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From the Editors
Shorts from our editorial team
07 July 2015
Ever played press release bingo? As you can imagine, we get a lot of electronic missives here at scotchwhisky.com from companies eager to secure their moment in the limelight. And some are, er, more imaginative than others.
Certain phrases and words have a tendency to crop up with alarming frequency. A recent press release on The Macallan Residence at Two Temple Place in London provides the perfect example: I ticked off ‘luxury’, ‘prestigious’ and consumers being ‘taken on a journey’ of ‘carefully curated’ experiences (whatever they may be). All in the first few lines.
Photo credit: Jonathan Daniel Pryce
The event provided ‘strong consumer engagement’, various things were ‘bespoke’, the whisky was ‘award-winning’ (with the number of gongs handed out these days, aren’t they all?), and the whole shebang showed The Macallan’s ‘unwavering dedication to quality and craft’. A surprising omission for that mot du jour, ‘artisanal’, but otherwise a full house.
Yes, it’s easy to scoff – and Scotch has moved on hugely from the days of heather and weather, when you couldn’t swing a caber (don’t you mean ‘toss’? – Ed) without hitting a grizzled, tartan-clad Caledonian in front of a brooding mountain-and-loch scene.
But, by fully embracing the ‘luxury lifestyle’ zeitgeist, Scotch is simply swapping one dead language for another. When the same adjectives, nouns and verbs are being shared by distillers, fashion houses, watchmakers and jewellers, Scotch’s individuality is subsumed in a monochrome porridge of communication targeting ‘aspirational’ consumers.
Oh hang on, aspirational. Bingo!
04 July 2015
I was watching Jacques Tati’s masterpiece Playtime the other night. If you haven’t seen it, please do so, and then watch it again. It is a droll meditation on modern alienation played out in a unrecognisable Paris (actually a city set built by Tati), in which people are cut off from each other. It’s not maybe the first thing which comes to mind when writing about whisky, but now that I have to write every week on the topic I’m finding connections everywhere.
Anyhoo… One of the film’s long set pieces features Tati’s M Hulot trying, and failing, to get to a appointment in a vast, anonymous building. Searching for the man he’s due to meet, he looks down (through glass, inevitably) into a room which is divided into small cubicles. Inside each is a member of staff. No-one talks to each other. They work in isolation, never interact. It’s a pretty neat manifestation of silo thinking.
Maybe I should explain. Silo thinking is when the individual departments in a firm don’t share – or want to share – information. While it’s a mentality which is beginning to be challenged – it has been blamed for helping to cause the financial crash – there are still plenty of firms that function in this way. In a drinks firm, for example, you could see the silos being different categories, or sales channels: one for on-trade, one for off-, one for travel retail, one for specialists. Now replicate that in every one of the firm’s offices and there’s a hell of a lot of people not talking to each other.
Because there is inevitably inter-departmental conflict, this is not so much the right hand not knowing what the left hand is doing, but the right hand wanting to cut the left hand off.
The upside of this, it can be argued, is that it allows a certain degree of autonomy for individual brands or categories – for example, allowing single malt to exist on its own, rather than just being bundled into ‘whisky’ – but if the people selling it aren’t talking to each other then any advantage this may give, I’d argue, is lost.
Dividing a business into silos also means there is the risk of a lack of coherence within brands. When every market and sales channel is autonomous, each one of them wants its own expression. The brand ends up being warped into unfamiliar shapes, and any consistency of message and flavour is lost. Is this happening in Scotch whisky? In the case of some brands, yes.
I first came across the silo concept via the writings of Gillian Tett who, as the FT’s US managing editor, is considerably more intelligent and perceptive than I, as you can see in this extract from her contribution to the Banque de France’s Financial Stability Review in 2010.
‘…as innovation speeds up in the 21st century, specialists are engaged in highly complex activities in numerous silos, that almost nobody outside that particular silo understands, or even knows about – even though the activity in that silos often has the ability to affect society as a whole.
‘There is thus a bizarre paradox in the 21st century world: namely while the global system is becoming more interconnected in some senses, the level of mental and structural fragmentation remains very intense.’
The bigger the firm is, the more likely this is to happen, and the implications are serious. As Annelise Riles writes on Cornell University’s Collateral Knowledge blog: ‘The silo mentality is not just about a lack of knowledge. It is also about a lack of confidence in one’s ability to communicate with people outside the silo.’
Is that happening in Scotch? You bet it is.
03 July 2015
Much cheering from the Scotch Whisky Association (SWA) on Scotch whisky being according the status of a Geographical Indication (GI) in Botswana. But why?
GI status is reserved for products from a particular place with a particular character – Parma ham, Sherry and so on – and all WTO members must protect them from misuse. In other words, no fakes allowed.
Botswana imported less than £500,000-worth of Scotch in 2014 – a pimple on an elephant’s posterior in the global context of exports of nearly £4bn. But that figure was 163% up on 2013, and there’s a lot more Scotch which crosses the border from neighbouring South Africa.
Even so, the Botswana decision is worth talking about not for its intrinsic importance, but for its symbolic value as Scotch companies greedily eye the African continent’s emerging economies.
Oil is bringing wealth to Nigeria and Angola, international investment is piling in and, even back in 2012, consumer spending accounted for more than 60% of economic growth in sub-Saharan Africa, according to the World Bank.
The number of middle class Africans varies according to your definition of the term – could be 350m, could be 120m out of a total of about 1bn – but it’s rising fast, and large numbers of these people are beginning to have money to spend on more than the simple necessities of living and breathing.
For an equally large chunk of the populace, Scotch whisky is, to descend into marketing speak, a ‘highly aspirational’ product. In other words, buying a bottle of Johnnie Walker or Chivas Regal is one of the ultimate expressions of a person’s new-found and hard-won economic independence and freedom.
That’s the size of the prize for Scotch whisky companies in Africa. And that’s why the SWA is talking up Botswana.
01 July 2015
The relationship between independent bottlers (IBs) and the majors has all gone a bit hokey-cokey this year. One spring day you’ll find Glenmorangie divesting itself of the Scotch Malt Whisky Society (SMWS) to ‘a group of investors’ (a phrase which always fills me with a certain dread), then the next Bacardi is buying a minority stake in Compass Box. So, now that the dust has settled somewhat, what’s going on?
The SMWS sale makes sense. There has long been a camp within Glenmo' who a) wanted to get shot of the Society having b) wondered why they had bought it in the first place. Always an awkward fit, it had become increasingly out of step with the needs of a sleek LVMH company.
The Society was set up by a maverick – the great Pip Hills – to be a maverick. It wasn’t only different from the distillers, it didn’t even conform to the independent bottler model. Society bottlings were always extreme, quirky, different – difficult even. This iconoclastic stance was continued under the aegis of Richard Gordon, who brought a degree of stability after the fireworks of the original set-up, but it was still identifiably the Society.
Yes, it has got more ‘professional’ in recent years, there are more members, more overseas branches, the website is good, the bottlings have increased, it has acted as the training school for a remarkable new generation of brand ambassadors and distillers, but the underlying spirit has changed.
Changing spirit: the Scotch Malt Whisky Society
This is not to say that Glenmo' ruined the Society. It didn't. It has simply come to the realisation that it was an impossible fit within a (luxury) brand-oriented company. What’s next? We’ll have to wait to see what these shadowy investors have in store.
For them to succeed, they have to come to terms with the reality of being a successful IB – access to great stock. The Society, like most IBs, has had to bear the consequences of stock shortages. In recent years, access to Glenmo’s blending library put them in a better position than many in terms of volume, but they still faced the same reality faced by all IBs: the stock from closed distilleries had long gone, the stellar single casks which were around in the past were, seemingly, harder to come by.
Having good bottlings is fine, but in the long term, any IB business is built on having great ones. This is even more important for the Society as its members require whisky of a standard which justifies the membership fees. If you set yourself up as exclusive, then you need to come up with the goods. Are there sufficient great casks out there for a new-look, independent SMWS to prosper?
It’s stock which lies at the root of Bacardi’s deal with Compass Box. The latter is a throwback to a mid-19th century model of a whisky blender, in the days before those blenders bought distilleries.
Good relations with Diageo gave CB access to juice, but it was, inevitably, limited. Growing the CB ‘brand’ therefore was always going to be tricky, especially as the firm’s rate of expansion was greater than the liquid which was available to it. You can’t sell what you don’t have. Sticking with existing contracts restricted CB’s potential.
Dewar’s has stocks. Deep stocks by all accounts, and of a mix which CB can utilise and which will allow the firm to grow. Add that to the continuing Diageo agreement, and the fact that the firm is filling its own casks means it is, finally, ready to make a significant step forward.
While CB has been vociferous in its assertions that nothing has changed, it will be interesting to see how Dewar’s plays this. Will we see subtle briefings to the effect that CB is their innovations arm? Indeed, where does this leave Dewar’s innovations? What happens if both sides want specific stock?
Whisky politics: Compass Box founder John Glaser
The deal makes good business sense and is proof of CB founder John Glaser’s ability to play clever whisky politics but, while I have confidence in what he is doing, I suspect there will be some interesting times ahead.
Come to think of it, if Compass Box was willing to do a deal like this, one would presume that it would first have approached Diageo. If it did, then why on earth didn’t the big D act?
It’s hardly the misstep of letting Bushmills go, but it raises another question mark about its overall whisky strategy.
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