The Single Malt Fund Trading Company

31 juli, 2023

2023 – Q2 Whisky Investment and Market Report

Welcome to the Q2 2023 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

The standout news of Q2 came from Edrington, owners of The Macallan, Highland Park and The Glenrothes whiskies, who announced that, in the full year to March 31st, 2023, sales exceeded £1 billion for the first time. Uniquely, the group reported strong sales and growth in all key markets, notably China, Hong Kong, Taiwan, the UK, Spain, and the US. LVMH, the world’s biggest luxury goods company and owner of Hennessy Cognac, Glenmorangie and Ardbeg, reported a more mixed picture, with positive news regarding recovery in China countered by less encouraging news elsewhere and especially in the US. “We’re definitely out of the zero-Covid period now. The page has turned,” LVMH chief financial officer Jean-Jacques Guiony told the Financial Times. “We expect this to continue, and we are very optimistic about the normalisation of the Chinese market.” However, “For the rest, the business is slowing down a bit,” he said. “Maybe interest rate rises are taking their toll on spending,” (LVMH). 

Challenges in the US, the number one spirits market in the world, was a theme for Remy Cointreau and Jose Cuervo, as well as LVMH, both of whom reported slower growths and, more importantly, pressure on profits, as price increases ahead of inflation proved impossible. Drinks Business reported on April 14th that credit card data from giant US bank Citi showed that luxury spending in March fell to the lowest monthly rate in nearly three years, down 18% as fewer people splashed out on high-end goods. The US comprised 37% of Diageo’s net sales in the six months to last Christmas and 28% of Pernod Ricard’s.

We have been reporting on Premiumisation that has been the buzz word for the industry for some time now. These reports from the US does raise the question as to the validity of such a strategy. However, we believe this is still the right priority in the mid to long term and that current headwinds will soften. Mark Meek, CEO, IWSR Drinks Market Analysis, said in a recent report: “The key trends that have underpinned the industry, such as premiumisation, will evolve as consumers respond to the increased cost of living crisis. The industry will, however, still deliver pockets of significant value growth.” He noted that in mature markets, premiumisation “looks to be embedded into consumer purchasing behaviours”, although “at slower growth rates”. Pernod Ricard are certainly not changing tack on premiumisation, having announced in Q2 that they have sold their more mass market positioned Clan Campbell brand to Stock Spirits group, as part of their “active portfolio management” strategy, said Alexandre Ricard, chairman and CEO of Pernod Ricard. One objective of this portfolio management is to open up greater opportunities for premiumisation.

Elsewhere, a recent study by Straits research reported that the alcoholic drinks market is projected to reach US$2,001 billion by 2031, with a CAGR of 2.5% from 2023 to 2031. The report outlined how “growth in the global population of young adults and the subsequent rise in demand for alcoholic beverages are the two main factors driving the world market” for alcoholic drinks. Also, “the consumption of luxury beverages has expanded as a result of its association with sophistication and class as a result of greater urbanisation”. According to the data, in the US, “the whiskey market is expected to grow by 3.2%”. 

In April, Master of Malt, the UK’s leading e commerce site, released its annual trends report on the spirit’s market. The growth of Asian spirits is one of the main trends, with whisky, liqueurs, shōchū, baijiu, and more from Japan, China, India, Taiwan, and Thailand all performing well. The big winner is Chinese baijiu, sales for which shot up by 91.5% in the last six months, compared with the six months previously. 

Regarding e commerce, Drinks Intel recently reported on the health of the spirits e commerce market, reporting that sales online may have softened after a 43% rise in 2020 during the Covid crisis, but that “online retailers and brands still predict a bright digital future;  “the e-commerce channel is expected to grow, adding $10bn to the alcohol beverage market between 2021 and 2026, according to the IWSR, and taking the sector’s market value to nearly $40bn across 16 focus markets.” The US and China will drive that growth. Back in the UK, our friends at Master of Malt reported a record year with a 30% improvement in EBIDTA in 2022. “We also had a 24-hour shipping record of more than 22,000 bottles going out. During December 2022, we shipped over 247,000 bottles by Christmas. These numbers support our feeling that people are really home-imbibing even though the on-trade has reopened. We still think people are enjoying drinks at home.” We agree wholeheartedly with this view. 

Back to premium whisky, Q2 also saw results published by Beamish International, with annual gross sales increasing from £15 million to £26 million. Beamish is a boutique, high-end cask agent, which sells casks of rare whisky to a clientele of ultra-high net worth individuals via several exclusive agreements with producers. This is the very top of the pyramid of rare whisky and, judging by these results, the demand for rare whisky remains high.  

At auction, the top end of the rare whisky market once again produced some mouthwatering highlights with Hong Kong and London vying for the headlines; in March, the world’s oldest Scotch, a Macallan 81-year-old, came up for sale at Sotheby’s, achieving a price of over US$ 600,000. In May, Christie’s Hong Kong showcased several prized Karuizawa lots, with the 36 views of Mount Fuji full set selling for over $150,000 being the highlight. Back in London, Sotheby’s sold a Bowmore Arc-52 Mokume edition for over £150,000, while Christie’s had a lot of The Macallan in Lalique Six Pillars collection which sold for £500,000.

So, at the very top end, the major auction houses continue to deliver impressive results. Overall, however, the UK auction market remains slightly soft. The Rare Whisky 101 Apex 1000, the barometer of the UK auction market for rare whisky bottles, declined by -0.5% in Q2 following a decline of -0.8% in Q1. It should be noted though, that the first half of the year 2022 was very strong, with growth of 5.2% in Q1 and a further 3.9% in Q2 (total 9.1% in first half). We do not believe that the 2023 results should be the cause of too much concern. It must be remembered that rare whisky continues to get rarer, while demand continues to grow. Perhaps there has been a softening in the short term, but the fundamentals remain, which should mean this period could be viewed as a strong buying opportunity. 

What is clear, as we have been saying for some time, is that the demand for the different brands continues to vary from quarter to quarter. This may be due to brand awareness, new consumers coming into auction market, changing tastes, tactical purchasing, or one-off sales of certain bottles, it is very hard to say for sure. Over the past 18 months, we see that some brands have had dramatic swings in sales growth from one quarter to another, while others have had a steadier path. Balvenie, Caol Ila, Highland Park and Springbank are worth mentioning as the only brands that have taken last years growth and continued an upward trend this year. Highland Park is the big winner so far in 2023 with a 12% increase on the back of a 3% improvement last year. As we move into the second half, we believe we will see growth return overall but that the adage that “rising tides lift all boats” will continue to be challenged.

Rare Whisky Q2 2023 results




RW Apex 1000 -0.8% -0.5% -1.3%
RW Icon 100 -1.8% -3.5% -5.3%
Japan 100 2.2% -1.6% 0.6%
Single Grain -0.5% 3.6% 3.0%
Ardbeg -0.6% -4.2% -4.7%
Balvenie -4.3% 5.1% 0.6%
Bowmore -2.2% 0.7% -1.6%
Brora -4.3% -0.6% -4.9%
Bruichladdich 3.1% -4.6% -1.6%
Bunnahabhain 0.4% 4.4% 4.8%
Caol Ila 0.7% 1.0% 1.7%
Clynelish 1.1% 2.6% 3.8%
Dalmore 3.2% -2.0% 1.1%
Karuizawa 1.2% -1.3% 0.1%
Glendronach 3.5% -8.0% -11.2%
Glenfarclas -17.5% -0.3% -17.7%
Glenfiddich 0.3% -4.9% -4.6%
Glenlivet 0.8% -8.5% -9.3%
Glenmorangie 5.4% -8.0% -3.0%
Highland Park 0.8% 10.7% 11.6%
Lagavulin 0.1% 1.7% 1.8%
Laphroaig -2.0% -5.5% -7.5%
Macallan -0.4% -8.0% -8.4%
Port Ellen -2.0% -5.0% -6.9%
Rosebank 0.8% -2.9% -2.1%
Springbank 0.1% 3.7% 3.8%
Talisker -3.6% -4.2% -7.6%
Yamazaki -1.0% -2.9% -3.9%

The Single Malt Fund Trading Activities in Q2 2023

We continue to build at with the number of customers up 33% to end June. 

On the product side, we added 50 more skus to the site in the second quarter of 2023, brining the total up to 476 by end June. This compares to 351 at the end of 2022. With this, we continue to broaden the appeal of the site and encourage new customers to visit. 

We would like to take this opportunity to thank all our suppliers and partners for all their support as we move forward with increasing confidence into the second half of the year. 


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

Dela rapporten

The Single Malt Fund AB (publ) 559118-4949

ISIN: SE0010547299

AIF-Förvaltare: Finserve Nordic AB

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