“Our vision is to be a driving force within the global spirits market. We are not the biggest player but we want to have influence.” That’s how Whyte & Mackay Director Global Travel Retail Richard Trimby describes the vision for the drinks company, traditionally known as a traditional blended Scotch maker, now firmly established as a luxury spirits business.
That transformation has much to do with the rise and rise of single malt The Dalmore in recent years, but it’s also a story of growth in Asia and in travel retail.
In the past three years Whyte & Mackay’s travel retail business worldwide has leapt by +42% in value, meaning the company today is the sixth biggest malt producer by value in the channel (IWSR).
In 2018 alone travel retail sales in Asia have surged by +50% year-on-year and that region now accounts for 40% of the business. Global travel retail is also the biggest market worldwide for The Dalmore; for Jura, travel retail is the number two market.
The Whyte & Mackay resurgence began with and is led by The Dalmore, once a rather dusty malt, now a category leader.
Chief Commercial Officer Nick Garland says: “Travel retail was the first channel in which we were able to bring The Dalmore to life. It gave us the opportunity to showcase the brand when we were growing it.”
That showcase helped the brand surge by +225% in volume and over +500% in value between 2010 and 2017 (including a doubling in sales value in the channel in the past three years).
And it’s far from finished yet, says the company. “We think the brand can be much bigger than it is today,” says Trimby. “The Dalmore is surging in Asia, with China and Taiwan palpable recent breakthroughs. Travel retail has been key to ensuring awareness and lift-off and establishing the positioning.
“We are investing in luxury visibility – with 35 luxury all bays across the markets – and we set guidelines as to how it’s presented along with in-depth training. You need staff to explain why it’s worth paying more for, so travel retail is at the centre of what we do with The Dalmore globally.”
Given the surging growth rates, fulfilling demand is the big challenge. “With high aged whiskies you can’t double the volume overnight of course,” notes Trimby. “But what we do is lay down whisky stocks for the future and from an investment viewpoint are committing to its success in the future. We need to navigate that growth and manage it in line with demand.”
Garland adds: “Our rate of growth has been explosive in recent years so with limited capacity we have been issuing allocations, examining pricing and doing what we need to do to ensure scope in future years.”
Yet as the company’s senior executives are keen to note, it’s not just about The Dalmore any longer.
The global relaunch of Jura is the other core element in the portfolio, complemented in turn by new collections from Tamnavulin and Fettercairn, with blended Scotch The Woodsman and Wildcat gin further recent additions to the expanding range.
Outlining the wider strategy, Garland says: “We talk about brands that consumers will pay more for. Now that sounds like it is all about The Dalmore. But it’s about liquid and packaging that stand comparison with any competitor, whatever the category. The whisky is at the heart of the game. We have always had fantastic quality liquid but in the past we weren’t presenting the brands in the way that lived up to that promise.
“We want to bring new thinking to the category that is actually greater than the scale of our business. Being a driving force is not about being the biggest. It is about ideas for our brands and the category that will positively influence our partners’ businesses and address their challenges. That needs considering at every point in our own processes and we ask ourselves every day how we can achieve that.”
Trimby adds: “We want to be known for building brands that consumers say are worth more. That means not only competing on price, but rather quality, distinctive brands that offer a USP.”
Here, Jura is embarking on a new chapter, with the Jura Sherry Cask Travel Retail Collection, having begun its global roll-out in April. New expressions will include a 28yo (replacing the 30yo from Q1 2019) and a 21yo.
“As a company we have doubled our business in the last five years. We expect to double that again in the next five.”
Trimby says: “So far we’ve seen encouraging growth in Europe and Asia and lots of interest from the consumer who hadn’t seen Jura before. We have activated it so the island comes alive in the travel retail market and that has been impactful. It is a very different personality to The Dalmore. It’s accessible, it’s about a community and it’s a little gem that not every company has.”
And the company is thinking big – just as it did with The Dalmore. “Jura is a premium malt that encourages people into the category,” says Trimby. “We’d like to see the growth we’ve seen from The Dalmore. Its heartland has been the UK and Europe but it has entered the US in the last two years and is growing strongly there. In Asia it is beginning to take off in travel retail, and we expect a significant increase in Asian distribution in coming years.
The product now also has a more consistent, lighter highland house style. Trimby says: “With previous versions our proposition was that we offered every flavour in Scotch from one distillery. While that was interesting the risk was that the experience was different for the consumer from one bottle to another. We needed a scalable proposition that was consistent. This gives us a spine from which to hang new variants from now, a proposition that can be scaled and communicated on consistently.
Jura, he adds, is now ready to come out of The Dalmore’s shadow and take off.
“We see a lot of growth in whisky in emerging markets and there lies an opportunity. Malt whisky has room to grow. New consumers are jumping past luxury blends and straight into malts and we need to be there to meet them. Jura fits that mould, It’s small, boutique, quirky and we have a freedom to be distinctive with it too. Taking its cues from the island itself, the DNA of brand is to be resourceful.
“We’re seeing double-digit growth in domestic markets, and in travel retail it is ahead of budget, having moved into a slightly higher price point when we premiumised. With new markets opening up next year the real measure will come once we have weeded out older stocks and moved into Asia with support from our major partners. Jura will ratchet up and I have big expectations.”
Beyond Jura’s new look, Whyte & Mackay introduced two single malt whisky collections, from Tamnavulin and Fettercairn, at the recent TFWA World Exhibition.
As reported, Tamnavulin Tempranillo litre bottle is a travel retail exclusive from the Speyside distillery, with an initial launch in 17 World Duty Free stores in the UK.
Single malt Fettercairn features the first new releases from this Highland distillery in almost a decade. The core collection comprises four new expressions (12yo, 28yo, 40yo and 50yo).
Trimby says: “Tamnavulin gives us an entry point to malts but has a smart, premium presentation that offers something different. That’s important as the biggest challenge for our retail partners is penetration. It’s a competitive proposition at that price point and once people try it, the level of repeat sale is very high.”
Fettercairn is described as the “next piece in the jigsaw of creating a portfolio”. Trimby notes: “It’s a small Highlands gem that we have used in our blends but we have stocks that are higher aged, which are being released. If you are looking for a USP, you can look at our distillation process that makes the whisky smoother.
“We have tried to bring that out in the bottle and packaging, which is quite distinctive. It stands out and becomes a talking point. It is positioned between Jura and Dalmore at about £60. It’s rare so we could go even higher and we know that collectors will be interested. It has potential to grow and there is a market out there for this.”
As the company notes, malts are outperforming other segments within whisky currently, but the industry has to adapt to evolving consumer habits in other ways too.
“People are increasingly shopping in unpredictable ways,” says Garland. “Current shop layouts are generally defined by industrial definitions and places of origin, but people are looking for something new. That means creating experiences and ensuring they can shop by occasion. The challenge in spirits is to do what other categories have done well, allowing the category to shine.”
So what more can airport and retailers do to lay the right platform for growth?
Trimby says: “For a brand like The Dalmore presentation is critical, especially as so much of that business in in luxury and in Asia. We can take cues from other luxury categories, and create destination spaces for people to go to.
“Whisky is a huge category and malts are at the heart of that. The challenge for us is that the big companies often get the best space first. Retailers need to think about where the next big growth wave will come, and make space for that.”
Whyte & Mackay’s management is determined that its brands will play their part in that wave, and have set themselves some big targets.
Garland says: “In the next five years we expect the momentum behind The Dalmore to continue as there is room to grow. We are investing behind Jura and in that time forecast that the brand will double in size. As a company we have doubled our business in the last five years. We expect to double that again in the next five.”
