White Horse Whisky
Background
Scotch whisky is, as far as the Scotch Malt Whisky Society is concerned, the very essence of Scotland that sums up the land and its people, about “peat-smoke and bog myrtle, heather flowers and mown hay, white beaches and salt spray: the scents of the land itself”[1]. Whisky, however, is not just about malt whisky, a single product from a particular distillery made in a particular way. The history of whisky is fairly easy to chart up to a point and as might be expected early accounts involve friars, monks and monasteries and ‘medicinal purposes’. It was apparently after the Reformation that ‘aqua vitae’, in Gaelic ‘uisge beatha’ and in English ‘water of life’ that farming communities began to distil grain. ‘Uisge’ was then abbreviated to ‘usky’, which became whisky. The earliest reference to whisky, or at least aquavitae, appears in the Scottish Exchequer Rolls for 1494 where there is an entry that reads ‘eight bolls of malt to Friar John Cor wherewith to make aquavitae’.[2] A boll is an old Scottish measure of not more than six bushels, one bushel being about 25.4 kilograms.
Until 1784 it was perfectly legal to make whisky at home from grain grown on one’s own land as long as this was not sold. Surplus grain was a catalyst in the development of whisky making during the 18th century. This, coupled with lowland urban population growth due to the Industrial Revolution, saw the advent of what would become the commercial distillery. Businesses may have benefited from the ban on private distilling after this date but legal produce was from the start heavily taxed and of course illegal distilling flourished. By the 1820s many of the illegal producers were encouraged to take out licenses and go ‘legal’.
Scotch can only be called Scotch if it is distilled and matured in Scotland[3]. There is a tradition, then, of distilling and maturing Scotch whisky that utilises crafts passed down over the generations. Until 1831 all whisky produced in Scotland was malt whisky. After the advent of the patent still in that year, the production of grain whisky was made possible. Blends are usually made from a combination of malt and grain whiskies. A blend could be made from any two single whiskies but usually blending, a ‘considerable art acquired only after years of experience’[4], involves a good number of different single whiskies. The job is essentially to blend whiskies of different character that produces a final product that is greater than merely the sum of its parts. There is also the desire to achieve consistency in this combination, which is called vatting. When a blend is created, only the youngest constituent part can be used to claim the age of the product. In other words if a blend is made up of a variety of single whiskies, most of which are over ten years old but one is eight years old, then the product must not try to proclaim itself to be older than eight years. It cannot be called Scotch unless all constituent parts are three years old or more.
Marketing challenge
It is said that Scottish whisky manufacturers are facing the biggest marketing challenge in their history. Bruce-Gardyne (2003)[5] reminds the reader that many brands of Scotch have disappeared over the years
or are stronger in overseas markets than in the UK. For example 100 Pipers was the number 4 whisky in Scotland 10 years ago but 'its image may have become a little too Scottish for the Scots themselves', yet it sells a million cases in Thailand alone and is big in Asia. The Scottishness country of origin effect is important in this context. The 1960s and 1970s were the golden age for the Scotch whisky industry (Jones, 2002)[6]. Changing tastes, drink-driving laws, and healthier living in the USA and UK alongside the mid-1970s recession have reversed this. The industry itself, according to Jones, was preoccupied with raising output and ignored these trends, reflecting a production rather than marketing orientation. The structure of the industry has not helped matters, at one stage it looking like an uneasy confederation of fiefdoms (Jones, 2002). Despite starting off in the 1800s having some idea of what customers wanted the ideas of segmentation and branding were slow in coming. Poor marketing research did not help and it took some while before proper qualitative research would provide usable information on what perceptions, beliefs and so on were out there. This with regard for smoothness, price willing to pay and other, relevant parameters. The industry had picked upon the VALS-type typologies with International Distillers and Vintners examining consumer responses to Smirnoff vodka in 1983 that came up with descriptors such as 'London trendsetters', 'young inexperienced' and so on (Jones, 2002).
The takeover of the Bell's brand by Guinness and the merger of Guinness with Grand Metropolitan (as part of Diageo) means that marketing, including brand-driven strategies that play a major role in maintaining prices and profitability, had finally replaced price competition, and that segmentation became key. In certain markets, the UK included, whisky drinkers are getting older and that makes them literally a dying breed. It is recognised that for younger consumers of alcohol whisky still conjures up images of 'briar pipes, cosy slippers and stags' heads over the mantelpiece'[7] It is known through taste tests that whisky does not appeal to the younger palate. Yet for years whisky was sold on the idea that it should be drunk straight, or with ice or water, a 'real man's drink'. Whisky then was not for mixing, at least in the UK, yet elsewhere in Europe whisky has been mixed freely with the likes of coke to make the spirit more palatable.
The Scotch Whisky Association knows this 'protocol' problem full well. The problem is what is seen as the younger consumer tampering with Scotland's national spirit, debasing it even. The Cutty Sark brand management has abandoned the UK and 'Scottish cues' because they simply do not motivate the younger target. David King, marketing director for Cutty Sark is quoted as saying that the message is "Its up to you. We're not going to judge you". In the US the strategy is unashamedly 'booze, bands and babes'. In Spain it focuses on lifestyle or choice issues such as drugs, sexuality and non-marital partnerships. King argues that the Scotch industry have effectively lost a whole generation of young consumer through being too limiting.[8]
On the other hand there are those in the industry who see this quite differently. Some advocate targeting mature whisky drinkers with a mature approach. Allied Domecq’s Teacher’s brand for example does just this to the 13.5 million UK scotch drinkers. Chivas Regal is said to favour a classic balanced approach – bring in the new without alienating the old. Gary Cartmell of Cartmell Communications, responsible for youth strategy for Chivas is quoted as saying that “We’d better not screw around with two hundred years of history. We mustn’t lose all those fantastic things that have kept the older end of the market so loyal to the product. I don’t want Chivas Regal to suddenly become a fashionable drink among a certain niche”.[9]
The Scottish Whisky Association is confident that people in the UK will get bored with vodka-based pre-mixed drinks and there will be opportunities for whisky. There is a realisation that there is a certain amount of cultural baggage and that it will take a substantial marketing effort to attract new drinkers. On the other hand there are opportunities to concentrate on those markets where younger consumers that Scotch can be mixed. United Distillers and Vintners (UDV), the brand owners of Bell's and White Horse, have sought to recruit a new generation of young drinkers to the whisky market. There is an opportunity to achieve this by repositioning their White Horse brand so that it shakes free of the old fashioned imagery currently associated with Scotch whisky, but the brand does come with a degree of fame. It is one of the leading brands in Japan for example. This would involve developing a marketing strategy and communications campaign that will change the way younger people perceive White Horse. The blend however does contain 40% malts including Talisker, Linkwood[10], and not surprisingly Craigellachie, a 14 year-old malt bottled by UDV, which would suggest an older palate. While some lighter brands such as J&B might mix well with Coke, White Horse may be perceived as being too heavy to do this. However, people's tastes have changed as seen with the increasing popularity of single malts and the move towards the more phenolic whiskies underlines this point (Bruce-Gardyne, 2003).
UDV, the largest drinks company in the world and one of four operations within Diageo), have already stated their intentions to promote Bell's in a way that continues to appeal to mainstream older, established whisky drinkers by continuing to reflect more traditional values.[11] Currently Bell's advertising is led by the Jools holland[12] campaign 'its in the blend'. The advertisement begins with musician Jools playing individual notes on a piano, which then becomes chords and is then accompanied by other instruments. The suggestion is that a good whisky is like good music - how things blend together, the whole being more than the sum of the parts. This is therefore intended to attract younger (than the norm) consumers into considering whisky as opposed to the many other options available. This underlines the relevance of certain things for consumers today, as opposed to the more traditional country-of-origin-led signifiers such as tartan or bagpipes.
The UK Scotch whisky market has been in decline for over fifteen years. Drinking patterns generally have moved away from traditional dark spirits (such as rum and whisky) in favour of white sprits (e.g. vodka), wine and lagers. Each generation of new drinkers has been attracted to the marketing and promotion of chilled, long, lighter drinks. Brands that come from other countries such as Russia or parts of Latin America combine genuine authenticity with exciting contemporary images have enjoyed persistent growth.
The size of the blended whisky market was substantially lower toward the end of the 1990s (8108000 x 9 litre cases) than it was in 1990 (10980000 x 9 litre cases). Over time the profile of whisky drinkers has gradually become older, within a base that is in itself declining. The number of adults drinking whisky at least once a month has declined by 600 000, and over half the remaining 4.2 million consumers are over 50 years old. The rate of recruitment of people in their twenties and thirties has declined rapidly over recent years.[13]
As suggested above, whisky has always been acknowledged as an 'acquired taste' that was unlikely to appeal to novice drinkers, but rather reflected a more mature palate. In the past people made the transition to traditional dark spirits but the evidence seems to suggest that this is no longer the case, or at least not in anything like the numbers they did historically. Consumers no longer seem motivated to rise to the challenge of drinking traditional dark spirits, but are still interested in trying new dark spirits. The growth in malt whisky and Bourbon demonstrates this. The table below illustrates this decline:
Profile of whisky drinkers
Age Dec 80 Dec 85 Dec 90 Dec 95
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18-24 10% 11% 11% 10%
25-34 19% 14% 15% 15%
35-49 27% 27% 24% 24%
50+ 44% 48% 50% 51%
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Source: Institute of Practitioners in Advertising (IPA), (1999). White Horse Whisky. Advertising and Academia seminar, London.
The leading brand has consistently remained Bell's, but the total share of all the brands is being consistently eroded by less expensive and less famous alternatives. So, in addition to operating in a market that is in overall decline, brands are losing their share of that market. The recent recessionary climate has not helped the fortunes of this sector.
Table Three
Brand share 1993 1994 1995 1996 1997
% % % % %
Bell's 18.9 17.0 17.7 17.0 17.0
Teachers 7.4 7.5 6.9 6.2 6.2
Famous Grouse 13.4 12.8 12.4 12.9 12.8
White Horse 3.1 2.7 2.9 2.3 2.4
Grant's 5.3 5.3 5.1 4.8 4.9
Whyte & Mackay 4.4 4.6 4.7 4.1 4.2
Own Lab - 18.9 19.0 18.9 19.0 19.1
Cheapest on display 9.1 10.8 12.8 13.3 13.4
Other to 100%
Source: Institute of Practitioners in Advertising (IPA), (1999). White Horse Whisky. Advertising and Academia seminar, London.
The Current Image of Whisky
Recent research[14] utilised qualitative research amongst 18-25 year olds (typically still experimenting) and 25-30 year olds (usually becoming established in their repertoire) to try and understand what the barriers to drinking whisky are and therefore how a marketer might go about challenging these beliefs through brand presentation.
This research found that there were both product and image barriers to whisky drinking. It is believed to be a strong and overpowering spirit, with a potent bitter smell and 'rough' or 'fiery' taste that will linger unpleasantly after drinking. It is also universally described as a spirit that is very difficult to mix. Repertoires are usually restricted to 'ordinary' mixers such as ice, water, ginger, and lemonade. This makes it more difficult to make whisky accessible in a more dilute form, which is typically how young people learn to acquire a taste for spirits. It is rare to be able to take them neat from the beginning. For some, these product barriers can be seen as an initiation test, with the reward being the acknowledgement of being the aforementioned ‘real man’.
There is a fair degree of myth and mystery surrounding Scotch whisky. For example turning a bottle of Scotch upside down before opening does nothing to it but folklore says one should practice this. It is not injurious to drink whisky with oysters, but legend has it so. [15] Current whisky imagery is seen as outdated and largely irrelevant. Itputs out tired, safe old images of tartan, hills, heather and glens, lochs, bagpipers, open fires, old men drinking on their own, and so on that are all considered to have once been targeted at their parents or grandparents. These images are not felt to reflect the more authentic, real-life images of Scotland and its rich heritage. Films such as 'Braveheart' and political moves to give Scotland greater independence are all areas of much greater interest and offer more compelling images of the dignity and depth of Scotland's rich history.
The Consumer
The IPA research project also investigated the values of young people generally, not just with respect to whisky. The findings were as follows:
- Today's young people view balance as a necessity to successful life in the 21st century.
- They are motivated by success in their desired careers, but the focus for them must also be on enjoyment and escapism in their spare time (hence the popularity of drug and rave culture).
- They are materialistic, but in a less aggressive way than the young people of the Thatcherite eighties.
- To some extent, an environmental awareness and the need to treat and respect the world we live in have softened this.
During the nineties it is thought that a shift towards honesty and authenticity - a move away from the contrived life style orientated eighties - occurred. Therefore being true to oneself is identified as being important. Optimism was also evident, as it is with many young people who have not been hardened by the reality of life. Reflecting the honesty that they view as prevailing in the nineties, they appreciate quality, sincerity and unpretentiousness. This reflects a going-back-to-basics mentality. They also consider originality, intelligence and a degree of irreverence (or not taking oneself too seriously) to be particularly important. In sum, 'less is more'.
Humour is seen to be an important vehicle for facing up to the realities of life. Humour that is self-
deprecating, subtle and self-referential is particularly liked. British comedians such as Jack Dee are felt to capture this style. The honesty and insight involved with this approach is also appreciated because it credits the viewer with some intelligence.
The values associated with young people today are also tinged with a degree of vulnerability. The prospect of recession has forced many to fear losing their jobs, and, therefore, to face the possibility of underachieving in their lives. The thought of contracting HIV or AIDS is also a concern among many young people who are sexually active.[16]
Whisky blending and branding
Early blending was not sophisticated and is associated with the ways in which whisky, legal and otherwise, was traded. There was little quality control and not much respect for consistency. Andrew Usher, in 1853, is accredited with the first commercial blend, the first to be offered for sale to a wider market. Usher was agent in Edinburgh for Glenlivet and his creation was named ‘Old Vatted Glenlivet and by 1860 it was being advertised in London and sold in India. 1860 also saw Gladstone’s Spirit Act which allowed blending to occur in bonded warehouses before duty was paid.[17] Peter Mackie, one of the most well known whisky blenders and distillers of his day, in 1890 created White Horse whisky. He named it after one of Edinburgh's most famous coaching inns, The White Horse Cellar. Indeed the brand logo reflects the pub sign design. In its distinctive 'squat' bottle the brand sells at about £11.99 for 70cl, which is below that of Bell's (£12.99) and Teachers (£12.69). These would be typical blends on the market. Malts on the other hand are generally somewhat more expensive and can be very expensive indeed. A 1998 survey of five of the world’s top malt whisky specialist saw the Highland Park and Lagavulin brands come out on top. These brands retail for well over 20 pounds. The scoring was based on the quality of the malt, the consistency of that quality over time, the distillery overall and brand expression in the market.[18]