The global spirits market is still dominated by whiskey, but the year 2024 will see significant changes. Both the American and Scotch whisky sectors face challenges, from rising costs and an oversupply of whiskey to fluctuating consumer demand. Brands must fine-tune their strategies as we move into 2025 to achieve a balance between premiumization, production planning and market diversification.
American Whisky – Managing the Oversupply and Demand
After years of explosive growth, American whiskey began to slow down in 2024. Smaller distillers have been under pressure from an oversupply of standard-tier whiskeys and a declining demand. MGP Ingredients has made strategic shifts in its production, highlighting the importance of innovative branding and cautious forecasting.
Scotch whisky: export declines and premium challenges
The Scotch Whisky Association announced an 18% decline in export values in early 2024. Even in regions with a strong tradition, demand has been tempered by saturating premium markets and cautious expenditure. To regain momentum, brands must focus on authentic quality and transparent storytelling.
Secondary market volatility
In 2024, the secondary whiskey market saw a sharp drop in prices due to cyclical investing behaviour. Disciplined investors, however, still see the potential in rare and historically proven bottles.
Growth of Emerging Markets
Global whiskey sales will grow by 4% per year despite the challenges of mature markets. This growth is largely due to emerging markets such as India and Brazil. Brands that invest in regional tastes and innovative product designs will benefit significantly.
Innovation & Differentiation
Innovation is key, whether it’s unique cask finishes or terroir-focused releases. RTD products and flavoured whiskies appeal to younger demographics and offer growth potential.
Recommendations on Strategic Initiatives for 2025:
- Premiumization with precision: Balance premium offers with genuine quality
- Tailoring Strategies to State-Specific Demand Patterns:
- Transparent branding: Build confidence through transparency in production methods
- Measured production planning: Align the supply with realistic forecasts
In conclusion, whiskey brands entering 2025 will need to navigate a mature, cyclical marketplace with smart strategies and authentic innovation. They also must focus on storytelling. Delivering real value while building resilient brand identities is the key to success.
