Meet the challengers on a mission to democratise the World of Whisky

Prices for scotch whisky have risen dramatically in the past decade, particularly in the rare & collectible sector of the market, with the average price for a bottle of Macallan rising from £130 in 2011 to over £1000 today, according to whiskyhunter.net. This rise in price has been fuelled by international demand and has been resilient even to the Covid-19 pandemic which has battered other retail markets.  Yet critics argue that there is more to the price explosion than supply and demand alone. With tight production controls on a highly concentrated local industry, 65% of the market is controlled by just three multinational conglomerates: Diageo (36%), Chivas Brothers, a subsidiary of Pernod Ricard (20%), and Bacardi (6%).  Such a level of control by a small number of players rarely gives consumers a strong hand.

The Whisky Cask Company is one firm working to change that, by offering access to bottles directly from private collectors, at a lower price compared to traditional retail outlets, where distributors and wholesalers take a large share of the value.

“Consumers are getting smarter and more knowledgeable,” said the company’s chairman, Alexander Johnson. “They want more data points on what they buy beyond just customer reviews, and they are realising that access that is more direct is usually better priced. Our focus is on transparency behind maturation of the highest quality single malts.”

Transparency has become an increasingly important issue in the food & drink sector in recent years, and is the number one trend in the sector in 2021 according to Innova, a market research firm, in a recent sector review.  Johnson agrees: “Provenance is a big focus in the food and drink sector right now,” he says. “Consumers expect to know what they are buying and how it was produced. Just as customers now want to know where their meat came from, we can show them exactly how their whisky was both made and matured.” 

In this sense, the whisky market is some way behind wine and beer, where ingredients and manufacturing process have been under the spotlight for many years, and players such as Naked Wines have introduced new funding models which allow customers to get closer to the source of the product, resulting in positive reviews from customers.

The firm’s platform, currently available to members by invitation only, offers bottles direct from individual casks in its own cellars and a network of private collectors.  Whiskies on offer include those from names such as Ben Nevis, Knockdhu, and Craigellachie, and each bottle can be traced to the exact cask from which it was produced. 

The Whisky Cask Company doesn’t produce its own whisky. Its model has similarities to the traditional business of independent bottlers such as Douglas Laing and Gordon MacPhail, who take casks from well known distilleries and bottle them for sale. Due to their limited production, these bottles can fetch higher prices than those produced by the distilleries themselves. 

“It all comes down to scarcity value. “ says Johnson, who is also a visiting lecturer in business and entrepreneurship at the University of Oxford’s Department of Continuing Education. “The lower the quantity produced, the higher the price that units from a bottling run can fetch.”

This is even truer when unusual casks are added to the equation. Whiskies aged in unusual oaks can fetch eye watering prices when bottled. For example, a recent release by Bowmore finished in casks made from Japanese Mizunara oak is on sale for £2,400 a bottle.  With as much as 80% of the flavour of a whisky coming from the wood, according to Whisky Magazine, high quality casks clearly add value, but can prices that high really be justified?

“We were one of the first to import Mizunara oak for Scotch maturation, and the flavours it produces can be quite remarkable.  It’s good to see these unusual maturations gaining popularity but it’s important to make sure consumers know what they’re getting.  ‘Finished’ could mean anywhere from 2 years to just a few weeks. More and more consumers are realising there is a big difference between the two.”

Mr Johnson, who is in his own right a venture capitalist backing early stage ventures, is keen to drive forward the brand into new territories. “My dream is to expand this business into America,” he says. “There is so much we can do in that market.”  The Whisky Cask Company’s platform will open to the public later this year, and Johnson is enthusiastic about the opportunity to extend access to a wider range of consumers. “We want everyone to have access to the best quality whisky, at a fair and transparent price,” he continues. Now that’s a sentiment that everyone can drink to.