Ageless in Japan: Suntory sells "world whisky" blend as premium tipple

Suntory Beverage & Food

16/04/2019 24:00

* Suntory calls "Ao" a premium "world whisky" blend
    * Suntory's "Ao" uses whiskies from 5 countries, no-age
statement
    * This is a blend rarely ever tried by whisky makers
    * Comes amid shortage of mature whisky following global boom

    By Ritsuko Ando and Martinne Geller
    TOKYO/LONDON, April 16 (Reuters) - Japan's Suntory Holdings,
faced with a whisky crunch, is selling a rare mix sourced from
around the world as premium whisky, aiming to elevate the status
of young blends among discerning drinkers who often swear by
aged single malts.
    Whisky makers globally, and in Japan in particular, have
been forced to suspend some aged bottles in recent years as a
surge in demand for mature whisky depleted stocks.
    Last year, Suntory suspended the popular 17-year Hibiki - a
glass of which Bill Murray's character in the film 'Lost in
Translation' famously promoted, saying "For relaxing times, make
it Suntory time". Now it sells online for 40,000 yen ($357)
versus 10,000 yen some years ago.
    In a bid to expand its options, Suntory, on Tuesday, started
selling an unusual alternative, "Ao", a no-age statement (NAS)
blend made with whisky from Scotland, the United States,
Ireland, Japan and Canada.
    Priced at 5,000 yen per bottle, it is a five-country blend
rarely ever tried by whisky makers, but possible for Suntory
given the global assets at its disposal following its $13.6
billion purchase of U.S. spirits maker Beam in 2014.
    While Ao will be sold exclusively in Japan, with 30,000
dozen-bottle cases being shipped this year, it will be closely
watched by rivals across the $6 billion global industry as they
too grapple with dwindling supplies of premium stocks.
    Unlike other hard liquor such as vodka or gin, whisky needs
to be aged in barrels over anywhere between three and 50 years,
meaning producers must predict demand decades in advance. As a
result, many have introduced NAS whiskies to manage supply.
    Global distilleries including The Macallan, owned by
Edrington, The Glenlivet, owned by Pernod Ricard  PERP.PA , and
Diageo's  DGE.L  Talisker have launched NAS variants in recent
years. 
    Pernod says its NAS Founder's Reserve has been a great
success with a new generation of drinkers, becoming the
sixth-biggest single malt Scotch globally in 2017 two years
after it was launched, when there was a temporary shortage of
The Glenlivet 12 Year Old. 
    "Since then we have been working hard to future-proof this
expression and ensure that supply is secured for the long term,"
said Miriam Eceolaza, marketing director for malts at Pernod's
Chivas Brothers whisky unit, adding that Glenlivet 12 is back in
some markets, such as Britain, with more to come.
    Most NAS whiskies are priced modestly versus longer-aged
whiskies, due in part to the industry's success at persuading
drinkers that older whiskies are better. 
    "It's no mystery you can charge a lot for something with a
very old age statement on it, but how can you add value to
younger, NAS whisky, thus making it more profitable?" asked
Chuck Cowdery, publisher of The Bourbon Country Reader.     
    "If you can make a valuable product from a larger inventory
pool and be successful with it, that becomes more than just a
prestige project. That's something you can take to the bank."  
            
    PRICING
    However, whisky experts say it is hard to say whether a
"world whisky" will catch on in the premium category.
    Ao's price is more than Chita, a no-age Japanese single
grain, or a 10-year old Laphroaig, both owned by Suntory and
available for around 3,400 yen online. 
    It also costs double rival Nikka's From the Barrel, a malt
and grain blend with no-age statement.  
    But some observers say Ao's price does not look outrageous
versus say the 63,000 yen Ichiro's Malt & Grain Maduro blend -
one of the few other bottles sourced from five countries but
using older whiskies matured in French oak wine barrels.
    Suntory, which started in 1899 by making and selling wine,
denies "Ao" is a result of the shortage, although its executives
said they wanted to expand the range of what is available. The
company is private, but its food and non-alcoholic drinks arm,
Suntory Beverage & Food  2587.T  is listed. 
    In addition to the Hibiki 17, Suntory last year halted sales
of its 12-year Hakushu too, while rival Nikka, owned by Asahi
Group Holdings  2502.T , has also suspended aged single malts.
    "It pains us that there are still limitations in supply,
even though we have established increased production," Kengo
Torii, head of the Suntory's whisky division, has said.
        
    PROVENANCE
    Ao's launch comes amid growing questions around provenance,
as loose Japanese regulations have meant imported whisky, when
bottled or blended in the country, can be passed off as local.
    With Ao, Suntory is aiming at transparency, while showing
off its global assets and blending skills.
    Suntory's chief blender, Shinji Fukuyo, says he was
initially wary of the assignment. 
    "I couldn't at all imagine what it would taste like," he
told Reuters ahead of the launch, adding it took multiple trials
to make the "Ao" blend.
    Whisky from Alberta Distillers in Canada is Ao's biggest
constituent, followed by liquid from Jim Beam's Clermont and
Booker Noe distilleries. Scotland's Ardmore and Glen Garioch,
Ireland's Cooley and Japan's Yamazaki and Hakushu distilleries
contribute to a lesser extent.
    Some whisky aficionados will always seek an age statement
for sign of quality, Bernstein's European beverages analyst
Trevor Stirling said, adding that some high-quality blends, like
the Johnnie Walker Blue, Green and Gold, deserve recognition.
    "So there are some whisky snobs who say if it isn't single
malt I'm not drinking it ... I think blended whiskies are
unfairly looked down upon." 

 (Reporting by Ritsuko Ando in TOKYO and Martinne Geller in
LONDON; Editing by Himani Sarkar)
 ((Ritsuko.Ando@reuters.com; +81 3 6441 1743; Reuters Messaging:
ritsuko.ando.thomsonreuters.com@reuters.net))