In a major step for spirits group Edrington, The Macallan’s stunning new distillery and visitor experience are being unveiled at a series of special events this week. The move sets a new benchmark in the premium spirits industry, the company said at a spectacular opening event on Wednesday night.
Edrington is investing £500 million in the brand, of which the £140 million distillery is the centrepiece. The programme will increase the group’s investment in whisky, warehousing and The Macallan’s sherry-seasoned oak casks.
The Moodie Davitt Report is attending the opening, along with other guests, including leading travel retail partners and media. (See below for reaction from Edrington Global Travel Retail Managing Director Igor Boyadjian.)
The new distillery and visitor experience is located on the Easter Elchies estate, which has been home to the single malt since 1824. The brand has risen to become the leading international single malt by value, with leading positions in significant Scotch whisky markets including the USA, Taiwan and Japan.
The project was announced in 2012 and the build began in December 2014. The first whisky ran through the stills in December last year and the visitor experience will open to the public on 2 June. It is expected that visitor numbers will double in the first year and continue to rise thereafter, according to Edrington.
Edrington Chief Executive Ian Curle said: “This is an exciting occasion for Edrington and The Macallan. The unsurpassed quality of The Macallan is in high demand and we face the future confidently with this new distillery. It’s an authentic, abiding, ambitious investment that will match consumer expectations for generations to come.
“When the doors open in June, we expect this new Macallan enterprise to deliver significant benefits for the tourism industry, Scotch whisky exports and the economy.”
This is the first distillery on Speyside to be designed by an internationally acclaimed architect, Rogers Stirk Harbour + Partners, which was selected to lead the project after an international competition. Elgin-based Robertson Construction delivered the complex architectural design.
The distillery will enable production of The Macallan to increase by one third if required. The new stills were crafted by Scottish coppersmiths Forsyths, who have been making the brand’s distinctive, ‘curiously small’ stills for The Macallan since the 1950s.
Edrington said in a statement: “The striking piece of contemporary architecture is cut into the slope of the land, taking its cues from ancient Scottish hills and maximising the aesthetic beauty of the building while minimising the visual impact on the Speyside landscape, which has been classified as an ‘Area of Great Landscape Value’.”
The undulating timber roof structure is one of the most complicated timber roof structures in the world, said the company, comprising 380,000 individual components.
The Macallan Creative Director Ken Grier said: “As The Macallan has grown globally it has been very important that we make sure we can sustain demand for this wonderful amber liquid. We’ve taken exceptional care in making sure that the spirit that is produced in the new distillery is identical to the spirit that we produced in our previous distillery. This is the beginning of a really exciting new chapter in the evolution of this wonderful brand that is The Macallan.”
Graham Stirk, Senior Partner and Lead Architect, Rogers Stirk Harbour + Partners commented: “The Macallan estate truly is a special place; a place we have come to love and respect hugely. The vision was always ambitious but this enabled us to challenge our own thinking to create something so dramatic and awe-inspiring. It has been an honour to play our part in shaping the next chapter for The Macallan.”
Premiumisation drive: The travel retail view
Speaking to The Moodie Davitt Report, Edrington Global Travel Retail Managing Director Igor Boyadjian said: “This opening is a once in a lifetime event. It’s not every day that you open a new distillery. First and foremost it’s a wonderful asset to play with. We are trying to bring together all the legacy and heritage of The Macallan over the decades, and send a strong statement of confidence in the future. It’s about connecting the heritage with a forward-looking view in terms of our confidence in the brand, in Scotch whisky and in Scotland.
“What is even more interesting from a travel retail viewpoint is that our customers attending this event see this statement. How do we bring a piece of that statement to our airports and retail environments? How do we bring it to life and send a message to the consumer and retailers that this is the very essence of the brand. It has generated a lot of stimulus and ideas already in terms of possible retail activation, boutique concepts and shop in shops. Not everybody can see the distillery so for us it’s about finding the right partnership to bring that experience to the outside world.”
Boyadjian noted the importance of travel retail as a brand showcase. “Basically this asset reinforces our premium play and we are determined to reinforce that premium play through the channel. The premiumisation of the range is one element, as with the roll-out of The Macallan Quest where we have taken the packaging, story-telling, navigation a step up. It is also about the premiumisation of the retail experience, premiumisation of partnerships and premiumisation of locations, education, brand ambassadors and so on. This is where we believe we can make a big difference with The Macallan and beyond that with our super-premium portfolio, and with Glenrothes to follow.
“What we are trying to explain is what added value each brand plays for the retailer, define the consumer target, role and occasion that each brand connects to.”
Looking ahead, Boyadjian noted that The Macallan remains the priority brand for this year. “With Quest we are probably halfway to where we want to be. We have clear visibility on Q1 performance, which has been very solid and beyond expectations. That will create a few ‘good problems’ in terms of liquor availability and allocation. There are promising signs but it’s early days. We have supported that launch so you’d expect a strong performance early on. We know the range is here to stay so we need to have a bigger global picture but the signs are positive, whether it’s in Singapore, Sydney, Dubai, Paris or London.”
Boyadjian also said there would be an “evolution” in how Edrington approaches store formats.
He said: “We are exploring with some partners how when can execute some projects. This could mean stand-alone boutiques, shop-in-shops or other formats. It’s in the interests of brand, retailer and airport to create a point of difference. Everyone is trying to lift value and The Macallan can play a big role in this.
“Passenger traffic growth is there but consumers are not always spending enough. We have a portfolio that aids this value growth. But you need to have the right retail environment. We can sell a 72yo decanter but the purpose there is to magnify the brand reach, and for that you need the environment. We will be very picky in how we release our prestige items.”
He recognised that the company could leverage its voice as an industry leader to create new conversations around delivering value in the industry.
“We need to have the pragmatic commercial discussions of course, but in some cases and with some partners we are moving away from them to build on our point of difference. The best partners are looking to improve the overall experience at the airport. The Macallan is ready to have those conversations but will be choosy about environment and partners – we are not desperate to sell. We are moving away from the US$40-50 price point; our entry point is now US$80. We want to play a different role and that is good for the brands but also for the retailer. With more Asian consumers travelling the world you have a big opportunity to capture some of that market.
“We are also looking at premiumising across the range, even on The Famous Grouse in Europe, with some more premium innovation. We know that in the end that premium opportunity is in our DNA.
“One of our strategies is to ‘perfect The Macallan’. What that means is to never be complacent about the brand, retail execution, education or commercial viewpoint. It’s a quest to improve, to premiumise, to ask ‘is that good enough?’ In the past maybe we were too shy about this. Now it’s part of the culture of our teams and our projects coming up will elevate that and bring it to life.”
He concluded: “ With The Macallan, what has been special is that the brand has grown everywhere with a restricted pool of liquid. It has grown in value across the globe. Travel retail reinforces that and delivered a strong year last year. We cannot afford to grow volumes too fast so it’s about value creation. In the year ahead, it’s not easy to put a number on it – though we anticipate strong single or even double digit growth – but that all depends on our ability to drive prestige and premium with the stock we have access to. There is an exciting future ahead.”
He added: “We know consumers want new items and innovation more often. They want to be excited. So our innovation pipeline is quite intense. For the core range we’ll bring out a concept series of affordable, collectable items around US$110-120. This year is also about celebrating the distillery opening so that will be supported by some interesting launches like a 72yo decanter, with is probably the oldest liquor we have bottled yet.
“We will also reinforce the opening with a limited edition of Rare Cask Black , with a value added expression, some great photography, and tell the story to the world about this wonderful asset.
“We are doing some great work on upgrading our Highland Park offer, making it more compelling and easier to understand in travel retail. We’ll have more news to come on this.
“We are also reinforcing our prestige innovation. That is a big point of difference for us. We’ll have a prestige pipeline with some exciting news to come later in 2018. We know we need to be faster on innovation covering the core and prestige, so there is much to look forward to.
“Beyond that we’ll also roll out our first ever communication campaign for The Macallan later this year and we’re looking at how the airport can play a role. We have had ad hoc communications before but no truly global communication behind the brand. This is about ensuring we continue to recruit new consumers into the brand.”
More comment and reaction from the official unveiling (tonight) to follow.
