Blog: Bowmore looks abroad amid UK thirst for discounts
Olly Wehring | 21 November 2006
UK supermarkets were the subject of yet more criticism from the drinks industry late last week - and this time the attack came from the picturesque Scottish island of Islay.
Morrison Bowmore Distillers, part of Japanese drinks group Suntory, has embarked on a root-and-branch revamp of flagship single malt Bowmore in an attempt to boost awareness of the whisky among consumers.
The company is spending GBP20m (US$37.9m) on promoting what it sees as the “premium” credentials of Bowmore and has redesigned its packaging, created new advertising and reduced the brand’s range to focus on its core expressions.
One would think that a perfect showcase for the new-look Bowmore would be in UK supermarkets, the most important domestic shop window for many a drinks product – certainly for a company that has aspirations to build a brand.
But not for Morrison Bowmore. The company seems to be placing more importance in growing the presence of Bowmore single malt overseas. According to chief executive Mike Keiller, the UK market is not the most lucrative place to develop and grow a single malt, to say the least. And that, Keiller argues, is due to the power of UK supermarkets and their thirst for price discounts.
“The supermarkets are demanding price discounts, a cut-price product and have a policy of pile it high, sell it cheap. We’re short of stocks, so we took a decision that it wasn’t worth pushing volumes in the UK market,” Keiller says.
“The UK market is not a living example of how single malts can develop. You can find an 15-year-old whisky below GBP20 - I find that shocking; I cannot understand how a responsible owner can sell an 15-year-old below GBP20.”
Morrison Bowmore marketing director David Wilson insists the company believes the growth of Bowmore will come on a global basis and cites the US, Asia and duty-free as key to that development.
The strength of parent company Suntory in Asia should stand Morrison Bowmore in good stead, especially now that it is armed with a product in more modern, confident, premium-looking packaging.
Nevertheless, many, if not all, whisky producers are eyeing the buoyant demand for single malts in markets like China and South Korea with interest and are taking steps to bolster their presence accordingly. Turning its back in the UK, despite the issues with pricing, represents quite a gamble for the Islay distiller.
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Here's a round-up of the big stories on just-drinks last week, featuring PepsiCo, SABMiller, the Scotch whisky category and the US wine market....
- Analysis - Remy's Cognac "dead-cat bounce"
- Comment - How Hand-Made is Tito's Handmade Vodka?
- Diageo's future brighter than present suggests
- Diageo's Q1 Results by Region
- SABMiller's troubles fuel M&A rumours
- Moët Hennessy unveils first Travel Retail outlet
- United Spirits sees Q1 net loss
- Beam Suntory, Edrington part ways in Travel Retail
- Diageo puts Beckham centre stage in Haig Club ad
- TWE unveils Penfolds range after CEO's "bold move"