Wine and Spirits : Single-Malt Scotch Far From on the Rocks

Thirty years ago, it was nearly impossible to find single-malt Scotch in the United States. This year it’s predicted that more than 40,000 cases will be sold in Southern California alone.

Why are sales up? No one really knows, but here are some guesses:

* Consumers’ gradual discovery of the intriguing character of single-malts.

* The purchasing of many single-malt distilleries by major corporations, which has led to increasingly savvy marketing by producers and retailers.

* The recent craze for staging cigar smokers’ nights at upscale restaurants. Cigars and fine Scotch seem to be symbiotic symbols of male pride--and many of these events have attracted a number of women too.

While no hard figures for 1994 single-malt Scotch sales in Southern California are available yet, one wholesaler reports 1994 was up 50% over 1992. Nationally, single-malt sales rose an estimated 4% in a market that saw plummeting sales of most spirits. Upscale wine shops are showing increases in the double digits, some as high as 25%. The biggest gains of all are in restaurants, where single-malt is sold by the glass.

Even a decade ago, you’d have been hard-pressed to find an American restaurant that sold single-malt by the glass. Practically speaking, the only Scotch available in the United States back then was blended. And if you found a restaurant that had a single-malt, it would only pour one brand.

One reason it took so long for single-malt to catch on was its assertive aroma of peat and smoke, which comes from the process of drying the malted barley over a peat fire. “Single-malt was too strongly flavored for most people,” says Willie Phillips, chief distiller for Macallan Distillery. It’s an acquired taste, and about a decade ago Americans began to get it.

Even then, sales didn’t rocket forward, and a major reason was price: Good single-malt costs as much as VSOP Cognac. In the last five years, demand has driven prices up by 20% to 40%, and today a good single-malt costs roughly $30 a bottle, about twice as much as blended Scotch.

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One reason for the surge in single-malt sales is that wholesale houses are now doing special promotions--using point-of-sale material and video cassette explanations of single-malt. Southern California’s largest wholesaler, Southern Wine and Spirits, offers a gift package of six 50-milliliter bottlings of single-malts (Glenkinchie, Cragganmore, Dalwhinnie, Oban, Talisker and Lagavulin), all from different regions, for comparison tastings.

One of the strongest-scented of these, Lagavulin, has been the hottest single-malt Scotch item at Wally’s in West Los Angeles. Lagavulin is described in “Michael Jackson’s Single Malt Guide” as being “very smoky and peaty.” It’s an Islay malt and even more assertive than Laphroaig, one of the peatiest Scotches on the market.

More single-malt is being imported to the United States than ever before. In 1994, U.S. sales topped 300,000 cases for the first time (still a pittance compared with 11.4 million cases of blended Scotch).

Part of the reason for single-malt’s greater visibility is that, in the last decade, some of the world’s largest beverage companies have become heavily involved in the single-malt game. Firms such as Guinness, Allied-Lyons, Seagram and Whitbread have bought up smaller single-malt distilleries because they need top-quality single-malt stock to continue making their blended Scotches. Roughly 90% of the 103 producing single-malt Scotch distilleries today are owned by large corporations. The involvement of the major firms has fueled far more sophisticated marketing campaigns aimed at extolling the virtues of single-malt’s uniqueness.

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In Hollywood and on the Westside, in particular, this message has reaped rewards. Greenblatt’s Deli in Hollywood has one of the largest collections of single-malts--about 65 different brands. Included are a number of specialty single-malts that have been aged much longer than usual. Wally’s, in Westwood, has about 75.

This is nothing, however, compared with a number of shops in the San Francisco area, where single-malt Scotch has been on a roll for a decade. D & M Wines and Liquors in San Francisco, Beltramo’s in Menlo Park and the Cannery Wine Cellar in San Francisco all boast more than 200 single-malts, including limited bottlings of specially aged casks.

One specialty importer who handles these small-lot Scotches is Henry Preiss of Santa Fe Springs, whose William Cadenhead bottlings are in very limited supply (sometimes only one barrel is made of an item). These specialty Scotches run $100 and more per bottle, and part of their fascination is that they are sold at “barrel strength,” proof readings of 105 and 110 being not uncommon. Standard single-malt has had local spring water added to it before bottling and is sold at 80 proof (40% alcohol).

Jim Allen, general manager of Southern Wine and Spirits, says his sales of single-malts are up 50% over two years ago, with Oban 14-year-old, which sells for $38 a bottle, a particularly hot item.

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Ed Rose, head of spirits sales for Wine Warehouse, a Los Angeles wholesale company, says single-malt sales really picked up in 1994. Rose says he was surprised at the sales of two relative unknowns, Deanston ($30) and Ledaig. The latter, a strongly flavored 20-year-old Islay malt, sells for $70, yet has been moving.

Chuck Smith, vice president of sales for Remy Amerique, which owns The Macallan, says sales of The Macallan are up 30% per year for the last three years. “It has a kind of cult following,” he says.

The Macallan, the only single-malt aged exclusively in Sherry casks, is a richly scented Highland malt. The 12-year-old Macallan sells for $35 a bottle, the 18-year-old for $55. Wine and Spirits Magazine, in its annual poll of upscale restaurants, says The Macallan was the No. 1-selling single-malt in the country by the glass for the last three years. The national leaders in overall sales are the Glenlivet and Glenfiddich; The Macallan is third.

Mike Tarr of Wally’s says that besides Macallan, he’s had success with Glenkinchie, Cragganmore, Dalwhinnie, Oban and Talisker. He says that a number of these brands once appeared in simple bottles and sold for less. “Some of them have been repackaged (in fancy bottles) and are more heavily promoted,” and prices are up to support this treatment, he says.

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Analysts say single-malt sales in the United States this year will be 5% higher than last year while sales of blended Scotch are up only 1%. Sales of most other spirits are either flat or on a downward slide.

Jobson Publications, which tracks sales in the alcoholic beverage industry, said recently that besides Scotch, one of the few spirits that showed a sales increase in 1994 was Irish whiskey, up 4.9% to 258,000 cases. Oddly, one of the things that distinguishes Irish from Scotch is that it doesn’t have the smoky/peaty character found so strongly in single-malt.

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Single-Malt Scotch Sales in the U.S.

While sales of most spirits are plummeting, interest in single-malt scotch is on the rise.

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U.S. sales of single-malt Scotch, 1993 in cases

The Glenlivet: 160,000

Glenfiddich: 80,000

The Macallan: 18,700

Knockando: 8,500

Glenmorangle: 8,000

Cardhu: 6,800

Aberlour: 6,500

Lagavulin: 6,500

Laphroaig: 6,300

Oban: 5,000

* Source: Jobson Liquor Handbook 1994

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Sales of all single-malt Scotch in the U.S. in hundreds of thousands of cases

1990: 260

1991: 261

1992: 273

1994: 284

* Source: Impact 1994 Annual Distilled Spirits Study