Scotch as Investment

Today’s story comes from a today’s – The Toronto Globe & Mail.

They were doing a story on the new Glenfiddich 50 year old, currently selling for $16,000 a bottle, apparently William Grant is taking a different approach and not marketing this to the whisky drinker or even the whisky collector – but instead to the investor.

I was asked my opinion for attribution I told him that I feel now the same way that I did back in December of 2005 “World’s Most Expensive Scotch” when I said:

While I understand that positive exposure and free press are a great thing, in this context, and in my estimation, it simply reinforces the widely held misconception that Scotch is for silly old rich men, Dot Com millionaires or Traders with expense accounts.

I wonder if there is a correlation between the release of the “most expensive” stories and a noticeable increase in sales? I also wonder if such stories have the effect of solidifying any “for the old & stodgy” perception that Scotch may have amongst the general public.

All in all, I would really like to know if these stories are a net positive or a net negative. Both for the companies mentioned as well as the sector as a whole.

I’m guessing that the short term bump in brand recognition is not worth the long term effect. But I’ve certainly been wrong before. So lucky for me (and for you) I have access to people in the industry who can and will share their viewpoint with us…

I finished up that story with the opinions of a view industry friends and they are still interesting reading.

From the Globe & Mail story:

An acquired taste, smooth returns
Makers of Glenfiddich release 50-year-old single malt that will sell for $16,000 a bottle – though it could be worth more in a few years on the ‘whisky market’

From the story:

“Like any investment, it’s only worth something if someone else wants to buy it at a later time,” said Kevin Erskine, a Virginia-based author who runs The Scotch Blog and has written a book about single malt Scotch. “And whisky drinkers aren’t usually investors. They’d buy it to drink it. So it goes back to these generally being publicity stunts. And you’ll see the distilleries argue over who has the most expensive bottle, like it’s some point of honour.”

I was immediately proven correct by this Twitter and Blog Post from Whyte & Mackay’s Richard Paterson (@the_nose):

“You call that an expensive whisky? I’ll give you an expensive whisky… http://bit.ly/ivfCO

Read the Full Globe & Mail story here

Production over 25 years has been flat

According to a letter published today in The Herald the production of LPA (litres pure alcohol) of Scotch Whisky has not changed much over the past 25 years.

a total growth of 1.14% over the 25-year span, equivalent to an annual growth in physical volumes of 0.145%.

At least that’s what Donald Blair contends in a report published in September last year entitled The Global Scotch Whisky Industry: Hit or Myth – a 25-year study

I used independent research commissioned and published by the Scotch Whisky Association to estimate that, had the Scotch whisky industry matched general global economic growth during the 25-year period studied (conservatively estimated at around 1.5% a year in real terms by some researchers), there would have been around 16,700 new jobs necessarily created in Scotland to meet the increased global demand for Scotch. The jobs foregone through the industry’s minuscule growth in the past 25 years thus put Diageo’s potential 900 job losses in the shade.

NYT WTF?

And for your reading pleasure, might I give you the stupidest analogy I’ve seen in quite some time…

Some Scotch drinkers like single malts, while others prefer a blend.

Leaf-eating insects had been thought to prefer a blend as well. Their olfactory receptors respond to a mix of volatile chemicals released by a plant and the insect moves toward it, a behavior called chemotaxis. But a study in Current Biology reveals that silkworms, at least, are more like single-malt lovers.

You COULD read the rest, but there’s no other mention of Scotch.

Diageo DOES Comment

Diageo was kind enough to send this to me

Dear Kevin,

You might be interested to read Diageo’s response to the article published yesterday in the Scotsman which is referred to in your blog. The response came from Ken Robertson, Corporate Relations Director, Diageo Whisky and has been published today’s edition. Please see below

Best,
Isabelle Thomas

I would like to respond to the alarming misrepresentation in Thursday’s “Scotsman” newspaper of Diageo’s sponsorship of “The Gathering.”

“The Gathering” is a commercial undertaking that required money from commercial sponsors to make the event happen.
We believe approaches were made to a number of Scotch Whisky producers including Diageo.
After some negotiation, Diageo agreed to sponsor the event on terms that are absolutely standard for any commercial sponsorship – exclusivity for Diageo whisky brands being a core part of the agreement as it would be in any brand sponsorship of any event.

In fact, we did make a significant concession by including one of Scotland’s leading independent retailers who will have many non-Diageo Scotch Whisky brands for sample and purchase in the area set aside for Diageo brands and by allowing other whisky brands to take advertising space in the event publications.

When we entered this sponsorship we were not aware of the plans for a Scottish Produce Market festival associated with “The Gathering.”

This came as a surprise to us and we can understand the views of other producers who feel they have been denied access. Scotland’s whisky industry has a rich diversity of brands and cultures and these deserve to be celebrated – indeed as part of “Homecoming” they are being rightly celebrated in Scotch Whisky Festivals across the country this month. Festivals to which Diageo has also made a significant contribution working effectively in partnership with other whisky producers of all sizes.

We believe that the organisers of “The Gathering” have done an excellent job in staging and presenting this event and we also believe that Diageo has responded positively with much needed sponsorship funding, without which this flagship event may well have foundered.

Diageo and its predecessors in Scotland have a long record of positive investment in Arts and Culture in Scotland from major sponsorships of The Edinburgh Festival Theatre, Scottish Ballet and the new Museum of Scotland to support for Scottish traditional music through initiatives such as “The Nineties Collection.”

Diageo is the single largest industry supporter of “The Homecoming” and just this month unveiled in Edinburgh the world’s largest collection of Scotch Whisky bottles and memorabilia, bought by Diageo from a Brazilian collector and brought back to Scotland as part of our commitment to Homecoming.

Anyone visiting the Diageo Claive Vadiz Collection in the Scotch Whisky Experience in Edinburgh will notice that it contains Scotch Whisky brands from producers across the industry. In short is inclusive and representative of the industry. This is the way Diageo works. The impression given by The Scotsman does not reflect the value we believe we bring to Scottish life and culture.

To 'e' or not to 'e' – Part 2

I’ve been pretty vociferous that whisky should be spelled based on the local spelling of where the product is from and not (as some [looking at you Chuck Cowdery :)] think – that it should be spelled based on where YOU happen to be.

Let’s revisit the lively argument: To ‘e’ or not to ‘e’

Well, seems like the New York Times finally agreed with me…

New York Times forced to drop the ‘e’ in whisky
By Alexander Lawrie

SCOTLAND’S whisky industry is celebrating after a respected US newspaper was forced to change its spelling of the country’s national drink from whiskey to whisky.

For years Scotch experts have been fuming at the paper’s erroneous spelling of whisky with a superflous ‘e’.

But now the newspaper has decided to amend their style guide following “aggressive” complaints in a piece they carried about Speysidemalts.

An article appeared in an edition of the New York Times last month sparking a barrage of letters of complaints about the misspelling.

And editors at the US newspaper have now decided to see sense and amend any future copy that includes the word.

Whisky experts in this country are now delighted that their perseverance has finally paid off.

A spokesperson for the multi-national giant Diageo – who own the J&Band the Johnny Walker brands – said: “There is clearly a hard and fast rule for Scotch Whisky which should be spelt without an ‘e’, and the New York Times is to be congratulated for accepting that fact.

Read the rest here

Whisky galore! An English malt, please

I read this article in The Independent about the English Whisky Company, which I thought you’d also like to read. Enjoy.


Whisky galore! An English malt, please

Originally published March 10, 2008 and reprinted with kind permission of The Independent.

The sweet smell of ground grist wafts over the surrounding peat marshland as a one-tonne copper still boils and distils mash into the unmistakable dark liquid that will eventually become whisky.

The first run of single malt, meanwhile, lies maturing in hundreds of specially imported Bourbon barrels from the United States watched over by Molly, Bert, Oscar and Zeb, the distillery’s four Labrador dogs.

At first glance nothing in this particular distillery looks out of the ordinary. But to the factory’s founders and whisky connoisseurs worldwide what lies in those casks is not just whisky; it is history in the making.

For this is not just another new distillery to add to Scotland or Ireland’s already thriving industries. This is the English Whisky Company, the latest attempt to try and cash in on the unprecedented clamour for fine whisky worldwide and, also, the first company to produce an English malt whisky in more than 100 years.

Read the Rest of the story at The Independent site

Is anything worth £1,000 a dram?

I was once again quoted in the Scottish Newspaper The Scotsman.

This time in reference to Johnnie Walker 1805, a bottling that makes the arguably over-priced Johnnie Walker Blue look like a cheap wine.

From the article:

The main
bar at Gleneagles Hotel in Perthshire where the rare Johnnie Walker
1805 has just gone on sale. It is claimed to be a very limited edition:
only 200 bottles have been made to celebrate the birthday of the
label’s founder.

That
scarcity value has been enhanced, the makers claim, by the fact the
majority of the nine malts used are from distilleries which have since
shut down. None of the bottles are on sale to the public: the
Gleneagles hotel has one, and another is behind the bar of Fifty, a
members-only club in London.

Want to try it for yourself? It’s selling at the Gleneagles for £1,000 a dram. And if you can afford that you’ll like want to stay in the Royal Lochnagar Suite at a mere £1,900 per night (but breakfast IS included).

You can imagine what I said…but if you don’t like to imagine, Read the article here.

Columba Cream Responds

MERRY CHRISTMAS!!!

Unless something REALLY big pops up, this will be the only story this week.


A few months (September 6th) ago, I did one of my news wrap-up stories (Whisky Season = News Stories) which included a short clip on how Columba Cream was having issues with its plans to take on Diageo’s

That story was a summary of a story from The Scotsman called Columba Cream Plan Hits The Rocks.

I just received a response from Jamie Morrison of the Scottish Liqueur Centre, who took some issues with my story and attempted to clarify some statements. It’s great to get more information and I thank Jamie for writing me.

Below is his email, my response to some of his comments as well as the text of the original story.

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More damned foreigners buy distilleries

The Scotsman reports that Thailand-based InterBev has bought Inver House. Negotiations probably took place whilst everyone had their eyes on Whyte & Mackay and the Mallya soap-opera.
Pulteney, Balblair, Knockdhu, Speyburn, Balmenach are the distilleries under the aegis of Inverhouse, but they also have gin, vodka, and liqueur brands as well

I have a story or two in the works on some of InverHouse’s products – which are sadly unappreciated. Hopefully, InterBev will infuse some more money into InverHouse, so that gems like Old Pulteney get into the hands of more people.

The full Scotsman story below…

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The rare Saturday story

James Thompson* emailed me this morning to tell me about an article in today’s Times (UK) which, on its surface, discusses the Ladybank distillery, but strayed to touch on issues of terroir – this time regarding water and its impact on the finished spirit.

Now before anyone jumps on me for the term terroir and how it is not applicable to the production of Scotch whisky – I’m still looking for someone to come up with a Gaelic term that means "the place where a thing is made" I’ll happily start using that term.

Back to business…

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