Graphic Done by Mario Arasakumar
On April 30th, 2020, prominent watchmakers will congregate for the 103rd annual trade show, Baselworld. The convention, hosted in Basel, Switzerland – birthplace of tennis phenom Roger Federer – will showcase the newest releases from luxury watch brands like Rolex, Patek Philippe, and Jaeger-LeCoultre. The cost of covering a wrist ranges between a $900 Bulova and a $1,200,000 Jaeger-LeCoultre.
Mostly small changes are offered up, the sizing of lugs and crowns, for example, but every once in a while, significant changes are delivered.
In luxury markets like this, however, nothing too disruptive tends to stick. Value is placed on the craft and historical roots rather than the practicality often accompanying innovation. Travel back a few decades and this concept is illustrated through the advent of quartz watches.
In December 1969, about three months after Neil Armstrong rose to fame, Seiko released Astron, the world’s first quartz watch. Quartz watches differ as they are powered by a crystalline battery rather than kinetic energy (generated from wrist movement), which is how automatic watches work. This revolution brought about the Quartz Crisis, as the new technology offered a plethora of benefits: more accurate timing, ease of use, less maintenance, lower costs, and mechanical durability.
While the Quartz Crisis hurt local swiss brands and catalyzed the Asian watchmaking machine, it never reached the critical velocity needed to usurp the mechanical luxury watch market. In 1971, Rolex dipped its nails in the market with the 5100 Date which quickly sold its minute production lot of 1,000 watches. Eager to pounce, it pursued the Rolex Oysterquartz which, while being produced for 25 years, resulted in a meagre production of 25,000 watches. For perspective, Rolex – and Tudor, it’s more affordable subsidiary – supplied over 1,000,000 watches in 2019 alone. Buyers seemed to have no interest in these novel watches, irrespective of their technical advantages. The revolution didn’t seize the luxury market. Rather, it created a new segment and challenged less costly watchmakers.
In 1495, the Scottish exchequer journal recorded, “To Friar John Cor, by order of the King, to make aqua vitae, [eight bottles] of malt [liquor].” This reference to “aqua vitae”, literally “water of life”, was the first mention of what would become known as scotch whisky. Throughout the next 500 years, the industry became a global phenomenon that led to hundreds of distilleries lining glens where water abundantly flowed. Like swiss watchmakers in the 20th century, these distilleries secured a moat around their valleys and a place atop the price and quality chains of the global liquor industry. The Macallan, Dalmore, and Glenfiddich’s of the scotch world share an eerily similar corporate model to the Rolex, Omega, and Breitling’s of the watchmaking business.
Scotch’s premium pricing stems from constrained supply due to a rigid aging process and strict production regulations. New technology attempts to match the tastes Scottish distilleries have perfected without having to age whisky for years. Using molecular manipulation, cutting edge tech companies like Endless West – based in San Francisco, California – are making Glyph, a spirit whisky that takes 24 hours to mimic the famous decades-old scotch tastes that are so coveted by aficionados.
The company employs what they call a note-by-note, three-step production process. First, they map different taste profiles – one may target a smoky Highland taste while others seek the sweeter Speyside taste palate. Don’t know where the hell the Speyside region is, don’t worry, it won’t add much to your bill.
Once specific tasteful molecules are identified, the next step is procurement. Corn, sugar, and fruit are the common hiding places that lab rats sniff out in search of these flavorful notes. Everything is sourced naturally at this step, from plant yields, yeast, and fruit, which eliminates the need for artificial ingredients.
The last step combines the molecules with a grain-based spirit to develop a whisky-like flavour profile. “It’s important to emphasize that everything we make is our own original recipe. Using our note-by-note production process, we can make Glyph in under 24 hours or overnight,” Endless West CEO and co-founder Alec Lee told Fortune. The notion that 24-year-aged whisky’s taste can be recreated in 24 hours is an astonishing and, for some, frightening prospect.
Luxury markets often share an arduous and inefficient production process. Instead of having Swiss horologists fret over each spring and rotor through an eye loupe, quartz batteries allowed for a streamlined process, automated by machine rather than man. Similarly, diamonds – a monopoly market borne of effective marketing and consumer conditioning – have been provided the alternative of cubic zirconia (CZ). Instead of investing billions of dollars in African mines operating 250km below the earth’s surface, laboratories can develop CZ crystals for ~0.5% of the cost, but they haven’t (in the luxury market, at least).
Fans of the authentic, artisan original will not make concessions. But innovations – like lab-made scotch – will, however, create sizable sibling markets. Asian watchmakers like Casio, Citizen, and Seiko have all seen success develop from the quartz disruption. CZs provide a reasonable alternative to frugal jewellery buyers that appreciate ostentation without doling out thousands of dollars. Luxury markets will always retain purists who demand a product should never stray from antecedents. Innovation will, however, drive sibling markets that appreciate both craft and practicality.
Such is this author’s prediction for the scotch industry. Die hard scotch-swillers will refuse to consume artificial alternatives that imply science can supersede the art of barrelling and aging a fine whisky. Watch connoisseurs in Switzerland and DeBeers proponents will side with this logic. Luxury goods are the epitome of times past, and no amount of technology and innovation will ever be able to disrupt that pristine image.