The Scotch Whisky ‘Downturn’: The Bad, The Complex, And The Case For Genuine Optimism
5 minutes read
Introduction by: Peter Marshall
Scotch value sales and profits are suppressed near-universally. But dig a little deeper and Scotch is still in demand. Whisky IS resilient, writes Kristiane Westray, and shareholders just need to calm down.This is a realistic and insightful perspective of what’s really happening with Scotch by one of the industry’s leading commentators.
It feels a little bit like Groundhog Day for whisky writers at the moment. ‘Tis the season for financial reporting – and on the surface, at least, there’s little joy to be found.
In the last couple of weeks alone, Glenfiddich parent company William Grant & Sons reported a 30% fall in profits for its 2024 financial year.
Meanwhile LVMH, which owns Moët Hennessy’s Glenmorangie and Ardbeg, announced a 7% fall in organic sales (although Cognac accounts for much of this). It follows a slew of pessimistic reports from the last year or so where the tale of woe is the same: value sales are crumbling and Scotch has fallen out of favour.
But, for some the tide appears to be turning. Campari (which owns Glen Grant) released broadly flat first-half results, signifying what many see as the start of a recovery. At the same time, Rémy Cointreau, which owns Bruichladdich, announced a first-quarter sales jump of 5.7%, with spirits and liqueurs the biggest winners.
Diageo’s interim full-year results, due for release on 5 August, will make for interesting reading.
A useful macro read comes courtesy of the Scotch Whisky Association. Its 2024 export figures illustrate what many have been feeling. While values fell by 3.7%, volumes actually increased by 3.9%. There are more people drinking more Scotch in more countries around the world than ever before. And yet shareholders will tell you we’re in a time of crisis. The dissonance shows something is awry.
Jonathan Driver, private client managing director at William Grant & Sons, said as much in a presentation at the recent World Whisky Forum. He struck a measured tone in ‘The Rise, Fall and Rise again of the Scotch Whisky Industry’, which should serve as something of a tonic. Over an hour, he charted the financial landscape of the sector through the 20th century and beyond. “Everyone forgets history when we’re in decline,” he noted.
The darkest days for Scotch? Straight after the Second World War, Driver stressed, when there were precisely zero operational distilleries in Scotland. Then there was the downturn of the 1990s, and Scotch still survived. “There were people, real people making decisions in situations far, far worse than you find yourselves in now,” he told the room.
While some analysts link the Scotch downturn to the rise of Ozempic and other semaglutide products (they are understood to dull all pleasure responses, not just kill appetite), reduced consumption from health-conscious Gen Zs, tariffs, and heightened regulation, he thinks these have “minimal” impact on demand. “It’s economic,” he stated. “We are a discretionary purchase. When you haven’t got money, you don’t buy [whisky]. When you have money, you probably will.” In other words, without a stronger economy, Scotch was always going to struggle.
What’s actually happening on the ground
That’s the theory behind the downturn – and the situation on paper. But what about in practice? Shareholder pressure has resulted in redundancies at distilleries and offices alike. Every reduction in ‘head count’ (to intentionally use corporate lingo) means hardship and stress for real people and real families, which needs to be acknowledged. And in the rural settings where many of these distilleries are based, the situation in Scotch is hitting communities hard.
Glenglassaugh was one of the first to cut production and therefore operational jobs. Back in January 2025, the Brown-Forman-owned company confirmed it had merged teams with Benriach, another single malt maker in its portfolio. At the time, a spokesperson said there would be “periods of production” as well as “occasional” silent seasons.
More recently, CVH Spirits made a “small number” of roles redundant as it cut distillation volumes at Tobermory. This was “in response to the ongoing slowdown in global Scotch demand,” said chief exec Ronan O’Rahilly.
“There has been no impact to our visitor centre which is operating as normal, welcoming the thousands of people who visit Mull each year. Tobermory and Ledaig remain key brands within our portfolio of unique and rare single malts.”
Speaking with smaller makers off-the-record shows more inventive ways to balance the bottom line. One has committed to avoiding redundancies, instead taking out one or two mashes a week (given that, based on rough maths, a mash costs a small distillery around £5,000 a go), both protecting jobs and making sure there are no gaps in stocks laid down. Another is ramping up its hospitality offerings.
The climate element
An underreported element to all this is the shifting climate in Scotland. An uncharacteristically dry spring and early summer meant that some were forced to cut production. On a visit to the distillery earlier in the year, Jura confirmed they became very close to needing to halt proceedings as water levels dropped. Meanwhile, over on the Ardnamurchan peninsular, there was a two-month drought.
“We normally pull from secondary burns coming off the hills and, to a limited degree, from the larger Glenmore River that runs alongside the distillery,” a spokesperson confirmed. “While there was still plenty of water in the river throughout the drought, we have a built-in mechanism to prevent withdrawing when below a certain level in an effort to keep the natural ecosystem of the river unharmed. As a result, we lost four days of production, or eight shifts.”
This might not seem like a vast stoppage – and in the grand scheme of things, it isn’t. But it points to a wider challenge faced by an extremely water-intense industry that is harder to solve than a temporary economic downturn.
As one delegate told me at the World Whisky Conference, the distilleries that will fare best going forward are those without stock gaps in their warehouse. “We’ll see in a decade who is able to sustain a 10-year-old single malt.”
Causes for optimism
But it isn’t all doom and gloom. Some makers have been in growth the entire time, and others – as evidenced by Rémy Cointreau’s Q1 figures – are returning to profitability. And there are cases where production is increasing.
Up at The Glenturret, production has doubled from 220,000 original litres of alcohol (OLA) in 2022 to 440,000 OLA by the end of this year. “This growth reflects both our board’s ambition and investment, and the remarkable expertise of our team,” said distillery manager Ian Renwick.
Other bright spots? In his presentation, Driver mentioned the popularity of smaller-format bottles, especially in the US. “I can’t afford 70cl, 75cl, but I love the brand. I’ll have 200ml if I can find it.” While he acknowledges it’s a pain for the supplier, it underscores what we know about Scotch: “From a consumer perspective, the demand hasn’t gone away.”
The industry’s main problem? A lack of realism. The post-lockdown bounceback of 2022 was never going to be sustainable. And yet forecasts were tied to it. And now targets are being missed, shareholders are angry. It’s a self-created problem. “In terms of volume, in terms of consumer relevance, just be realistic,” Driver underscores. “Understand the market. Understand what people actually want.”
The problem never was Scotch. The resilient volume sales speak to that. Now, can all of us in the industry just take a breath and just calm down?
