Japan: Asahi’s Nikka Whisky rushing to meet growing demand

For the first time in two decades, employees at Japanese distiller Nikka Whisky will be working day and night shifts to meet global demand for made-in-Japan whisky, Bloomberg reported on October 8.

Even so, the best fruits of their labor probably won’t be on the market for at least another decade, given the time it takes to age the finest vintages.

Japanese distillers have been both a beneficiary and victim of the world-wide thirst for whisky, with the market projected to grow 19% to $147.6 billion in the five years through 2023, according to Euromonitor International. The island nation has been steadily gaining a reputation for quality whiskies, but because of long aging times, the current boom has caught distillers unawares and unable to meet demand. Last year, Suntory Holdings Ltd. ran out of Hakushu 12 and Hibiki 17.

Now Nikka, owned by Japan’s largest brewer Asahi Group Holdings Ltd., is rushing to expand production. The distillery has halted sales of some of its top brands, which include Taketsuru, Yoichi and Miyagikyo. Nikka is boosting output by 20%, investing 65 billion yen ($606 million) over the next two years to build new infrastructure and doubling shifts. Nikka is Japan’s second-largest whisky distiller, after Suntory.

“We’re not shipping enough,” said Asahi spokesman Masato Ishihara. “The market will grow as the reputation of Japanese whisky spreads domestically and overseas.”

Total demand for Japanese whisky is projected to climb 7% annually through 2022, according to Bloomberg Intelligence. Fun fact: It’s whisky in Scotland and Japan, while elsewhere it’s spelled whiskey.

Domestic demand for Japanese whisky peaked in 1983, according to the National Tax Agency. That slowed as customers’ tastes changed, also causing some distillers to cut production. But in the past decade, the spirit has gained fans as the highball — a mix of whisky and soda — became widespread in Japan.

“Whisky’s popularity will continue,” said Hiroshi Ito, executive director of the Japan Spirits and Liquor Makers Association.

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