Tag Archives: Macallan

Are we at the tipping point?

As a lover of whiskey in all (well…most) of its forms I diligently follow whiskey related news, stories, books, blogs, and publications of all kinds. That works for and against me. With the growth in the popularity of whiskey there is no shortage of information available. Unfortunately, a lot of its either crap or true enough but just serves to piss me off. I have a lot to be pissed off about these days.

Recently, I saw this article in The Spirits Business and some of the commentary around the web and I had to take another long, deep sigh. When I saw the headline “Diageo Halts Scotch Expansion as Demand Dives” my first thought wasn’t “oh, no the proverbial sky is falling” but rather “It’s about damn time.” I’m not worried about a scotch whiskey bust. I’m not worried about more moth balled distilleries. I’m not really worried at all. I’m actually kind of excited because maybe we are finally at the tipping point.

I’ve been a scotch drinker for about fifteen years now. That doesn’t sound like a long time but for an industry that has had as much change as scotch has in the last decade and a half it feels like a lifetime. More to the point of my excitement, the way scotch prices have soared in the last 15 years is ridiculous to me. When I say “soared” I am not being hyperbolic. In 1999 I could walk into my local liquor store, at the time it was Capital City Liquor and grab Macallan 18 (Gran Reserva at the time) for around $65. Now if you can get it for less than three times as much you’ve found a deal! That kind of price inflation should be left to third world countries with tanking currencies.

Yes, I know times change and prices of consumer consumables go up but scotch as an industry and particularly single malts are an egregious perpetrator of this farce. It does not cost three times more to make a bottle of 18 year old scotch compared to 1999. What has happened is that the companies making scotch have taken advantage of the interest in their products and wrung it for every damn dime they can get. I’m not just picking on Edrington for Macallan. Pernod Ricard, Diageo, and most of the rest are just as guilty. Macallan is just the easiest to pick on. They aren’t making any better whiskey than they used to. They aren’t making less whiskey than they used to. What they are doing is riding a marketing wave that should be the capstone of someone’s marketing MBA course work. That wave tells you that their product is awesome and you should buy it. More of you have bought it. That drives up demand, which drives up price. Also, through advertising and other great public relations work they have convinced you to pay more for their whiskey than anybody else’s. Is it better? Not necessarily. It’s good, sometimes really good but there is a lot of good whiskey out there.

The whole industry participates in the push to drive demand and premium pricing and collectively prices have risen dramatically. Again, I’m not just picking on Macallan/Edrington. Whyte and Mackay tried it a few years ago when they relauched Dalmore. While the regular line prices has fallen more in line with the market their special releases command astronomical prices in the tens of thousands of dollars at retail. The latest to try to rebrand as super premium is Mortlach. Diageo’s pricing for these 500ml bottles is laughable. But somebody is buying it….or at least they were.

Let’s shift back over to Diageo now. They were the focus of the article that started this rant, they are the latest super premium rebranders with Mortlach, and they are the largest spirits company in the world. Of their portfolio of spirits, a significant amount is whiskey. So even though they don’t release enough detail for me to dive deep down into their whiskey portfolios, their corporate numbers tell the story better than most. From 2009 to 2014 their sales have grown by about 10%. However, in Asia it is 48% growth over the same period of time. By contrast, North America grew by less than 5%. However, from 2013 to 2014 sales in Asia dropped twice as fast as North America as a result of the economic factors mentioned in the Spirits Business article. Although, it is also true that the sales numbers have dropped across the board for Diageo over the last year. I find it interesting though that even though sales declined in North America by 7.5% the profit margins went up. In fact, those margins have steadily increased year over year since 2009.

I don’t want to get too into the weeds on this point because even though my day job is in finance, most of you come here to read about whiskey and may not care about the difference between an operating margin and margarine. Bear with me for a minute. What the margin increases mean is that for every dollar of product they sell they are keeping more of that money as profit for the company. How do they do that? Well really in one of two ways. They can lower their costs which include materials (barley, water, barrels, etc.), logistics (delivery, transportation, etc.), marketing dollars, and other expenses or they can charge more for their products. Said another way, if you make 40 cents on the dollar you can make it 45 by either cutting 5 cents of cost or charging $1.05. When looking at Diageo’s cost of goods sold it only went up 3.5% over the five years from 2009 to 2014. That means that they are either charging more (they are) or are shifting to a different mix of products that they make more money on (they also are).

In getting back to my original “It’s about damn time” comment it’s only so long a company or industry can keep doing this before the market’s demand for its products will no longer bear the prices they are trying to charge. So in looking at Diageo’s financial results in light of their halt of further expansion it looks like they got the double whammy. The new markets they are pushing look to be pulling back a bit and their old markets (Western Europe’s numbers look similar to North America) may just be tired of continuing to pay more every time they go buy another bottle.

It’s not just Diageo. Pernod Ricard’s trends are similar. It’s not just scotch. Bourbon has seen large increases and marketing driven price increases too. It’s all got a bit out of whack. In “proselytizing the way of malt” I’m not supposed to root against whiskey but as the international fascination and fad dies down a bit maybe we can come a little closer to a healthy normalized industry. One with good give and take between consumer and suppliers instead of the crazy race to the top we’ve seen in the last few years. Prices have gotten ridiculous and it pisses me off. Hopefully, I’ve vented enough that I don’t start a regular series of “Things About Whiskey That Piss Me Off” on Whisk(e)y Apostle. Now I’m going to go take another deep breath and have a drink.

Event Notice: MASC September Tasting

Jack Smith over at the Metro Atlanta Scotch Club has put together another great line up for their September tasting. This month they will be meeting Thursday (9/20/12) @ 7:00 pm @ Johnnie MacCracken’s Celtic Pub, 15 Atlanta St., Marietta, GA 30060 (at Marietta Square).

The menu of this month’s whiskies consists of:
1. Teaninich Single Malt / 1994 / 12-yr / 46% / NCF / IB: CC (Gordon & Macphail)
2. Glen Grant Single Malt / 15-year / Distillery Labels Range / 40% / IB: Gordon & Macphail
3. Macallan (The) Single Malt / Fine Oak / Masters’ Edition / NAS / 40% / OB
4. Balvenie Founder’s Reserve Single Malt / 10-yr / 43% ABV / OB
5. Benromach Single Malt / Organic / Limited Edition / 2003 / 43% / NCF / OB
6. Lagavulin Single Malt Whisky / 12 yr / 2010 Special Release / CS 56.5% / NCF / OB

If you are interested in attending then RSVP Jack at jaxsmithjr@juno.com. The price is $35 per person and light appetizers will be served.

Drink wisely my friends,

Richard

Event Notice: Macallan Tasting

It’s been a while since Macallan did a public tasting in Atlanta. They have a new Ambassador for Georgia. Randy Adams came over from Glenlivet to represent Macallan in the Southeast. You can check out Randy’s thoughts on The Macallan Sherry Oak range over at The Macallan Blog. Randy is a great guy and will be hosting a tasting Octboer 25th at Mac McGee Irish Pub.

Here are the details.

Who: Mac McGee Irish Pub
When: Tuesday, October 25th at 7:30 PM
Where: 111 Sycmore St, Decatur, GA 30030
Pour: Famous Grouse, Macallan 10 Yr Fine Oak, Macallan 12 Yr, Macallan 15 Yr Fine Oak, Macallan 18 Yr
Price:$40
RSVP: 404-377-8050

Drink wisely my friends,

Richard

Event Notices: Bourbon at Ecco & Macallan at Atkins Park

I just had a couple of events in Atlanta come across my desk. One is a Bourbon education offered by Ecco in Midtown and a Macallan tasting at Atkins Park Tavern in Virginia Highlands. Here are the details:

Where: Ecco at 40 7th Street NE, Atlanta, GA
When: Sunday, January 30 · 6:00pm – 7:00pm
Pour: No details available but it should be multiple bourbons as part of this education class
Price: No Price listed
RSVP: No reservation required

Where: Atkins Park Restaurant, 794 N Highland Ave, Atlanta, GA 30306
When: Thursday, January 27 at 6:30 p.m
Pour: Multiple versions of Macallan
Price: $35
RSVP: (404) 876-7249

Drink wisely my friends,

Richard

Barriers for New Whiskey Drinkers Part 1 (Richard)

As you might imagine, I think about whiskey quite a lot. Matt and I write a blog on the stuff that we try to update with new content as regularly as we can. But that’s more of a product of our obsession rather than a driver. The idea behind Whisk(e)y Apostle was to help get the word out. “Proselytizing the way of malt.” When we started formulating the idea for the site a couple of years ago there really wasn’t too much out there on the subject. Most distilleries didn’t exactly have the greatest websites and in terms of blogs and related websites there was really only John Hansell, Sam over at Dr. Whisky, the ruminations of various Malt Maniacs, and one or two others.

Oh how times have changed. Every distillery seems to be revamping their websites multiple times a year and it seems like everyone and their brother is talking about whiskey. This isn’t a bad thing at all. The more we talk about it, the more people learn about it. The more they learn, the more they buy and ultimately the more stuff comes out on the market.

So with that in mind I decided to take a step back and think about what is still inhibiting people from drinking whiskey…aside from those poor misguided souls who still think that they just don’t like it. Here’s my top four.

Price
Whiskey isn’t exactly cheap once you move off the bottom two shelves and let’s face it, there’s a lot down there that might make you never want to try whiskey again. Bourbon and Irish are still relatively affordable up against the increasing prices of Scotch but their prices are soaring too. However, you can still value good values in all these categories if you know what to look for. Scotch has some great blends like Black Bottle and value single malts like Glenfiddich and Glenlivet shouldn’t be sneezed at. You can even move down the connoisseur route if you’re selective. Macallan may get all the love but Edrington’s Highland Park Distillery puts out great single malt at noticeably lower prices than Macallan in the same age ranges. Bourbon and Irish are rife with old labels at good prices offering solid value. Weller, Old Grand Dad, and Evan Williams are just some of the Bourbon names to look out for. Powers, Paddy’s, and a number of other Irish tipples are worth a shot. Also, Rye is still an under marketed value gem (but don’t tell anyone). Don’t let the prices scare you. Buy smarted, not harder.

It should also be noted that you might also look at price per drink. If you spend $20 on a bottle of wine you my only get four or five glasses out of it. That’s $4 or $5 per drink. If you assume a standard pour of around 30 ml or so then that gets you 25 drinks for the price of a $45 bottle of Scotch. That’s less than $2 a drink. I’m assuming you’re drinking the glass of wine and the glass of Scotch at about the same pace and not slamming back shooter like a frat boy. It’s just something else to think about.

Variety
It really is a great time to buy whiskey. There are so many choices that it seems like you could spend your whole life trying to taste them all. However, that same variety that makes me giddy when I walk in the liquor store may seem daunting to the uninitiated. Bourbon, Rye, Irish, Single Malt, Blends, Blended Malts, Japanese, Indian, Australian, American Craft, Welsh, English, Swedish….you see where I’m going with this. Don’t be afraid. Take it slow. It’s no different than beer or wine. Try a few at a local drinking establishment and then try others similar to what you liked. It’s as simple as that.

Tradition
Do you know how you’re supposed to drink whiskey? Neat? With a splash of water? On the rocks? With cola? Out of a tulip shaped glass? Out of a tumbler? The real answer is to drink it however the hell you want. Why would you let someone else tell you what to do with something you bought? You don’t have to drink every glass of single malt scotch neat out of a tulip shaped nosing glass while wearing a kilt in front of a roaring fire used to cook haggis. You can. You might try it sometime because you might like it but that doesn’t mean you have too. Don’t worry so much about what you’re supposed to do and spend more time doing what you enjoy.

Advice
This one is tricky. How do you talk about advice as a barrier for new drinkers without giving advice? You really can’t but I feel that I have to. If you ask questions about whiskey to bloggers, writers, aficionados, bartenders, shop owners, etc. you will get plenty of opinions. You just need to remember that at the bottom of the glass that’s all they are, opinions. It is all relayed with good intentions but the only way you will know what you like is to get out there and try stuff. Then you can decide for yourself. If over time you find the recommendations of one blogger or writer similar to what you like then you can give that person more weight than others but that’s up to you. We do reviews on Whisk(e)y Apostle because we enjoy doing them and some people might find them helpful. Personally, I think our event postings and editorial posts are a more important part of what Matt and I do. After all, we may think Redbreast walks on water but if you can’t stand Irish whiskey then you’re not going to agree. You have to make up your own mind.

That’s all I’ve got so say on the subject…for now (have blog, will pontificate). Matt’s take on the topic should be along soon.

Drink wisely my friends,

Richard