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FROM THE LATE 1990S ONWARDS THERE WAS A PREDICTABILITY ABOUT SCOTCH WHISKY SALES. Almost every year the Scotch Whisky Association would announce another record-breaking performance in terms of volume and value in export markets around the world. Scotch was thriving and achieving growth in a comfortingly diverse range of locations. 

And by ‘scotch’ the implication was, essentially, blended scotch because, despite the increasing interest in single malts, in terms of pure statistics, on a global basis blends have remained the big game in town, still accounting in volume terms for some 83% of all scotch sales.

Then, in September last year, the SWA declared that all was not so rosy in the scotch whisky garden. A statement from the SWA declared: “While scotch whisky exports to some key markets, such as France and Taiwan, increased in the first six months of 2014, the overall trend was downwards with economic headwinds and uncertainty having an impact.”

This was followed on April 1 this year by the news that “weaker economic conditions and political volatility in some markets saw the value of scotch whisky exports decline 7% to £3.95bn in 2014 from £4.26bn the previous year”, although during the calendar year there was significant volume and value growth in a number of important markets, such as India, Thailand and Japan.

Although single malts have seen growth in some markets, particularly those that are more ‘mature’ in terms of whisky sales, in many countries malts barely register and blends are really the only game in town.

They dominate in Singapore, for example, reflecting its role as a gateway for much of Asia, where blends generally sell much greater quantities than malts. Overall, Singapore is the world’s third-largest scotch whisky market in terms of value. Meanwhile, in the Americas, Mexico and Brazil, occupying 9th and 10th places in the ‘value’ table, are overwhelmingly blend markets.

So just where is blended scotch performing well against the overall trends for scotch as a category, and how are producers and their marketing teams ensuring its success in those territories?

The US remains by far the largest export market for scotch in value terms, both blended and malt, with Diageo’s Johnnie Walker being the leading super-premium blended scotch. Despite a worldwide drop of 12% in sales during 2014, the Johnnie Walker family remains the world’s best-selling blended brand, with almost 20% of global blended scotch sales being accounted for by entry-level Johnnie Walker Red Label and first step up Black Label. 

Johnnie Walker may be a firm favourite in the US but, according to a Diageo head of whisky outreach Dr Nick Morgan: “Buchanan’s, now at more than 350,000 cases, is one of the hottest scotch brands in North America. In the six months to the end of December 2014, net sales were up 33% as it continued to leverage its strong connection with the Hispanic community. Scotch volume in the US continues to decline, but value is growing – this is a continuation of a 10-year trend toward premiumisation in the category.” 

 Latin America remains a region with great potential for blended scotch, with Diageo’s Buchanan’s and Old Parr Tribute recording strong growth in Columbia. Morgan notes: “In Mexico broad distribution, along with the media campaign Keep Walking Mexico, drove Johnnie Walker Red Label’s 40% contribution to net sales growth. We also introduced Black & White to participate in the segment, resulting in net sales growth of 70%.” 

With blended scotch sales falling significantly across the board in mainland China, “marketing spend for Johnnie Walker is being focused on the modern on-trade to improve profitability,” according to Morgan, “and to launch Johnnie Walker Double Black and test new campaigns in the more profitable off-trade channel to build new occasions for scotch”. 

He adds: “Marketing spend in China was also focused on Johnnie Walker Blue Label and the Johnnie Walker Houses, including the addition of the Johnnie Walker House in Chengdu.”

Africa is increasingly being viewed as a key blended scotch whisky continent, and Morgan says: “Johnnie Walker’s net sales were up 15% in Africa in the first half. The brand more than doubled in Angola and showed strong growth in other African countries, including South Africa, where Johnnie Walker Black Label and Red Label net sales were up 13% and 17% respectively, supported by the Where Flavour is King and Johnnie & Ginger campaigns that focus on quality and liquid credentials.”

In terms of recent releases, Johnnie Walker has added two Private Collection expressions, one last year and the second early in 2015. These are limited annual editions, designed to showcase different elements of Johnnie Walker’s character – to date ‘smoke’ and ‘fruit’. Essentially they are bottlings intended to compete in terms of liquid quality and prestige with high-end single malts and alternative spirits, rather than other blends, as price tags around the £475/£550 mark reflect.

Third place in the global blended scotch top 10 behind Johnnie Walker Red Label and Black Label goes to Pernod Ricard’s Ballantine’s range of blends. Global brand director Peter Moore says: “Our latest half-yearly figures for Ballantine’s are pleasing. Volumes were up 6% and organic sales growth 5%. Asia remains our biggest challenge, though there is positive momentum in Japan.”

Latin America has seen strong performances for Ballantine’s, with double-digit growth and, specifically, a 40% volume increase in Brazil. “We’ve done lots of promotional work in Brazil around music with a high level of digital material,” says Moore.  

“The brand has been in Brazil for a very long time, but we’re at an early stage of development in Mexico. However, we are doing well there.”

Moore also nominates Africa, India and eastern Europe as markets where Ballantine’s sales have been strong, noting that: “In Europe, we are also seeing greater stability in markets such as Spain [where overall scotch whisky volumes rose by 1% in 2014], with positive signs during the past three or four months, after six years of decline.”

Scotch whisky exports to France, the biggest market by volume and second biggest by value, were up 2% to £445m and 3% to 183m bottles in 2014. Moore says: “We’ve seen modest growth in France, which is our biggest single market with our strongest Ballantine’s portfolio presence in Europe. We have Finest, blended malt, 12-year-old and even 17-year-old in France.”

Despite tough trading conditions in Russia at present, Moore says: “Overall, there is positive momentum around Ballantine’s Finest in Russia. As in Brazil, we’ve been involved in music-related activities in Russia, and we are also employing music activation in South Africa and Angola. In South Africa we collaborate with the famous DJ Black Coffee, using him in advertising and digital media. We’ve seen real momentum  for Finest as a result.”

Another factor in the comparatively positive trajectory for Ballantine’s has been a repackaging exercise for Finest, accompanied, as Moore says by “putting positive energy into point of sale displays, which seems to be paying off”. 

Another leading blended brand which has benefitted from repackaging is Dewar’s – the best-selling blended scotch in the US. Last year saw the range receive a major overhaul, with brand activity focusing on the slogan True Scotch Since 1846.

According to a Dewar’s spokesperson: “Under the banner of True Scotch, the new Dewar’s visual identity is designed to intrigue and engage consumers in the most direct way possible – bringing the values, aspirations and authenticity of this unique whisky to life, while showing how relevant these qualities remain.”

Bacardi global marketing manager for whisky Stephen Marshall adds: “The relaunch has been global, so it takes time to bleed through the system, but we’re seeing really positive signs in the US and Spain, two of our most important markets.”

It is impossible to consider the role of blended scotch on the global stage without considering Chivas Regal, and a Chivas spokesperson declares: “There has been good brand performance in the key growth markets of Brazil, India, Turkey, Mexico, South Africa and Australia, and also in mature markets, including France. 

“Chivas Regal is ramping up its activity globally, employing Win The Right Way – our biggest integrated campaign yet, supported by The Venture, the founding of a $1million fund for social entrepreneurs.”

Last year also saw the release of the first new Chivas Regal blend since 2007 in the shape of Chivas Regal Extra, which employs a higher than usual percentage of sherry cask-matured whiskies in its composition, and which takes its place in the brand’s super-premium sector.

So much for the activities of some of the key blended scotch brands in export territories, but one blended scotch market that is rarely mentioned in positive terms by producers at present is the UK. 

Since 2009, the overall UK market for malt and blended scotch whisky has fallen by some 9.5%, according to HM Revenue & Customs figures, and established blends have borne the brunt of that decline.

However, it is not all doom and gloom, as Compass Box supremo John Glaser observes. “Our business is up around 25% in the UK and much of that growth comes from our Great King Street blends. This follows several years of significant UK growth for us.”

The ‘niche’ Great King Street blends depart from more conventional offerings by giving the consumer far more information than most blenders would ever dream of disclosing, including the identity of component whiskies and the maturation regimes involved in their development.

In terms of the decline of traditional blends in the UK, Glaser says: “I see it as a brand issue rather than a blend issue. The big name blends don’t have any relevance to younger people. If you present the right blend to the right people in the right way, it will sell.”

In these still challenging times, the global art of presenting ‘the right blend to the right people in the right way’ has arguably never been so important.