Diageo Calling

An inevitable side effect of growth in the whisky industry is the acquisition and subsequent merging of many distilleries by large corporations. The number of active distilleries seems to go through repetitive growth and contraction cycles, based on the popularity of whisky as a whole and single malts in particular. As single malts have become more popular (and profitable), companies have purchased and re-opened some previously closed or "silent" distilleries. As part of the purchase, these companies obtain whatever product is aging in the warehouse, so part of the motivation is to gain access to these aged stocks in the hopes of bottling it and selling it quickly. The more shrewd/prescient companies or corporations were able to purchase struggling distilleries in the lean years for a relative song and are now selling bottles of old whisky stock at premium prices.

Even before the single malt boom, large distillers specializing in blended whisky were acquiring smaller distilleries whose products were major contributors to their blends. This served two purposes: 1) Economics, in that they no longer have to purchase the whisky from a third party but can produce it themselves at cost and 2) Stability, keeping production steady in order to maintain the composition of their blend for uniformity of product. It also has the bonus effect of allowing the new owners to limit access of their malts to competitors for use in competing blended whiskies.

Being part of a larger corporation can be a great boon for some small distilleries. If the corporation is interested in promoting their product, injection of capital for marketing and distribution purposes can enhance both the visibility and availability of the whisky. It also allows the distillery managers the opportunity to increase the variety of expressions available to the public, which is demonstrated in the plethora of whiskies available today. So what is the downside? Well, that extra capital comes at a price (literally and figuratively) and that price can be a loss of control at the distillery. Control of production methods and distribution may now rest in the hands of parties that have little interest in tradition or the local influence of a particular brand of whisky.

Diageo PLC is the largest beer, wine and spirits company in the world, formed as a merger of Guinness UDV with the spirits company Grand Metropolitan in 1997. Its brands are highly recognizable in every category of the spirits world: Captain Morgan rum, Smirnoff vodka, Tanqueray gin, Johnnie Walker and Crown Royal whisky, Guinness beer. This is but a small sampling of Diageo's huge brand coverage in the alcoholic beverage industry. The assimilation of Guinness UDV brought with it a collection of Scottish distilleries that used to be known as United Distillers and before that, Distiller's Company, Limited. Six of the more well-known malt whiskies from this collection were selected to become part of a "classic malts" range including representatives from different whisky regions:

Dalwhinnie - Highland

Glenkinchie - Lowland

Cragganmore - Speyside

Oban - Western Highland

Lagavulin - Isle of Islay

Talisker - Isle of Skye

These malts also represent varying styles as well as regions. Dalwhinnie is a very light, honey and heather-like whisky, while Talisker and Lagavulin are very strongly flavoured with smoke and peat, respectively. I've listed them in order of increasing flavour "robustness". These six malts were chosen out of UDV's substantial collection to be their flagship representatives in the burgeoning single malt whisky market. The others continue to exist in relative obscurity, known only to connoisseurs and available almost exclusively in the UK through independent bottlers and Diageo's "flora and fauna" range (so named because they sport relatively unexciting labels which include pictures of local plants and animals). These whiskies continue to be used extensively in blends and there are some real gems in this group.

As the popularity of single malt whisky continues to grow, Diageo has recently added a couple more representatives to its classic malts range. These two were originally dubbed "hidden malts" but after making the latest cut have joined the classics:

Clynelish: Coastal Highland

Caol Ila: Isle of Islay

Before I digress too much, let me explain why I'm outlining Diageo's considerable whisky portfolio. In November of 2008, the following story appeared courtesy of the CBC (Canadian Broadcasting Corporation):

www.cbc.ca/canada/new-brunswick/story/2008/11/03/nb-scotch-shortage.html

In a nutshell, the story is about Diageo deciding to pull most of its whisky products out of New Brunswick, possibly to sell them in the more lucrative markets of the BRIC countries (specifically Russia, India and China - not sure about Brazil). There was a wide variety of responses, and your blogger posted this comment:

"After all the preaching that customers receive about 'loyalty' to a brand by corporations, here we have an example of a company not being loyal to its customers. I don't blame the individual distilleries, as they would have no say in this decision. This is one of the perils of being part of a conglomerate such as Diageo.

That being said, the power still lies with the consumer. Boycotting Diageo won't hurt them, but we can still transfer our loyalty to local brands (such as Glenora) and smaller companies which would appreciate our patronage. There are plenty of fantastic scotch whiskies out there that are not part of the Diageo empire. Springbank and Bruichladdich are gems that any whisky fan should try, but are not always available in NB. Why not?

If our business isn't good enough for Diageo, then I say let them move to other markets. I strongly urge NBLiquor to support smaller distilleries and companies that want our support and will be loyal to their customers. These don't have to be Scottish brands, as the number of Irish, American and Canadian distilleries making quality product is growing every day.

NB customers aren't good enough for Diageo? I beg to differ."

Let me make a quick point here: I can understand why Diageo is doing this. They can make more money by selling these whiskies for higher prices in some of these developing countries. That makes good business sense, and we're talking about a major multinational corporation - which historically, represent abysmally poor examples of moral judgement concerning individual customers.

Then, after almost a year of living without the classic malts, the following story appeared in the Times-Transcript, a NB newspaper:

http://timestranscript.canadaeast.com/news/article/848880

So now Diageo products return to the shelves in New Brunswick, and we have sub-prime mortgages, toxic credit default swaps and Lehman Brothers to thank for it. Now if I had to make a guess as to what happened during this whole affair, here's what it would be:

Due to increasing demand in both developed and developing countries, Diageo decides it can make more money by pulling product out of NB and selling it elsewhere. They may have offered NBLiquor the opportunity to purchase stocks of these products at higher prices and perhaps NBLiquor refused. The global economic downturn significantly affects (reduces) demand for many higher priced goods - including single malt Scotch whisky, in many countries. Diageo decides to return some of its products to NB with some slight increases in price.

Am I glad that these products are back? Sure. I like many of the whiskies in the classic malts range, and appreciate the opportunity to buy them even if I feel some are overpriced (Oban). If they want to raise the price due to supply and demand, let them do it and let the customers decide if these whiskies are worth the inflated price. However, I do feel a bit like I've just received a phone call from an ex-girlfriend who thought she could do better, played the field and now realizes she gave up a good thing.

Diageo's prodigious marketing power has done wonders for the single malt and premium whisky markets - providing considerable customer education and attracting enormous interest not only for their brands, but the entire industry. That being said, many customers (including your blogger) will remember how such companies value their patronage and once spurned, may decide not to answer the early morning "booty call".

Daddy's Dram

Anyone who has been following this blog knows that my favourite reason for drinking a good whisky is a special occasion. Instead of popping open a bottle of champagne I prefer to crack open a bottle of whisky, often one that has been staring at me for some time from the shelf in my home. This also means that special bottles will have been purchased in advance of significant occasions, and these will often be more expensive or rare bottles that add to the fun and memory of the moment. Given that taste and smell are strongly associated with memory, a distinctive dram of a fine whisky not only adds something to that occasion in the present, but can conjure back memories of those special times by tasting that particular whisky again in the future.

The birth of my daughter, Melody, in August of this year has trumped any other special occasion since my wedding back in 2007. So which bottle did your blogger choose to celebrate her entry into the world? This is the story of that special bottle...

A trip to Scotland back in the summer of 2004 with a close friend (also a whisky fan) allowed me to participate in nine different distillery tours. We also visited three others but were not able to take tours. Our original plans didn’t include so many distillery tours, but whisky is such an integral part of Scottish culture that they can be hard to avoid (even if one were …ahem, really trying). I’d be lying if I said that our three day stay on Islay wasn’t planned with whisky in mind, but it was a wonderful surprise to experience how those distilleries infuse the distinct culture of the island and the sense of pride they instill in the Isleachs.

Of the nine distillery tours that we took, two allowed us to bottle our own whisky straight from the cask: Aberlour and Bruichladdich. I think that more distilleries have since introduced this practice into their tours, but at the time it seemed very novel and special. Given the limits on alcohol volume allowed duty-free back into Canada (1.14L), and the fact that we were backpacking, the bottles to be brought home were chosen with great care.

Bruichladdich was the second distillery we visited in Scotland (after Oban), and the first on Islay. I have been a huge fan of their whiskies ever since participating in a tasting event earlier in 2004 hosted by their CEO, Mr. Mark Reynier, at a wine and spirits festival in Montreal. He was both charming and engaging in conversation, guiding us through the myriad pleasures of Bruichladdich whiskies and encouraging us all to visit the distillery should we ever find ourselves on Islay. Never being one to turn down a personal invitation from the director of a distillery, I resolved from that day to visit Bruichladdich.

After settling into our B&B accommodations in Port Ellen, my friend and I made our way west across Islay, past the town of Bowmore to the Bruichladdich distillery, avoiding the odd sheep that make their way onto the roads. It was a beautiful, scenic drive with the coasts of Laggan Bay and then Loch Indaal on our left and huge grassy fields with their precious peat hidden underneath on our right. After arriving at the distillery, we spent some time admiring the coast of Loch Indaal (right across the street) before entering the visitor’s centre. Bruichladdich is a beautiful old distillery that has stayed true to its roots. It is one of the few remaining distilleries in Scotland that still has its own bottling facility on-site. It also does specially selected bottlings of other malts for its Murray McDavid Independent Bottling division.

We were given a dram of the Bruichladdich 10-y-o while waiting for the distillery tour. This gave us the chance to peruse the visitor’s centre and see the various Bruichladdich whiskies and related merchandise for sale. Your blogger used the opportunity to pick up a pewter flask. The tour itself was a truly international experience, as our group of 10 visitors included Germans, Japanese, Americans, British and Canadians. Touring a smaller distillery like Bruichladdich is a great way to learn how Scotch whisky is made, as you really get to observe each step in the process and how everything is done in-house. It is readily apparent that they are not interested in expansion at the cost of tradition and authenticity.

After the tour, it was back to the visitor’s centre. Time to bottle that cask of whisky! The whisky used in these tourist bottlings is chosen by the Master Distiller, Mr. Jim McEwan and these special “Valinch” expressions all have their own story. They are not for sale outside of the distillery, and thus available only to visitors on these tours. That day, they were finishing a cask of the “Flora McBabe”, a sherry-finished Bruichladdich whisky celebrating the life of a very prolific Isleach pig. Watching them empty out the last spirit from that cask, filtering out the large, dark wood bits with a cheesecloth, all while drinking drams of that whisky with my best friend and other big whisky fans from around the world was pure magic.

It would be 5 years later, almost to the day, that I would taste Flora McBabe again, sharing a dram with my beautiful and exhausted wife and toasting the birth of our baby girl. Tired as we both were, the taste of Flora instantly whisked my mind back to that day at Bruichladdich; the salty tang of an Islay breeze mixing indelibly with the tears of joy we shed welcoming Melody Emma to the world.

No Excuse Required

"Formerly every event was made an occasion for drinking. If it was raining, it was 'we'll have a dram to keep out the wet'; if it was cold, 'we'll have a dram to keep out the cold'; and if it was a fine day, why then 'we'll 'drink to its health'".

- J.A. MacCulloch

A wonderful way to become more comfortable drinking whisky is to incorporate it into other activities surrounding your life. Much like having a coffee can become a relaxing experience by association; a dram of whisky can be a nice way to unwind after a long day, such as having a nightcap before bedtime. Although a bottle of whisky is a great way to commemorate a special occasion, the mundane routine of everyday life can also be spiced up with a nice drink now and then. In my opinion, one of the great advantages of spirits over wine is that you can keep an open bottle for a long time, having a drink once in awhile over a period of weeks or months (if not years). Although air in an open bottle will start to affect the spirit over time, it will still be good for quite a while. A couple of years ago, over the course of a brutally cold winter, I went through a bottle of Talisker 10 y-o simply by having a dram every night while reading a series of novels. This is a great way to become familiar with any particular malt, bottling, or expression; by drinking small amounts routinely over a short period of time (weeks to months). It took about 7 consecutive nights/drams before I started really appreciating the dark chocolate notes in the taste of Talisker that I hadn’t noticed previously by having isolated drams every once in awhile.

Bars and pubs can also be great places to try different whiskies on a more random basis and provide a much cheaper alternative to buying a bottle of something you may be unfamiliar with. There are some real diamonds in the rough when it comes to whisky bars. Establishments that specialize in whisky will have increased selection, but the drinks themselves will be more expensive as these places are fully aware of the value and rarity of their stock. If you can find a nice pub that doesn’t specialize in whisky, but happens to have 5 or 6 nice bottles, you can often get a really good deal. These bottles are often due to the past or present employment of a bartender who is a whisky fan, and was able to convince management to purchase some good whisky. My friends and I were able to find a small pub on the West Island of Montreal that sold drams of Oban 14 y-o for $4CDN, as opposed to the $12 that was being charged at some of the Irish pubs downtown. In general, good whisky is quite expensive in bars and something you probably won't be ordering signficant quantities of.

In making the decision on whether or not to have a dram when out on the town, I find it useful to think of it more in terms of coffee than say, beer. In other words, the sorts of conditions that one would make one think of having coffee (other than to wake up) are often good for whisky drinking, too; some examples being: After dinner with dessert, on a cold afternoon with a good book in front of a fire, out with friends for a couple of drinks and conversation, etc. These are all great whisky appreciation moments. Whisky tends to warm you up, so a hot summer afternoon after playing volleyball on the beach is probably not the best time for peat-fueled firewater in the belly! I’m talking about drinking straight whisky here, but there are lots of mixed drinks using whisky served cold that would fit the bill. Alternatively, if you prefer your whisky “on the rocks” (with ice), that will also temper its heat a little bit.

A couple of weeks ago, I attended a Biosciences trade show in Fredericton, New Brunswick. This was a part of Canada’s National Biosciences Week and it involved exhibits from biotech companies within the province as well as a couple of seminars on building biotechnology infrastructure. I was there representing my employers and since the show ended late afternoon, when it was over I headed to Fredericton’s best whisky bar: The Lunar Rogue. I’ll do another post later specifically on the Rogue, but suffice it to say that its regular list of 200+ different malts has gained it an international reputation as a whisky bar, including a shout-out from Whisky Magazine. Perusing their substantial whisky menu, I settled on a dram of Lochside (bottled 1991), an Eastern Highland distillery that closed back in 1991.

After being served my whisky (in a glencairn glass, no less – good on the Rogue), I mentally reviewed the contacts and conversations made over the course of the day. It was a sunny and warm late summer afternoon, so it was the perfect time to relax on the patio of the Rogue and watch both foot and vehicle traffic pass by on King street. How was the Lochside? Not great, but not bad and certainly better than if I had been drinking it in my living room and really critically analyzing it. No tasting notes for this one. Sometimes it’s nice to just relax with a dram and enjoy the context as much as the drink itself.