Scotland’s ancient culture is a key ingredient of this famed product’s success
By Louise L. Schiavone
It is impossible to overstate the beauty of Scotland – the tapestry of Highlands, Lowlands, and Uplands, the icy blue waters of the North Atlantic to the west, the oil-rich North Sea to the east. Fresh water babbles energetically throughout the country, and almost everywhere, it seems, are rolling green meadows, hills, and mountains.
All these natural resources form the foundation of the Scotch whisky business, which joins energy and finance at the top tier of industries in Scotland. It is a business steeped in ancient culture, running headlong into the 21st century as it faces the challenge that organizations today must be both profitable and sustainable.
How important is the product to the country’s image and income? Scotland has resorted to both national and international courts to block poor imitations and to keep other countries from discriminating against Scotch whisky in their markets.
A gem among Scotland’s gems is the Highlands distillery of the Glenmorangie Company in Tain, Ross-shire – a member of the wine and spirits group within the conglomerate of luxury brands of Paris-based LVMH Moët Hennessy Louis Vuitton S.A. And while Glenmorangie is committed to delivering a quality product and running a smart business, it has signaled that, in doing so, it will not scrimp on or shrink from its responsibility to preserve the natural setting that makes the industry possible.
Glenmorangie Highland Single Malt Scotch Whisky begins with the waters of its own Tarlogie Springs. After the brew of grain and yeast is committed to casks, the organic waste of liquid and solids flows into the Dornoch Firth, which Scotland has designated as a Marine Protected Area. The process is strictly guided by nationally prescribed environmental management systems, with the water of origin and distillery effluence monitored and analyzed within the limits set by the Scottish Environment Protection Agency. Of concern is the potential for the plant component of the distillery effluence to rob the firth of critically important oxygen. As a result, Glenmorangie is poised to begin construction of a multimillion-dollar waste water management plant, designed to remove up to 95 percent of the “chemical oxygen demand” of the distillery’s effluence. Additionally, the distillery is taking part in local efforts to preserve the beach and enhance the reef along the firth.
Hamish Torrie is director of Corporate Social Responsibility at the Glenmorangie Company. More than that, he is a Scotsman of ancient lineage and personally invested not only in the Glenmorangie product but also in the culture that surrounds it. Torrie’s Irish-born father was a Church of Scotland minister. His mother was the granddaughter of a Scottish baron and the great-granddaughter of the founder of the Cunard shipping line. The family descends from the Macleans of Duart, whose warrior ancestor Red Hector died in 1411 in Aberdeenshire, at one of the many battles for which Scotland is legendary.
Torrie’s vision for Glenmorangie is value and image. His marketing strategy, besides ensuring excellence of product, is to paint a memorable picture and create an indelible experience for the consumer, all synchronized with the culture of Scotland.
Preservation and continued flourishing of both business and ecosystem are the goals of the 171-year-old Glenmorangie distillery, as well as of the nearly-200-year-old Hebridean Ardbeg distillery (also owned by LVMH). Besides the imperative of water-quality assurance, the industry in Scotland is focused on optimized fuel usage and smart design. Enter the waste water treatment plant. “A by-product of treating distillery effluent is methane gas,” says Glenmorangie’s Torrie, “which we intend to use as an energy source at the distillery. This will not only reduce our carbon footprint but also our energy costs. Also, it has a direct and beneficial effect on brand reputation, which in itself over time creates more brand loyalty.”
While Glenmorangie is committed to delivering a quality product and running a smart business, it has signaled that, in doing so, it will not scrimp on or shrink from its responsibility to preserve the natural setting that makes the industry possible.
Glenmorangie exports to 130 countries, and the United States is the brand’s No. 1 customer. Sales are strong, says Torrie. Industry-wide, figures internationally appear mixed. The Scotch Whisky Association says total exports of its products in 2013 were worth 4.36 billion British pounds (6.81 billion U.S. dollars). However, in late September the group reported that export sales of Scotch whisky for the first half of 2014 totaled 1.77 billion pounds, or roughly 2.89 billion U.S. dollars. Because of what the association calls “economic headwinds” in some nations, the total is roughly 11 percent lower than during the same period in 2013. Exports to Singapore dropped by 46 percent; to Mexico, by 27 percent; and to Germany, by 22 percent. The United States purchased $536 million worth of the product during the first six months of 2014 – still 16 percent lower than for the same period last year. The good news for the industry is that sales are growing in France, the No. 2 market for Scotch whisky. Taiwan appears to have discovered an affinity for the product, with a 39 percent increase in purchases. India, Japan, and Lebanon are also buying significantly more Scotch whisky, with sales to India up by 31 percent.
Markets and politics change, but the distilleries are counting on the ancient culture that binds the people of Scotland to remain constant. Ultimately, that is the story – and one of the strongest selling points – of the Scotch whisky industry.
Louise L. Schiavone is a senior lecturer at the Johns Hopkins Carey Business School and a journalist.