although counterfeiting has not greatly harmed the Chinese whisky market, industry watchers say the future of the drink remains in doubt due to the fast-changing trends in modern China.
‘The whisky market is dynamic, but it is not very solid,’ says Fu Leibin, editor of the Chinese magazine Food and Wine. ‘People are always searching for something new and they have a tendency to always follow the latest trends. So sales will probably continue to rise, but growth may slow.
This won’t be the case if the Scotch whisky industry has anything to do with it. The focus for marketing is on newer markets such as Asia and South America. Singapore, Taiwan, Thailand and South Korea are among the largest export markets for whisky. Sales to China increased 27 per cent to US$119m, making it the 10th most important export market.
In a sense it’s taking whisky back to its origins. Distillation dates back to 800BC in Asia, and it probably arrived in Europe via north Africa.
The earliest record of whisky in Scotland dates back to 1494 when Friar John Corr bought 1120 pounds of malt to make some 1500 bottles of water of life, or aqua vitae, as the monks called it.
Ever since it was first taxed in 1644, the whisky business has been tied up in red tape and marketing. The business was driven underground by increasing taxation and The Act of Union 1707 with England. By 1777, there were some 400 underground distillers and only eight legitimate ones paying their taxes. What changed everything was the Excise Act of 1823, which charged a duty on each gallon produced. Over the next 10 years, nearly all the underground distilleries went legitimate. One of those was the Cardhu distillery. Although it was officially established in 1824, founder John Cumming had been a long-term whisky smuggler, illegally distilling there since 1811, when he first took a lease on the farm.
It was later bought in 1893 by Johnny Walker, whose name is still given to the whisky brand today. Johnny Walker whisky is owned by Diageo, which has a turnover of US$18.85bn and spends more than US$2.06bn in a year on marketing alone.
The story of Johnny Walker – or most distilleries for that matter – is a case study of successful marketing, especially to international markets. It is about a tenacious people who took a basic commodity, turned it into a product of greater value, and worked out a way to export it to the world.
The Johnny Walker story starts with a humble shopkeeper who opened for business as Walker’s Kilmarnock Whisky in Ayrshire in 1820.
John Walker sold many whiskies, the most famous being his own, called Walker’s Kilmarnock. After his death in 1857, his son and grandson, both called Alexander, developed the business. The first blatant act of branding was perhaps the introduction of the signature square bottle in 1870.
At the same time, other families were building their businesses. In 1866 William Grant became a bookkeeper at a distillery. He showed a talent for whisky production and eventually became manager of the distillery. In 1886, together with his wife Elizabeth and their nine children, Grant founded the Glenfiddich distillery. In 1906 Alexander Walker created ‘special old highland whisky’, a blend of smoky malts and lighter grains. Three years later, in 1909, that whisky became the branded blends we know today, Johnny Walker black label and Johnny Walker red label.
Another 10 years on, in 1919, the sons of Alexander Walker – George and Tom – devised the ‘striding man’ label over lunch. The next year, according to the company, Johnny Walker whisky was being exported to 120 countries in the world. The striding man eventually strode, in the form of red-label whisky, into the US in 1937. It was a global drink by 1951. Meanwhile, the Grant family was having similar success. William Grant’s son John set up the export side of the business. By the early 1900s there were more than 60 agencies selling the whisky in 30 countries. Fast forward to 2006 and US$5.14bn of whisky was being exported, a 4 per cent increase on the figures of the previous year.
While the most popular brands remain the blends, drinkers around the globe are generally becoming discerning towards single origin products: single malts. In 2006 exports of single malts approached US$857m for the first time.
In 1953, just before he slipped into an alcoholic coma and died, it was Dylan Thomas, a poet who liked a drink, who said: ‘Eighteen whiskies. A record, I think.’ Certainly, sales of the water of life are beating all records.
Additional reporting by Philippe Massonet, AFP
Six steps to making whisky
1. Harvest and germination. Barley is harvested and soaked in local spring water. It is then allowed to germinate for up to 10 days.
2. Malting. Germination is stopped by drying the barley in smoky peat-fired kilns. This is what gives Scotch whiskies their smoky flavours.
3. Grist to the mill. The malt is ground into ‘grist’ and soaked in more local spring water. The water is drained and the malt soaked several more times, thus converting the malt’s starch into sugar. The resulting liquid is known as the wort.
4. Fermentation. Yeast is added to the wort and the fermentation process creates alcohol. When it reaches up to 9 per cent alcohol, the ‘wash’, as the gunk is called, begins the first of its two initial distillation processes, leaving low wines with up to 25 per cent alcohol.
5. Distillation. Another series of distilations separates the good from the bad until the final product, whisky, is left.
6. Maturation. By law all Scotch whiskies must be matured for at least three years in oak casks. Typically, the best whiskies are matured in sherry casks. It is not unusual for some whiskies to be matured for 20 years or more.
Fiddling the books
Fiddling the books was rife in the whisky business until it was clamped down on. The idea was that a distillery would “sell” a consignment of whisky to a bank, while at the same time acquiring an option to buy it back at a fixed point at the original price plus interest. The distillery would claim it was a sale, yet the goods would never leave the premises. The option would always be taken so, in fact, it should have been treated as an interest-bearing loan rather than a sale.
Whisky swaps deals
Whisky distilleries, even rivals, often trade barrels. Sometimes it’s a deal in which equal values of whisky are swapped; othertimes it a cash deal. This allows distilleries to blend whiskies to keep the flavours consistent.
How to drink it
There is a lot of pretension that goes into drinking whisky. The water mixed with it is important, and some companies have even marketed a brown murky water from Scottish peat bogs as a mixer.
There are four primary tastes in whisky and some 32 smells. So to really taste whisky it should be smelt first.
Those who make whisky like a choice of mixer on the bar: a jug of water or a bottle of lemonade.
They choose, of course, the lemonade because that’s what they like best, according to whisky-maker Ian Williams, manager of Home of Johnnie Walker at the Cardhu distillery.
Williams himself has been mixing cola with his whisky since the 1960s. But that doesn’t mean he’s averse to sitting down with a 10-year-old Talisker (justifiably rated as one of the top single malts, according to many experts) with a dash of water.
Scots have been adding herbs, fruits and other foodstuffs into their whisky since they first invented the brew, simply to make backyard brews more palatable. They used to drink it young and raw out the cask until, one day, a cask was left in a forgotten corner for a year or two. The whisky matured into something altogether more drinkable.
Every year we drink more whisky that has been premixed with cola.
Why, Williams says, should people be snobby about blended whisky when the finest champagnes in the world are blended?
Whisky, with 40-odd per cent alcohol, isn’t the kind of drink to take neat. The blenders themselves drink it at 23 per cent alcohol, which means diluting it with a roughly equal amount of water.
Whether or not the water should come from the tap depends on where you live. Williams, who lives in Scotland, rates Sydney’s water highly but was disappointed with what came out of a tap in Melbourne’s St Kilda.
Diluting the whisky first of all stops it from burning your tongue. If you are tackling it neat, you may want to anaesthetise your tongue with iced water.
Reference: August 2007, volume 77:07, pp. 26-28