The Single Malt Fund Trading Company

31 oktober, 2022

2022 – Q3 Whisky Investment and Market Report

Welcome to the Q3 2022 Single Malt Fund Trading Ltd report, where we comment on the latest developments in the rare whisky as well as broader industry markets and give an update on our trading operations. 

Industry news

Despite geopolitical uncertainty, inflation pressures and reduced consumer spending power, most of the big groups in the spirits world, continue to report strong results, with whisky sales at the heart of their numbers. Premiumisation is a key factor to performances as is, presumably, the ability to secure long term supply partnerships and benefit from strong purchasing power. That strong financial position is also allowing these groups to press ahead with major capital expenditure projects, notably in the building of new distilleries, thus ramping up production to catch up with demand.

Pernod Ricard released its sales and results for Q1 FY23, with sales totalling €3,308 million and an organic growth of +11%.

China and India saw strong growth, with Europe also dynamic thanks to a tourist driven improvement in the on trade. Travel retail is also rebounding. Alexandre Ricard, chairman and CEO, said: “Our performance continues to be broad-based with growth across many markets and diversified across our portfolio with all our spirit segments in double digit growth. 

“Within a context which remains challenging and volatile, as for every business, we continue to actively invest to support our unique competitive advantages and fuel our future growth,” Ricard added. Diversified double-digit growth was seen across all spirits segments, with +12% growth driven by Scotch, Jameson, Absolut, Beefeater and Martell, and +13% driven by the growth of Seagram’s Whiskies. “We expect this dynamic growth to continue through FY23, demonstrating the strength of our strategy and the dedication and full engagement of our teams around the world”. 

Q2 Highlights

• Industry news
• Rare Whisky 101 report
• Auction update
• Trading update

Beam Suntory reports strong first-half performance driven by premium brands.

A strong performance in key markets saw Beam Suntory’s net sales increase by 13% year-on-year in the first half of 2022, a 25% increase on the pre-pandemic period in 2019. Sales grew at more than twice the rate of volumes, an indication that Beam Suntory’s premiumisation agenda is paying dividends.

“The fact that we were able to deliver these strong results in a challenging period underscores the resilience of our markets, quality of our brands, and the significant impact of our premiumization strategy,” said Albert Baladi, president, and chief executive of Beam Suntory. The company recently announced a $400 million investment in its Booker Noe distillery in Boston, Kentucky.

Diageo Trading comment – Oct 

Ivan Menezes, Chief Executive, announced; “We have made a good start to fiscal 23, with organic net sales growth across all regions, reflecting our advantaged portfolio, our continued investment in brand building and our agile supply chain and culture. We expect the operating environment to remain challenging with ongoing volatility due to geopolitical uncertainty, a weakening of consumer spending power, inflationary pressures and disruption related to Covid-19. However, I am confident in the resilience of our business and our ability to navigate these headwinds while executing our strategic priorities, including our ambitious 2030 sustainability plan.

We remain well-positioned to deliver our medium-term guidance for fiscal 23 to fiscal 25 of organic net sales growth consistently in the range of 5% to 7% and organic operating profit growth sustainably in the range of 6% to 9%.”

In a separate release in September, Diageo also updated us on plans for a new distillery in Scotland. “Earlier this year Diageo announced plans to invest £1 billion in expanding its malt whisky production capacity in Scotland to meet growing global demand for our brands.” Three sites in Speyside, adjacent to existing distilleries at Teannich, Glendullan and Inchgower have been shortlisted for the new distillery.

Rare Whisky Q3 results

The Rare Whisky 101 Apex 1000, the barometer of the UK auction market for rare whisky bottles, was unable to build on the strong start to the year, with a slight decline of 0.6% in Q3. It seems like, with some notable exceptions, the slowdown was at the top end of the market, with the Icon 100 index declining by 3.2%. The Japanese index continued to grow outperform all other indices, although the pace of growth at 3% is slowing.  

At brand level, a swing from -11% in the case of Brora to a whopping +19% for Balvenie shows that volatility is increasing. The big guns of Macallan, Yamazaki and Karuizawa continue to lead the way this year, showing that the very top end iconic brands remain in much demand, even though prices may be softening. Glendronach and Glenfarclas performed well in Q3, which suggests that brands with a strong use of sherry cask finishes are increasingly popular.

Auction Update

Sothebys held six auctions in quarter three, which returned $7.8 million in sales. As ever, the auctions were dominated by high end Macallans along with some prized collections from Karuizawa, Hibiki and Yamazaki. Notable among these auctions was the sale of the oldest whisky in the world, a Macallan 81-year-old, which sold for GBP 300,000.

Bonhams had two auctions in the quarter, one in Hong Kong and one in London. The Hong Kong sale was, not surprisingly, dominated by Japanese bottles from Hanyu and Karuizawa. However, it was a bottle of Glenfiddich 50-year-old which stole the show, selling for between $25,000 and $32,000. In London, there was an interesting range of bottles on offer, notably from Springbank and Ardbeg, with, of course, The Macallan also dominant. Again, as expected, it was a Macallan that came out on top; a 50-year-old sold for GBP 50,000. Sothebys held six auctions in quarter three, which returned $7.8 million in sales. As ever, the auctions were dominated by high end Macallans along with some prized collections from Karuizawa, Hibiki and Yamazaki. Notable among these auctions was the sale of the oldest whisky in the world, a Macallan 81-year-old, which sold for GBP 300,000.

Bonhams had two auctions in the quarter, one in Hong Kong and one in London. The Hong Kong sale was, not surprisingly, dominated by Japanese bottles from Hanyu and Karuizawa. However, it was a bottle of Glenfiddich 50-year-old which stole the show, selling for between $25,000 and $32,000. In London, there was an interesting range of bottles on offer, notably from Springbank and Ardbeg, with, of course, The Macallan also dominant. Again, as expected, it was a Macallan that came out on top; a 50-year-old sold for GBP 50,000.

Index Q1 Q2 Q3 YTD
RW Apex 100 5.2% 3.9% -0.6% 8.7%
RW Icon 100 11.5% 3.4% -3.2% 11.7%
Japan 100 9.0% 3.9% 3.0% 16.6%
Single Grain 2.2% 4.2% 0.2% 6.7%
Ardbeg 1.2% 8.4% 0.9% 10.7%
Balvenie -0.3% -2.0% 19.3% 16.5%
Bowmore 5.4% -2.7% 1.3% 3.8%
Brora 12.2% -0.6% -11.0% -1.0%
Bruichladdich -7.7% 17.7% -8.6% -0.8%
Bunnahabhain 2.0% 10.7% -2.8% 9.7%
Caol Ila 10.1% 1.1% -7.0% 3.5%
Clynelish 1.3% -2.6% -1.9% -3.1%
Dalmore 0.6% -4.9% -0.9% -5.2%
Karuizawa 10.9% 6.9% 5.5% 25.0%
Glendronach 3.4% 8.0% 12.4% 25.4%
Glenfarclas 0.3% -0.3% 6.2% 6.3%
Glenfiddich 1.9% -0.5% 2.6% 4.0%
Glenlivet 4.2% -3.6% 0.9% 1.3%
Glenmorangie -1.1% 4.5% -5.1% -1.9%
Highland Park 4.8% 1.0% -0.2% 5.7%
Lagavulin -2.0% 3.9% -1.1% 0.7%
Laphroaig 3.3% 6.6% -6.6% 2.8%
Macallan 12.6% 4.3% 5.9% 24.3%
Port Ellen 5.2% 2.7% 2.5% 10.7%
Rosebank 6.5% -6.5% -5.5% -5.9%
Springbank 5.8% 0.8% 2.1% 8.8%
Talisker 11.8% 10.0% 2.6% 26.2%
Yamazaki 10.9% 35.9% 6.8% 61.0%

The Single Malt Fund Trading Activities in Q4 2021

Another strong quarter for our webshop, www.thesinglemaltshop.com, which continues to build momentum. For the year to end September, we processed 2,440 orders on our site, delivering 4,250 bottles to 1,782 customers across 20 countries. On average, each order contained 1.7 bottles, with a value of €398. The average bottle value was €228. To date, our customers have shopped, on average, 1.4 times with us.

The highlight of Q3 was the launch of our next exclusive single cask bottling. This time it was a very special, highly exclusive 50-year-old from Linkwood distillery, bottled by Gordon & Macphail. Given the rarity of this bottle and the amazing liquid, we made a big deal of this launch; we collaborated with Whisky Magazine, the world’s biggest specialist whisky publication, and then held a very special launch event in London to mark the launch. This was attended by press, trade partners and several high-net-worth individuals and was supported by Gordon & Macphail. The highlight of the evening, held at Boisdale of Belgravia, was a tasting by Charlie Maclean, the world’s most notorious whisky writer. A very special first public event in the UK for www.thesinglemaltshop.com.    

Our Facebook fan page has increased from 28,000 at the end of Q1 to over 42,000 at the time of writing this report. Our e mail database continues steadily every week. 

Purchasing in quarter three focused on extending our Irish whiskey offer and on building up stocks of brands, such as Redbreast, which are expected to be in short supply on a global scale in the months to come. 

 We would like to take this opportunity to thank all our suppliers and partners for all their support and look forward to ending 2022 on a high. 

Slainte!

Ed Forrest
Managing Director – The Single Malt Fund Trading Ltd.

Dela rapporten

thesinglemaltfund.com

The Single Malt Fund AB (publ)

Org.nr: 559118-4949

ISIN: SE0010547299

AIF-Förvaltare: Finserve Nordic AB

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