Whisky producers benefit from export boom Scottish whisky producers have had an international outlook ever since Tommy Dewar, a scion of the Dewar whisky dynasty, hopped on a boat to sell his family's wares in the emerging markets of the late nineteenth century. Marketing whisky in the US and Australia at that time had its pitfalls, however. "By the time Dewar got back to London to see two distributors, one of them was dead and the other was bankrupt," points out Alex Bruce, who works at Adelphi, an independent bottler in north west Scotland. Things have come on a bit since then. Today, Scottish whisky exports are booming, with demand in Latin America and Asia fuelling growth. Total exports of Scottish whisky rose almost a quarter to £4.23bn in 2011. Whisky producers are feeling the benefit. Sales at Gordon & MacPhail, an independent distiller and bottler specialising in single malt whiskies, rose by almost a third in 2011. Since 2009, total sales at the 117 year-old company have jumped 86 per cent. Exports, meanwhile, have almost tripled since 2000. It's a similar story at the other end of the sector. At Diageo, net sales of Scotch, which accounted for almost a third of Diageo's gross profits in 2011, have jumped 50 per cent in the last five years. "This year there's no doubt we'll go through the £3bn [sales] mark," says David Gosnell, president for global supply and procurement at Diageo. The rising demand for Scotch in countries such as China and Brazil has been put down to the emergence of an increasingly wealthy middle class. For Mr Gosnell, however, it also comes down to something less tangible. "It's aspiration," he says. We believe that Scotch is an aspirational drink. People aspire to drink good quality Scotch. We call it the aspirational ladder. Everybody is on a particular step, but everyone wants to be on the next step. The means and timescale of Scotch production lend the drink a cachet that other spirits struggle to match. By law, Scotch must be produced in a distillery in Scotland, before being left to mature in oak casks (also in Scotland) for at least three years. The length of production means that many smaller producers were caught short by the recent leap in demand for more mature, premium whiskies. "It's very difficult to perceive what the demand for your single malt will be ten years ahead," says Mr Bruce, sales and marketing director at Adelphi. It has caught the industry out - in the best possible way. The rapid growth in demand has triggered a flurry of investment in the sector. Earlier this month, Diageo announced plans to invest £1bn in Scottish whisky production over the next five years. Chivas Brothers, the whisky producer owned by Pernod Ricard, recently announced plans to invest £40m in Scotch production to meet rising demand, even re-opening a mothballed distillery. The increased investment comes as fears of a "whisky bubble" have begun to emerge, however. In a note published earlier this month, analysts at Redburn warned: "If [scotch] consumption is based on fashion or corporate expense accounts then there is no inherent brand equity to weather a downturn in either the economic or fashion cycle." Such worries are overplayed, according to Christian Porta, chairman and chief executive at Chivas Brothers. "Everybody talks about the bubble in the 1980s and in the 1990s and they are perfectly right to question us about that," says Mr Porta. Japan's economic boom triggered a spike in demand for premium Scotch - a demand that collapsed with the Japanese economy in the early 1990s. "But if you compare the world today to the world in the 1980s or 1990s, it is completely different," continues Mr Porta. China, Russia, India, Brazil, Mexico, Vietnam - all those countries were not as important [then] as today. The growth in export is also relatively evenly spread between mature and emerging markets. While growth in emerging markets has been the most rapid, growth in mature markets has almost kept pace. Scotch exports to the US rose 31 per cent, while exports to France jumped 27 per cent in 2011. In the eighties, Scotch was essentially a product for the US and Western Europe. Today, Scotch has a worldwide footprint," says Mr Porta.