Blends drive momentum for Scotch whisky in Germany

Scotch whisky enjoyed a record-breaking year in Germany during 2023, registering double-digit growth as price-conscious consumers embraced the perceived greater value for money offered by blends.

According to IWSR market data, Scotch whisky volumes in Germany grew by +22% during 2023, spearheaded by blends, which rose by +30% – compared to a -7% decline for malts.

“Blended Scotch has been growing steadily in Germany in recent years, driven by heavy promotional activity,” explains Fernanda Saldana, Market Analyst for IWSR. “Although malt Scotch is a key aspirational category, it has been struggling to tap into the large base of blended whisky drinkers because of its exclusive image and relatively high price points.

“In 2023, this dynamic enabled blended Scotch to overshadow single malts, consumers of which found a good-value proposition in blends when looking to spend less. The perception that blended Scotch is more affordable than single malts even benefitted high-end blended Scotch, which saw volume gains – showing that there are still pockets of premiumisation in the category.”

While standard blended Scotch drove category gains in 2023 – volumes were up +57% – there was also robust growth for premium blends (+25%), super-premium blends (+9%) and ultra-premium blends (+12%), as shown in IWSR’s market data.

IWSR’s Bevtrac consumer research suggests that this category expansion has also drawn more consumers into Scotch whisky in the past 12 months, particularly among the LDA Gen Z and Gen X age cohorts.

“The strong promotional activity we saw among leading standard and premium Scotch brands in Germany towards the end of 2023 not only boosted blended Scotch volumes, but also attracted a broader user base into Scotch,” says Nastya Timofeeva, Senior Bevtrac Consumer Insights Manager, IWSR.

“Recalled consumption of blended Scotch among LDA Gen Z and Gen X consumers particularly stands out, going from 2% in H1 2023 to 11% in H1 2024 for Gen Z, and from 9% to 15% for Gen X.”

Scotch’s gains have been made in the context of a declining spirits market in Germany, with volumes down by -1% in 2023. According to IWSR consumer research conducted in the first half of 2024, spirits remain in negative territory in terms of recalled volume and frequency, whereas recalled volumes for Scotch appears to be moving back towards equilibrium.

Meanwhile, recalled per-bottle spend on whisky in the country is largely stable, but the price ceiling for single malt Scotch has fallen since 2023 – a consequence of financial worries among German consumers.

While blended Scotch’s gains during 2023 single-handedly pushed the entire whisky category into double-digit volume growth, such strong increases are not expected to persist during 2024.

“After reaching an all-time high in 2023, blended Scotch represents roughly 40% of whisky volumes in Germany, but it will inevitably go through a correction phase in 2024, dragging the total category down in the short term,” explains Saldana.

IWSR market data forecasts expect overall Scotch whisky volumes to decrease at a CAGR of -3% between 2023 and 2028, with blends falling at a CAGR of -5% over the same timescale. While the steepest declines are anticipated in the standard price band, super-premium-and-above blends are expected to grow off a small base.

“Blended Scotch should gain volumes over the medium term among higher price points, with the sub-category having proven that it can offer quality whisky,” says Saldana. “Premium products should start to see volume gains in 2025, especially for single malts, but for blends too.

“While the market is not expected to see big jumps in high-end volumes as it did during the Covid-19 pandemic, brands can capitalise on the recent gains the category has seen in LDA Gen Z and Gen X consumers through their marketing and pricing strategies.”