The Scotch Blog

New "independent"? Maybe not.

You may have heard about Jon, Mark and Robbo's Easy Drinking Whisky Company (JMR), you know the "small" whisky company started by brothers Jon and Mark Geary and David "Robbo" Robertson, that wants to make whisky more accessible to the masses.

Their approach to accessibility is evidenced,in part, by the names that they've selected for their three products: The Rich Spicy One, The Smokey Peaty One and The Smooth Sweeter One.

Really.

And If those product names are accurate descriptors for the product in the bottle, then these guys have done something so insanely simple that it might just work.

But if you are reading this in the US, you haven't been able to buy the stuff. But you soon will.
Though they officially launched in the US in June, it'll be this August before distribution will begin in earnest.
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Let's take a closer look at the company and the product.
FULL DISCLOSURE: I have not tried any of their products yet, though I am looking forward to it.

Their website SCREAMS irreverence. It's not your standard scotch whisky site.

Good start.

"What we're seeking to do is exactly what Aussie winemakers have been doing for over a decade: make Scotch whisky more accessible and package it in a more contemporary way."

Sounding even better. 

If you read ScotchBlog regularly (and you should), you know I'm 100% behind making whisky more accessible.

Then I hear that "the company believes leaving any age statement off JMR's bottles further enhances accessibility."

Uh-oh.

As you probably know, the Immature Spirits Act of 1915 (Scotland), requires that scotch whisky MUST be aged at least three years. As you probably also know, in the case of a blend (including a vatted malt), only the age of the youngest whisky in the bottle may be displayed. As a result, bottlers sometimes choose not to display any age on the label - if the youngest whisky in the blend is not at least ten years old. That's fine, it's a common practice, among vatted/ blended whiskies.

But, to declare that you are positioning yourself for new drinkers, and then mislead those same new drinkers by leaving an age declaration off and then spinning the decision to say that it "enhances accessibility," is just not right in my book.

And then some confusion about the product itself.
On their web site, they don't make it clear exactly what is in the bottle. (The best I can make out from the pictures on the web site is "Malt Scotch Whisky" on the label). Not Blended Malt Scotch Whisky, Not Vatted, Not Single, Just "Malt Scotch Whisky."

Again, for someone familiar with the oddities of scotch whisky labeling, I have less of an issue with this - but they are specifically marketing to new drinkers.

I'm guessing that the product is a vatted malt. Since they are marketing a vatted malt, we'll classify them as bottlers, since it doesn't appear they are actually producing any whisky. Nothing wrong with this at all, I just like it to be clear.

I'm also a little confused about the funding and distribution model for this upstart independent.

It appears that the company is backed by the Edrington group. In case you are not familiar with the company, they own Highland Park, Famous Grouse, Macallan and Cutty Sark. It's not a secret that David "Robbo" Robertson, was formerly master distiller at the Macallan, but according to an article in today's Sunday Herald (Scotland), apparently one of the Gearys (I'm not sure which one) continues to hold his position of Director of Planning and Research at ...Edrington Group.

How many companies do you know that would allow someone to continue employment when they have publicly launched a company that competes by selling in the same space? None in my experience.

And the US importer for JMR? Remy Cointreau/Amerique. Who also happens to be the US importer for  Highland Park, Famous Grouse, Macallan and Cutty Sark.

What am I getting at?  I am just wondering if maybe JMR is not really a small start-up, but instead a marketing ploy by Edrington to see how the market reacts to such innovative labeling and marketing tactics.

I could be wrong, but until JMR is clear about all of this, it is my nature to be a little incredulous. It is equally possible that these guys are just well connected and have called in a few markers. But that's hard for me to believe based on what I've read.

The product is very likely, very good, given the pedigrees of the involved parties, and since I admittedly haven't tasted it, I'm not equipped nor am I attempting to judge the product.

I am questioning the creation of confusion in the marketplace. It is NOT what the whisky industry needs right now.

I am all for attracting new drinkers, but attracting new drinkers through innovative tactics also needs to include helping new drinkers understand the what whisky is, what it is not, and opening their eyes to the spectrum of available whisky - not to sell a few bottles short term.

Drambuie's return from the dead

Drambuie.
Most people (nowadays) have never tried Drambuie.
Others have never even heard of Drambuie.
And the new leadership at the 260 year old business wants to change that.

Outsider CEO, Phil Parnell put it bluntly:

"We are sitting on top of a world-class brand that has ceased to exist in the minds of the next generation of customers. It is our task to make Drambuie relevant again."

When your CEO starts talking like that, you know he means business.

What is Drambuie?
In case you are one of the people who has never tried it, Drambuie is blended whisky, honey, with added "secret ingredients." It is sickeningly sweet when taken neat, but as a mixer it can be quite tasty - chances are that your grandparents drank it over ice.
Drambuie is not owned by one of the big conglomerates, and instead currently produces only three liqueur products: Drambuie, Drambuie Black Ribbon (same secret ingredients, but with vatted single malts), and Sylk, an unfortunately named product, which is Drambuie-based cream-liqueur.

Well, smart man that he is, Parnell realizes that their real market lies with the 20-30 something, bar-hopping, luxury-spirit drinking, lounge crowd. The new focus is pushing Drambuie as a core  ingredient for mixed drinks - which it is quite well-suited for.

Parnell's straightforward approach is refreshing.

"I am not in the business of criticising the past running of this company but it has been somewhat secretive organisation to say the least."

What he means is that the company was run into the ground by the MacKinnon family, shepherds of the secret recipe, lo, these many years.

You have to know your past to see your future. And Drambuie sees their future clearly: they  will now focus on the mixed drinks market and the 28- to 35-year-old clientele in the up-market lounge space, currently dominated by luxury vodka brands such as Grey Goose and Belvedere.

If he is smart, (and I'm betting the new guy is), Parnell will move Drambuie's marketing to play off the heritage and "secret ingredient" shtick - but to attract their target market, I believe they'll have to do it in a self-deprecating, tongue-in-cheek way.

Oh, and my words of advice?
1. Drop the price. At least until you establish the brand again. If  you want the lounge people to start stocking their bars and using the stuff, you'll have to offer it at a better price than $20+ for a 375ml bottle

2. Sylk - You need to make some changes. First of all, going head-to-head with Bailey's in the cream-based liqueur arena won't work. Diageo has spent more money advertising Bailey's in the past year than Drambuie has made. And that name? Terrible - at least in the US market. Too close to Silk, a horrid, but soccer-mom popular, soy milk concoction - and let's face it - no one wants to  mix Soy Milk in with their tasty adult beverage.  (By the way, how DO you milk a soy bean?)

North America accounts for 50% of Drambuie sales, and will certainly be a major focus of marketing attention. I can see it now - hot girls in tight clothes plying drunken lounge boys with the sweet sticky elixir at binge bars across the country. Sweet.

www.drambuie.com

Who chooses what's No 1???

Note: I'm sure you'll be reading the following in a number of places if, like me, you get a regular feed of whisky related stories. This very "article" is a big part of the reason why, unlike all of the whisky news and information sites, I don't simply post press releases.

"Highland Park named world's No 1 spirit"

According to a recent story in the Scotsman (link at the bottom), The American Spirit Journal, "a leading drinks magazine" has named Highland Park 18 year old the best spirit in the world. Not just the best whisky, mind you, but the best spirit.

    The problem is there is no American Spirit Journal!!!

Even aside from that little fact- I'm a little suspicious of stories like this. I mean how do you compare and judge a whisky (or ALL whiskies) against the numerous tequilas, vodkas and gins?

I want more information. Who were the judges? How were they judged? Just what is "The American Spirit Journal," since it doesn't really exist?

A little reading and research goes a long way. And obviously reporters don't do either.

Let's look closer. According to the Scotsman article,

The Highland Park 18-year-old single malt topped a list of the world's 100 best distilled spirits, published in the American Spirit Journal. The list was compiled by the American drinks specialist Paul Pacult, who judged thousands of whiskies, rums, gins, vodkas, tequilas and other distilled spirits for the list. He said: "Out of the hundreds of whiskies from Scotland, Canada, the US, Japan, India and Ireland, Highland Park 18-year-old is the finest of them all and right now is my favourite distilled spirit.

Ah, Paul Pacult. Yes, he is a writer on the topic of spirits, with four solid books under his belt. Though two of those books appear to be written on behalf of the companies on whom the subject matter is based (Chivas Brothers & Jim Beam). But as stated above, there is no American Spirit Journal. So where was this list of best spirits published?

Could it be in the F. Paul Pacult's Spirit Journal which DOES exist?

If so, this means that Paul has decided to rate his favorite liquors, in his self published journal.

Does he have the right to name his "favourite distilled spirit?" Absolutely.

But Paul's personal preference was disseminated, via press release, as if it were an actual award. And of course, the release was scooped up and further disseminated by Highland Park. And those news hungry reporters turn the press release into a story.

Don't you think that releasing Paul's personal favorites as a news story is a little silly?

Highland Park IS a great whisky. But is it the best? To Paul, obviously. To you and me? Maybe, maybe not.

If you want to rate "the best" how about you start by convening  panel of experts including MacLean, Jackson, Murray and some select others. Now that would have some weight with me. (Note 8/3/05: Brett from Binny's reminded me that Whisky Magazine recently released their 3rd "Best of the Best" list which is done with blind tastings by panel judges. Highland Park 18 y.o. did not make that list.)

I doubt though, that this prestigious group would agree on a single "best."

I think any promotion of the whisky industry is a good thing, and helps bring new drinkers in. But getting new drinkers is all about helping them find what they like. Not pushing a single, expensive bottle, based on one person's opinion.

Read the press release here.

But keep an eye on this; and you'll see the media 'chain reaction' begin,with reporters beginning to grab, in ever smaller pieces, the parts of the story they want. The story will soon morph into a one liner: "Highland Park voted best whisky in the world" without much of the background info.

Oh wait, it already started. This from today's  Yahoo! alert on whisky.

Oh, by the way, I hereby declare Laphroaig Cask Strength to be the best whisky. And Hendricks Gin to be the best spirit in the world. Well at least they are MY favorites.

Happy 200th Johnnie

In case you didn't know, today is the 200th birthday of one Johnnie Walker.
Yes THAT Johnnie Walker. Born July 25th, 1805.

Years later, Johnnie Walker is the top selling scotch whisky in the world.
We celebrated his birthday yesterday with cake and Rusty Nails.

Here's his story from the Johnnie Walker site:

Johnnie Walker
1805 - 1857

This is the man who started it all, and whose modest beginnings clearly fostered an ambitious nature.

John was born a farmer's son, but when his father died he seized the opportunity to leave the land and set himself up in business in the nearby town. At the age of 15 he was already the proprietor of a small grocery shop in Kilmarnock, the start of what would later become an international business empire

Defining Steps in John Walker's life
- In 1820,at the age of 15, John opened a grocery business in Kilmarnock
- John applies tea blending principles to whisky with great success
- Walker's Highland Whiskies are created and launched to much acclaim
- The business prospers and John's reputation as an expert blender spreads throughout the West of Scotland
- 1852 Kilmarnock flood devastates the town and threatens to destroy John's business, but with the strength of his reputation and the loyalty of his consumers, John rebuilds his business
- John dies in 1857 and leadership passes to his son Alexander.

John Walker as whisky's saviour?

Some say that if John Walker and others like him had not started blending malt and grain whisky, the drink itself may never have become as popular as it has.

200 years ago, single malts were not appreciated the way they are now - they were too oily and heavy for many people's tastes. Without the introduction of the smoother and more balanced blend, whisky might never have left the remote highlands and islands of Scotland - and what a tragedy that would have been.

 

Single Malt's poster child

According to a recent report in the UK (2005 Scotch Whisky Industry Review), single malt is continuing it's growth spurt. In 2004 single malt sales increased by 10% over 2003 sales, while the export growth rate soared to 12%.

It's apparent that whisky consumption is swinging towards single malts as well. In 1984 only 1 in 40 bottles of whisky consumed in the UK was a single malt. In 2004 the figure had increased to 1 in 10 bottles. Export growth is equally impressive: almost 5 times as much single malt is exported as is consumed in the UK. In 1984 1 in 50 bottles of whisky consumed outside of the UK was a single malt. In 2004 it had increased to 1 in 17 bottles.

Within two decades, UK single malt consumption had tripled from 2.6% of all whisky drunk to 10.5% – while blended whisky has fallen by a third.

UK sales of Single Malt whisky now contributes £100m to the UK government - £62m in Excise Duty and about £38m in VAT - and it is guessed that about a similar amount is lost in cross border smuggling, owing to excessive Excise Duty discrepancies with neighboring countries.

Smarten up, Britain and lower your whisky taxes.

And if you like peat, then you'll be happy to hear that the Islay category is the fastest growing sector. Between 2000 and 2003 it expanded at 27% outperforming the UK industry growth rate twice over.

And my friends at Bruichladdich, are happy to let me know that they are the fastest growing single malt distillery in the UK, with case sales having grown 500% in the same period (2000-2003). In the UK they are growing 36 times faster than the industry average.

Andrew Gray, Bruichladdich Sales Director, calls it "a remarkable achievement." And he's right. Bruichladdich is selling a line of comparatively expensive single malts, with a very small sales team and an equally small marketing budget - the smallest in the industry, in fact.

Bruichladdich’s "Think different" approach to single malts is paying off. Bruichladdich stands out on the shelf with colorful, distinctive packaging and a varied product line. And their natural approach to whisky distillation (bottled on Islay, using only Islay water, non-chill filtered, no added coloring, and using ONLY Scottish barley) is obviously hitting a nerve with the consumer.

Am I sounding like an ad for Bruichladdich? Probably. But as long as Bruichladdich is the poster child for Scotland's whisky industry, I don't have a problem with it.

Full disclosure - I have NEVER received any free whisky from Bruichladdich, but they have been very helpful in providing me with photos for my book.

Compass Box Gets It

In my last post I wrote about the imperative for introducing scotch to new drinkers.

And the way to do it is NOT to sell scotch as a great cocktail ingredient. It's to do new things.

John Glaser at Compass Box gets it. And as the company celebrates their fifth birthday, I think they'll continue to get it.

According to John, the company's real specialty is "the creation of a style of whiskies that a whole new generation of people are saying they really enjoy. Our whiskies are softer, slightly sweeter and richer -- a style more in line with the tastes of a generation brought up on California Chardonnay and Coca-Cola."

Wow. That's some more pretty heretical stuff. Make whiskies that people will try and like. Who would have thunk it? And from a vatter nonetheless!

Listen, I love peat. But if I want someone to try scotch, I'm not going to give them a Laphroaig their first time. (Except maybe the Cask Strength - damn that stuff is good!)

Will whisky made for the Pepsi generation damage the industry? I doubt it.
Is John producing "starter" scotch? By his own admission, yes.
Will this lead a Compass Box drinker to the "hard stuff?" Hopefully.

Keep up the great work, John! Oh, yeah. Happy Birthday.

By the way, if you've had any Compass Box, then you know it's not just for newbies.

Attracting new scotch drinkers

Attracting new drinkers. That seems to be the new imperative for many distillers.

• Bruichladdich introduces "Rocks" a single malt actually designed to be served over ice. HERESY!
• Glenlivet sponsors a  loosely veiled ad in the form of a "debate" to discuss the merits of using single malts in cocktails.
• Whisky Magazine sponsors their second annual competition at Whisky Live London for the best whisky-based cocktail.

Just what the hell is going on here?

Well, obviously distillers are seeing the potential for cultivating a new market among the hip young bar crowd. You know them - the 20- to 30-somethings who frequent the latest trendy bar/club. They've been weened from micro-brews and moved on to martinis.

But let's face it, they aren't drinking your father's martini - they scarfing down sickeningly sweet mixed drinks made with gin, vodka, rum, tequila or another liquor of the month, served into a martini glass.

This crowd asks for Grey Goose, but couldn't tell it from Popov. This crowd wants to drink as much as possible, but doesn't really want to taste the alcohol.

Distillers figure (rightly so) that whisky is the next frontier. The next great untapped drink ingredient. And the distillers and distributors, most of them anyway, would really like to get a piece of that "potential market demographic" (that's my marketing jargon :)).

Are you surprised? Don't be.

Yes, most distillers are in the whisky biz for the love of making the stuff. But most distillers are owned by large companies, who are in turn owned by shareholders. And it may surprise you to know that there are many shareholders who own a piece of Fortune, Pernod, Diageo and others, who could care less about the tradition and history of whisky making. They want to see a return on their investment. Even little independent privately-held Bruichladdich, is looking to make some money.

And I don't think there's anything wrong with making money. A profitable market helps all of our favorite distillers to keep on keepin' on. And that's a good thing long-term.

The issue that many of the old-guard have with these short-term marketing tactics is that they could  dilute the mystique of single malt. That may very well be true. But I'm not so worried about the mystique as I am for the industry and some of the companies.

Since the path for getting a whisky from the still to the bottle is a long term affair, the companies who are implementing the short-term marketing tactics could be damaging their own future in the end.

How? Well obviously a smaller company like Bruichladdich has less whisky in the pipeline, and any increase in output today won't hit the bottom-line for a number of years. So, I'll pick on "the laddie" (but it's only 'cuz I love you guys) and make a few broad predictions:

1. Bruichladdich ramps up production today, and by the time the stuff is really ready, 10 years, the trendy market has LONG moved on the the next big thing. Bruichladdich has a surplus of product that they sell-off cheap, or it becomes the main ingredient in a nice blend.

2. Bruichladdich continues their trend in non-age-labeled product (by releasing the product long before the standard 10 years aging) in order to get some short-term profits. This results in a general degradation of reputation of the product. This leads to a complete abandonment by a notoriously snobby old-guard. If and when the whisky trend goes the way of the wine-cooler trend, Bruichladdich sees some very hard times.

3.Bruichladdich has played the market absolutely correctly and becomes the Grey Goose of single malts.

How it really works out is anyone's guess. I think the big guys (Glenlivet, Glenfiddich) have little to lose. Many people look down on these two for be too populist, anyway. They'll always have a market.

Bruichladdich has little to lose as well, they are already considered to be a young upstart, but as far as I am concerned they are doing some really neat things.

The middle market will likely sit back and wait to see how it turns out.

Me? I'll continue to take my single malt neat, with a little water on the side (I've never liked mixed drinks anyway).

Best quote ever

Once, during Prohibition, I was forced to live for days on nothing but food and water.  ~W.C. Fields

Is Diageo too big?

Apparently some people think that Diageo is getting too big for it's own good.
Even after the Pernod buyout of Allied, Diageo is still more than twice as large as its nearest competitor.

Analysts have been calling for the spin-off of Guinness for several years, pointing to the Guinness empire as being outside of the core spirits business.

One of Diageo's institutional shareholders says "I can't see a break-up happening but it will be difficult for them to keep growing. They'll find partnerships and get into new territories, but it is difficult to see how they will keep growing."

While the U.S. is showing strong growth, the European market, where Diageo generates 70% of its sales, has been on a downslide.

Shares in Diageo, dipped 4% yesterday after the company warned of a steepening decline in European sales,which dipped 1% in its first half to December 31, were set to fall even faster in the second six months, though the business is beginning to benefit from operational efficiencies.

The firm also signalled a policy of higher price increases in the coming year, most imminently in North America, with sales of Smirnoff Ice falling in the US.

And with recent misteps like the Cardhu "Pure Malt" fiasco, which led to the departure of at least 2 execs, things are not as great as they could be for the largest purveyor of spirits.

Full Disclosure: I own a small number of shares in Diageo.

Park Avenue Liquor

Got a chance to have a brief visit at Park Avenue Liquor (292 Madison Ave., NY, NY).
John was nice enough to toss me a dram of a delicious Highland Park, Cask Strength, bottled exclusively for, you guessed it, Park Avenue Liquor ($185).

Based on John's recommendation I picked up a bottle of the Compass Box "Monster" a very smoky cask strength vatted single malt (Mostly Caol Ila & Ardmore). This is NOT to be confused with Compass Box's Peat Monster, This is the original - it is cask strength (54.9%), limited edition (only 540 bottles) and make exclusively for, you guessed it, Park Avenue Liquor ($85.)
I don't know if I should drink it or save it :) Read More about Monster.

Oh and thanks guys for the chocolate you gave my daughters. it was delicious!