1st Quarter 2008

tennessee whiskey exports by market 2007 graph


market growth: selected countries graph


Tennessee Whiskey Exports:
The New Old Reliable (continued)

A peculiarity of the Jim Beam vs. Jack Daniels duopoly is that different foreign markets are dominated by one or the other brand. For example, the largest whiskey importer, Great Britain, is Jack Daniels country. Ninety percent of its imports come from Tennessee. (Great Britain purchases more than 15 percent of all American whiskey exports.) France, Spain, and South Africa — all top-10 American markets — buy more than 80 percent of their whiskey from Tennessee. Two-thirds of the American whiskey sold in Italy, the ninth-largest market, comes from Tennessee. Australia and the Netherlands, on the other hand, buy more than 80 percent of their American whiskey from Kentucky. Japan buys three-quarters from Kentucky. Canada, the second-largest whiskey market, is perhaps the most lopsided. Less than seven percent of its purchases come from Tennessee. Among the large markets, only Germany is relatively balanced, with a little less than 60 percent of sales in that market coming from Tennessee.

The vast majority of American whiskey is sold in Europe, Japan, and the other developed countries. Three-quarters of the sales go to these markets. However, there is great interest in China and the other newly industrializing countries. With wealth seems to come a taste for high-end whiskey. The largest developing markets are in East and Southeast Asia. Singapore and China each have purchased about $30 million worth of American whiskey through this April. For China, about 60 percent of this has come from Tennessee, while for Singapore, it’s about 40 percent. South Korea and Malaysia are the other major Asian markets. In the Middle East, Tennessee’s exports to Turkey have more than doubled over the past year, and the state’s whiskey sales in the United Arab Emirates are up more than 50 percent. The former eastern bloc states are also turning into very good markets. The only region of the world that seems indifferent is Latin America. Mexico remains a modest market, given its size and proximity to the U.S., and no South American state buys very much of the product. Chile is the leading importer of American whiskey, and it ranks only 22nd among America’s markets (and 33rd among Tennessee’s). Brazil, one of the most populated countries on the planet, has purchased less than $300,000 of Tennessee whiskey this year. It would be interesting to know why this area of the world has proved so resistant, whether it is the failure to market or simply different cultural attitudes, but it remains the largest nut to crack for whiskey exporters.

The current fall of the dollar has only brought more good news for these exporters. American whiskey is ever more competitive against Scotch, Irish whiskey, and other alternatives. For this reason, we should expect continued growth in what has become one of Tennessee’s premier exports. to trade report