Bourbon's Big Lesson for Scotch Whisky Marketing
Could your favourite Scotch whisky dare to stop showing its age...?
SHORTLY after I left Beam Suntory, the owners of Maker's Mark bourbon, a row broke out between the distiller and a large group of its loyal customers, writes Rupert Patrick, co-founder and CEO of WhiskyInvestDirect.
With severe pressure on its stocks, due to recent sales success, the decision makers at Maker's decided, in their wisdom, to reduce the alcoholic strength of the bottlings from 45% to 42%. This was to save money and make their limited stocks – bottled after 6 years' maturation – go further.
But it was a bad move. Their customers spotted it immediately and were up in arms.
The back-down from the distiller was immediate. Maker's Mark recognised they had got it wrong, plus how much damage the brand might suffer if they ignored what their customers were telling them.
In an open letter to their customers, Maker's Mark said: "You spoke. We listened. And we're sincerely sorry we let you down."
With similar pressures on whisky stocks in Scotland today, some Scotch companies are also trying to make their supplies go further, quickly.
Why? Because sales of single malts have been strong, beating production forecasts 10 years ago. Short of going back and distilling more whisky a decade ago, it's now difficult to maintain those high profits without the odd short cut.
So where we used to have leading single-malt brands proudly showing their age, we now see many of them re-branded, spiced up, and looking good. But without a sniff of an age statement.
Is this what the customer wants? And if it isn't, how long do we persist trying to convince them that age doesn't matter?
At a time when many brand companies are desperate to find a penetrating and illuminating consumer insight – one that will lead to accelerated sales – the Scotch whisky industry may run the risk of ignoring some more obvious, tried and tested truths.
An easy place to listen to spirits consumers is airport 'Duty Free' stores. Over seven years of managing global Duty Free for Beam Suntory, I spent an unhealthy amount of time in the air, and at airports. I learnt a lot from my conversations with the duty-free shop staff, and two things still stand out.
First, duty-free shoppers everywhere want to feel they are getting better value than their domestic market. Second, they like age statements on single malt Scotch.
Simple lessons, but easily ignored.
A large outdoor advert at Edinburgh airport now shows a range of whiskies available for purchase in the duty-free shop. The message is that you won't find these whiskies anywhere else. That suits the retailer, because the prices can't be benchmarked. But how does it suit the customer who wants some way of ensuring good value?
One shop salesman did his best to persuade me to part with £50 for one of the very nice looking (but "no age statement") single malt brands I'd seen in the ad. It tasted good, the packaging was attractive, and to try to get me over the line he said "Oh, and it's about fourteen years old." Overstepping the line, perhaps, on a no-age statement Scotch. But I shall never blame a salesperson for enthusiasm.
Glenmorangie's Taghta campaign is a great example of how not only to listen to your customers but also to seek their advice on creating a whisky. Taghta means 'chosen' in Gaelic, and this bottling was influenced by a group of customers, asked for their opinions on design, the choice of cask for the 'finish', and the name. I suspect that Diageo's Johnnie Walker rye-cask finish whisky came about from listening to customers who like both the taste of Scotch and rye whisky. What a great idea!
The marketeers at Laphroaig should also get credit for listening to their customers, about eight years ago, when the label design was up for 'refreshing'. An agency had come up with some dramatic ideas to modernise the look and feel of the brand – it was deemed far too old fashioned. A quick survey of customers provided consistent feedback saying "Don't you dare mess with our brand. We love it the way it is."
Social media has made it very easy, and cheap, for brand managers to listen to their customers. Yes, marketing's job is to push information out, but great customer understanding often starts with taking information in.
Is the Scotch whisky industry listening? Or will the pressure on mature stocks stifle that message?