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Gabrielle Vizzavona
/ 13 Oct, 2021
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[Interview] David Moroz, economics researcher specialising in the Whisky market

Whisky, like wine, has become a collector's item, even an investment asset, with auction records that far exceed prices in the wine market”.

Gabrielle Vizzavona: Can you briefly present your background, your current position and the topic of your research?

David Moroz: I am a lecturer and researcher in economics and associate professor at EM Normandy. This is the reason I began working, among other topics, on the whisky market, in a bid to assess what defines the value of whisky: the reputation of its distillery, its provenance, its age, the type(s) of casks used for the ageing process, etc.

GV: To what extent has the whisky market progressed in the last ten years?

DM: Two things have changed significantly in the whisky market. Firstly, the number of producer countries. When referring to whisky, newcomers will think of the trio Scotland/Ireland/USA, but the fact is that other countries have entered the scene. One of them is Japan which is now recognised as a producer of excellent whiskies. More recently, there is also India, Sweden and France, where the number of distilleries has gone from two at the end of the 1990s to about 90 today. Secondly, whisky, like wine, has become a collector's item, even an investment asset, with auction records that far exceed prices in the wine market. As a comparison, the record for a bottle of wine at auction is between €450,000 and €500,000, while a bottle of whisky can fetch around €2 million.

GV: What is the reason behind this global popularity?

DM: There are several factors involved. The first is that whisky can be produced from a variety of cereals, not just barley, and that many countries have the opportunity to produce it from the cereals that are most readily available locally. Secondly, whisky appeals to cultural cues that are not restricted to its own universe and this probably contributes to its success. Finally, from a consumption perspective, the logistics of storing whisky are relatively straightforward: whisky does not spoil over time as long as the bottle is not opened; it can withstand variations in temperature; and it is also a staple spirit that is recognised in the art of mixology.

GV: Has the whisky market become more premium?

DM: With the increase in the number of producer countries, and in particular with the arrival of Japan in the market in recent decades, yes, inevitably. Japanese production has played a part in premiumisation. The willingness of some Japanese producers, in the 1970s, to commit to high quality production allowed Japan to be internationally recognised as a major producer at the turn of the 21st century. Scottish distilleries, which were already producing excellent whiskies, also sought to improve the quality of their beverages and to diversify their range. Also, the whisky industry follows general consumer trends – over the last decade, we have witnessed the emergence of organic whiskies and whiskies that focus on the use of locally grown cereals. 

GV: What types of whisky are the most highly valued?

DM: The collector's market offers the ideal arena to answer this, and the verdict is clear: Scotch and Japanese single malts. In terms of product characteristics, so-called ‘cask strength’ whiskies, i.e. ones where water hasn’t been added when the whisky is removed from the casks, and the older whiskies are more valued, though it seems that consumers do not differentiate between 30-year-old whiskies and older whiskies, in terms of expected quality.

GV: Which markets spearhead demand?

DM: France can claim to be the leading whisky consumer country for per capita consumption, with an annual volume of over 2 litres. This provides the French distilleries that have emerged over the last 20 years with good opportunities for sating domestic demand. In terms of production output, the leading countries are, unsurprisingly, Scotland and the USA.

GV: Cognac and Champagne have a strong aspirational image, evocative of French luxury, royalty and our rich cultural heritage. What makes whisky aspirational?

DM: Whisky fits in relatively well with certain national novels and its aspirational status seems to be reliant on the culture of the region to which the distillery is attached. In Scotland, whisky conveys an image of rebellion, as its English oppressor long forbade its production and sent it underground. The same is true for Ireland, where pot still production using malted and un-malted barley can be ascribed to the fact that the Irish population was taxed only on malted barley. In the United States, many distilleries allude, in one way or another, to Prohibition. Having said that, whisky’s aspirational status is not all about its nefarious past. Japanese whiskies have built their history around an image of excellence, entrepreneurship and innovation, highlighting the efforts made by Japanese industry pioneers to first imitate Scottish producers, and then equal their standards.

GV: What is consumer perception of a whisky’s age?

DM: Consumers seem to have a tendency to believe that the older a whisky is, the better its quality. They apparently have a greater willingness to pay for a mature whisky, even though many experts agree that an older whisky does not necessarily deliver better quality flavours. Novices will always feel that a 20-year-old whisky is better than a 10-year-old. However, 30 years seem to be the threshold – from this age onwards, consumers allegedly do not judge a whisky as being significantly better.

GV: What are the main conclusions of your research?

DM: If I were to draw a comparison with the wine market, which has been studied for many decades, I would say that for whisky, the reputation of the distillery matters significantly more than the reputation of the distillery’s home region. This leaves plenty of scope for entrepreneurs who want to venture into whisky! Secondly, in the whisky industry, the quality of the expertise is perhaps more important than the quality of the raw materials. Scottish distilleries provide evidence of this as some of their whiskies are made from barley and malt produced outside Scotland.

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