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09 Mar 10

A bespoke eCommerce website has been designed for Ardbeg by Story to drive sales and increase efficiency for process orders.

The system has been developed to meet growing international demand and will support the brand’s CRM programme, Ardbeg Committee by encouraging membership.

The website integrates with payment and shipping platforms to provide a safe and trusted online shopping environment.

The website uses the brand’s earthy, muted colours and in line with Ardbeg’s brand values, using new photography by Packshot Factory to display its products.

Hamish Torrie, brands director at the Glenmorangie Company, explained: “To support the Ardbeg Committee and to manage increasing demand, we needed something that would ensure secure and efficient accessibility to our products and drive sales. Story, with both strong creative and digital expertise, has created an innovative eCommerce system which continues to push the boundaries and persuasively spreads the Ardbeggian message worldwide.”

Manos Riglis, digital director at Story, added: “It was a real collaborative effort and we worked closely with The Glenmorangie Company I.T. department. Our digital team had to be technically innovative to allow us to achieve something that not only gives Ardbeg’s customers a sense of security and confidence when buying online but also didn’t disappoint emotionally. Ardbeg fans expect to be seduced by the brand’s quirky personality, so the design of the website has also to charm and tease whisky lovers. A very provocative combination.” http://www.thedrum.co.uk

08 Mar 10

Glenmorangie has generated £500,000 worth of revenue and increased membership of its fan club by 2,000 since it launched an ecommerce site for its Ardbeg whisky brand last week.

Glenmorangie launched the ecommerce site, created by Edinburgh-based agency Story, to boost global sales of its special-edition Ardbeg Rollercoaster whisky.

Ardbeg Rollercoaster was issued to celebrate the tenth anniversary of Glenmorangie’s relaunch of the Ardbeg brand.

Hamish Torrie, brand director at the Glenmorangie Company, said the campaign generated orders for 10,000 bottles in its first week. Ardbeg Rollercoaster retails at £50 a bottle.

The campaign also encouraged an additional 2,000 consumers to sign up to Glenmorangie’s 50,000-strong fan club, the Ardbeg Committee, according to Torrie.

The company generated interest in the ecommerce site through a direct mail campaign in the run-up to launch. “Through this mix of old techniques and new technology we generated huge demand,” said Torrie. “Ardbeg is a very cult brand so we wanted to keep a hand-made element to the campaign.” http://www.nma.co.uk/

08 Mar 10

Glenfiddich takes throne as best-selling malt
By Tristan Stewart-Robertson, http://news.scotsman.com/
FOR more than a decade it has held its position as the best-selling single malt whisky in Scotland.

But after 13 years at the top, Glenmorangie has lost its title as the nation's favourite to its rival Glenfiddich.

Latest figures show a massive jump in sales of Glenfiddich and a parallel drop by Glenmorangie.

According to market analysts Nielsen, sales of Glenfiddich in the UK have rocketed 24 per cent to £27.1 million while Glenmorangie has plummeted 24 per cent to £17.5m over the past year.

Neither firm was available last night to comment on the figures but whisky experts expressed their surprise that Glenmorangie had been dethroned.

The report, in trade magazine The Grocer, said that while it was already the leading single malt in the UK market overall, taking the top spot in Scotland had previously eluded Glenfiddich.

James Stocker, marketing controller for premium dark spirits at First Drinks, the distributor bought by Glenfiddich distiller William Grant & Sons in 2006, put the success down to continued investment in the brand.

He said: "Despite the tough market conditions, we have continued to invest in Glenfiddich when other people have decided to cut back.

"William Grant is still a family-owned company and see Scotland in particular as a key market. The fact that we continue to invest in our Scottish distilleries and employ Scottish people is very important."

In 2004 Glenmorangie was bought by Moët Hennessy Louis Vuitton and Edinburgh-based whisky writer Charles Maclean said they had upped their game to improve their "premium position". He said Glenmorangie had ceased chill filtration to improve the texture.

Mr Maclean said: "It's difficult to understand why this change has happened. I would think it comes down to advertising and pricing. From a taste perspective, Glenmorangie have upped their game. It's little things like filtration that have enhanced the flavour, and that can be influenced by a whole range of factors in malt whisky.

"Generally distillers don't like to change the flavour of their produce because customers don't like it. And 90 per cent of whisky goes into blends.

"But I think Scots are shopping around a bit more. Both Glenmorangie and Glenfiddich are relatively light styles of malt whisky compared to McCallum's, for example."

Ken Storrie, owner of The Pot Still in Glasgow, renowned for its large whisky collection, said the reported sales figures do not match those of his customers.

He said: "It would be nice to start shifting some Glenfiddich. For every seven or eight cases of Glenmorangie, we sell one bottle of Glenfiddich. Glenmorangie has always been more popular.

"I think customers are getting more sophisticated and we get a lot of overseas visitors and they can get Glenfiddich anywhere. They look for something more unique.

"Taste is more relevant than anything when customers have flown over and spent money on hotels and food. They're not looking for cheap malt of the month.

"Glenmorangie is something people flock to and has different expressions, where Glenfiddich is just the same old, same old 12 and 15 year old. People can explore more with Glenmorangie."

Earlier this year, Glenmorangie announced it had found a new home for its headquarters in the centre of Edinburgh. The company said it would move from Broxburn, West Lothian, to The Cube building in the east end of Edinburgh by September 2010.

In 2008, the top brands in the UK were Glenfiddich, followed by Glenmorangie Original, Glenlivet, Glenmorangie 10 year old, Laphroaig, Highland Park, Aberlour, Glen Moray, Isle of Jura and Talisker.

More than 2,500 brands of Scotch whisky are sold around the globe, with as many as 200 available in the UK. In the first nine months of 2009, more than 807 million bottles were shipped abroad, a growth of 1.5 per cent on the previous year.

03 Mar 10

Seven whiskies have scooped the titles of ‘World’s Best’ in the final round of Whisky Magazine’s World Whiskies Awards 2010.

The 2010 winners are:

World’s Best Single Malt Whisky
Ardbeg Corryvreckan

World’s Best Blended Whisky
Hibiki 21 Years Old

World’s Best Blended Malt Whisky
Taketsuru 21 Years Old

World’s Best American Whiskey
Rittenhouse Straight Rye 100 proof

World’s Best Whisky Liqueur
Wild Turkey American Honey

World’s Best Grain Whisky
Greenore 15 Years Old

World’s Best New Release
Parker's Heritage Collection Golden Anniversary

For the full results, click here

19 Feb 10

The 16th annual Malt Advocate Whisky Awards were recently announced on Malt Advocate magazine Publisher John Hansell's blog, What Does John Know?

The categories and award winners are:

Best Buy Whisk(e)y of the Year:
The MacPhail's Collection (Tamdhu 8 year old,
Glenrothes 8 year old, Highland Park 8 year old)

Artisan Whiskey of the Year (operating 10 years or less):
Stranahan's Colorado Whiskey (Batch #49)

American Whiskey of the Year:
Parker's Heritage Collection "Golden Anniversary"

Canadian Whisky of the Year:
Crown Royal Cask No. 16

Irish Whiskey of the Year:
Jameson Rarest Vintage Reserve (2009 release)

Scotch Whisky: Blend of the Year:
Compass Box, "The Peat Monster"

Scotch Whisky: Single Malt of the Year:
Ardbeg Corryvreckan

Industry Leader of the Year:
Mark Brown, President and CEO of Buffalo Trace Distillery

Distillery of the Year:
Cooley

Pioneer of the Year:
Whisky bloggers

Lifetime Achievement Award:
John Ramsay & Robert Hicks

Also announced were the Top Ten New Whiskies for 2009
(listed alphabetically):

Ardbeg Corryvreckan
Brora 30 year old (2009 Release)
Dalmore 50 year old
Gold Bowmore, 1964 Vintage
Jameson Rarest Vintage Reserve (2009 Release)
Laphroaig 25 year old
Pappy Van Winkle's Family Reserve (Bottle B1986)
Parker's Heritage Selection Golden Anniversary
Rittenhouse Rye 25 year old (Barrel #1)
William Larue Weller (2009 Release)
The Malt Advocate Whisky Awards exist to recognize excellence in the world of whisky. Now in their sixteenth year, these awards are the oldest and longest-running annual whisky awards program. They honor the world's greatest whiskies and distilleries, and the individuals who make and promote them. To be eligible for this year's awards, products must have been sold in the U.S. during the 2009 calendar year.

A complete write up of each award winner will be published in the Spring issue of Malt Advocate magazine, out March 1st. You can see this in advance, with a lively discussion about each winner, on John's blog (www.whatdoesjohnknow.com).

14 Feb 10

Scotching the myth that all whisky has to wear a kilt

Ian McConnell, http://www.heraldscotland.com
Hiroyoshi Miyamoto quips that his Japanese employer, Suntory, does not use Sean Connery to advertise its whisky any more because the Scottish actor is “too expensive”.

But it is not just a matter of cost. Miyamoto, whose business card signals to people that he is just as happy to be known as Mike as Hiroyoshi, hammers home his belief that there is absolutely no need for Japanese whisky to dress itself up as Scotch to sell.

He knows plenty about both Japanese and Scotch whisky.

Miyamoto has been executive general manager of Suntory’s Yamazaki single malt whisky distillery, between the ancient Japanese capital of Kyoto and the city of Osaka, for five-and-a-half years.

Prior to that, he was based in Glasgow as deputy managing director of Suntory subsidiary Morrison Bowmore. This was his second stint at this Scotch whisky subsidiary, known best for its Bowmore single malt from Islay. He spent about five years at Morrison Bowmore on his first posting, while his second term in Scotland followed an interlude at Suntory’s Tokyo office and as head of the Japanese firm’s Hakushu distillery.

Miyamoto is dressed in a fawn-coloured distillery uniform with purple piping, complete with hat. The uniform, particularly the hat, gives him the look of someone who might be going for a round of golf. Miyamoto has a laid-back air, in keeping with the “Hiroyoshi (Mike) Miyamoto” name on his card.

However, when he starts to speak it becomes clear he is driven by a real passion for the production of whisky at the Yamazaki Distillery. And he seems determined to build further the reputation of Japanese whisky on the world stage.

He talks of himself as a whisky “engineer” and about the “science” of the production process. He emphasises his belief there should be continuous improvement in the product. Miyamoto also highlights his view that the Scotch whisky industry is more resistant to change.

Suntory’s old habit of using western actors to advertise its whisky brands provided the pretext for the fictional film Lost In Translation, in which a jet-lagged Bill Murray finds himself bemused at the instructions of an ultra-trendy and volatile director making a commercial for the Japanese drinks giant’s whisky. Murray is confronted in a subsequent scene by a photo-grapher who wants him to act like Roger Moore.

Asked about Suntory’s use of famous actors, Miyamoto replies: “We don’t use Sean Connery any more. He is too expensive for us.”

Miyamoto highlights the publicity which Suntory’s whiskies receive from amateur bloggers and the boost from visits to the Yamazaki Distillery. Word-of-mouth is now a key marketing strategy.

“About 110,000 people came to this distillery last year,” he says. “They went back with a good impression of whisky.”

Eschewing the idea of using a “very famous” western actor to advertise Suntory’s whisky these days, Miyamoto says: “We don’t want to give the consumer the wrong impression, that we are making the Scotch whisky-type. We are making Japanese whisky. Maybe 25 or 30 years ago, the image of Europe seems to be higher and better. That is why we might have decided on the European actor in our TV commercials for whisky, but the Japanese people these days understand the Japanese product should be good as well.”

Miyamoto highlights the raft of gold medals won by Suntory whiskies, including Yamazaki, at prestigious international events.

As he conducts a tour of the Yamazaki distillery, which began production in 1924, he pays tribute to Suntory founder Shinjiro Torii’s “bold” move to diversify into the production of whisky.

Suntory, founded in 1899 as a small merchant store in the Osaka area, was by the 1920s doing very well for itself, selling lots of fortified port wine or Akadama.

Miyamoto says of Torii’s vision: “He just wanted to make authentic whisky for the Japanese palate. At that time, Scotch whisky was too characteristic and unique to the Japanese palate.”

The company board, Miyamoto declares, told Suntory’s founder that he was “insane” to take such a step with a business which had made them wealthy. Miyamoto notes that, at that time, Japan was at a “primitive or pre-advanced” stage relative to the likes of the UK when it came to industrial processes.

However, he says that creating whisky for the Japanese palate was Shinjiro Torii’s dream and “his dream has come true now”.

Asked about the differences between whisky production in Scotland and Japan, Miyamoto replies: “Scotland is blessed with Mother Nature. That is why whisky-making started.”

He noted that Japan, in order to overcome potential negative factors in terms of the environment for whisky-making, had to adopt a “different type of approach and philosophy”.

Miyamoto, however, highlights the quality of water at Yamazaki. He points out that a famous Japanese tea master, Sen-no-Rikyu, built a tea house there nearly 500 years ago.

Humidity is another vital factor to ensure whisky remains in good condition as it matures, notes Miyamoto. Scotland has no problem in this respect. Miyamoto says that it can often by too dry in Japan. However, he adds that three rivers merge at Yamazaki. These rivers are at different temperatures and their confluence causes a “fog”.

Yamazaki Distillery uses Scottish barley, with Miyamoto noting the Japanese equivalent is four or five times the price.

And he makes a big deal of the fact that the fermentation vats are made of wood. He says Yamazaki has moved from stainless steel vats to wood, whereas a lot of Scotch whisky companies have moved in the opposite direction.

Miyamoto is sure this is the right way to go because the small bacteria which play a part in the fermentation process stay in a wooden vat even after washing. Such bacteria would be wiped out at this stage if the vats were made of stainless steel.

In a whisky nosing and tasting session after the tour, Miyamoto points out the “oriental incense” and cinnamon aftertaste from the Japanese oak in the Yamazaki 12-year-old single malt, which sells in shops in Japan for the equivalent of about £50 a bottle. And he flags the sherry flavour of the 18-year-old Yamazaki, which retails for about £120.

Asked about the impact of the global economic downturn on the privately-owned Suntory’s whisky sales, Miyamoto notes that there was an increase in volumes last year. This followed 26 consecutive years of decline.

Yamazaki increased its sales. Suntory’s Hibiki blended whisky suffered a fall in sales, with Miyamoto pointing out this whisky is often bought for business entertaining and such expenditure appeared to have been reduced by most companies last year.

However, Suntory’s Kakubin standard blend “square bottle” whisky did well, because of the successful promotion of this product as the base for a “high-ball” drink with soda, and this helped ensure the rise in overall volumes.

Miyamoto says Yamazaki now sells about 150,000 cases of 12 bottles each year in the Japanese market and about 25,000 cases overseas. He hopes for a significant increase in overseas sales in countries such as the UK, France, Sweden, the US, China and Taiwan.

UK supermarket giant Tesco has expanded the number of stores in which it stocks Yamazaki 10-year-old from 100 to 370. Hibiki was introduced last year to the UK market-place.

Asked if Morrison Bowmore had proved a good investment for Suntory, Miyamoto replies: “Yes, indeed...It is a long-term investment. Now Bowmore is...one of the top 10 single malts in Scotch whisky.”

Suntory acquired a minority stake in Morrison Bowmore in 1989 and took full ownership in 1994.

Miyamoto says: “Scotch whisky people don’t want to introduce something new to their system. They don’t want to change things. On the other hand, as a Japanese whisky engineer, you like to be as progressive as possible. We like to be slightly better each day.”

Asked what his colleagues at Morrison Bowmore think of Yamazaki, Miyamoto replies: “They really appreciate the quality of the whisky we produce.”

He adds: “We sell lots of Bowmore in Japan today. We like to see both grow together.”

Miyamoto’s time in Scotland has had a lasting impact not just on him but on his family.

He laughs when he recalls how his daughter, Yoshino, who went to the High School of Glasgow, speaks with a “perfect Glaswegian accent”.

This confused some in the industry when he took her to the Whisky Live event in Tokyo three years ago.

“Japanese look but Glaswegian accent,” he laughs.

12 Feb 10 By Andrew Johnson, http://www.express.co.uk

DIAGEO, the maker of Guinness, Johnnie Walker whisky and Smirnoff vodka, is threatening to quit the UK in the face of ever more onerous taxes.
Chief executive Paul Walsh fired a clear warning shot to politicians, saying the world’s biggest drinks group was unhappy with taxation in this country.
He said: “We like operating out of the UK but if we continue to see tax increases at the corporate and individual level, we will look at other options.
“We have no plans to relocate but the Government should not take us, or other multinationals, for granted.”
It is believed that corporations are finding it tougher to attract and retain executives with the top rate of tax due to increase to 50 per cent on April 6, the start of the new tax year.
High taxes also make it harder for them to relocate businesses to the UK after acquisitions. A number of companies, including advertising giant WPP, medical group Shire and office services firm Regus, have already left the UK for tax reasons.
Walsh was speaking as Diageo unveiled a 3 per cent drop in underlying profits, to £1.5billion on revenues down 2 per cent to £5.1billion for the half year to December, as consumers globally traded down to cheaper drinks in the face of recession. The figures sparked analyst concerns the group may miss annual growth targets. The shares fell 7p to 1018p.
However, Walsh said the first-half figures included a £95million hit from restructuring costs in moves to save £185million this year. The company moved back into growth during the second quarter, after first quarter sales falls, as emerging markets recovered.
Walsh said: “The world is polarised with growth from Latin America, Asia and Africa, while Europe and North America are flat.”
Despite consumers choosing cheaper drinks and buying more from off licences than bars, Diageo is still pressing ahead with some “super premium” spirits.
It recently launched The Johnnie Walker, a blended scotch costing £1,800 a bottle. The first 50 bottles immediately sold out in China.
11 Feb 10 Whisky Worth £100,000 Is Stolen
Police are hunting thieves who stole two trailers loaded with £100,000-worth of whisky.
The articulated trailers were taken from a secure transport yard in Dumfries between 6.30pm on Wednesday night and 4am on Thursday.
Each contained thousands of bottles of Grant's whisky stacked in pallets. http://www.ayrshirepost.net
03 Feb 10

BERRY BROS. & RUDD TO SELL CUTTY SARK BRAND TO EDRINGTON

Britain's leading fine wines and spirits merchant, Berry Bros. & Rudd (BB&R), today announced that it has finalised an agreement under which it will sell the Cutty Sark blended Scotch whisky brand to The Edrington Group, makers of The Famous Grouse and The Macallan.

Under the deal, BB&R will acquire The Glenrothes single malt brand from Edrington, which has signed long-term supply agreements to provide whisky fillings and stocks to BB&R. Edrington will retain ownership of The Glenrothes distillery.

The transaction will also involve Edrington acquiring all distribution contracts on Cutty Sark in force at the time of completion. The Edrington sales-and-distribution alliance (Maxxium) will continue to distribute The Glenrothes in key international markets and is also expected to provide a distribution option for other brands within BB&R’s super-premium spirits portfolio.

The agreement is due to be concluded by April 2010. The total consideration has not been revealed.

Hugh Sturges, managing director, BB&R, said the sale of the Cutty Sark brand and purchase of The Glenrothes was in line with the company's long term vision of concentrating investment resources behind developing a world leading position as a supplier of fine wines and super-premium spirits. “The strategy that supports this vision is already reaping dividends, particularly within emerging markets,” said Mr. Sturges. “We are convinced that future growth will come from us focusing even more on our strengths. That means targeting our sales and marketing efforts on those brands and sectors where we can compete most effectively and develop market positions that will drive real value long term. We therefore believe this agreement is in the best interests of the brands concerned and both companies.”

Ian Curle, chief executive of Edrington, said the deal would enhance the group's position as Scotland's leading international premium spirits company and strengthen its position in the Scotch whisky category with an unrivalled and well-established portfolio of leading blended and single malt brands.

"In an ever-consolidating drinks industry, this agreement offers significant operational synergies and market advantages. It improves our distribution in key territories and strengthens our position as an independent premium brand company," said Mr. Curle.

Edrington has enjoyed a long-term partnership with BB&R under which it has supplied blended whisky for the Cutty Sark brand for over 70 years and is currently responsible for all aspects of producing Cutty Sark. Today, Cutty Sark is a top three whisky brand in Mediterranean countries such as Greece, Spain and Portugal, where it is popular in the fast-moving on-trade. The brand continues to have a strong presence in America and is increasing its footprint in Asia and developing markets.

In Spain, Cutty Sark’s largest market, the distribution agreement with Importaciones Varma will come to an end prior to the completion of the sale of Cutty Sark. The brand will then be handled by Maxxium Espana, a 50/50 joint venture between Edrington and Beam Global Spirits & Wine. In Greece, the distribution of Cutty Sark will remain with WS Karoulias, which will continue as a wholly-owned subsidiary of BB&R.

BB&R said the acquisition of The Glenrothes reflected its ambition to grow its super-premium business as the brand was one of the world’s fastest growing single malts.

The long standing relationship between BB&R and Edrington will continue under the new arrangement. Both companies will continue to work hand-in-hand on projects of mutual interest that aim to maximise shareholder value and support the long-term development of their brands. Source: Edrington

01 Feb 10

Still Life
Islay?s Bruichladdich distillery have re-installed Scotland?s oldest pot still.
Commissioned in 1880 for the Harvey Brothers? purpose-built Islay distillery it is, according
to experts, likely to be the oldest pot still in use in Scotland at 130 years old.
The life expectancy of most pot stills is only around forty years. After which, having eroded
over the years with constant boiling, the copper becomes too thin and liable to collapse.
But this venerable pot still, riveted in the Victorian way, was made with an exceptionally
thick copper bottom to endure the intensity of a coal fire underneath it.
The wash still has been renovated and tested by Forsyths of Rothes, one of only two
remaining Scottish coppersmiths, and passed with flying colours for continued use.
Duncan MacGillivray, manager and chief engineer said: “We are told at 130 years old this
is most likely to be the oldest whisky still in the world. They don?t make them like this any
more - there?s plenty of life left in her and we intend to keep her going for a wee while yet.”
Bruichladdich?s stills, designed most likely by John Harvey, the middle of the three Harvey
brothers, are unusually tall and narrow-necked. The Harveys sought a unique shape to
obtain a spirit of elegance in contrast to the heavier spirits produced from small, more
compact stills on the island at that time.

To superstitious distillers, still-shape is sacrosanct. Any alteration is abhorred, fearing the
slightest of changes will impact on the style of the whisky. Often mistaken for miserliness,
they would prefer to continue with the still they have rather than buy a new one.
This still?s unusual longevity owes a good deal to fate. Under usage between 1881 and
1945 owing to struggling finances, two depressions, US prohibition, two world wars and a
fire that nearly destroyed the distillery, meant it was already in remarkably good shape by
the time it was converted to more forgiving internal steam coils in the fifties. www.bruichladdich.com

30 Jan 10

Springbank new releases:

Springbank 18 yo, £62.50
Springbank CV, £28.50

25 Jan 10

Taiwan whisky beats Scotch in blind taste test, says report
Asians have begun distilling malts that compete with the best distilleries

A Taiwanese whisky beat a trio of top Scottish blends in a connoisseurs' blind taste test organized to mark Scotland's annual Burn's Night festivities, the Times reported yesterday.
The Taiwan-distilled Kavalan brand, described as a "Far Eastern incomer," came top in a test against three Scottish and one English whisky in a historic hostelry in Leith, north of Edinburgh, said the paper.

"Oh. My. God," author and whisky connoisseur Charles MacLean told the paper when the unexpected result was confirmed.

The newspaper organized the test itself, in what it called a "piece of mischief-making" inspired by the launch of an English whisky, "St. George's" last November.

Its hope was to catch the experts out with the tipple from Scotland's traditional "Sassenach" English rivals - but to their surprise it was the Asian whisky which came up trumps.

"It's tropical fruits. Tropical fruit jam," said MacLean, chairman of the panel, after Kavalan - which is not marketed in Britain - came out top with 27.5 points out of a possible 40 maximum.

Langs, a three-year-old Scottish premium blend, scored 22 points, followed by King Robert - also from north of the border - on 20 and the English three-year-old malt on 15.5.

Last came quadruple-distilled Scottish blend Bruichladdich X4+3, on only 4.5 points, described by MacLean as "not cooking oil. Not diesel oil. Sewing machine oil."

In a commentary the Times noted: "Asians are not only some of the world's most sophisticated consumers of Scotch, but have begun distilling malts that compete with the best Scottish distilleries."

Burns Night, named after 18th century poet Robert "Rabbie" Burns, competes with St. Andrew's Day as a focus for traditionally whisky-fueled celebrations in Scotland and by Scots around the world. http://www.etaiwannews.com

Note: Well, calling a 3 YO whisky a "premium" blend and blind tasted against other unknown blends, the comparison is quite biased. A comparison with premium Scotch such as Chivas Regal, Glenfarclas or Linkwood would have been more corret. Never the less, the Ka Va Lan is not a bad whisky.

25 Jan 10

Distillers go with flow as Latin America develops taste for Scotch
By Hamish Rutherford, http://business.scotsman.com
A WORLD away from the whisky stills of Scotland, the Havana Club, a fashionable dancing venue in Cartagena, a colonial-era Spanish city on Colombia's Atlantic coast, is crowded with partygoers, part of an burgeoning middle class in Latin America.
Bottles of Buchanan's and Old Parr disappeared from bars and liquor stores in Europe decades ago, but in this corner of the southern hemisphere the brands are synonymous with a thriving Scotch whisky market. A growing class of affluent consumers in their 20s and 30s crowd chic bars across Mexico and South America, and in large numbers they have taken to one of Scotland's iconic products.

Along with Asia, Latin America has been identified by the Scotch industry as a key region for the future, with the likes of Venezuela, Brazil and Colombia already becoming substantial markets. In 2008, of all the spirits imported into the region, 56 per cent of it by value was Scotch.

The potential for growth is massive, with imported spirits accounting for only 13 per cent of total consumption in the region.

As political and economic volatility decreases in Latin America, affluence is increasing and the opportunity growing.

Diageo, which owns eight of the top 12 Scotch brands in Latin America, has seen compound growth in the category of almost 8 per cent a year during the last five years, as sales in the UK struggle.

Both Buchanan's and Johnnie Walker sell more than a million 12 bottle cases a year in Latin America.

"The great thing about Scotch is it's aspirational," Randy Millian, Diageo's managing director for Latin America and the Caribbean.

An American who lived in Argentina and Costa Rica as a child (his father was a diplomat) Millian knows the region well and has held senior positions with several multinationals there.

While most of Latin America's 340 million adult population may not be able to afford Scotch, Diageo estimates that there are 50 million households with an income of more than $10,000 a year.

"That's a big number," Millian says. As well as selling huge quantities of regular brands, Diageo continually introduces new premium and luxury lines to appeal to the growing middle class. Millian admits that while volatility goes with the territory, the trend is improving.

Latin America suffered a banking crisis in 2003, meaning the financial system was prepared for last year's troubles. "The banking system in a lot of countries in Latin America is a lot better than in Europe, because it went through all this," Millian said in Diageo's Colombia headquarters in Bogota. "The US looks to Brazil as a model of what they would like to do with their banks."

Although careful not to name targets, Diageo's Latin American executives are clearly excited by the future potential of the market.

While the future for countries such as Venezuela remains uncertain, Millian says highly social Latin Americans usually cope with whatever life throws their way.

"Latins will be good with life. The place could be falling down around them and they'll still be having a good time with their friends."

Latins also love to be linked with brands, both fashionable and historical. Another popular Scotch in the region, White Horse, had the label altered to remove the horse image, only to be replace it recently to fuel nostalgia. "Young men remember their fathers drinking White Horse and remember the label, so we put it back on there," says Millian.

Despite its dominance of the Scotch category in the region, United Distillers (which later merged with Guinness to form Diageo) only established a direct business in the region in the 1990s, many decades after Scotch was introduced to the wealthier parts of society.

The history of Scotch in Latin America began when the barons of the industry went across the world in the early 20th century, taking product with them in their suitcase. Sometimes establishing distribution links was secondary to recreational pursuits. Buchanan's – a brand which many Latin drinkers feel ownership of – was brought to South America when Sir James Buchanan, a keen horseman, went to Argentina to seek what were considered the finest horse breeders in the world.

But a long history has not prevented the image of Scotch there from moving with the times in Latin America, perhaps much more so than in the UK.

Johnnie Walker's "Keep Walking" campaign was launched at the Grand Prix of Brazil with a 500 seat stadium for its fans. The brand is closely linked with a major anti-drink driving campaign fronted by two time world champion Mika Hakkinen.

But the success in attracting young and upwardly mobile drinkers in Latin America raises questions about the struggles of the industry in the UK to recruit new drinkers in force.

Ken Robertson, Diageo's head of Scottish corporate affairs, says South America has a number of advantages in fostering a vibrant drinking culture, including its climate and family oriented society.

However Robertson, a board member on the Scotch Whisky Association and The Keepers of the Quaich, says the industry may have also lost touch with younger drinkers since the 1960s and 70s in the UK and has failed to reinvent itself to new drinkers.

Robertson believes that while brands such as Johnnie Walker have been focused at the massive international opportunities, domestic brands in the UK may have less appeal. He said: "Somehow or other we haven't kept (Scotch] as alive as we should have done. I can only speak for Diageo but I suspect in the industry that's something we need to address. Can we get any of that back? It will require a lot of fundamental change, and the problem is, at what point does it become the law of diminishing returns?"

So is it possible that international companies might simply accept that the UK may have turned ex-growth, and focus resources on markets such as Latin America?

"You could see that situation and you could almost end up there by default," he says.

"The brand owners have got to ask themselves, 'do we want to have a growing business here, or do we want to do it on a care maintenance sort of basis, and grow elsewhere'. That will be a tough one (to answer] because the opportunities in Asia and beyond are such that you're going to have to invest."

While Scotland appreciates the economic benefit of the industry, Robertson says most Scots know little of the workings of the industry, with little real ownership of the industry.

"If you have very willing consumers who actually want your products in other parts of the world, and you've got people you're fighting to convince at home, you're going to go where you can grow your business and it's joy to do so."

21 Jan 10

Whyte & Mackay increases profits

Mark Smith, http://www.heraldscotland.com
Whyte & Mackay, the whisky and vodka maker now owned by flamboyant billionaire Indian tycoon Vijay Mallya, boosted its profits at the pre-tax level, but sales slumped as the recession corked demand for its brands.

Nonetheless, the Glasgow-based Scotch whisky distiller, which last year announced plans to axe 100 jobs after the Chancellor’s tax rises, said it had managed to reduce the number of redundancies to 80 after consultation.

The company, whose brands include Vladivar vodka and Glayva liqueur, as well as the eponymous blended Scotch and Dalmore and Jura malts, posted pre-tax profits of £31.7m for the year to the end of March 2009.

As a result of the reorganisation at the company following its takeover by Mallya’s United Breweries in 2007, the latest annual figures are set against the previous 18 months. However, on an annualised, pro-rata basis, last year’s pre-tax profit compares with £17.1m.

Whyte & Mackay, whose accounts were obtained by The Herald from Companies House, noted that profits were boosted partly because “the decrease in interest payable and similar charges has contributed significantly”.

The accounts reveal that charges in the year to March were down to £14m, compared with £24.2m in the 18 months to March 2008.

The company was also hit by what it described as “onerous lease provision” of around £3.2m in respect of a rented property.

However, at the same time, turnover fell £216m last year, compared with £232.1m on a pro-rata basis during the previous period.

Rob Bruce, head of corporate communications at the group, said: “Without a doubt, it’s been very tough. The time period covered in these latest results was a very bland market with global consumption down almost everywhere, higher production costs and tighter margins.”

18 Jan 10

Distillery plans to cut costs with bacteria-eating 'digesters'
By VICTORIA THOMSON, http://business.scotsman.com
SLUDGE from a distillery on Islay is set to be turned into green energy to power whisky production on the island.
Bruichladdich will next month install two anaerobic digesters – in which bacteria eat yeasty waste to produce methane – at a cost of about £300,000.

The methane gas will then be burned to provide electricity for the distillery.

Managers forecast the system to have paid for itself within five years and expect savings on their waste disposal costs which currently run at £20,000 a year.

Seven other distilleries on the island are believed to be considering similar schemes.

Up to 80 per cent of Bruichladdich's energy needs could be met by the anaerobic digesters. At present, tonnes of waste from the distillery are pumped into the Sound of Islay each week via a pipeline.

The digesters will be built by Biowayste, company based in Northamptonshire, which has already installed five such systems, including one at Orchard House Foods in Northampton and one at Muntons, a brewery in Suffolk.

Spare gas from the digesters could potentially be used to run methane-powered cars on Islay.

14 Jan 10

Johnnie Walker gets intense
Written by Claire Hu, http://www.harpers.co.uk/

Diageo is launching a new variant of the world's number Scotch whisky brand called Johnnie Walker Double Black.
The new blend uses peaty west coast whiskies to create a flavour that is more smoky than Johnnie Walker Black Label.

Global brand director David Gates said: “Interest in the Scotch whisky category continues to be high and we believe consumers want to explore the huge range of flavour experiences that a brand like Johnnie Walker can deliver.

"We believe that Johnnie Walker Double Black will excite consumers in the blended Scotch whisky category while delivering a fantastic tasting new blend."

Master blender Jim Beveridge said: “Johnnie Walker Double Black takes Johnnie Walker Black Label as its starting point. Drawing on generations of blending and maturation expertise and with the keys to the largest, most diverse stocks of aged Scotch whiskies in the world, I have created Johnnie Walker Double Black to be a new and complementary perspective on Black Label."
From this month until June, Johnnie Walker Double Black is being trialled in airports around the world.

11 Jan 10

Just found on internet (www.maltadvocate.com) this.

Diageo launches the next batch of their first-ever single-cask collection of Single Malt Scotch Whiskies

Following the first batch launched in September, Diageo have announced that the second batch of their single-cask collection of Single Malt Scotch Whiskies has arrived.

The project encompasses all 27 of Diageo’s Single Malts - the first time that Scotland’s biggest estate of Single Malt distilleries has issued a comprehensive series of single-cask bottlings. Labelled The Managers’ Choice, each distillery is represented by a very restricted bottling of its Single Malt Whisky drawn from one single cask, selected after a careful examination of distillery stocks.

The rare limited-edition series is aimed at collectors and connoisseurs who will enjoy owning and exploring an unusual expression of their favourite Single Malt or even a whole anthology of highly individual Single Malts, chosen to represent a unique take on each of the 27 distilleries’ distinctive distillery character.

The releases are being staged in four batches over several months. September 2009 saw the first release of six malts: Cardhu™ (1997), Glen Elgin™ (1998), Linkwood™ (1996), Mortlach™ (1997), Oban™ (2000) and Teaninich™ (1996).

This second release comprises of:

Blair Athol £200 1995, 570 bottles, Bodega Sherry European Oak
Cragganmore £250, 1997, 246 bottles, Bodega Sherry European Oak
Dalwhinnie £250, 1992, 270 bottles, Refill American Oak
Dufftown £200, 1997, 282 bottles, Rejuvenated American Oak
Glen Spey £200, 1996, 276bottles, New American Oak
Strathmill £200, 1996, 300 bottles New American Oak
Talisker £300, 1994, 582 bottles, Bodega Sherry European Oak

For each Malt, the cask was nosed, tasted, discussed and finally chosen as a highly distinctive expression of that distillery’s Single Malts by a judging panel of acknowledged experts, including leading maturation experts and the distillery managers themselves.

In many cases, unusual cask woods will have had their influence on the final result. Perfect maturation and spirit quality have been the criteria, resulting in a bottling that delights with original and sometimes unexpected flavours whilst allowing the distillery character to still shine through.

Depending on the size of the cask and the rate of evaporation over the years since it was filled, the volume of bottles obtained can vary between approximately 600 and as little as 200.These are, consequently, extremely rare and distinctive whiskies.

Each cask is bottled at its natural cask strength. This means that the liquid the connoisseur pours into his or her glass is exactly as it emerged directly from the cask when it was hand-picked a few months earlier by the experts – it’s as good as a dram drawn from the cask in the warehouse itself.

Classic Malts Selection spokesperson Nick Morgan said: “As we said last year when the first batch of The Managers’ Choice was launched, this is the most extensive collection we’ve ever released of single cask malt whisky bottlings, from all 27 of our operational malt distilleries.

“Our announcement last September provoked a great deal of interest and comment. The release was a huge success, with a number of customers asking for more allocation. It met all our commercial expectations: in some territories, these bottlings turned out to be the fastest-selling limited-edition single malt whisky bottlings we have ever launched. We expect the second batch, which like before offers both celebrated and lesser-known single malt whiskies, will also be very well received.”

Full details, including tasting notes, will displayed on the Classic Malts Selection™ website www.malts.com. The updated website content includes the story of The Managers’ Choice and the selection process, a “Meet the Managers” page where they talk about The Managers Choice collection & questions related to the world of whisky, whisky tasting notes & audio, Q&A with a Sensory Expert, and details of where to buy the whiskies. Whisky enthusiasts registered as Friends of the Classic Malts™ have been given advance notice of the launch.

The Managers’ Choice bottlings are available from specialist retailers in the United Kingdom, Germany, Switzerland and the Netherlands only

08 Jan 10 COMMITTEE ATTACK ON SPIRIT DRINKS MISPLACED AND FLAWED
Responding to a Health Select Committee report on alcohol published today
Campbell Evans, Government & Consumer Affairs Director at The Scotch Whisky Association,
said:
“It is disappointing but unsurprising that the Committee has simply re-hashed restrictive blanket policies that fail to target problem drinkers, whilst penalising moderate consumers. Ever higher excise duties on Scotch and minimum pricing would do little to target the minority of people who drink to excess. Yet they would seriously damage a major contributor to the economy and one of
the country’s few manufacturing successes, representing 25% of UK food and drink exports.
“The Committee is unfairly singling out spirit drinks, such as Scotch Whisky. Spirit drinks represent less than 20% of the UK drinks market and alcohol sold as spirits is already taxed more heavily than other drinks. In calling for minimum pricing, the Committee is seeking to introduce a measure that we believe to be both illegal and ineffective.
“Distillers are committed to tackling alcohol misuse and support measures to tackle loss-leading alcohol sales, ensure strict licensing law enforcement, and uphold the highest standards of responsible marketing practice.
“The Health Committee is right to call for more efforts to tackle alcohol related harm. However, it would have been far better for the Committee to examine what effective measures to tackle alcohol harm could be brought forward in partnership between government, retailers, and producers.”http://www.scotch-whisky.org.uk
06 Jan 10

Whisky boom revives old brands
By Rodney Jefferson, http://www.nzherald.co.nz/

The Annandale stills are being restored to their original condition, much like these at Glenmorangie. Photo / Supplied
Ninety years after Johnnie Walker stopped making Scotch in Annandale, David Thomson wants to put the distillery back on the whisky map of the world.

The plant, 19 kilometres from where he grew up in southern Scotland, closed in 1921. With £5 million ($11 million) in cash, Thomson plans to open it up again next year.

"We can make so much more of malt whisky as an industry," said Thomson, 54, who submitted plans for local government approval on November 12. "We haven't even begun to tap into the potential interest."

More money is being invested in whisky than at any time since the late 1960s, according to the Scotch Whisky Association in Edinburgh.

The reason, producers like Diageo say, is to make sure they have enough of it to serve China and India, as well as to cater for the growing demand among malt buffs.

"The Chinese have bought into Scotch whisky," Gavin Hewitt, chief executive officer of the association, said at his office in the Scottish capital. "There's a huge new middle class and they want to make a statement about themselves."

Companies announced expansion plans during the past two years costing more than £500 million, according to the industry group. Whisky is Scotland's biggest export, excluding oil and gas, it said.

The liquor being distilled today can't be called Scotch whisky until it's three years old and then often has to age for at least another seven before it's bottled as a single malt. It also has to be made in Scotland.

The largest single investment during the past two years was by London-based Diageo, the world's largest liquor maker and biggest producer of Scotch.

Its net revenue from whisky, including top brand Johnnie Walker, rose 7 per cent to £2.42 billion for the 12 months to June 30, the company said.

Diageo, whose best-selling malt is Talisker, spent £40 million on a plant at Roseisle in northern Scotland, part of £100 million of investment.

"It's about growth over the next two or three decades," said Ken Robertson, Diageo's head of corporate relations for whisky. "You have to lay products down well in advance."

Glenmorangie, which Paris-based LVMH Moet Hennessy Louis Vuitton SA bought in 2005 for £300 million, is increasing capacity at its plant at Tain in the Highlands by 50 per cent.

Along with new bottling and warehousing, the investment over two years amounts to £45 million, Glenmorangie said.

Thomson said he first had the idea to go into the whisky business in the late 1980s and early 1990s when 25 distilleries closed as more liquor was produced than the world could drink.

He didn't have the money at the time to snap one up, he said.

There are currently seven new distilleries being planned, including Thomson's, the association said. Since 1995, 18 plants that were dormant have been brought back to production.

At Annandale, the buildings from the 19th century remain intact, complete with a pagoda-style ventilation turret and a beige brick chimney next to a small stream.

Glasgow University archaeologists are digging out the foundations of where the whisky stills once stood so Thomson can restore the plant to how it was originally.

Exports totalled a record £3.1 billion last year.

Total sales this year in volume terms are up about 2 per cent, while the value of bottles sold declined about 4 per cent, Hewitt said. The biggest markets are France and the US, though sellers are counting on Brazil, Russia and Asia for growth.

"The decisions companies make now are for 10 or 15 years ahead," Hewitt said.

Most malt whiskies, typically drunk in Scotland with a few splashes of water, are made in the Highlands, with a cluster of producers in Speyside near Inverness. Should it come to fruition, the Annandale plant would be one of only half a dozen in the Lowlands.

The risk for new producers is how they fund themselves before their whisky makes it into the bottle and how they differentiate themselves from existing malts, Robertson said.

"Keeping alive for the first few years is the tricky thing," Robertson said at Diageo's Edinburgh offices. "The threat to the mainstream is: can it continue to expand into the markets it's earmarked for itself?"

A professor of consumer psychology based near Oxford in England, Thomson bought Annandale for £1 million from a local farmer in April 2007 and is spending £2.8 million on refurbishment, installing the plant and groundwork. He reckons it will cost another £500,000 a year until he bottles whisky in 2013 or 2014.

Annandale will include a visitors' centre and store to cater to tourists whose revenue Thomson hopes will help fund the plant. Thomson's planning application will be heard this month amid potential problems with the access road, he said. The Scottish Government granted aid for the project in April 2008.

"If you ask me what I'd like my legacy to be, it would be to bring back a distillery to life," Thomson said. "And leave it as economically viable."

03 Jan 2010

Scotland's whisky industry nurses a hangover
ZOE WOOD
January 3, 2010

WHEN workers at drinks group Diageo's Johnnie Walker scotch whisky packaging plant in Kilmarnock, south-west Scotland, agreed to a redundancy deal days before Christmas it ended six months of bitter protests over the group's decision to sever links with the town after 189 years.

The plant's closure marks the culmination of a tough year for the scotch whisky industry, which has been forced to slash jobs in the face of a deep recession.

As with many of its consumers, scotch producers partied through several bumper years only to face a major financial headache last year. Demand began to slow in early 2009 and cracks began to appear in some of the industry's traditional export markets. Scotch Whisky Association (SWA) figures show sales, by value, were down 3.5 per cent at £2.1 billion ($A3.78 billion) for the first nine months of 2009.

After the high of three boom years, which produced record exports of £3.1 billion in 2008, last year was one of the toughest in recent memory for the industry. Diageo prompted union fury by pushing through restructuring that will eliminate 900 jobs and end Johnnie Walker's historic links with Kilmarnock. Whyte & Mackay, owned by Indian billionaire Vijay Mallya, cut a third of its workforce, while in November the Edrington Group announced plans to mothball Tamdhu, the Scottish Highlands distillery, whose malt is a main component of Famous Grouse, for only the second time in its 112-year history.

But SWA's David Williamson says the figures for 2009 were ''encouraging'' as conditions had improved after a ''tough'' first quarter: ''Scotch whisky has been recession-resilient if not recession-immune.'' A surge in exports to countries such as Venezuela, which jumped by 83 per cent, helped offset problem markets such as Singapore, where sales slumped 20 per cent.

There were also some big blows to Scotland's distilling pride. International whisky authority Jim Murray named 18-year-old Sazerac Rye from Kentucky the finest whisky in the world. Its top billing in Murray's 2010 Whisky Bible pushed Ardbeg Supernova from Islay into second place. There was further upset with third place going to a single malt from Bangalore called Amrut Fusion. England got in on the act in 2009, as the English Whisky Co bottled the first English whisky for more than a century. It has even been shipping to Scotland. Source: http://www.theage.com.au

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