Edrington puts Cutty Sark whisky brand up for sale
Edrington has put its Cutty Sark and Glenturret whisky brands up for sale, along with its Glenturret distillery in Crieff – Scotland’s oldest single malt distillery – so that it can prioritise investment in its core brands.
Edrington revealed plans to put the Scotch whisky and distillery up for sale in its full year results to 31 March 2018 as part of a plan to streamline its business and focus investment on its single malt brands, including The Macallan and Highland Park, and blended whisky The Famous Grouse.
Edrington chief executive Ian Curle said that the proposals will enable “greater focus and investment to support the long-term growth of the company’s premium portfolio”, including The Macallan, The Famous Grouse, Highland Park, The Glenrothes, and Brugal Rum.
“Premium spirits is the fastest growing area of the spirits market,” he added. “Focussing our resources and investment on the brands best equipped to compete powerfully will help Edrington to capitalise on the long term prospects from premium spirits.”
The sale will mean the end of the Famous Grouse Experience – a busy tourist attraction in Crieff, Perthshire – which is housed at the Glenturret Distillery, which itself is Scotland’s oldest Single Malt Scotch Whisky distillery.
In June, Edrington opened a new visitor experience with its new Macallan distillery and visitor centre. It is part of an ongoing investment of £500 million in the brand which includes the visitor experience, distillery, whisky, warehousing, and in The Macallan’s signature Sherry-seasoned oak casks.
The sale of Cutty Sark and Glenturret will begin this summer, and is not expected to involve any redundancies with Edrington hopeful that all 31 employees at The Glenturret in Crieff, Perthshire will be transferred to a new owner.
The Cutty Sark brand was first launched in 1923 by Berry Brothers and Rudd, and was sold to Edrington in 2010. It’s blended and bottled at Edrington’s Great Western Road facility, and accounts for around 10% of volume output at the site.
Graham Hutcheon, group operations managing director, said the impact will be managed over time. “Our intention is to offer blending and bottling facilities to a new owner. If that should not prove appropriate we do not anticipate any compulsory redundancies and would endeavour to redirect our people to the dynamic premium developments at Great Western Road.”
Announcing its full year results, Edrington reported core revenue was up 7% compared with 2017, to £707m, with profit before tax rising by 3% to £195m.
It’s 2020 Strategy will focus on boosting the Macallan, which achieved 7% growth last year. The brand will benefit from its first global advertising campaign in the autumn with an £11m budget.
Meanwhile, Highland Park saw a 23% boost to its marketing budget, with a new range and packaging helping to boost sales by 15%.
Other premium brands owned by Edrington include The Glenrothes Single Malt, which is now sold in 30 international markets, and will have a relaunch this summer.
Commenting on the 2018 results, Curle said: “Economic and market developments remain encouraging in the near term. All regions are experiencing an upturn in economic growth and Scotch Whisky exports are also in growth.
“The premium segment of Scotch Whisky and other spirit categories is the fastest growing, reinforcing Edrington’s emphasis on premium brand building. While consumer trends are encouraging, the geopolitical context, including Brexit, remains uncertain. Scotch whisky is a robust and successful industry but it does face increasing competition from other authentic spirit categories leading to the 400+ trade barriers faced currently.
“Against this backdrop we want our governments to create a climate where economic development and growth is actively encouraged and rewarded. Despite ongoing geopolitical uncertainty we are confident about the medium and long term prospects for the business and will continue to invest in our people, brands, and processes. With its premium brand portfolio, proven strategy, and management capability, Edrington remains well-positioned to deliver further growth.”