Diageo blending the conversation in the UK

Johnnie Walker Black where flavour is king

A hectic start

It was quite a hectic start to my day, when I went to the Diageo offices in Edinburgh. I had had a few too many pints in Brewdog the night before (as you do) which meant I woke up with about 20 minutes to get to Diageo HQ. Quick shower, taxi and I was there just on time, feeling right as rain (which is surprising after many pints in Brewdog). It was good I was hangover free, because they don’t mess about at Diageo HQ, but I’ll get to that in a minute. First, let me explain why I was there.

Changing the UK’s perception of Blends

Nick Morgan spoke to us all when we arrived, and explained what we were going to look at. In case you don’t know, Nick Morgan has been working for Diageo for longer than he would care to remember, but his main task in the past was to look after the malt portfolio, now he has been re-assigned to look at blends and particularly, how blends are perceived in the UK.

His main point to begin with, was to really lay it out to the room (who were all huge single malt fans) that blended Scotch whisky was the most important part of Diageo. Volume and value is in the blends.

In broader terms, I have to agree with his sentiment. If you were to look at worldwide whisky sales, blended whisky really keeps many of the single malt distilleries going. I have often wondered why so many malt heads have such disdain for blends.

The Numbers

To give you some of the numbers Nick gave us on the day:

  • Single Malt makes up 7% of the whisky market world wide, yet has 95% of the conversation.
  • Diageo have roughly 90 different blends and store 7 million maturing casks in Scotland at any one time (roughly a billion litres of alcohol).
  • Some blends have tiny markets in comparison to others, but are kept because of customer loyalty (5000 cases of John Begg v 12 million cases of Johnnie Walker).
  • There is much focus on China for whisky’s next big growth market, but actually Latin America is growing at a rate of knots and Africa is potentially the next huge growth market.
  • In terms of value: Scotch is 29% of Diageo’s value (Beer is 22%, Vodka is 11%).
  • Johnnie Walker is 54% of Diageo’s whisky portfolio (value).
  • Blended whisky is a very dynamic area and is still growing in several worldwide markets.

The Tasting 

Now as I mentioned, I was glad to be hangover-less, as we had a bit of a tasting to get into during our morning discussion. Nine different blends in Diageo’s portfolio (told you they don’t mess about!). While we were tasting all of these different and fascinating blends, Maureen Robertson (Master Blender extraordinaire) walked us through these different whiskies, and gave us some idea of her varied role within Diageo’s blending team. I have selected a few of these, and here are my tasting notes:

 

Windsor 17 Year Old (Windsor strategically positioned to be number 2 to Johnnie Walker)
Number 1 Blend in South Korea
No smoke on this blend. Market research has shown this market not so keen on peat yet.

Nose: Light, lively and zesty.
Palate: More lemons, limes, oranges and berries.

Maureen explained a little about her role; creating new blends for specific markets, doing tastings, considering perfect serves and quality control. If ever there is a vat that is not good enough, it can be re-casked, which shows you that Diageo are blessed with a level of finance. They don’t have to bottle everything they make.

J & B Reserve 15 Year Old (Asia, South America and some European countries)

Nose: Small hint of earthy smoke. Orange and marmalade cake.
Palate: Bit more beach fire smoke and an orange and ginger biscuit finish.

Bells Original (No 1 blend in the UK)

Nose: Younger than the others, malty, and a touch of smoke. It smells like the beginning of the process, all malt and smoke.
Palate: Smoke comes through. I admit, I prefer the other blends I have tried so far.

At this point, there were some quite interesting points made regarding the UK market in comparison to other markets. The expectations of consumers (for huge discounts) coupled with Supermarkets pushing for huge discounts, meant it could be quite a challenging market for the spirits producers.

Old Parr 12 (I didn’t know Grand Old Parr was England’s mythical oldest man)

Nose: Like a tropical cocktail. With a sparkler (ok, maybe morning tastings take effect quicker than other tastings).
Palate: Very fruity. Peaches and oranges. Lovely stuff.

Buchanans 18 Year Old

Nose: Creamy, citrusy and blackcurrant. Bit of spice and fruit to it, like Christmas cake and Cognac.
Palate: Lovely. Marzipan, liqueur chocolates.

I had a really interesting morning and learnt quite a bit about the global market that is whisky. It was quite amazing to hear the logistics of distilling, casking, blending, branding and transporting such an unbelievable amount of whisky all over the world. I didn’t enjoy all the drams (Bells and White Horse weren’t great) but I thought the Buchanan’s and Old Parr were top notch.

I came away from the meeting feeling more assured. I worry when there are booms in whisky (like we are in now), because all of my studies into the history of whisky have shown that after every boom, there is a bust. I’m not saying there will never be a bust, but Diageo are making every effort to make the boom last as long as possible. Hopefully until my retirement.

Chris Hoban

Comments

  1. What percentage does Scottish single malt make up of the total Scotch whisky market?

  2. Hey! The figure I that has been pretty constant over the past 3 or 4 years is 90% Blended Whisky to 10% percent Single Malt whisky (ish). That’s volume figures. Value is a little more complicated. For example, Johnnie Walker and Chivas manage to get volume and value with some of their super premium blends.

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