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Beer, Wine & Spirits

Single malt from Taiwan shakes up whiskey industry

As Asia grows wealthier, its people are taking an interest in drinking and investing in whiskey.
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Budding Taiwanese whiskey maker Kavalan is making a big splash in the world of single malt, delighting the taste buds of connoisseurs globally.

While still relatively undiscovered by the masses, Kavalan, Taiwan's first distillery owned by domestic conglomerate King Car Group, has been racking up awards, most recently winning top honors at the 2014 Malt Maniacs Awards, which is followed by industry experts.

Kavalan began distilling trial runs in 2006 and launched its first bottle in its home market two years later. It is one of two whiskey distillers in the country, the other one being government-owned Taiwan Tobacco and Liquor Corporation.

In 2013, the company started exporting to markets across the world including Europe, the U.S., South Africa, Australia, Hong Kong and Singapore. Today, it counts France as its biggest market followed by the U.S.

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"Between 2013 and 2014, we've seen a roughly 50 percent growth in exports, and are optimistic we'll see a similar level of growth in 2015," Ian Chang, master blender and global export director at Kavalan, told CNBC in a phone interview.

As orders ramp up, the distillery plans to expand production capacity from 3 million bottles per annum to 7.5 million in 2017, Chang noted.

The company currently exports 40 percent of its production and sells the remainder in its local market. A bottle of Kavalan sells for between $50 and $400 in Taiwan, based on age and quality.

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When asked what makes Kavalan's whiskey different from its peers, Chang said: "There's a perception that quality whiskey can only be produced in colder climates – Scotland, Ireland, U.S., Canada, Japan – but our sub-tropical heat speeds up the maturation process."

"The heat mellows the whiskey to a very soft, round complex. That combined with the sweetness from the water here makes Kavalan unique in terms of quality," he added.

The challenge

Whiskey experts agree the brand's quality is up to the mark, but note there are still some challenges around the perception of Taiwanese whiskey.

"When people first hear of Taiwanese whiskey they often turn their nose up or scratch their heads. But we always have open bottles at our store, so we invite people to have a taste and they soon change their minds," said Timothy Barnes, Singapore-based wholesale manager at La Maison Du Whisky.

"The seasoned whiskey drinkers are giving their thumbs up," he said, noting there has been a steady rise in bars and restaurants that stock the brand in Singapore.

However, as it stands, Kavalan does not yet pose a serious threat to more established Japanese or Scottish brands, say experts.

"Kavalan is still niche so it is not likely to be a threat yet. It is much younger as compared to established Japanese or Scottish brands. Whether or not the quality of Taiwan's future whiskey will be sustainable remains as a question," said Honey Lim, analyst at Euromonitor International.

Nevertheless, the future is bright for the up-and-coming whiskey maker, notes Barnes.

While Kavalan may not emerge as a serious threat to its peers, it will become a genuine competitor in the industry, he said. "They will become a very well-respected producer."