The Tasting Panel magazine

September 2015

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Page 26 of 140

SCOTCH REPORT B rand activity in Scotch tends to slow down through the summer, espe- cially in August as distilleries close for their annual maintenance, and marketing and sales teams take time off to prepare for the Christmas sales peak. So let's take a look at some broad market trends and the contrast- ing fortunes of distillers large and small. The Scotch Whisky Association (SWA) recently reported on export sales of Scotch whisky, which dropped by 7% in value terms in 2014 as the category suffered in the U.S., its biggest market. Exports to the U.S. dropped by 9% in value to GB£748 million. And, as you might expect, industry leader Diageo has not been immune from the slump, though their North American whiskey portfolio sparkled with a 10% increase in volume. A new head of the company's North America division has been appointed, with current global CFO Deirdre Mahlan confirmed as the replacement for Larry Schwartz. An early challenge will be to address the SEC enquiry into alleged stock loading which spooked investors and hit the company's share price. In happier news, the tiny Isle of Arran Distillers has reported a second consecutive near-50% leap in annual net profits. Isle of Arran Distillers highlighted the broader performance of the Scotch category seen in those SWA figures. "In a challenging period for Scotch whisky our continued growth is testament to a . . . clear strategy well executed," said Managing Director Euan Mitchell. Shareholders in The BenRiach Distillery Co. are also celebrating as they announced record pre-tax profits of GB£11.1 million for 2014, up 24%, with sales rising 17.6% to GB£41.5 million. Consequently, the company, owner of the BenRiach, GlenDronach and Glenglassaugh distilleries, will invest GB£25 million (US$39 million) over the next two years to drive growth for its trio of single malt brands. Company Sales Director Alistair Walker said, "We are always actively trying to buy back mature [cask] stock of our whiskies that is under third-party own- ership, and we will make a significant investment in mature stocks this year." Walker highlighted "unprecedented" demand for the company's brands over the past year, led by the "huge" Taiwan market and followed by Germany, the U.K., Africa and the U.S. Though relatively little-known in North America, BenRiach's three single malts are favorites of mine, especially Glenglassaugh, where I assisted the original owners in the rebranding and relaunch. A more unusual whisky, but also one I can solidly recommend, is the Bain's Cape Mountain grain whisky from South Africa, which has just made its U.S. debut in Illinois, Minnesota and Missouri. Lee-Anne van Wyk, Bain's Global Marketing Manager for Distell, said: "This is a proudly South African whisky . . . a spirit that is overdue for the American consumer who appreciates a smooth, easy-drinking whisky and is interested in trying new things." The plan is for Bain's Cape Mountain Whisky to roll out across the U.S. during the fourth quarter of this year, van Wyk added. The launch follows renewed interest in grain whisky—the basis of blended Scotch. Perhaps this previously neglected Cinderella style will excite U.S. consumers and generate some growth in the market. Some good news for the category is overdue. The Bigger Picture by Ian Buxton OUR SCOTCH CORRESPONDENT SCOPES OUT BROAD MARKET TRENDS 26  /  the tasting panel  /  september 2015 The team at Isle of Arran Distillery celebrates continued growth. BenRiach is investing heavily to drive growth of its single malt whisky. IMAGE COURTESY OF BAIN'S CAPE MOUNTAIN Bain's Cape Mountain Whisky is a newcomer from South Africa. PHOTO COURTESY OF ISLE OF ARRAN DISTILLERY PHOTO COURTESY OF ANCHOR DISTILLING

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