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Interview, Part Two: Paul Ross, President And CEO, Edrington Americas

May 27, 2014

In this second part of our interview with Paul Ross, the Edrington Americas president and CEO discusses opportunities in the blended Scotch segment with the company’s Famous Grouse and Cutty Sark brands, as well as openings in upscale rum with Brugal and the upcoming launch of Snow Leopard vodka.

SND: While single malt has been hot in the U.S. market, blended Scotch has faced a tougher road. How are you planning to build your Famous Grouse and Cutty Sark brands (flat at 160,000 cases and 130,000 cases respectively in 2013)?

Ross: Famous Grouse is the top-selling Scotch in Scotland, but in the U.S. nobody knows it. However, that’s starting to change. Famous Grouse is up 40% in the on-trade this year and doing well in places like Williamsburg, Hoboken, Austin, Chicago and San Francisco. It’s made with Macallan and Highland Park, as it says on the back of the bottle. We’re focusing on Black Grouse (retailing at $30) in the on-trade with cocktails. It adds a little smokiness to a cocktail without overpowering it, and is being picked up by a lot of mixologists. Cutty Sark was the number-one imported spirit in the 1960s, selling 2.5 million cases annually. It’s got a story behind it, and it’s a real, authentic brand that died. We’re now starting to invest and talk more about Cutty Sark again, and it’s turning up in places we wouldn’t necessarily have put it. We plan to fuel that fire. One way is through the beer-and-a-shot, which traditionally may have been more of an Irish whiskey occasion. We saw a few places where Cutty was coming back into that area organically, and now we’re looking at things like Cutty Back programs where we’re partnering with breweries to market beer and a shot of Cutty. The new Cutty Sark Prohibition Edition ($30), which is 100-proof, is a completely U.S.-led initiative. It’s very early days, but it’s already making a lot of noise within the cocktail community.

SND: What direction are you taking in rum with Brugal (down 20% to 63,000 cases last year)?

Ross: It was a deliberate choice to invest in Brugal in 2008 with a view to targeting growth in markets like the U.S. Tequila and vodka have premiumized, Scotch and single malt have always been premium, and now small-batch Bourbons are contributing to premiumization. There’s also a $2.4 billion category called rum, of which only a very small proportion is super-premium or above. We believe super-premium rum will be a trend to watch in the long run, and we want to get in on the ground floor. Brugal Añejo is currently the best seller in the portfolio, but at the moment we’re working on Brugal 1888 ($50), which is aged eight years in American oak and four years in new Spanish oak. We also see strong potential with Brugal Extra Dry ($20), a white rum. It’s actually a four-year-old añejo that we filter to take the color out. So you get an aged white rum with a creamy mouthfeel that you wouldn’t associate with a white spirit. It gives us something unique in the marketplace that can play on the rocks and in the cocktail scene.

SND: What other categories are on your radar screen?

Ross: We acquired Snow Leopard vodka in late 2012, and so far it’s really only in London and pockets of Europe. It’s made from spelt grain, which is distinctive, and the profits help support efforts to save the snow leopard in Mongolia and Tibet where it’s endangered. We’ll launch it in key areas in the U.S. around September at about $35 a bottle.

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