The Scotch Revival: A Selective Recovery

Source: Martin Purvis and Duncan Mcfadzean

The Road to Recovery: Scotch Whisky Normalise

The Scotch whisky industry has navigated a turbulent "COVID supercycle," moving from a pandemic-driven shortfall to a massive shipment surge in 2022. As the market cools, many investors and producers are asking: when will the Scotch whisky market truly recover?

By analyzing the pre-pandemic baseline of 2019 against the "bullwhip effect" of the last few years, we can project when supply and demand will finally find their footing.

Understanding the Post-2022 Decline

While the headline figures show a decline from the 2022 peak, context is key. Over the last 20 years, Scotch exports have averaged roughly 100 million cases. Our current estimates for 2025 remain above this long-term average, even if they feel lower compared to the anomalous "boom" years.

The Role of Bulk Whisky

Interestingly, bulk exports have been a saving grace for the category’s volume. From 2010 to today, bulk exports rose from 15 million to a peak of 35 million cases, a 4% annual growth rate. This is largely driven by India, which utilizes bulk blend and grain whisky to meet high demand at lower price points.

Bottled Scotch: A Steady Performance

If we strip away bulk movements to look specifically at branded, bottled goods, the picture becomes clearer. From 2000 to 2025, bottled exports grew at a steady 1% compound annual rate. While 2025 estimates hover around 70 million cases, slightly below the 18-year average, the trend line remains resilient.

Blended Scotch vs. Single Malt: Two Different Recovery Paths

The recovery timeline for Scotch is not "one size fits all." Different subcategories are moving at different speeds.

1. Blended Scotch Whisky

Blended Scotch saw a massive spike in 2022, reaching nearly 80 million cases, followed by a sharp drop to historical averages (approx. 62 million cases).

• The Verdict: Using 2019 as a baseline, the excess stock from the 2022 boom has finally sold through. We expect the COVID-related volatility for blended Scotch to be completely unwound by late 2026.

2. Single Malt Scotch Whisky

Single malt has had a more dramatic journey, growing 6% annually over 25 years before hitting a 37% decline from its 2022 peak.

• The Verdict: Excess stocks for single malt peaked in 2023 with an extra 4 million cases in the market. We predict a slight uptick in 2026, but it likely won't be until 2028 that we see a return to pre-pandemic export volumes of 10.8 million cases.

Strategic Summary for 2026

The "bullwhip effect" of the pandemic is finally losing its sting. While the market has been "tricky" since 2022, there are reasons for optimism:

• Blended Scotch is already nearing a "clean slate" for 2026.

• Single Malt requires a bit more patience, with a projected recovery to peak levels by 2027/2028.

• Value-driven exports (bulk) continue to provide a floor for the industry.

For smaller single malt producers and cask investors, the next 12 to 18 months represent a period of market rightsizing. As excess inventory clears in 2026, the industry will return to being driven by global economic factors rather than pandemic-era backlogs.

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