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Last month, William Grant & Sons inaugurated a new grain distillery and bottling plant at its Tullamore Dew Irish whiskey site. The opening ceremony, held on a windy, rainswept afternoon in central Ireland, was one of the final stages in the group's Irish whiskey venture, launched when it bought the Tullamore Dew brand in 2010. In that time, the company has built a greenfield distillery in the brand's original home of Tullamore, including a malt whiskey distillery that started production in late 2014. Under Irish whiskey rules, those first casks are now of legal age. But, it is the new grain distillery that will do most of the work at Tullamore, creating the triple-distilled grain spirit needed to compete in the increasingly-competitive Irish whiskey market. Ahead of the opening ceremony, just-drinks sat down with William Grant CEO Simon Hunt and Tullamore Dew's global brand director, Caspar MacRae, to discuss Tullamore Dew's future, the importance of innovating with stock and why new technology should never get in the way of a consistent brand story.
William Grant & Sons acquired Tullamore Dew in 2010
just-drinks: This is a big day for Tullamore Dew. How big is it for William Grant & Sons?
William Grant CEO Simon Hunt: It's a milestone for the brand. But, as a company, we see the opportunity in Irish whiskey - the taste, the authenticity, the general appeal of Ireland - which is why we got into the category to begin with.
Today marks the end of a six-year plan to finally be in control of our own destiny, to have a foundation for the brand for the next 50 to 100-odd years. So, internally, it's a really big deal.
j-d: You bought the brand in 2010. Why has it taken so long to get to today?
SH: Have you seen the weather?! The truth is you have to phase these things. We looked at about 50 sites around Ireland, and we decided to come back to Tullamore because it was the right thing to do: It's where the brand is from. Now, the challenge is that the site we chose is a peat bog. If you give some of the engineers a drink, they'll tell you how much they love digging in peat. It's been a lot of fun for them.
It takes time to find a site. And now, we have a state-of-the-art bottling facility and also our triple-distillation grain distillery, so we will be in complete control of our liquid going forward.
j-d: There are a lot of Irish whiskey distilleries that have just - or are just about to - come online. For a long while, there were just three. Does that mean there is going to be a lot of competition for stock, particularly mature stock?
From a stock point of view, we are very comfortable
SH: When we acquired the brand it came with stock as well, so it does give us some options. One of the challenges we have is that the brand is doing very well, so from that point of view, we are tight on stock. Certainly, we have enough to meet our future needs. In our growth markets, we have really innovative variants that give us a different opportunity to get consumers excited about not only the category, but also the brand. From a stock point of view, we are very comfortable.
We also take a much longer view than most companies. We're thinking about what people are drinking in 30-40 years time, so when we think about the stock model, we manage the short term but we plan for the long term.
Tullamore Dew global brand director Caspar MacRae: There is still a huge opportunity in Tullamore Original. There's a long way for us to grow this brand's core expression in a lot of markets over the world.
But, innovation is something you'll see a lot more from us. We've done some innovation with our current supply. A huge impetus behind us acquiring the site was to give us the flexibility to innovate from grain to glass.
Tullamore Dew XO Caribbean Rum Cask [launched in Global Travel Retail last month] is an example of the kind of thing we can do. We also launched Cider Cask Finish in 2015. Plus, we have some great maturing stocks, older stocks to give us flexibility to do stuff. Over the next three to four years, we are going to really be able to flex our muscles in innovation.
j-d: With all the multinationals coming into Irish whiskey [Diageo's Roe & Co, Brown-Forman's Slane, etc], there is going to be a lot of competition over the new few years, with a lot of people looking to take from Jameson's 70%-80% market share.
You say that Jameson is 70%-80%. In some markets, we are the leader
SH: You say that Jameson is 70%-80%. In certain markets, yes. In other markets, we are the leader. We have a leadership position that gives us the confidence to be a challenger in other markets. Being a challenger is a fun position to be in because you can be a bit more daring in what you do.
CM: It's a slightly false choice to say that it is us or Jameson. More and more, we see consumers drinking across categories in whisk(e)y, particularly in social occasions. The category of whiskey is on fire and consumers are looking for easy-drinking social whiskies. We don't just compete against Jameson, we also compete against American whiskies or Scotch and actually there is a huge amount of appeal for our brand and our category amongst that set.
It's not just us versus Jameson, it is us winning in social occasions for whisk(e)y, which is a much, much bigger opportunity. And, it is a huge growth area, not just in the US, but in Europe and Africa.
j-d: Is there a risk of all the innovation in Irish whiskey taking the category away from its USP, especially as everyone tries to differentiate themselves in a new market?
CM: Nowadays, the consumer is extremely well informed and has a huge amount of information to hand to make more discerning choices than they used to. We believe people have more of an ability to discern, more so than in the past.
There is a huge amount of innovation in Irish whiskey, and we are working closely with the Irish Whiskey Association to make sure that any innovation is clear, transparent, is done with integrity and builds interest in the category.
Irish whiskey is not as clearly defined as Scotch, for example. But, one of the exciting things about the category is that it is evolving and it is a very dynamic category. As long at that dynamism is driven by a good set of rules with the IWA behind it, then it will be a great time for the industry and for the consumer.
j-d: Here in Ireland, there is almost as much talk about Brexit as in the UK. As a company with distilleries now in both countries, how do you view the matter?
SH: Anyone that tells you they know what is going on, I take with a pinch of salt. What everyone is looking for is scenario-planning for what possible outcomes there could be. Clarity around tariffs, reciprocity with the EU - that's what people are trying to work through. We are working very closely with the Scotch Whisky Association and what we'll have a look at is how this thing could turn out. In the short term, there may be bumps in the road.
The current Brexit uncertainty is not helping anyone
The current uncertainty is not helping anyone and the sooner we are in a position to resolve exactly what those relationships will be, the better it will be for all businesses. Once business has clarity, it will be a lot easier to move forward. But, at this stage, it really depends where it ends up.
