Whisky has ‘regained its attractiveness’

Scotch whisky is moving beyond its traditional consumer base and has “regained its attractiveness” following a “challenging year”, according to the CEO of Chivas Brothers – Pernod Ricard’s Scotch and premium gin arm.

Chivas’ new £25m Dalmunach Distillery

Speaking to the drinks business at the opening of the company’s new £25 million Dalmunach Distillery in Speyside yesterday, Laurent Lacassagne admitted the next few years could be “bumpy” for the industry, but that Scotch was showing signs of growth.

Last year saw the value of Scotch whisky exports drop by up to 39% in half of its 20 top markets, contributing to an overall 7% decline in 2014. The biggest plummet in value exports was in Singapore, which saw a 39% drop to just £201m – down from £329m the previous year – while volumes declined by 41%. Furthermore, this year’s Power Brands report revealed a slow down in Scotch, with Diageo-owned Johnnie Walker witnessing a drop in its score for the first time in 10 years.

“It’s true that last year was a little bit more challenging”, admitted Lacassagne. “We have a challenging situation in China and we know we have deteriorating economic conditions in Europe. Emerging markets were less than they had been so yes last year was not as dynamic as previous years. Having said that I remain very confident in the long term future of the industry. Emerging markets remain very strong.”

Increasing Chivas’ malt whisky distillation capacity by 17%, producing 10 million litres per year, the Dalmunach Distillery in Speyside will provide an essential component to Chivas’ blended Scotch whiskies. The project began five years ago with the company keen to support global demand for its brands, despite recent declining exports.

“Long term we are very confident and we are very pleased with this investment”, said Lacassagne. “I wouldn’t say that the road will be and easy one – it will be a bumpy road, but we are confident in the future.”

Moving past the difficulties of last year, Lacassagne asserted his belief that whisky had “regained attractiveness and popularity” within the spirits world, largely driven by the US market.

“Whisky globally, and Japanese whisky, has regained growth and attractiveness. It’s going beyond its traditional groups and consumers; we are getting new consumers, younger men and women.”

Laurent Lacassagne, CEO of Chivas Brothers

He pointed toward the single malt category as currently being particularly “dynamic”, “surfing this wave of craft products which is very strong, particularly in the US”. However he stressed the need to continue to innovate to keep pace with an increasingly “fragmented” and shifting whisky market, as well as to attract new consumers to the category.

“Innovation is a strong part of our company direction”, he said. “The whisky world is very competitive. We have very dynamic competitors, such as Bourbon and American whiskies and Jack Daniels. Japanese whiskies are becoming very trendy in the big cities. We live in a world of whisky that is more fragmented with different players, which makes it more competitive.”

“Innovation is key to recruit new consumers, but also to maintain the character of our brands to ensure they remain relevant to the world, which is moving and changing all the time.”

One way that the brand is diversifying its image is by promoting new ways of consumption, with a particular focus on cocktails.

“We are expanding our repertoire of drinks and promoting the Chivas Collins as a cocktail”, said Lacassagne. “It’s a long drink – Chivas, tonic and lemon. So we are trying to position the brand in this global movement.”

“It is a way to expand and build our consumer base and attract people to the brand. It’s a way to refresh ways of consumption and to expand our base.”

Recently the company released Chivas Extra, a “smoother, richer brand matured in Sherry casks”, and also Ballantines Brasil – a spirit drink based on Ballantines whisky and lime, tapping into the growing flavoured whisky category.

Click through for a selection of pictures from the distillery’s launch yesterday, which will not be open to the public, attended by Scottish First Minister Nicola Sturgeon…

Situated on the site of the former Imperial Distillery which was closed in 1998, Dalmunach is the most energy efficient distillery within Chivas Brothers’ portfolio, with a 20% efficiency improvement over traditional distilleries. Chivas Brothers recently won The Sustainability Award at The Drinks Business Green Awards with Dalmunach praised for its design efficiency.

First Minister Nicola Sturgeon (centre), Laurent Lacassagne, chairman and CEO of Chivas Brothers (left) and Alexandre Ricard (right), chairman and CEO of Pernod Ricard, at the distillery’s official opening.

The distillery’s 9 metre wide mashtun, housed in a huge room with windows overlooking the Spey river, draws spring water for production from the site’s original water sources.

Located in Carron in Scotland’s Speyside, construction began in July 2013, with the distillery representing a £25 million investment by Chivas Brothers and Pernod Ricard. It boasts a new tun room which contains 16 new stainless steel washbacks.

Dalmunach’s shiny new stills started whirring into action for the first time in October 2014, and will be used in blended whisky brands within Chivas Brothers’ portfolio, which includes Chivas Regal, Ballantine’s and Royal Salute. The distillery houses eight copper pot stills, with a tulip shape used for the wash stills and an onion shape used for the spirit stills, replicating those from the Imperial distillery which was situated on the site from 1897 until 2012.

MSP Nicola Sturgeon admires the distillery’s hexagonal spirit safe, a first in the Scotch whisky industry, which houses four safes with a waterfall feature dispensing the distillery’s new make spirit.