Taiwan’s first whisky producer is moving full steam ahead on its way to becoming a “millennium” distillery.
In some cultures, diners are very specific about matching foods and liquor, but most Taiwanese do not really care which kind of liquor goes with what kind of food. Their loyalty to specific types of alcoholic beverages is low and consumer preferences change from time to time. In other words, every kind of liquor has potential in this market.
Whisky was once unfamiliar to the Taiwanese as there is neither barley nor oak on the island. But after the government lifted the ban on imported spirits in 1991, people in Taiwan soon familiarized themselves with the liquor. Statistics from the National Treasury Agency show that in the five years from 2004 to 2008, Taiwanese consumed an average total of 14.2 million liters of whisky annually. If that figure is too large to be meaningful, try 600 milliliters--approximately a bottle--for each member of the country’s population of 23 million.
The figures also show that more than 99 percent of the whisky retailed in Taiwan is imported. In fact in the past, even so-called “locally produced” whisky was imported at “cask strength”--strong whisky straight from the cask before it is diluted for drinking--and then blended and bottled in Taiwan. With dozens of imported whisky brands available, most consumers could not care less whether Taiwan had its own whisky distillery or not. It was, however, something that bothered Lee Tien-tsai, who is the founder and CEO of King Car Food Industrial Co. “He has always been ambitious in doing things that haven’t been done yet,” King Car spokesman Richard Ma says of Lee. “I guess what really motivated him to build a whisky distillery was that no Chinese had ever done it before.”
Last December, King Car released Kavalan single malt whisky--the very first whisky produced in Taiwan. Using malt kilned in Scotland, the grinding, mashing, fermenting, distilling, maturing and blending are all done in the distillery operated by King Car, which is the leading brand in Taiwan’s canned coffee market. Lee had the idea of building a distillery even before the government was forced to break up its monopoly on alcoholic beverage production upon Taiwan’s accession to the World Trade Organization in 2002. He even had the name of the liquor decided--Kavalan, the old name of his hometown Yilan.
Kavalan whisky faces competition from dozens of foreign brands in Taiwan. In the alcoholic beverage industry, individual distilleries come up with their best liquor and then look for ways to attract consumers. (Photo by Huang Chung-hsin)
In the eyes of most people, including many King Car employees, operating a whisky distillery in Taiwan was unrealistic, to say the least. “Taiwan had no experience, no equipment--no nothing quite frankly--and even the climate wasn’t right,” Ma says. “And even if we somehow managed to produce our whisky, what has a Taiwanese distillery got to compare with Scottish distilleries that have been producing the liquor for centuries?”
Being a self-made entrepreneur who started from scratch, Lee was probably a little stubborn when he made up his mind he wanted to do something. Being a successful entrepreneur, meanwhile, he was also clear that he had to be very well prepared before entering a new area of business. So before constructing anything, he and King Car’s research and development team paid many visits to distilleries in Scotland, the United States and Japan, and after careful evaluation decided to give it a go.
Vital to Quality
In 2005, the construction of the distillery in Yilan was completed. Water, which is vital to whisky quality, is one of the reasons for choosing Yilan, where the distillery is able to take advantage of the clean water from the Central Mountain Range and Xue Mountain. Also, as the location is swept by wind from both the mountains and the sea, the air circulation allows the wood to “breathe” better, which results in a richer taste of the liquor.
One of the largest investments King Car has made for the distillery is for the maturing barrels. Ian Chang, King Car’s spirit research and development coordinator and blender, explains that liquors matured in different barrels have different colors, smells and tastes--or colors, nose and palate in terms used by the trade.
The sizes, shapes and woods of barrels and also the liquors previously contained in them are all critical to the characteristics of the whisky matured in them. Wood policies--the selection of barrels to use and the mix of different barrels--are therefore trade secrets of individual distilleries. Chang estimates that King Car has invested nearly NT$1 billion (US$30 million) in a dozen types of barrels from all over the world.
These German stills have a production capacity of 6 million bottles a year. With another set of stills from Scotland, King Car now produces 9 million bottles of whisky a year. (Photo by Huang Chung-hsin)
Barrels ready, stills in place and professional distillers from Scotland moved in, the operation of Taiwan’s first whisky distillery thus began. But something was not quite right, as the production did not go as smoothly as anticipated. “The problem was the Scottish distillers,” Chang says. “They know how to make whisky, but they know how to make whisky in Scotland only.” For example, they had no idea about how the different temperatures in the two places can influence the time needed for maturing. What works in Scotland, therefore, does not always work in Yilan.
Since there was not any local expert, King Car again turned to foreign aid, this time in the form of Jim Swan, who is a leading expert on whisky flavor and composition and an independent consultant to distilleries worldwide. Chang explains that in addition to his experience, Swan is one of the few in the industry with a doctorate in chemistry and biological sciences. “He knows how, and he can provide a scientific analysis to tell you why,” Chang says. “It means he takes the specific environmental elements here into his calculations and comes up with a policy that works.” With more than three decades of experience in the industry and having helped establish several successful distilleries, Swan sets the wood policy as well as the operation procedure for King Car. He flies to Yilan once every other month to inspect production, and keeps close contact with King Car’s research and development team.
Unlike traditional Scottish distilleries, which rely mostly on experience, King Car counts on technology. The entire manufacturing process is regulated by an automatic, precision controlled system. Every day, samples from different stages are collected, analyzed and recorded in Ian Chang’s lab. “For more than three decades we’ve been making beverages, which relies more on R&D and technology than on manpower and individual craftsmen’s experience,” he says. “We don’t have the experience Scottish distilleries do, so we make up for it with what we’re good at.”
Meanwhile, the final blending of liquors from different barrels to reach a desired and uniform “personality” relies on the blender. In “whisky terms,” the company describes the personality of Kavalan whisky as having a nose that is “clean, elegant, floral, fruity and seductive, with hints of honey, mango, pear drop, vanilla, coconuts and suggestions of chocolate.” The palate has “a hint of sweet mango juice with that spicy complexity and gentle warmth on a medium, oily and citrus finish.” And the color is “a lively and passionate amber.”
Through free sampling, King Car tries to break local consumers’ preconceived ideas linking the age of a whisky with its price and quality. (Photo by Huang Chung-hsin)
After sampling early batches, King Car’s managers liked what their blender had come up with. As for whether the consumers would appreciate it or not, the industry has its own way of working. Chang explains that unlike the market for non-alcoholic beverages, in which manufacturers make what consumers prefer, alcoholic beverage manufacturers make what they prefer. “Distilleries come up with what they believe to be the best, and then find a way to make the consumers like the products,” he says. “There is no bad whisky or good whisky in this market, just different whiskies.”
King Car entered the market with what the company believes to be the best, but Kavalan whisky immediately drew some criticism. For one thing, almost all imported whiskies are at least 12 or 18 years of age or even older, and consumers have never seen anything that is only three years old. “That’s exactly the difference between a Taiwanese distillery and a Scottish one,” says Chang, who goes on to explain that the times needed for maturing are different because of the temperature and other environmental differences between the two places. In Taiwan, it takes only a quarter of the time needed in Scotland for the liquor to “work” with the wood. And the equipment in Chang’s lab says that three years in the barrels is the perfect time for the liquor to reach the desired finish.
Setting a Price
The retail price--NT$2,200 (US$67) for a 700-milliliter bottle--has also drawn criticism. Although reduced to NT$2,100 (US$64) since last June because of government tax adjustments, it is still two to three times that of many 12- or 18-year-old imported whiskies. King Car spokesman Ma admits that there were a lot of discussions on the price before the product was launched. “The conclusion was that we should set a price that reflects the quality of our whisky rather than worrying about how much other whiskies retail for,” he says. “We believe we’ve set a price that’s very fair for Kavalan whisky.”
King Car has reason to be confident about the quality of its whisky. It won the silver medal in the San Francisco World Spirit Competition this year, which is one of the three largest international spirit competitions.
King Car has invested in about a dozen different types of oak barrels, which is a key factor in producing quality whisky. (Photo by Huang Chung-hsin)
Jim Murray, author of Jim Murray’s Whisky Bible--the world’s best selling and most influential whisky guide published annually since 2003--also rated Kavalan whisky as silver-medal quality when he visited King Car’s distillery earlier this year. And after sampling, Murray liked King Car’s cask strength liquor even better. “He told me that it’s one of the best he’d ever sampled and it’s definitely gold-medal stuff,” Chang says. So at Murray’s suggestion, King Car decided to release the cask strength as a limited run, which was scheduled for June this year.
For judges in international contests and critics like Murray, age is not an issue when reviewing liquor. Many Taiwanese consumers, however, still associate the quality and price of a bottle of whisky with its age. Richard Ma explains that the company anticipated that one of its biggest marketing challenges would be this myth about age. To counter that bias, King Car opened its distillery last December to the public so that more consumers could learn why they do not have to wait for 12 years for a bottle of Kavalan whisky.
Following trained guides, visitors get to see many of the production facilities and learn about the distillation process and the storage of the whisky in large oak barrels. Detailed information is available in both Chinese and English on large information boards and in printed materials. A few steps from the facility is the tasting room for those who want to sample the beverage, as well as a shop where Kavalan whisky can be purchased. According to Chang, the distillery often receives 7,000 to 8,000 visitors on weekdays, and more than 13,000 per day on weekends and holidays.
Currently, the distillery has a production capacity of 9 million bottles of whisky per year and an expansion project is on the way. In two years, the company expects to become the world’s fifth largest whisky distillery with an annual production of 24 million bottles. In addition to the domestic market, King Car has also started some trial marketing in mainland China, where whisky has been gaining popularity in recent years. “We aim to be a ‘millennium’ distillery--one that lasts for hundreds of years,” Ma says. It is still early days for the distillery, but the foundation seems to be solid and the first few steps have proven to be on the right track.
Write to Jim Hwang at jim@mail.gio.gov.tw