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Food & Beverage

Nikka to crank out 20% more whisky, tasting future demand

Japanese distiller pours $61m into resolving shortage by 2030

At Nikka's Yoichi distillery in Hokkaido, whisky is distilled the old-fashioned way using coal.

TOKYO -- Nikka Whisky Distilling will increase production of raw whisky by 20% in response to surging demand, Nikkei has learned, as the company aims by 2030 to resolve a shortage that forced it to reduce or even end sales of some products.

The Japanese distiller has earmarked 6.5 billion yen ($61 million) through 2021.

Nikka will add tanks at its Yoichi distillery on the northern island of Hokkaido, some to fill barrels with raw whisky distilled in pot stills and others to ship whisky after aging in barrels. A new storage building will be constructed for aging barrels.

The company will resume day and night shifts, a practice it ended in the latter 1990s. Nikka also will build a storage facility at its Miyagikyo distillery in Miyagi Prefecture.

Nikka expects these moves to boost whisky output beyond its 1983 record of 58,000 kiloliters as early as 2025.

The company has reduced shipments or halted sales of some products under the Taketsuru, Yoichi and Miyagikyo brands since 2014. But shortages of raw whisky for these products likely will be resolved in 2030, allowing shipments and sales to resume.

Domestic whisky shipments plunged to 74,000 kl in 2008, or one-fifth of Japan's 1983 peak, due to changing consumer tastes. But demand is recovering thanks to the growing popularity of highball cocktails made with whisky. Domestic shipments rose 9.7% in 2018 to 178,000 kl, and Japan's market is projected to climb 3% to 4% a year.

The whisky boom is a global phenomena, with shipments seen growing 15% from 2018 to reach 3.93 million kiloliters in 2023, according to Euromonitor. Japanese whisky receives high marks overseas, winning prestigious awards in Europe, with exports rising 10% in value terms during 2018.

Supply has failed to keep up with demand. Shipments cannot be increased quickly because raw whisky needs to be aged for years in barrels and blended. Nikka looks to boost production, expecting that demand will continue to grow.

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