China has a history of thousands of years in the art of brewing, with a rich cultural heritage and brewing techniques.
Simultaneously, as an emerging and open market, Chinese consumers are also embracing and appreciating different types of spirits from the West.
We found that according to data from the General Administration of Customs of China, in 2022, the import volume and import value of whisky increased against the trend by approximately 8% and 20%, respectively, making it the fastest-growing category among all imported alcoholic beverages.
Earlier last month, the globally renowned spirits company, Edrington Group, held a launch event for its premium Scottish single malt whisky brand under its umbrella, Macallan, introducing The Macallan Litha to Shanghai. Prior to the event, Luxeplace.com had a conversation with Francois Saurel, the Managing Director of Edrington Group in the Asia-Pacific region, about Macallan’s development in the Chinese market.
During the exchange, he described the Chinese market as “essential.”
Francois Saurel joined Edrington Group in 2019, responsible for the overall strategic and executive management of the Asia-Pacific region. Prior to this role, his work at Procter & Gamble and Coty Group also involved Asian business. The Macallan officially entered the Chinese market in 2005, and Saurel arrived in Asia to work and live in the same year.
- About whisky and the Macallan Brand
- The high-end whisky market in China is currently experiencing a remarkable acceleration!
- Brand assets take precedence over product sales.
- What are the highlights of Macallan’s latest product, Litha?
About Whisky and the Macallan Brand
In an interview, Saurel detailed the reasons behind the excellence of Macallan products—high-quality ingredients and masterful craftsmanship.
The uniqueness of whisky lies not solely in the malted barley used for fermentation, but rather, 80% of its flavor and its entire color derive from the aging process in sherry oak casks. Macallan’s new release, Litha, is aged in these sherry oak casks, imparting a rich and layered taste to the liquor.
In the Western world, whisky origins trace back over a thousand years, when distillation techniques traveled with monks from the European mainland to Scotland and Ireland. Due to the absence of vineyards and grapes in these regions, grains were used for fermentation, giving birth to modern whisky.
Whisky typically uses grains such as barley as raw materials and undergoes processes like germination, saccharification, fermentation, distillation, maturation, bottling, and blending.
Among the five major whisky-producing regions—Scotland, Ireland, the United States, Japan, and Canada—Scotland is renowned for its single malt whisky.” This type of whisky is produced using only one type of malted grain in a single distillery, and Macallan falls into this category.
Founded in 1824, Macallan was one of the first distilleries in Scotland to receive a license. Its distillery is located in the Speyside region, one of the main whisky-producing regions in Scotland.
The Macallan Rare Vintage Series, distilled in 1926, was sold at auction for a staggering £1.5 million and remains the holder of the record for the highest single-bottle auction price in the history of wine and spirits categories. In 2022, the release of The Reach, an 81-year-old single malt whisky, claimed the throne as the oldest whisky by brand age.
Luxeplace.com: What makes Macallan whisky so exceptional?
Francois Saurel: We are very humble as a company, but we have a certain confidence that, due to our own whisky-making style, we probably craft the most exceptional type of whisky liquid possible. We source the best wood, and we season those casks with the finest sherry as well. Our distillation process in Scotland ensures that there is an encounter of the best cask with the best type of new-make spirit, resulting in the best liquid. So, without a doubt, this gives us an advantage, probably to compete as an exceptional brand.
Note: Last year, Macallan released its first biographical short film, “The Spirit of 1926,” narrating the pivotal role of Janet Harbinson in revitalizing the Macallan estate’s history.
The high-end whisky market in China is experiencing remarkable acceleration!
Luxeplace.com: What position does the Chinese market hold in Macallan’s brand strategy?
Francois Saurel: I use the term “essential” for China. China is essential to us in Asia, and it is equally crucial for us globally. This is due to the demographics and the love that the Chinese audience has already shown for The Macallan. We must expand our presence in China and engage with the Chinese audience. Therefore, China is a highly significant location.
Luxeplace.com: China also has excellent domestic high-end liquor brands, such as Maotai. Do you believe Macallan competes with these brands?
Francois Saurel: No, I don’t think so. What’s crucial for us in our perception of China is that this market is vast, particularly in baijiu, thanks to China’s millennia-old spirits culture. This is fantastic because we, in the West, have decades and centuries of experience in whisky making. I believe it’s important, from the perspective of exceptional craftsmanship and creativity, to approach a market that holds such deep respect for the long tradition of crafting spirits in an exceptional manner. So, there is a very positive, I would say, emotional reception to welcome newcomers like whisky in general and The Macallan.
The second thing is, I believe it’s not just my belief; when we observe how the market is structured in China, different spirits cater to various moments and occasions, and this will persist. There are valid reasons why baijiu is so prominent in China, and these reasons won’t vanish. Whisky, including The Macallan, is entering as a complement for different occasions than baijiu, perhaps distinct from brown spirits like cognac, enhancing the repertoire. Especially for younger consumers, it provides a new opportunity to celebrate during specific gathering moments.
We are very confident that the two will coexist harmoniously. As a humble Scottish brand, we first and foremost hold immense respect for the craft that already exists in China. We are simply and humbly trying to present our whisky in the best possible way to the Chinese audience.
Luxeplace.com: What are the characteristics of the development of the high-end whisky market in China in recent years? Do you see a promising future for its development?
Francois Saurel: So I would say we are witnessing the beginning of a phenomenal acceleration in this market in China.
What could be driving this? We believe there are many factors. The first one is probably the observation that consumers are generally younger when they start drinking whisky. In China, I think about 52% of consumers are under the age of 34, if I remember correctly. So, it’s a younger age group compared to the rest of the world that is choosing whisky, probably as a way to do a couple of things, perhaps to differentiate themselves from what used to be the traditional consumption of spirits in China. It doesn’t mean that they will reject the more specific Chinese liquors, as these liquors play an immense role in a very important part of the occasions for consumption. However, they see whisky as a complementary and appealing way to express their distinct qualities or personalities. I view this as something very positive.
The second aspect is the burgeoning young generation. They are a sizable demographic with significant disposable income. We have witnessed how they have boosted the luxury fashion, cosmetics, and even the French business. Therefore, we also anticipate that they will drive the acceleration of the category in China.
Luxeplace.com: Based on your extensive experience in the Asian market, what insights do you have into Asian consumers?
Francois Saurel: I came to Asia in 2005, and I have been living and working here for nearly 20 years now. I love it. Working in Asia has always been my desire. What has perhaps been a hallmark of my journey in Asia is the natural curiosity I’ve observed in Asian consumers in general. They possess a profound understanding of their own culture and a curiosity about the cultures of others.
The second aspect of Asia, in general, is a profound respect for tradition, and even deeper respect for authenticity, as well as a recognition of the hard work required to do things right. There is also a tradition of respecting others and the environment. This aligns naturally with The Macallan’s values. When we talk about The Macallan, we always emphasize our exceptional creativity and craftsmanship. Our exceptional excellence in craftsmanship is deeply rooted in our respect for the environment and our commitment to sourcing the best sherry-seasoned casks, which are at the core of our whisky-making process.
So I believe these two worlds of Asia and The Macallan were naturally destined to coexist harmoniously.
Luxeplace.com: In China, are female customers an important consumer group for Macallan?
Francois Saurel: They are. Our whisky maker, or master whisky maker, is a woman, Christine Campbell. I think this is already highly iconic in terms of the importance of women and female artists, just like the collaboration we have with Sijia.
What we tend to believe when we look at a new market, especially in China, where there is also a very established spirits market. Sometimes, this well-established spirits market has long been dominated by male drinkers. I have always believed that female drinkers can probably find something interesting with whisky because the range of flavors is broader, and it’s also a way to differentiate themselves from male drinkers who are accustomed to consuming other types of spirits. So, we are also confident that Chinese women will soon become an important segment of whisky drinkers in China.
Brand assets take precedence over product sales
The enormous potential and opportunities have made more and more brands eager to enter the Chinese market, hoping for rapid growth.
However, Saurel remains cautious about such rapid growth.
Before telling the brand story to consumers, a brand must first accumulate stories and history over the years of development. Even venerable brands like McLaren, with nearly two centuries of history, still need to continuously build brand assets, especially when facing emerging whisky markets like China. Taking steady and well-thought-out steps is the essential mindset for achieving long-term and sustainable growth.
Luxeplace.com: What is the biggest challenge you have encountered in the Chinese market?
Francois Saurel: I think the biggest challenge, as I mentioned earlier, is that it’s crucial when you work, not just in China but particularly in China, where things become even more sensitive. However, when you work with an exceptional brand and have the privilege of caring for it, you always need to find the right velocity and balance between making yourself known, building awareness, and ensuring, at the same time, that your story isn’t just rich initially but continues to grow richer and richer.
The mission of anyone at Edrington in Asia and globally is ultimately to create brand equity, which is our number one mission. Brand equity must always grow faster than the volume of the product. We always maintain a strong desire for our brand, and this is extremely important. This challenge exists everywhere, but in China, it’s even more critical. Why? Because China is tempting for many brands to grow extremely quickly. Many brands focus on the numbers and attempt to expand distribution too extensively and rapidly. If you do this too quickly, you may neglect investing in your brand equity.
Luxeplace.com: Do you find consumer education challenging?
Francois Saurel: It is not difficult if you know who you are, if you have worked on yourself sufficiently, and if you possess an authentic product story and culture. In that case, it’s just a matter of finding the right channel to engage with the consumer. You should present yourself humbly, but you likely have an interesting storytelling approach.
Luxeplace.com: In the future, what do whisky brands need to do to further penetrate the Chinese market?
Francois Saurel: You use a very good word, “penetrate,” which means we are just at the beginning. We are indeed just at the beginning. From the perspective of other countries or markets, many would already love their own market to be as big as the Chinese whisky market. However, when you compare that size to the opportunity in China, we are just at the beginning. What is absolutely fundamental, as I mentioned, is your own story and education in general. Whisky making is a new trend, but it’s still very, very new to the Chinese market. So you need to take the time to explain what is so specific about whisky in general and the whisky-making process of The Macallan. This is why this product is so important to us because it’s the first time we visually express the process of whisky making. We believe it’s the right way to start for someone who wants to discover what The Macallan stands for.
What are the highlights of Macallan’s latest product, Litha?
Luxeplace.com: The Macallan has recently introduced its latest product, Litha. How does this product reflect the brand’s history and DNA in your opinion?
Francois Saurel: As you can see, there’s something very rare for The Macallan and its product. When you look at it immediately, your attention is captured by the packaging, which is rich in storytelling. What we aimed to achieve with Litha is to create a product expression that summarizes and presents in a highly creative and artistic way what The Macallan stands for as an exceptional whisky and what the defining elements are at the core of exceptional mastery in whisky making. This is why you have these two worlds that are absolutely fundamental. The world of Spain, where we season oak casks with sherry, sourced from woods either from Spain or America, and the world of Scotland, where we take the newly made spirit from distillation and mature it in the cask.
And each of those different icons symbolizes an element of the whisky-making process that represents what we stand for as a brand.
So, definitely, the horse, as you can see, and the sun are symbols of Spain, especially the horse, which is typical of the region of Jerez in Spain where we have our casks being seasoned. When you look at Scotland on the other side, the peacock that you can see is a symbol of something very important to us, which is a commitment to natural color. The Macallan is all about natural color; our colors never come from any kind of artificial ingredients. The color we obtain is the result of the blend of all the casks, the marriage of our casks.
So all these elements are extremely rich in terms of storytelling. To a certain degree, we wanted the packaging to be an opportunity for the audience, for consumers to talk about it. We really see this project, this liquid, as an opportunity to socialize, to celebrate with friends, to toast and savor a very nice liquid, and to start a conversation about The Macallan.
Luxeplace.com: Litha is also the first product where the brand collaborated with a Chinese artist for its packaging. Why did you choose a Chinese illustrator to create the packaging for Litha?
Francois Saurel: Our initial intention was how we could translate the exceptional aspect of our whisky making into a highly creative, very artistic packaging that could also resonate with the audience.
So we didn’t necessarily think that we needed to have a Chinese artist. That wasn’t our approach. We had a selection of opportunities, a selection of different artists, and out of those opportunities, Sijia came in with the strongest artistic proposal, which we believed as a team would be the best way to express what we stand for.
Luxeplace.com: The Macallan has close collaborations with the arts, such as film, fashion, and more. In your view, what can art bring to a brand?
Francois Saurel: The collaboration with 007 is a typical example. If you examine the history of The Macallan’s appearances in cinema or television dramas, it’s absolutely phenomenal. There are multiple instances, I believe totaling more than 100 appearances. One highly iconic instance was in Skyfall, where we featured a bottle from 1962.
We used to have, and even within our management team, people who are deeply involved in the world of cinema. For instance, Allan Shiach, who used to be the chairman of The Macallan, is also a highly renowned creative director and producer in the film and drama industry. He was involved in co-producing The Queen’s Gambit, which I’m not sure if you’re familiar with, but it was a major success on Netflix.
As I mentioned, we stand for exceptional creativity and craftsmanship because ultimately, our goal is to deliver extraordinary value, something very unique, and something that is also very personal to each individual. This is where we see art as a domain where we are absolutely legitimate, and we will continue to progress in collaboration with artists.
| Image Credit: Provided by the Brand
| Editor: Elisa