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Why Taiwan Is Poised to Conquer the Whisky World

This small East Asian country is going toe to toe with Scotland and Japan

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"The Taiwanese do it better than the Scots these days," states Chuck Rhoades, the character portrayed by Paul Giamatti on the Showtime series Billions. Rhoades marvels at the whisky in his glass. For the uninitiated, this episode, which aired last February, must have unleashed a flood of Google searches. Taiwanese whisky? That's right. Say hello to Kavalan.

The general public may have gotten its first look at Kavalan, whose single malt distillery is located an hour southeast of Taipei in Yilan, Taiwan, in that moment, but the whisky world has taken notice for a bit longer. Kavalan's distillation began in 2006, the company's first whisky was released in 2008, and the accolades and awards have quickly piled up since. Not only is Kavalan the sole international player representing Taiwanese whisky (see sidebar below), but the brand has managed to kick-start an entire spirits category.

In 2012, Whiskey author Jim Murray named Kavalan's Solist Fino Sherry Cask his best "New World Whisky of the Year," and three years later Kavalan's Solist Vinho Barrique was named the "World's Best Single Malt Whisky" by the World Whiskies Awards, while five Kavalan whiskies garnered double golds at the San Francisco World Spirits Competition that year. Already in 2016, Kavalan's Solist Amontillado, which hits the U.S. market this fall, was hailed as the "World's Best Single Cask Single Malt" by the World Whiskies Awards. It's an impressive collection of hardware, from some of the most respected awards doled out across the industry.

What began as Kavalan's biggest challenge has become its secret ingredientTaiwan's subtropical heat.

The first murmurs of a Kavalan craze, though—and the fact that award-winning whisky production was taking place in Taiwan—began in earnest in 2010, when Kavalan beat out a handful of the Scotch big boys in a blind tasting event in London organized by a newspaper. Adding insult to injury, the tasting was held on Burns Night—a celebration of Scottish cuisines and traditions. Burn.

Not only was Kavalan beating the Scots, but the young Taiwanese producer managed to pull off the feat in fewer years than it should even take for a single cask to mature, let alone an entire company. And this is all in stark contrast to the fact that even as age statements continue to disappear, many drinkers still associate better quality whisky with more time in the barrel.

Kavalan Distillery in Yilan, Tawiwan. [Photo courtesy of Kavalan]

Whether or not that's justified, some consider an 18- or 25-year-old Scotch as the standard-bearer for excellence, while perhaps a 10- or 12-year-old is seen as a mere barrier to entry. With Kavalan only making whisky for a decade, that means even their very oldest remaining stock wouldn't past that age test, let alone what they've produced, aged, bottled, and sold since. So, how in the world is this scantly aged spirit from an upstart whisky country conquering the whisky world?

The Beginnings of a Whisky Empire

"When we first began, many people were very skeptical," says Yu-Ting Lee, CEO of the King Car Group (which owns Kavalan) and son of Tien-Tsai Lee, who founded King Car in 1956 and dreamed of one day opening a whisky distillery.

"Mr. Lee wanted to have a distillery when he was a young man, but he wasn't able to," explains Ian Chang, Kavalan's master blender. It wasn't as easy as simply getting the funding—private enterprises were barred by the government from opening distilleries until Taiwan joined the World Trade Organization in 2002. Planning for the Kavalan distillery began shortly after.

King Car Group is actually a massive corporation which counts the Kavalan distillery and its whiskies as one piece of its highly varied enterprise—from coffee and health drinks, to shrimp and orchid production, and beyond—and Tien-Tsai Lee was at least at one point ranked amongst the wealthiest men in Taiwan. Entering the whisky business with that much financial oomph is partially how Kavalan was able to take such large strides forward so quickly.

Yet, as Lee mentioned, the doubters and skeptics were many, and Kavalan needed more than monetary investment. They needed expertise and knowhow. "We contacted 10 consultants, and they turned us down and said it was not possible," explains Lee.

They did find a taker though while the distillery was still in its planning phases: Dr. Jim Swan, a noted whisky consultant and distiller with a PhD in Chemistry and Biological Sciences. Swan helped the distillery find its legs, offering guidance on everything from stills and warehouses, to fermentation and distillation processes.

Kavalan strictly produces single malt whisky, and follows a double distillation system with 12,000-L wash stills and 7,000-L spirit stills. Five more sets of stills are on the way, which will bring their annual production capabilities to a staggering 9 million litres of pure alcohol. That would comfortably place Kavalan in the top 10 of Scotch single malt distilleries in terms of size, in a class approaching industry giants such as the Glenlivet, who happens to have a solid 180-year head start.

The Magic Behind Taiwanese Whisky

Kavalan describes itself as "Taiwan bottled," and the whisky's ties to its country run deep. "Kavalan" is the name of both a Taiwanese aboriginal group and the region they inhabited. The area is now known as Yilan County, where Kavalan's distillery is situated. The name looks to the country's past, while its original bottle looks to its modern accomplishments, designed in homage to the Taipei 101 towerthe tallest building in the world when it was completed in 2004, a year prior to when Kavalan's construction began.

L to R: Inside Kavalan, and master blender Ian Chang. [Photo courtesy of Kavalan]

There's more to that bond between whisky and country than symbolism, though. What began as Kavalan's biggest challenge has become its secret ingredient—Taiwan's subtropical heat. It's the reason that Lee was told it couldn't be done, and now it's the reason Kavalan is able to supercharge the whisky maturation process, accomplishing in four or six years what might take a Scottish producer 15 or 25 years. The very simple explanation is that heat increases the interaction of the spirit with the wood, leading to more rapid and intense extraction of desired flavor compounds.

"We try to utilize all natural resources ... instead of fighting the heat, we should harness it."

"Here at Kavalan, it is aging redefined," states Chang. "It's the heat which really has a huge impact on the maturation and quality." Temperatures routinely hover above 110 degrees in the upper floor of Kavalan's five story warehouses, and the distillery fully capitalizes on that to let nature run its course. "We try to utilize all natural resources ... instead of fighting the heat, we should harness it," adds Chang.

The stifling heat leads to an angel's share which can be as high as 12 to 15 percent. Therefore, not only is the whisky reaching maturation quickly, it's also disappearing rather rapidly as well. Even if Kavalan wanted to age its whisky as long as Scotch producers doand they don'tthe whisky would be exceedingly over-aged for the same reasons; they wouldn't be able to as there would be nothing left in the barrels.

While the area's humidity plays a role in the aging process, it doesn't alter maturation. "Humidity doesn't affect the flavor and maturation, it's the heat which increases extraction," says Chang. Instead, what humidity does is to change the dynamics of that aforementioned angel's share. More alcohol than water is lost, comparatively, which lowers the proof of the whisky over time as opposed to raising it, as is common with bourbon in Kentucky, for instance.

In addition to Taiwan's subtropical environs, Kavalan also chose its precise location thanks to its abundant, clean water source. The nearby Lanyang River happens to have a favorable mineral content, and flows down through the adjacent mountains in an area that previously lacked much industry. "Yilan is a city which is known for its tremendous, high rainfall," explains Chang. "And the region is also known for the very high quality of its water. I believe the first advantage that we have is this natural environment."

All in all, whisky that gets made here could be imitated elsewhere, but it could never be properly replicated. The climate's heavy-handed relationship with the maturation process is entirely unique.

Whisky's Place in Taiwanese Drinking Culture

One way to understand Kavalan's emergence in Taiwan is to look at the country's interest in Scotch. According to the latest available statistics from the Scotch Whisky Association, Taiwan was the 15th largest global market by volume for Scotch, importing over 1.7 million 9-liter cases in 2015.

That's impressive enough for a country with a population of 23.5 million, 53rd globally. Then consider that Taiwan ranks 4th if measured by value rather than volume, with Scotch exports to the country totaling over £182 million, placing Taiwan behind only the U.S., France, and Singapore. In other words, not only is Taiwan importing a great deal of Scotch, but its interests are heavily skewed towards the good stuff.

As such, it's no surprise that the first distillery to emerge in the country didn't flood the market with cheap whisky meant as mixing fodder. Kavalan has emphasized precise control and scientific methods from its inception, racing towards the production of whisky which not only would do the rest of the world proud, but more importantly, would find a place at its own tables, too.

"That's why it's important for us to have a strong foothold here in home," says Mr. Lee. "And then to continue to branch out to international markets."

A glass of Kavalan. [Photo courtesy of Kavalan]

American whisky drinkers got their first taste of Kavalan in 2014, when Anchor Distilling Company began importing the brand here. Even with a late start comparative to the rest of the world, the U.S. is already the brand's second largest export market, trailing only the EU as a whole. "I have very high hopes for the American market," says Lee, who expects America to emerge as the top export destination within two to three years.

As for finding a place at its own tables, well, Taiwan is apparently a thirsty country. "We drink a lot here," says a laughing Chang. "Instead of wine, we drink whisky. Before, during, and after a meal."

Whisky that gets made in Taiwan could be imitated elsewhere, but it could never be properly replicated.

During those meals whisky is commonly portioned out in mini glasses about a third the size of a typical shot glass, with pitchers on hand to dole out refills. Water is enjoyed on the side, as the Taiwanese like their whisky strong.

"In Taiwan we say there's no such thing as strong alcohol only weak men," jokes Chang. "In Taiwan, consumers prefer high strength, cask strength whisky, like our Solist Sherry."

The switch towards drinking more whisky, even with meals, represents a generational change, with older Taiwanese tending to continue drinking traditional beverages like Chinese rice wines. "I think we're looking at a paradigm shift not just in Taiwan, but also around the world," adds Lee.

Meanwhile, though beer represents the majority of alcohol sales in the country, younger Taiwanese are now also choosing whisky and other spirits, and are even beginning to seek out craft cocktails.

While they've figured out the heat and humidity, and recognition amongst the whisky nerd set is already high, Kavalan's largest challenge that remains is getting the average consumer to give this crazy Taiwanese whisky thing a chance. "Whisky is a sector that is somewhat dominated by these conventional, well-established brands in a lot of people's minds," said Lee. "A lot of these whisky connoisseurs are creatures of habit. Our hope is that we can win them over by showing them these high quality whiskies that we produce here."

You don't have take it from me, or even from Chang or Lee though. Just watch Giamatti as Rhoades sip his Kavalan and pretend you aren't intrigued.

Editor: Kat Odell

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