If you’ve been thinking that the world is going completely insane, than the latest news of global spirit shortages should convince you that you’re right.
Now you probably knew about the Tequila problems and, hopefully, you’ve probably got your head around the Japanese Whisky shortages. ut if you thought that was the worst, hold onto your Rocks glass as recent news has shown that Cognac and Irish Whiskey are also joining the tally.Now one or two shortages is unfortunate, I hear you say but four? Yes, that is indeed beginning to look like carelessness.
So what exactly is going on? Well, to put it simply, it’s all down to popularity – damn it. All four of these spirit types have been going through a resurgence and distillers simply can’t keep up with demand. And Mother Nature hasn’t helped the cause either, but we’ll get to that later.
So here’s a quick summery of what is going on around the world.
With celebrities tripping over themselves to own Tequila brands, it’s no wonder that the spirit has seen substantial growth, particularly for high-end Tequila brands. Since 2002, Tequila volumes across the category have grown 140%, an average rate of 6.0% per year. In 2017 alone, 17.2 million 9-liter cases were sold. But if you look specifically at Super Premium Tequila volumes these have skyrocketed since 2002, gaining a 805% rise (account for 3.2 million 9-liter cases).
The increase in demand has resulted in a shortage of Agave —the plant from which the alcoholic beverage is made. Fully grown Agave generally take seven to eight years to reach maturity. Already, the 17.7 million blue agaves planted in 2011 in Mexico for use this year, fall far short of the 42 million the industry needs to supply 140 registered companies, according to figures from the Tequila Regulatory Council (CRT) and the National Tequila Industry Chamber (CNIT).
Improved planting strategies have been put into place, but due to the time needed for the plants to reach maturity, it will be years before they bear fruit. It is believed that the shortages will last until 2021.
Japanese Whisky has also seen a massive surge of popularity but in their case, existing aged stock simply hasn’t met the demand. Sales of Japanese whisky increased 47.9% to 13.37 million 9-liter cases between 2011 and 2016, according to London-based industry research company IWSR.
The shortage can be attributed to several factors. First, “Massan” a 2014 television drama about Masataka Taketsuru, the father of Japanese whisky and founder of the Nikka distillery, led to a domestic craze for Whisky. Then that same year, Suntory’s Yamazaki Single Malt Sherry Cask 2013 won the title of best in the world from the Whisky Bible, raising the global profile of the Japanese spirit.
Mainly though, the shortage can be put down to the ebb and flow of fashion. About 20 years ago, Japanese Whisky was in the midst of a decades-long lull in popularity, so distilleries simply didn’t set enough aside in their aging warehouses. Now, 12, 17 and 21 years later, there’s not enough aged whisky to go around.
Millenials have proverbially brought Cognac down from the attic and global demand for the spirit is booming. But Mother Nature and geographic constraints are proving too much for demand. Hennessy, which controls half of all production of the brown liquor, warned of a storage last year. The reasons were consecutive poor harvests, as well as capacity constraints in the Cognac region.
Producers, who have had three consecutive years of bad weather, were further devastated in late May, as pebble-sized hail stones pelted the region. More than 10,000 hectares of vineyards were damaged, including around 14% of the brandy-producing vines of Cognac, with many vineyard owners saying that they had lost all hope of harvesting any grapes.
Hennessy has been planting more vines, but new vineyards will take up to six years to start producing usable grapes – even Hennessy’s youngest Cognac is aged between two and eight years. It’s expected the shortage will really begin to bite in late 2019 to early 2020.
Irish Whiskey producers are basically facing the same problems as their Japanese counterparts. The ever-increasing popularity of the spirit means that demand is outstripping supply. Even though production has drastically increased, what distillers are producing now, won’t be available for another seven years.
Irish Whiskey is one of the fastest growing spirit categories in the world and according to the Times, sales of Irish whiskey are growing more than 10 per cent a year in more than 75 countries.
The good news is that the number of distilleries across Ireland has increased from four to eighteen in recent years. Additionally, production across those distilleries has also dramatically increased, but, again, it will be another couple of years before those newer distilleries will have matured liquid coming on to the market.