Scotched earth policy

Christian Davis talks to Beam Global Spirits & Wine's Michael Cockram
27 August, 2008
Page 26 
One definition of luck is: "events that are beyond control and seem subject to chance; fortune". In other words, luck has a lot to do with being in the right place at the right time.

Not for a minute should it be said that Michael Cockram, Beam Global Spirits & Wine's global Scotch category director, is lucky . Far from it. He has worked his way up from British bank NatWest, via Jim Beam Brands Greater Europe and William Grant & Sons to Allied Domecq Spirits and Wine .

But after years in the doldrums, the fact is, Scotch is hot. Earlier this year Diageo, the biggest drinks company in the world and the major player in Scotch whisky, announced a £100 million investment in Scotch - £80 million in expanding malt and grain distilling capacity and the rest on packaging and warehousing.

Chief executive Paul Walsh is not going to stick his neck out on such a venture unless it is a sure-fire winner. Witness the latest results, delivered at the end of August: Johnnie Walker, its flagship and the world's leading Scotch brand, now sells more than 15†million cases per year.

Cockram must be one of many in the Scotch whisky industry, pinching themselves and asking: "Is this real, or just a dream? And how long will it last?" Arguably even more so for Cockram because he has one of whisky's most iconic brands under his belt - Laphroaig. The peaty single malt from Islay , not deemed suitable for the wimpy, faint-palated whisky drinker , is strictly for macho, anorak-clad aficionados - the whisky of choice for Scotch hoodies. This brand is only on allocation. Supply and demand? Forget it.

"I don't think anyone anticipated such a strong boom. There has been strong evolution," he says, as a piece of masterly understatement. "The rise of the BRIC countries (Brazil, Russia, India and China) has been significant. Forty -three per cent of all growth in Scotch over the last†four years has come from these†countries."

But why this massive switch to Scotch? In Europe it seems we can't be bother ed with it. Walsh has pulled the plug on investment in traditional markets such as the UK and Ireland, while Spain, once a big consumer , has become "difficult" following its discovery of rum.

"What we are seeing is part of the way the world is moving," says the 37 year old. "The economies of Latin America are strong and Asia has been up and down, but there is strong potential. They are all moving to western ways."

Nevertheless, why Scotch? "In other countries, Scotch is more prestigious. Scotch is a wonderful mix of a strong heritage and quality, and there is a real sense of discernment," says Cockram.

But surely Cognac has the same qualities? It is also enjoying a renaissance, even though endorsement of certain brands by New York rappers has created a somewhat narrow "audience".

Cockram says: "Scotch has been exporting for hundreds of years - all those Anglo-Saxon countries and historical relationships from global trading. Also, the flavour [of Scotch] meets the needs of global consumers, from smooth grain whiskies to heavy malts like Laphroaig. The sheer range is, I believe, unique among spirits. The volume is still in blends but [sales of] malts are growing strong er. It is still an acquired taste and that gives individual discernment."

Cockram recently oversaw the launch of Laphroaig 25 Year Old to replace the 30 Year Old expression, and the unveiling of a limited-edition 27 Year Old that will cost the princely sum of £500 - for one of 1,000 bottles or so. No worries about shifting old stock with Laphroaig.

One challenge for Beam and Cockram is the resuscitation of dear old Teacher's. Once the strong, number two blend in the UK , it now languishes in the wake of Famous Grouse and Bell's . Help is at hand, according to Cockram.

"Teacher's is the number one bottled Scotch whisky blend in India and Brazil, and is stable in the UK," he counters. "From research, we have not identified any big problems with it. In fact, Teacher's has a lot of strengths. We are going to rebuild equity in the brand, strengthen it and give it a profile. There is still a lot of people who love it, but it has been quiet for a long time."

Cockram reveals that next September we will see a new-look Teacher's: "It is a complex project, involving the whole world."

With Scotch, you dismiss or ignore the whole world at your peril. Lady Luck - who needs her?
----=== Michael Cockram ===September 2005-present: Scotch category director, Beam Global Spirits & Wine

June 2003-August 2005: Malt brands director, Allied Domecq Spirits & Wine

March 2000-June 2003: Business development manager, UK and Ireland, William Grant & Sons International

August 1996-February 2000: International brand manager, malts and Scotch liqueurs, Jim Beam Brands Greater Europe

December 1995-August 1996: Manager, brand strategy, NatWest UK---- === All Scotch whisky (volume change) ===The world

1996-97 2001-02 02-03 03-04 04-05 05-06

-0.28 -1.39 0.80 2.23 2.72 3.04

Source: IWSR