The just-drinks Interview - Edrington CEO Ian Curle - Part I

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Late last year, just-drinks travelled to New York to interview - for the first time - the CEO of Edrington, owner of the Cutty Sark, The Famous Grouse, Highland Park and The Macallan Scotch whisky brands, Brugal rum and Snow Leopard vodka.


Ian Curle is a tough man to pin down. He rarely gives interviews, and freely admits to using his company's status as a privately-held trust to keep his face, and thoughts, out of the limelight. 

It is, the Scot claims, a national trait. "How many Scottish people like standing up and getting profiled?" he says. "Not too many. It's in our DNA."

But here he is, on a cold December day in New York, sitting in Edrington's Sixth Avenue office, about to undergo a just-drinks grilling. 

Why now? Well, it's because now he has something to talk about.

In June last year, Edrington went public with a major shift in the way it does business, by bringing much of its global distribution in-house. On the ground, this has made for a massive change - there's a new office opening in Singapore, and the creation of the Edrington Fix joint-venture with a Middle East/Africa partner.

The US, however, is the main focus for this estimated US$10m investment. The New York office is expanding and premises are opening in Chicago, Los Angeles, Dallas and Miami. There is a corresponding jump in headcount: This time last year, Edrington had 30 employees in the US. The day I spoke to Curle, it had 85. By April, it should have 120. As one member of staff, rushing between floors, told me: "There has been a lot of human traffic recently, that's for sure."

"We've gone through various phases," admits Curle, "but in the past three to five years - the period post the financial crisis - one of the big areas of development has been growth in international.

"We took ownership of distribution assets for first time in 2009 when we took on Taiwan, South Korea and the Nordics. That momentum has been tremendous. It gave us an understanding of the benefits of running our own local companies. We look at the US and it's just a fantastic market for premium spirits. There's growth there and a great demographic, the trends show increasing growth in the premium segment. Whichever way we look at it, we think it's going to be the biggest market for the next five, 15, 20 years. And, given how our brands are positioned, we think having direct influence over that is the best way to go forward.

"It's a big step - we're right in the middle of it - but it feels really positive."

Curle's enthusiasm for the US is clear - it is, after all, the reason why we're meeting in New York. The market here, he argues, is performing not like a mature spirits market, but as the newest of the emerging markets, with a corresponding thirst for premium-and-above spirits.

"In the US, there are 1m new legal drinking age consumers every year that are buying more premium spirits. If you chose to segment the US in a certain way and look at new-style consumption over traditional consumption, you could say that there is a big chunk of the population that is behaving comparably to an emerging territory."

Edrington has six brands, but when Curle talks about premium spirits in the US, he is referring primarily to Edrington's single malt Scotch, The Macallan. Rum brand Brugal is a second focus for the US market, but "Macallan is the mainstay, the brand that gives us permission", he says.

It is also the other reason why I am talking to Curle. 

In November, four months after Edrington announced the distribution shake-up, it unveiled what Curle calls the second part of the jigsaw, a GBP100m (US$165m) investment in a new distillery at The Macallan's Easter Elchies estate.

On paper it is a massive undertaking. There's the brand new production facility with a greater capacity than the current site (how much bigger, Edrington is not saying). Then, there is the new visitors centre, which, according to initial plans, will sit alongside the new distillery buried into Speyside's rolling glens.

The architects hired to make the plans a reality are Rogers Stirk Harbour + Partners. This is a serious firm - they designed London Heathrow's Terminal Five and are involved in the reconstruction of New York's World Trade Center site, taking place a few dozen blocks downtown from where we sit. In more than one sense, that's a long way away from a countryhouse estate in Scotland.

"It's a serious investment," Curle says. "But, we are in a very important business.

"We are maybe paying a little bit more than some people would pay for a distillery. But, in terms of the image of the brand, the environment that it sits in, and our belief in its growth potential, it is absolutely the right thing to do."

But, as Edrington unveiled artists' impressions of its new distillery, other Scotch whisky companies were already two or three years into their own investment programmes. Buoyed by strong overseas growth, Diageo has launched a US$1.5bn construction plan while Pernod Ricard has committed to a GBP40m annual investment in its Chivas Brothers unit. Both companies have more than just drawings to show for their money. So is Edrington behind the curve?

"No," says Curle. "This is different for us because we are investing in just The Macallan. We won't use our liquid for anything else.

"The other distilleries, they are really being built for additional capacity to fuel the growth in the emerging world. So the returns will be on a shorter cycle because most of the liquid will go into blend.

Curle admits that Edrington "won't get to use this liquid for another 13 to 15 years". 

"We've just put a GBP100m investment into this project and we won't get any direct commercial benefit from it for maybe 15 years. That's definitely a different type of investment."

The second part of this interview, in which Curle outlines why he thinks Edrington's unique business model allows it to spend money that it won't see a return on for half a generation, and how Brugal can help to premiumise the rum category, can be found here.

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