Taiwanese Kavalan whiskey beats the Scots own

I dont understand their business plan. They invest 30 million US dollars, hire an expert “nose” and all that. And their capacity is 9 million bottles a year. Surely they are not going to be able to sell 9 million bottles priced at 2200nt a bottle are they?? What do they plan to do? What do you think their cost could be. Is it costing 300nt to make the 2200nt bottle of whiskey?

How much is a fair price for the product in your view (vis-a-vis its competitors)? And how much would it have to be priced at to make YOU a regular consumer? And how would YOU drink it? Straight, on the rocks or mixed with coca cola?

[quote=“tommy525”]I don’t understand their business plan. They invest 30 million US dollars, hire an expert “nose” and all that. And their capacity is 9 million bottles a year. Surely they are not going to be able to sell 9 million bottles priced at 2200nt a bottle are they?? What do they plan to do? What do you think their cost could be. Is it costing 300nt to make the 2200nt bottle of whiskey?

How much is a fair price for the product in your view (vis-a-vis its competitors)? And how much would it have to be priced at to make YOU a regular consumer? And how would YOU drink it? Straight, on the rocks or mixed with coca cola?[/quote]
I wouldn’t pay more than NT$3-400 a bottle for a s year old whiskey. I mean, Glenfiddich etc run at around NT$800-1200 a bottle and that’s in the 12 year old range ffs.
A student gave me a bottle of Taiwanese red wine called Pandorla (yes, Pandora with an “l” :unamused: ) that is made by some chemical company in Taiwan by “mixing” the “best” french red wines and doing some chemical “magic” on it and [quote]adding sweeteners for the Taiwanese palate[/quote]… I tastes like it was made by a chemical company, i.e. like ass. It has almost no aroma and all I could think of to describe it was - Chemical Shit Storm in a Glass. Perhaps that would be a better name than Pandorla.

IMVHO, besides Kinmen Gaoliang and that rice wine grog the Aboriginals make (and ok, I like Taiwan Beer), Taiwanese are good at many things, but making liquor, especially whiskey and red wine isn’t among their talents…

[quote=“tommy525”]How much is a fair price for the product in your view (vis-a-vis its competitors)? And how much would it have to be priced at to make YOU a regular consumer? And how would YOU drink it? Straight, on the rocks or mixed with coca cola?[/quote]From memory, it’s a bit better than Suntory. So could be priced at a suitable premium over Suntory, but still well below the Glenfiddichs/Macallans/Laphroaigs etc.

It’s fine straight or with a drop of spring water or with ice if you must. It’s perfectly drinkable, just nowhere near worth the asking price.

If they were able to market 9 million bottles at some USD 68/bottle thats a lot of dosh in a year. Thats over 600 million US dollars a year in revenue !!!

HOw well is the stuff sellling anyway? IS china the big market?

They said in an interview they’re in for the long term. In the medium term they must be hoping to capitalize on local pride to position themselves as a stylish (read–overpriced) brand in that segment of the local market. Setting the price too low could work against that, with little probability of it being a profitable product on its own merits at a low price anyway. It’s a huge company if I’m not wrong, I’m sure they can afford to take whatever losses they are on this for years.

Yes if they marketed the stuff at 300nt a bottle Taiwanese wouldnt buy it because “if its cheap its no good” mentality is strong on Taiwan. And they wouldnt make a decent profit on such a major investment and having to import all the raw materials and all that. And it would be a LONG LONG LONG climb to reach the edifying height of 2200nt/bottle.

So I guess they are starting very expensive and hoping that more and more people can be won over to the label. And of course in the meantime operating at much much lower capacity then they are designed for and running manageably in the red. As you said they perhaps factored in a ten year loss cycle in the beginning in order to position themselves where they want to (and need to ) be afterwards. Because its not a small investment they made and also their cost structure will likely remain rather high versus native producers of the same in Scotland. Plus their advisors such as Dr. Jim Swan would command a rather high premium for crafting this drink.

And with time their product will be 7 or 8 or 10 years old and then they could justifiably sit on the shelf for 2200nt per bottle perhaps?

It’s interesting that “premium products” here are really much more expensive than the regular equivalents. Someone was telling me the other day that Haagen-Daazs in the US is still a premium brand, but that it’s priced just a bit above other regular icecream. That, apparently, is enough for customers in the US. But here the price is just ridiculous.

Yup the Chinese in America wont pay much over invoice even for BMW and Mercedes but in TAiwan they brag about how MUCH their cars cost them, not how LITTLE>

By that time they can stick “12yo” stickers on all the unsold bottles :slight_smile:

By that time they can stick “12yo” stickers on all the unsold bottles :slight_smile:[/quote]
lol…I can see that happening!

I think thats the plan.

They are aggressive:

machinery.cens.com/cens/html/en/ … 26630.html

With the typically Taiwanese very loose application of corporate ethics, especially with this kind of money on the table, it seems to me very unlikely that King Car just rolled the dice and serendipitously came out the winner in this taste testing category… I’d not be in the least bit surprised if some those tasting panel members had a particularly lucrative time of it this year and at the very least this big money marketing gamble explains why their NT$2,400 single malt was entered in a category of budget priced low quality blended Scotches… Just what deceptive marketing and national pride may achieve them on the local market remains to be seen, but their goal of being one of the top 5 distillers in the world is IMO, laughable…

I wouldnt write them off from their goal. They invested 30 Mil in it and plan to invest another 30 mil. Thats not a small committment. They have announced a cheaper whiskey is coming. So they know that they cant sell 24 million bottles at 2400nt !

What’s the cheaper one going to be? A three week old at NT$1200 a bottle??

What’s the cheaper one going to be? A three week old at NT$1200 a bottle??[/quote]

You got it bud ! Whatever brings in the bacon they will do. They are Taiwanese afterall. Not ones to let a dollar slip by.

[quote]their goal of being one of the top 5 distillers in the world is IMO, laughable…
[/quote]
Don’t kid yoursef! I PROMISE you that the likes of Dalwhinnie, Morangie, Glenlivet, Balvenie, Talisker, Laophraig, and, oh, probably another 3,000 or so upmarket distillers are absolutely QUAKING! QUAKING, I tell you, in their shoes! :roflmao:
Course, it doesn’t say exactly in what respect they’ll be in the top five. Chemical additives, maybe?

I think they meant in production . 24 million bottle a year production will nearly equal Suntory whiskey production. They are after Quantity with enough quality to SELL. Whereas the established brands are after tradition and preserving their name, not only about overall production.

King Car wants to make whiskey like they make soft drinks. Big production at acceptable quality for sale to the Chinese mainland and other Asian markets and whoever will buy it.

If their pockets are deep enough they will be able to at least have a chance at sustaining mass production. Thats what they are all about. Mass production. Whiskey as a venue to PROFIT pure and simple.

Yeah but having a theoretical production capacity of 24 million bottles a year in no way shape or form means you have a market demand for 24 million bottles a year in sales… Especially with a product range of one, with one more on the way, both woefully overpriced…

It’s a bit like Kymco announcing that from now on they’ll exclusively manufacture a made in China 125cc chopper with a sales price of NT$500,000 and with that one model they expect to out strip Harley Davidson, Honda, Yamaha and Ducati in motorcycle sales…

Yes but they dont seem to be worried. They presently have a 9 million bottle production capacity and are planning to invest another one billion taiwan dollars (in addition to the first billion already invested) to up their capacity to 24 million bottles. Doesnt look like they are very concerned what to do with all the production at this point. The production costs must be low enough that they could find an outlet for the stuff. Their cost may be only something like 200nt a bottle.

Grains are pretty cheap. Even if imported from Scotland. The water is pretty cheap. The major investment is in the hardware (the used bourbon, sherry barrels, the stills, housing, etc) and the know-how. I would bet the good doctor (the creator of their blend) has a good payment scheme with them.

They know what they are doing.

Master Kang’s new soft drink facilities in China cost over 50 million US dollars. The liquid refreshment biz is big money invested and big monies returned.

If Kavalan doesnt make it selling their stuff for 2400nt/bottle, they will soon come out with much cheaper blends and flood the Chinese and SouthEast Asian markets.

Maybe even move into South America and Europe and other places too. King Car has a lot of experience marketing their soft drinks around the world already.

You seem very sure of that…