Business Unusual

Whisky - from nasty medicine to the drop of choice for movers and shakers

The history of whisky is best enjoyed straight up, although it certainly blends well with many other innovations and begins with rocks.

The “rocks” are the sulfide of the metal antimony which were ground to a fine powder and served as the first make-up. The extraction of the essence or spirit of the “rock” known as “al -kuhl” in Arabic came to represent the distillation of the spirit of a substance.

The alchemists pursued distillation as a way to create a substance that would allow them to turn silver into gold and heal any disease as well as to give those who consumed it immortality.

Alcohol consumption stretches back as far as human history does, but until the 1200’s it was obtained via fermentation. The refinement to distill it by the Italians saw the first pure alcohol distilled from wine.

It was not long before alcohol was distilled from grains and other common foodstuffs that would ferment. They were originally used as medicine and were believed to be the “waters of life”.

Its use spread with the greatest production centered in Scotland and Ireland which gave us the word we use today, whisky is a corruption of “waters of life” in Gaelic.

A significant innovation came in 1830, when a man with the surprising name, Coffey, created a far more efficient still, which is still a popular design in use today.

The improved still was the inspiration for James Watt who was working on improving the efficiency of steam engines, the use of a condenser (the means of collecting the distilled whisky) did the trick and so arguably it was whisky that triggered the second industrial revolution.

Fast forward to the 1920’s. The prohibition in the US banned all alcohol threatening to close the industry or drive it underground. But its ancient use was called upon again, allowing it to be prescribed as medicine. A small chain of pharmacies called Walgreens, now the second largest in the US, benefited greatly from this, and grew from 20 outlets to almost 400 during the decade or so it was not allowed in any other form.

By the 1980’s though, whisky had lost some of its lustre, sales were stagnant and it was not the drink of choice for the young and ambitious that were doing well in Europe.

The boom did provide the starting point for its next expansion which has lead to the dominance it enjoys now. Europe’s boom came, in part, from an increase in production and the growth of the economies in Asia. The marketing of whisky as the drink of the young, ambitious and upwarding mobile was perfect as it already had a heritage of success and prestige.

The top 30 alcohol brands in the World (2014) - Vinepair

Those efforts spread to other emerging markets with a growing middle class looking for a way to enjoy their new wealth.

Countries like Japan began to make waves in the 90’s and helped inspire other countries to begin building whisky industries, the increased production and better marketing created strong demand (although alcohol as a category increased in all the emerging markets during this time).

The demand has been so great that traditional single malts of a uniform age are in short supply and has lead to the creation of a broader range of blended whiskies with new styles and drink combinations.

India is the largest consumer by volume with 255 million litres of the most popular brand Officer's Choice and 1,5 billion litres consumed in total in 2014.

You can now even get non-alcoholic whiskey.

The innovations and disruptions of the whiskey industry are a good case study for any business in preparing to adapt, grow, and change to meet the needs of its clients and the pressures of its environment.

A testament to this is the Bushmills distillery in Ireland that has been making whiskey since 1608. A 408-year-old business, now that is unusual.

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