How Scotch Whisky Brands Can Appeal to a New Age of Gen Z Consumer?

There’s no doubt about it, Scotch Whisky is entering a new golden age.

Despite supply chain pressures and the lingering spectre of the Covid pandemic, sales are booming in key global markets. Exports were worth a staggering ￡6.2bn in 2022, brought on in part to the full re-opening of hospitality businesses, an increase in travel retail sales and the pound’s drop against major currencies.

Increased demand for Scotch has introduced new distilleries and despite the issues arising in the domestic market, the future looks bright.

But Scotch Whisky needs to future-proof itself because the consumer landscape is changing…

There’s a new generation of drinkers – the Gen Zs.

The Growing Gen Z consumer base

It is estimated that Gen Z now make up 40% of the global consumer base. They have significant purchasing power, equating to over ￡113 billion worth of spending worldwide.

With over 50% of Gen Z (those born between 1996-2010) having reached legal drinking age in Europe and Asia Pacific, this has presented a significant target market for Scotch Whisky brands.

Tastes and preferences

However, as a demographic Gen Zs are faced with an inordinate amount of choice in the marketplace and have different tastes and preferences compared to their predecessors, the Millennials and Gen X.?

Experts predict that they will be more moderate drinkers, in both frequency and drinking session, even compared to Millennials. They may drink less but they’ll be more health conscious and look for rarity, perceived value and provenance.

They are more likely to experiment with new flavours, filter out brands that aren’t authentic in their marketing efforts and look for products and services that align with their values.

Research shows us that they have three main concerns:?

• Authenticity and security
• Unique and personalised experiences
• Social compassion and sustainability

In fact, social compassion is a big one; with this generation making moves to change the world into a far better place on a scale unlike any other generation before.

How can Scotch Whisky brands adapt?

With the Gen Z consumer base growing fast, Scotch Whisky brands must concentrate their efforts on sustainability, provide unique experiences and utilise tech in new and interesting ways.

Sustainability and ethics

Gen Z consumers are increasingly conscious of their impact on the environment, and this is reflected in their purchasing decisions. In fact, 44% of Gen Z buyers are now influenced by a brand’s ethical and sustainable credentials when it comes to purchasing decisions.

Scotch Whisky brands can appeal to this emerging demographic by developing an environmental, social and governance strategy (ESG) and promote sustainable practices, such as using renewable energy sources, reducing their carbon footprint and using recycled?glass bottles. A fully developed ESG strategy is now essential, not just a ‘good-to-have’.

Additionally, many are opting to apply for B Corp Certification. B Corp is a framework for business to place sustainability and ethics on the same level as making a profit. B Corps are companies that meet the highest standards of three ‘foundational pillars’, which are social and environmental performance, transparency and legal accountability.

Two Scotch Whisky brands that have achieved B Corp Certification are Bruichladdich and Nc’Nean. In July 2021, Nc’Nean became the first whisky distillery in the UK to be certified net zero for its own operations, beating the industry target by 19 years! In January 2022, it went on to earn its B Corp Certification.?

Industry targets and social & environmental compassion aside, this has resulted in positive attention for the brand – Nc’Nean recently became Virgin Atlantic’s whisky of choice during B Corp Month in March 2023.

Personalised experiences

The Gen Z consumer looks for new ways to buy and experience products.?

Scotch Whisky brands need to find new ways to appeal. This can be either through brands offering new tasting experiences, flavour profiles or new ways to personalise the tasting process through artificial intelligence.

Artificial Intelligence

As Scotch Whisky becomes increasingly sought after, personalised experiences can add significant value to the brands offering them.

In 2019, Diageo, in collaboration with Vivanda, launched its digital platform ‘What’s your Whisky?’. ‘What’s your Whisky?’ was developed using Vivanda’s artificial intelligence?FlavorPrint?technology to map consumers’ flavour preferences against a large sensory database of foods and aromas to generate a unique ‘flavour print’.?

Johnnie Walker Princes Street have taken this to the next level at their immersive?Journey of Flavour?sensory tour in Edinburgh. Using AI, it tailors whiskies offered to customers to suit their palate, and with more than 800 flavour combinations available, the customer is spoilt for choice – they could visit a multitude of times and never have the same experience twice.

‘What’s your Whisky?’ was such a success that, in June 2022, Diageo acquired Vivanda and the?FlavorPrintAI, with a view to innovating the tech further.

Technology?

With an increasing need to provide digital provenance as well as offer new ways to own valuable assets, Scotch Whisky brands are turning to blockchain technology and NFTs.

Blockchain?

Blockchain technology is being used to provide a tamper-proof digital record of a whisky’s provenance as well as providing information on the product. Blockchain providers break down the production process into events which are stored securely on the blockchain. Once this happens, an immutable record is created that cannot be changed, creating an unbreakable link with the physical?asset.?

Customers can access the details by scanning a QR code printed on the bottle which can reveal a myriad of details about their whisky including: the batch number, fermentation time, type of barley, type of cask and length of maturation. This helps to prove authenticity and provenance, therefore, building trust with the customer.

The benefit to the producer is that they track the whisky’s journey and gain a greater understanding of how the bottle is being received by consumers.

NFTs

Savvy Scotch Whisky brands are now taking blockchain technology to the next level and offering their rare and limited-release malt whiskies as digital assets – in the form of NFTs. Apart from providing a proof of provenance, many brands have realised the value of offering unique, limited-edition releases, special blends and exclusive experiences attached to them.

NFTs (non-fungible tokens) are digital assets which represent ownership of a unique item, and they can be bought, sold and traded just like physical assets.

Many brands have collaborated with artists to provide a unique artistic impression of the bottle – in the form of a jpeg or hologram - which functions as proof of authentication as well as certification of ownership and can be shared across social media platforms.

If the owner wants to redeem his or her asset and physically own or (dare I say it) actually drink their whisky, the NFT is ‘burned’, the physical asset is delivered and the NFT effectively dies, never to be replaced.

Brands that have released NFTs in the last few years are Glenfiddich, Johnnie Walker, Ardbeg and Glenturret.

The future…

Gen Zs want to buy into brands that reflect the things they value the most while mirroring their lifestyle: what they think, what they believe, what they do and what they feel.

This cohorts’ youngest members will turn 18 in 2028, which is not too far away. Taking steps to pivot and appeal to Gen Z consumers now will help Scotch Whisky brands remain competitive, grow their consumer base, and adapt to consumer preferences in the years to come.?

www.provenancecopy.co.uk

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