If you had to pick one overwhelming success story in the first decade of the new millennium, you’d struggle to look far beyond Japanese whisky.

Its surge of success started a little earlier, at the back end of the ’90s, but it went stellar as the new millennium arrived, converting initial scepticism to its favour, taking full advantage of the surprise factor and revelling in its role as new kid on the block. Japanese whisky swept the board in awards event after awards event, attracted the curious, won over industry experts, then turned its attention to a wider public. And, armed with a mountain of critical acclaim, the leading Japanese brands were sought out by whisky enthusiasts.

They even managed to overcome a higher price point at entry level, and when 12-year-old Scottish single malts crept over the £30 mark in the UK and a psychological disadvantage was removed, Japanese whisky took full advantage.

But what really gave the whisky its wings was the taste. With distilling history stretching back 80 years Japanese producers had studied carefully how to make whisky from Scotland and, just like its car industry, set about not just recreating the overseas competition but bettering it. Japanese was – indeed is – world class and worthy of all the acclaim it received.

But a couple of years ago it all went quiet. Not only that, but other world whisky producers, most notably Amrut in India and Kavalan in Taiwan, started to steal its thunder.

So has it all gone wrong for Japanese whisky and is its place in the sun coming to an end?

Japanese whisky is dominated by two companies, Suntory, which is by far the biggest, and Nikka. Both refer to the era of Japanese whisky starting in the 1920s, though there is considerable evidence that whisky was made in some form for up to 70 years earlier than that.

Nevertheless the modern era for Japanese whisky began when Suntory’s founder, Shinjiro Torii, bought land between Osaka and Kyoto and built the Yamazaki distillery. It is with Yamazaki and its first manager, Masataka Taketsuru, that the modern Japanese whisky story really starts, and it was fully established when the latter set up on his own to form the company that would become Nikka.

World development

Today Japan is the world’s second-largest single malt whisky producer, though it has relatively few distilleries. As a whisky-drinking nation the country pays particular homage to Scotland, and domestic whiskies have not always been as warmly received at home as they are today. 

But their development as world-renowned brands has been due at least in part to a national culture by which rival companies do not co-operate with each other. Whereas in Scotland the 100 or so distilleries swap and share spirit so each has a wide choice of styles to include in its blends, the two main players in Japan must buy in malt or employ ingenious ways to create a range of styles.

Both Suntory and Nikka own two distilleries – but at Suntory’s Yamazaki distillery the company makes 70 styles of malt spirit by using different yeasts, different stills and still combinations, and by using an assortment of woods.

The attention to detail and quality has benefited the industry massively, but perhaps more importantly it has provided the leading two players the platform to create a range of different whisky styles and to offer the whisky lover beautifully crafted premium malts and, particularly in the case of Suntory’s Hibiki 21 Year Old, world class blends.

With all the components in place, then, Japanese whisky appeared to be ideally placed to advance from a position of strength and to establish itself alongside leading scotch and Irish brands. And yet that doesn’t seem to have happened. Indeed, until a flurry of new releases this autumn, everything seemed to go a little quiet on the Japanese whisky front, particularly with Suntory. 

That silence, which followed the dreadful earthquake and tsunami which almost literally knocked the country off course, coincidentally came just as other world whiskies were turning heads, and in particular two from the east – the releases from Amrut in India and Kavalan in Taiwan. So have circumstances conspired to push Japan off the world whisky throne?

Not according to Nikka, which adamantly claims that sales for its whiskies have been unaffected either by domestic disasters or international competition.

“We have not noticed any change,” said a spokesman for the company. “Interest is in fact higher than ever for Nikka whisky, and we are looking forward to continued growth, especially for Nikka FTB, Yoichi and Taketsuru.”

Suntory agrees that the domestic situation has had little negative effect on its business but, unlike Nikka, it admits that the silence is in part due to stock problems. In fact, says the company, it’s been a victim of its own success. It simply didn’t predict the slew of awards 20 years ago and therefore failed to predict the massive demand for its aged malts. As a result it hasn’t got much old whisky left so there has been little point in promoting and marketing brands which were happily selling out by themselves.

Thinly stretched

Suntory brand manager Zoran Peric says that what started as a trickle of interest from whisky judges and experts became a stream in markets such as the UK first and became a flood when countries in Europe started to get interested. Rather than slacking off, the rise and rise of Japanese whisky has gone on unabated, but is being stretched more thinly across a growing number of markets. He dismisses out of hand the threat from the likes of Kavalan and Amrut.

“The appeal of Japanese whisky worldwide is at a high point and as a result all Suntory markets are on allocation,” he says. “Consumer demand for Suntory brands is growing across Europe, particularly in countries such as the UK, France, Sweden and Germany. This demand has been growing since the early years of the decade when our whiskies started to win awards for quality. Since then Suntory has won more than 60 awards.

“The arrival of whiskies into the market place from other parts of the world shows the global popularity of whisky. There is no indication that the popularity of Suntory whiskies, or indeed Japanese whiskies in general is slowing.”

Indeed, argues Peric, Suntory is at an altogether higher platform than the young pretenders.

“Because we have been in the global market for several years we have progressed from just talking to whisky connoisseurs, who now know the brands well,” he says. “There are lots of other premium whisky drinkers who do not know Suntory whiskies and who we now want to reach. By contrast the likes of Amrut and Kavalan are at a much earlier stage of market penetration.”

Forces of nature

Marcin Miller, managing director of Japanese whisky importer Number One Drinks Company, agrees, although he does acknowledge that the earthquake and tsunami did create a blip in the rise and rise of Japanese whisky.   

“I’m pretty sure that Indian and Taiwanese whisky won’t sound the death knell for Japanese whisky any more than radio killed off the newspaper, or television meant the end of radio,” he says. 

“They are not a straightforward replacement, merely another avenue for the enthusiast to explore. Rather, does the arrival of whisky from India and Taiwan – to say nothing of the explosion of micro-distilleries all around the world – suggest that Japanese whisky is now mainstream? Certainly that would appear to be the case with listings for Japanese whisky in supermarkets and in travel retail. 

“Any slow-down in sales we’ve experienced has been due to factors other than the availability of other ‘new world’ whiskies. Because of recent lack of availability, visitors to Whisky Live Paris and The Whisky Show in London have been going mad for Karuizawa and Chichibu – it’s like a post-rationing frenzy.

“Unlike the more mainstream products of big distillers, our whiskies are not likely to be purchased by the casual consumer. The more committed whisky enthusiast is intelligent enough to have made up his own mind and not fall prey to scaremongering. 

“The disasters affected Number One Drinks in that we were unable to export to European Union  markets for a long while – thankfully, we were in a position to fulfil Taiwanese orders (our biggest market) – but any minor commercial impact on my business is totally irrelevant in view of the suffering and loss of those whose lives were ruined by the tsunami.” 

Miller says demand for Japanese whisky hasn’t reached its limit yet, and it is coming from even further afield – or arguably nearer if you’re looking at the world from Tokyo. “France is huge for us,” he says, “but we have a constant request for whisky from Taiwan. I could easily put everything I have into Taiwan and it wouldn’t scratch the surface. It is a massive market.” The collective view, then, is that Japanese whisky hasn’t been in the public eye so much because much of it has been sold and there has been little need to invest in marketing and advertising when demand is already so high.

The demand-supply imbalance has had another effects, too – prices have risen sharply. Nikka has disassociated itself from price hikes, claiming not to have stock issues or to have put up its prices beyond exchange rate variations. But Suntory’s whiskies have gone up in price considerably and that, coupled with some rare whisky exported by the Number One Drinks Company, has created a high-end super-premium Japanese whisky category.

It all makes total sense at the rare higher end of the market, but why is there so little younger Japanese whisky available too? 

Predicting demand

There are three main reasons: the surge in demand and the need to spread more thinly; because younger stock has been held back to make more older stock; and because of fashion trends back in Japan.

“As with all whiskies we must try to predict demand many decades ahead,” says Suntory’s Peric. “Prices have had to rise because of a shortage of supply. Yamazaki 10 Year Old single malt was discontinued entirely last year so that maturing whiskies could be reserved for other age-statement single malts in the future.”

But it’s the third of the three reasons which indicates most strongly what a good place Japanese whisky finds itself in. A craze among the fashion set in Tokyo for the Highball – a long drink normally made with soda water and embellished with ice – has seen the demand for younger expressions of Japanese whisky soar within Japan itself, so much so that one industry insider divulged that stocks were being recalled from Europe.

Rather than stalling then, Japanese whisky producers are metaphorically drawing breath, reloading and preparing for a fresh onslaught of world markets in due course. With extremely rare whiskies keeping the aficionados happy at one end of the market and more stock coming on line at the other, Japanese whisky is well locked into the future. The country’s newest distillery – Chichibu – has just started bottling three-year-old malt and year by year greater stocks will become available. 

Miller of the Number One Drinks Company even goes so far as to say that, rather than hinder or in any way damage Japanese whiskies, the new players from the likes of India and Taiwan will replace them in the ‘curiosity shop’ category and Japanese whiskies will become increasingly considered as mainstream and ‘old school’ alongside Scotland, Ireland, Canada and Kentucky.

“As awareness and appreciation of Japanese whisky increases, I think it is reasonable to think of it as part of the ‘old world’, to borrow 1980s wine terminology,” he says. 

“Although it doesn’t have quite the heritage of Scotch, Irish and American whiskies, the Japanese have been distilling since 1923. Or perhaps it forms a bridge from the old world to the new, by which I mean the wave of distilleries from Australia to Sweden. 

“No longer will Japanese whisky become an oddity, a surprise in a blind tasting. That means distillers will need to keep standards as high as possible. I expect more Japanese whisky to enter the US market soon and have great success there.”

Suntory has just issued a range of different cask finished single malts, Nikka’s leading whiskies go from strength to strength, and Miller is about to launch just 41 bottles of what is believed to be Japan’s oldest ever whisky, a Karuizawa from 1960. All three companies confidently state that the only reason they’re not growing their sector faster is because they can’t.

Only a fool would contradict them. The Japanese phenomenon looks set to run and run.