The Glenlivet 70. Gordon & MacPhail have done it again

The Location: Edinburgh Castle. Time: 11.00am. Date: Tuesday, 8th of March 2011.

The day that Gordon & Macphail showed again that they have some of the oldest and highest quality stocks of Whisky in the Country, and the World. Great planning through many years has allowed them to enjoy these moments. Mortlach 70 (A rich, spicy, smoky and treacly beast) last year and The Glenlivet 70 this year.

It was brought down the aisle of the private suite at Edinburgh Castle to the sound of 1940′s swing music (barrelled at the time of the battle of Britain, 1940) by a beautiful Lady in Red.

a-beautiful-lady-with-a-beautiful-whisky

Speeches were made. I especially enjoyed Charles Maclean painting a picture of the events around the time that this whisky was barrelled, the nature of Gordon & Macphail as a company and his opinion of this whisky. An excellent Orator, I take my hat off to you Charlie.

This event had class and sophistication. Nice music and truly stupendous Whisky mixed with the warmth of the fact this was a family occasion and celebration that we had been invited to.

The benefits of this kind of release cannot be overstated. This is a relatively small, family run company. By being well run, buying the best casks and choosing the right cask for the right whisky, they are now in the position to reap the rewards of what they sewed so many generations ago. Lets look at what it is worth to Gordon & Macphail:

Value of the Cask:

Lucas and I did a bit of back of the fag packet mathematics while we were sat anticipating our sample.

From this cask, 100 full sized(70cl) decanters were released at 10833.33 ex vat. When they are all sold (and they will be) the total sales will be 1 million, 83 thousand and 333 pounds (ex vat).

If they were all sold to retailers to sell on, the total revenue would be smaller by about 300,000 (this would be a guestimated margin the retailer would make). So say it was all sold to retailers to sell on, total revenue would be: 783 thousand and 333 pounds.

120 mini decanters (20cl) were released at 2,667.67 (ex vat). When they are all sold (and they will be) the total will be 320 thousand, 140 pounds and 40 pence (ex vat)

Again, if they were sold to retailers to sell on, the revenue would be smaller by about 60,000, so would be more like 260,14o.40

Say for arguments sake, all the bottles were sold to retailers, the ex vat total revenue would be:  1 million, 43 thousand, 473 pounds and 40 pence.

This is where all costs get a bit hazy, but say for arguments sake, after marketing/packaging, transportation and other government costs (taxes), total revenue came to 600,000 (I don’t talk about profits. Far too complicated)

Intangible Value

600,000 is a good return on a cask of whisky (if you can afford to keep it for 70 years) but the value of these releases is much more than just the initial return. By releasing The Glenlivet 70 and the Mortlach 70 before, Gordon and MacPhail are receiving international coverage for the Oldest Whiskies ever produced, which when you actually get down to the price of whisky, could actually be seen as good value and a possible investment (don’t invest in whisky, drink it!). The marketing value of a release like this, at this price, is as MasterCard would say: priceless!

In terms of Marketing, packaging and overall quality, Gordon & Macphail can be seen to be positioning their high end releases closer to official bottlings. This is an important step for them to take. The bottle looks like an offiicial bottling. Whisky Collectors and Speculators like official bottlings. The speed at which the Mortlach 70 sold out (it’s all gone now) shows that they were very successful with this release and I would argue the packaging has to match the liquid to entice someone to fork out over 10 grand for a product.

It is also what they may call in the business and marketing circles:  a Halo product. Many people will read the reviews of this whisky and read that it is fantastic (it is truly fantastic, I will post up tasting notes soon) but decide that they don’t have a spare 13,000, so they will try something else a bit younger from the Gordon & MacPhail range. By showing quality on their top end products, people begin to associate all Gordon & MacPhail products with quality (if they didn’t already). Gordon & Macphail have bottled quite a few Glenlivet’s, so while people may not be able to afford The Glenlivet 70 they will try to be part of the experience and event by trying something a bit younger and more within their price range.

I hope this all makes sense. If anyone has thoughts, completely disagrees with me or spots a flaw in my maths (likely), then please comment.

Chris

Comments

  1. Okay, I know it’s not the same. But I’ve been doing more and more research on home distilling and have been looking into these Kentucky oak barrels to compliment my copper gooseneck still (that I have NO plans on using ;) ). I’m amazed at the price descepancy. http://www.kentuckybarrels.com/hobbybarrels.html
    Cheers,
    Swift
    awhiskeydrink.com

  2. Hello, Chris!

    Thanks for an interesting review on this event. Lucky you are to visit it ;)

    Few days ago I wrote my thoughts about this old and rare Glenlivet. It’s good that world finally see this old stuff. But for the price of it(£13000.00) you actually could buy ALL malts from the Glenlivet range. Including their “Cellar Collection” of pretty old malts and even some past bottlings. That’s the case I think. You can’t compare all malts from distillery with just one but old. So Glenlivet 70 is a whisky not for whisky lovers, but for whisky investors. If I will have such money I probably spend them not just on one malt. I want to drink my malt, not to keep it safe in a bank.

    Cheers!

  3. Smoke must have been rising from that iPad, Chris! A very good post which steered clear of the invective and gushing compliments flying around the consumer end of the whisky world.

    I’m with ShadowWolf – I would have done a reasonable number of unspeakable things to have been granted an invite. Glenlivet is a profoundly significant distillery to me for without a humble 18yo sipped in the visitor centre I would not be writing this comment now. I’m full of admiration for a company who can bring this sort of thing to market, even if I can never ever hope to buy a piece of the action myself. MoM folk get all the perks!

  4. @ShadowWolf and Scotch Cyclist: Thanks for the compliments! I enjoyed writing this post. Yeah the event was amazing!

    But what would I do with 13 grand? I think I would go on a ridiculous holiday for 6 months and live the life of Reilly. I would probably drink plenty of whisky and visit plenty of distilleries on the way.

  5. G&M has been successful so far and this is good for value.
    As a value driver for G&M, I do not know if this would have a significant effect on the value of their other products. If we take Dalmore as an example, they made of lot of headlines, sold their very exensive whiskies, but global sales are going down..

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