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Interview, Part One: Edrington Aims To Double U.S. Sales In Five Years

May 22, 2014

This spring, Scotland’s Edrington Group officially took control of its own destiny in the U.S. market, assuming marketing and distribution responsibility for its brand portfolio—formerly handled by Rémy Cointreau USA—including the Macallan and Highland Park single malts, Famous Grouse and Cutty Sark blended Scotch whiskies and Brugal rum. SND senior editor Daniel Marsteller recently met with Edrington Americas president and CEO Paul Ross to discuss the company’s plan to raise its U.S. profile.

SND: What are your goals for Edrington’s U.S. business as you take the portfolio under your own wing?

Ross: Edrington is a relatively large company in Europe and Asia, and quite strong in Russia and Africa, but we do only about 20% of our business in the USA—where more than 40% of the world’s premium spirits are sold. We made a decision a number of years ago to expand here and rebalance our corporate risk globally. The USA is now our number-one priority. In the last three years we doubled our sales revenue in the United States (to just under $200 million), and the goal is to double it again in the next five years. With that in mind, there comes a time when you need to do things yourself. We want to get as close to the consumer as possible and have direct partnerships with distributors. From last September onwards, we started opening new offices in Miami; Chicago; Newport Beach, California; Dallas and New York City. We’ve quadrupled our headcount in the USA, and everyone on the team is a brand ambassador as far as I’m concerned. We have brands that are capable of significant growth.

SND: What are your plans for Macallan, your most visible brand in the U.S. (up 17% to 186,000 cases last year)?

Ross: If we’re really genuine about making 40% of our global business in the United States, Macallan will play a large part. Over the next 18 months we’re investing $200 million to expand Macallan. That will not only support growth over the next 12 years, but the next 24. Being owned by the Robertson Trust (Scotland’s largest charity) allows us to take a long-term view. Beyond the distillery, we’ve invested massively in cask production in Spain. We produce 90% of the world’s Sherry oak casks, and they’re 10 times the price of a Bourbon barrel. Sherry oak is the DNA of Macallan, Highland Park and Famous Grouse. For us to invest that amount of effort and money for the future means we have very high expectations.

SND: How would you differentiate Highland Park (up 13% to 16,000 cases), your other luxury malt, from Macallan?

Ross: Highland Park is a little jewel, still very much a connoisseur’s brand. It’s way underrepresented in the U.S. We’ve never really gotten behind it here, so there’s a huge opportunity to take it forward. It’s somewhat unique in the malt whisky world because it’s both smoky and sweet. At the moment our plan is to fish where the fish are. I don’t think enough people, even among malt drinkers, have tried it yet. Macallan is a younger consumer, much more multicultural, and there’s a broader appreciation of it. We have a new Highland Park expression that will launch in September, and a major program behind a new Macallan that will launch in September as well.

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