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relies on water for three points, barrels for seven points and marketing for the remaining 990 points.
In recent years, Japanese whisky has gained a great reputation. The cheap whisky of dozens of dollars five years ago is now sold for more than 800 dollars; The limited edition Yamazaki, which sold for $7000 in 2005, has been auctioned for 50 years and sold for $340000 in 2018. When Maotai sees the increase, it will shout big brother.
▲ the record breaking Yamazaki has increased 38 times in the past 50 years and 13 years
But just more than a decade ago, Japanese whisky was just a category that no one wanted. Japanese and Weiwei manufacturers closed down one after another because of unsalable sales or sold to foreign enterprises. No one expected today’s grand occasion.
So, is a bottle of Japanese whisky worth thousands of Yuan IQ tax? How did it get fired to its current high level? What are the elements of a wonderful marketing hype?
Let’s start with the conclusion that the price of Japanese whisky is far more than drinking value, but it has financial attributes like assets such as houses, stocks and futures. Therefore, the analysis of its hype path, like the analysis of all financial assets that can be hyped, is inseparable from four elements, namely:
A series of universally accepted unique narratives, a small group of makers with concentrated chips, a large group of speculative hot money, and an objective scarcity.
Here you can pause and think about whether diamond, Maotai, bitcoin and school district room have gathered these four elements, or which element is missing.
Next, let’s explain in order to see how they created the myth of Japanese whisky one by one.
The first is narration. An infectious narration can shape people’s cognition, and the unified cognition of a group of people is value. If a group of people think that something is valuable, it is valuable.
To be convincing and interesting, narrative should start from both rational and perceptual aspects.
The establishment of rational cognition of Japanese whisky depends on winning the prize. In 2001, the British professional whisky magazine held a wine tasting competition. Among the 293 whiskies sent by the manufacturers, one whisky from Japan was rated as the first. In the same year, another Japanese whisky also won the gold medal of IWSC, an internationally renowned liquor competition.
▲ Japanese whisky is emerging in Europe
Write down these two test sites. I’ll take the test later. This is the first time that Japanese whisky has defeated Scotland on the international stage, began to gain the attention of European lovers, and continued to win large and small awards in the next 20 years.
However, although the number of awards is increasing, there is a big difference between rational cognition and not. If there is more, it will be numb. Therefore, we need to rely on perceptual cognition, like multiple dreams in inception, to implant an idea into the hearts of the people with a large number of stories.
The most widely circulated story of RIWEI is the magical water wood wine barrel.
The wooden barrel used for traditional whisky is oak, which is not available in Japan. It is generally imported from North America and Europe. During World War II, the supply was interrupted, so we can only find local substitutes. Finally, we can find the water chestnut in Hokkaido. At that time, it was a last Resort, because it was not well sealed, the original wine was easy to leak and volatilize, and the aroma released in the first few years overshadowed the aroma of the wine, It looks very crude. So as soon as the war was over and the oak supply was restored, the winery immediately put this inferior barrel aside.
Unexpectedly, 20 years later, RIWEI became a friend of time. People accidentally opened the water wood wine barrel from the abandoned warehouse and found that the strong flavor in the past had become only a faint sandalwood and incense, full of mysterious oriental flavor. This water mahogany has become a unique feature of Japanese whisky.
This counter attack story was talked about by whisky lovers, who introduced the water chestnut aroma to Mengxin as the characteristic of RIWEI. They didn’t realize that they were just a communication node of the story.
Then the above is the means of RIWEI to establish rational and perceptual cognition. The most direct and effective way of rational cognition is to find authoritative endorsement, which belongs to well-known events. The perceptual cognition needs to hit the key of human nature. Like the unpopular water bucket, it finally wins. This reversal of shuangwen is just like the counter attack of Maotai from loss to national liquor. It is a story loved by most people.
In addition, the story will tell you that the water used by RIWEI is the mountain spring water of Japanese tea ceremony. The brewery is located in the unique terrain and climate of Japan, and the filtering material is bamboo rather than peat.
Admittedly, these factors will lead to objective taste differences, but such subtle differences, ordinary people drink, “tasted it, but it seems they didn’t taste it”, and drink it after accepting the above perceptual narrative, “it’s worthy of the taste of sandalwood, temples, bamboo forests and clear springs!”
However, how did this series of infectious narratives come into being and how did they get their first spread? This is the second element, the dealer.
When we say that there are makers in a market, we mean that most chips are concentrated in the hands of a small number of people. Only by controlling most of the chips can the holder ensure that he will not make wedding clothes for others and have the power to invest in the cost to hype. Just as diamond giant De Beers is willing to spend huge advertising fees to tell you that “a diamond will last forever” because it once monopolized 85% of the world’s diamond supply.
It was in this situation that RIWEI took off. In 2010, there were only nine breweries in Japan, and nine were still concentrated in the hands of several companies. Suntory alone accounted for the three most famous, compared with more than 130 in Scotland. That’s why RIWEI enterprises have the power to spread the story of Japanese whisky in a big way.
Suntory has stationed brand ambassadors in all regions of the world. It spends nine months every year holding tasting meetings everywhere to tell the stories of mountain spring water, climate and bamboo to whisky lovers, collectors and major association media again and again. Therefore, these well-designed narratives can be spread all over the world.
If this example is not direct enough, look back at this picture.
The wine in the third picture comes from the legendary distillery of Japan, mitsuzawa. The distillery was closed in 2000, but left more than 300 barrels in stock. It has been frequently appeared in the auction market since 2011 and was sold at a sky high price of $430000 a bottle in 2020.
Then why did the reception that had been shut down suddenly catch fire all over Europe? Because the publisher of the magazine (the first one) that first recommended Japanese whisky began to sell Amway to the European whisky circle in 2011 with all the inventory of mitsuzawa.
This shows that Japanese whisky has long had enough gimmicks and strength, as well as people who know how to appreciate it and can publicize it. However, it is not until this person becomes a dealer that he has the power to build momentum and publicize for Mitsui.
In summary, around 2010, the domestic production of Japanese whisky was monopolized by several enterprises, and the overseas inventory was monopolized by one company. The chips are quite concentrated, which means that RIWEI is a market with makers, so the internal driving force of story telling and price speculation can be found.
However, it is not enough for a market to have a dealer alone. Only when a third party responds to your speculation with real money and silver can it prove to the onlookers that this is not a dealer entertaining himself. Only in this way can we really revitalize the market, attract more funds and form a snowball growth.
This third party, usually in the stock market, is called hot money.
Japanese whisky has ushered in a number of professional hot money. The most representative is a private equity fund called platinum whisky investment fund.
▲ when issuing the fund, publicize the increase of whisky after 2011
Specialized in assets such as single malt whisky. The fund was established in 2014. In the following seven years, the annualized rate of return was 17%, which was comparable to kunkun, a family love.
One of the most profitable assets is 300 bottles of Koizumi 30-year-old wine, which made a net profit of 300% three years after it was obtained.
Now let’s continue with the previous one. Hot money received goods from the dealer, and the real money responded to the dealer’s call. At the same time, the story of earning three times in three years has become another signboard, attracting more funds to concentrate in this market, forming the phenomenon that the higher the price, the more the market buys.
Of course, relying on stories, makers and hot money, you can really make a myth of soaring in a short time, but it has been ten years since the emergence of Japanese whisky. For a long time, there must be a practical factor supporting its price, and this is the last point we want to talk about, scarcity.
The reason why the buyers are unwilling to pay for the scarce goods in the market is that the buyers are not willing to help the market.
There is an objective guarantee for the scarcity of Japanese whisky, because the upper limit of vintage production is determined by history.
For example, Yamazaki’s 18 years refers to the wine that has matured for more than or equal to 18 years. Therefore, the upper limit of the output of the vintage now depends on how much wine the winery brewed more than a decade or even decades ago. The previous 12 to 40 years, that is, from the 1980s to 2010, correspond to a whole period of the depression of the Japanese whisky industry.
In Japan, liquor consumption is basically composed of Shaojiu and whisky. Before the 1980s, whisky was a symbol of successful professionals in Japan, and soju was considered to be a drink only at the bottom of society. However, in the early 1980s, soju launched young people’s marketing and packaged the low-end label as “drinking soju is a rebellion against the stereotype of the older generation”, which occupied the minds of young consumers and made the sales of whisky in Japan decline sharply by 15% in two years for the first time.
▲ the shipments of Shaojiu and whisky reversed in the early 1980s
The second blow came from Scotch whisky. In the late 1980s, the European Commission launched tariff negotiations with Japan. The high-ranking UK first took into account its whisky exports and promoted Japan to significantly reduce the tariffs on Scotch whisky, which made Japan lose its cost performance. With the implementation of the new tariff in 1989, the sales of Scotch whisky in Japan soared by 56%, while the sales of Japanese whisky halved in five years.
The third blow was in the 1990s, when Japan’s economy fell into decline for 10 years, then 20 years, 30 years… Anyway, the office workers waving 10000 yen on the streets of Tokyo have never recovered, and they have been the key customers of whisky.
Therefore, Japanese whisky was hit by soju and Solvay first, and then experienced the ebb tide of consumption of the core audience. Under the condition of shrinking market year after year, any RIWEI distillery had to reduce production. This is why in 2000, the great potential of Igawa had to be shut down, and why by 2010, there were only nine whisky breweries in Japan, showing the monopoly pattern mentioned above. Hey, did you?
Then, having said the above, let’s string together four elements: the value of Japanese whisky comes from the market consensus, which is established by a series of infectious narratives. The design and promotion of these narratives need the dealer, and the dealer needs hot money to tell the story, The reason why hot money is willing to enter the market is that this asset is objectively scarce.
But it is hard to say whether this logic can continue in the future.
Around 2016, the surge in Japanese whisky exports stimulated the production of old distilleries and the entry of new distilleries. By 2020, RIWEI factory has more than doubled. The supply-demand relationship in the next five years and ten years is not good for the sellers themselves. Like the whisky fund mentioned above, it was cleared in September last year.
What’s more, whether it is because of the recognition of the so-called exquisite and elegant taste of RIWEI or the desire for its increase in the auction market, people are eager to pursue Japanese whisky, which is essentially based on a constructed dream. Luxury goods is a business selling dreams. It makes buyers think that tasting Japanese whisky is to feel exquisite Japanese culture, experience elegant life and have the possibility of becoming rich overnight.
However, in the two-year epidemic, global GDP growth fell to the bottom. As a result, 100 million people fell into extreme poverty, but the net assets of global billionaires increased by 3.6 trillion euros with the monetary easing of various countries, and the gap between the rich and the poor widened rapidly.
▲ “the proportion of billionaires’ wealth surged during the epidemic”
The last time the same situation happened was in the United States in the 1990s. After the Gini coefficient soared to 0.43, in 1996, only 1 / 4 of the United States believed that life would be better in the future, and the sense of rational consumption revived. The luxury goods industry has been greatly affected by the sharp decline in the number of ambitious people who become rich.
▲ in the early 1990s, the polarization between the rich and the poor in the United States was sharp
So, when the tide of economic recession and widening gap between the rich and the poor reopens, who should luxury goods sell their dreams to? Can the Japanese whisky piled up by dreams continue the growth myth?
Author: Zhou Xueling; Source: Yuanchuan Sea Research Institute (ID: aotekuaitan), reprint has been authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246); Foodaily Expo 2022] foodaily Expo 2022 is the theme and invites 500 + the world’s most innovative brands and 4000 + middle and high-level industry decision makers… In the conference (foodaily fbic 2022) module, we set 2022.05.31-06.02. We’ll see you in Shanghai! related reading