Edrington strategies seem to be working

The work that Edrington has been doing with their brands seems to be bearing some fruit. Here is a recap and commentary on the Edrington Group's results for the 12 months ending 31st March, 2007 and announced on July 4th 2007.

The Famous Grouse
The Famous Grouse, already popular in Scotland is starting to take off in other places, including the US. I became a big fan of the Grouse while in Scotland, where FG is the number one selling Scotch.

The Famous Grouse, our flagship brand, exceeded three million cases sold for the first time in 2006/07.  The brand has been the market leader in Scotland for the last 27 years and it is pleasing to report that it has also improved its position within the UK, its largest market. We continue to invest significantly behind The Famous Grouse in international markets and the brand has grown and developed its premium positioning in all of the key territories: Europe, The Americas and Asia Pacific.

Priced right and quite smooth it's a great house blend for your bar. I'd suggest stashing a few bottles because when a company talks about "premiumising our portfolio of key whisky brands" it generally means they will be raising prices.

The Macallan
The Macallan, continues to prosper and sold more than 500,000 cases for the first time in 2006/07. A good part of this is due to the brand extension into the Fine Oak range. Edrington declares that "The Macallan is now the number two single malt Scotch whisky in the world by value." (total dollar volume - that means that they ship less than Glenlivet, but charge more per bottle).

The Macallan Fine Oak line, despite the breast-beating, hair-pulling and caterwauling from purists seems to be selling quite nicely. I'll eventually get around to tasting and writing about the line, as I have samples of the entire line, which have been sitting in my office waiting for that event to occur.

Highland Park
Edrington is thankfully not calling it "The" Highland Park (yet); but are unfortunately still milking the 2 year old "best spirit in the world” tag from writer for hire Paul Pacult, Highland Park changed packaging last year to accolades and boos. Edrington feels the repackaging exercise was a success:

During the year, we repackaged the brand to accentuate its authenticity and reinforce its appeal to connoisseurs of premium spirits; initial results suggest that it has been well received in the marketplace and we have exciting plans to expand sales and coverage.

Cutty Sark
A brand whose time has come and gone, Cutty Sark is not the most popular whisky among whisky fans here in the U.S. Despite a repackaging exercise, even in Spain, it's largest market, sales have dropped by 6%.

Continued support for Maxiuum?
Back in October 2005, I wrote how Fortune Brands leaving the Maxiuum distribution partnership marked the beginning of the end for Maxiuum. This past November, Remy also decided to drop out (effective March 2009), leaving only Edrington, V&S and Beam in the partnership. How long can Maxiuum hang on? Only time will tell...but I'm guessing it's days are numbered.

Bottom Line

FINANCIAL RESULTS 2006/7
 
The Edrington Group's results for the 12 months ended 31st March, 2007 are:
 
FINANCIAL HIGHLIGHTS
 
* Group turnover UP 5.7% at £278.5m (2006: £263.4m)
* Profit before tax (excluding exceptional items) UP 6.8% to £68.9m (2006: £64.5m)
* Shareholders' earnings UP 17.4% to £33.1m (2006: £28.2m)
* Dividend UP by 9.0% to 15.7p (2006: 14.4p)

In support of this growth, Edrington plans to increase distillation and warehousing capacity at the Macallan facility - this investment will "take place over the next few years".

Certainly, our malt whisky brands are performing ahead of the industry average, both in volume and value, and we believe that this sector will continue to grow strongly in years to come. This latest investment programme, at both The Macallan and our other operations, including North British, will ensure that we are well placed to meet future demand.