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Diageo Pledges To “Explode” Its Single Malt Presence With Variety Of New Strategies

November 13, 2015

With a 37% share of the global Scotch category and 28 malt distilleries operating in Scotland, Diageo dominates the Scotch whisky industry. But its presence in single malt traditionally has been muted, overshadowed by the scale of its blended brands. Now the company is seeking to alter that dynamic.

“We’re the world’s number-one player in malts by value and the fastest growing, outperforming the competition by value and volume over the past three years,” David Gates, Diageo’s head of premium core spirits, told investors in New York this week. “But it doesn’t necessarily ‘feel’ like we lead the category, because our biggest brand is less than half the size of any of the top three. The sheer number of our expressions is unparalleled, but at the end of the day, a handful of mainstream malts set the tone, and ours isn’t one of them.”

But Gates went on to say that Diageo is undergoing a shift of emphasis that will “explode” its participation in single malt. The strategy starts with putting The Singleton malt brand front and center. “We will lead with The Singleton,” he said. “It’s our mainstream or ‘recruitment’ malt, and will be our largest contributor of (single malt) volume. Our other single malt brands will flank this mainstream offering.”

The Singleton has been tapped for this role because of its approachable name and concept, as well as its distinctive bottle, lighter liquids and accessible pricing, Gates said. It’s currently the world’s fifth-ranked single malt, but Gates added that Diageo “has an ambition to make it the world’s number-one malt whisky brand.”

Previously, The Singleton’s global presence was fragmented between three expressions, with The Singleton of Glen Ord label for Asia only, The Singleton of Dufftown for Europe only and The Singleton of Glendullan for the U.S. and Canada only. “All three variants will now be available in all markets,” Gates said. “That will provide real scale, allowing us to combine the volume of three distilleries under one simple trademark.”

Beyond The Singleton, Diageo’s single malt activity ladders up to its Discovery Malts, which include Talisker, Oban, Lagavulin, Cardhu and Dalwhinnie. “Each is tightly positioned, reflecting the unique characteristics of the whiskies,” Gates said. On the marketing front, he cited Talisker’s strong “maritime, outdoor” positioning and its title sponsorship of the Talisker Whisky Atlantic Challenge, an annual rowing race 3,000 miles across the Atlantic.

At the top of Diageo’s single malt sector is its Prestige Malts grouping, with Gates citing Mortlach as a key leader there. “Mortlach has now launched in 23 countries, so we have big plans for this spectacular brand,” he said. The Prestige Malts also include the company’s Special Releases program, whose labels have featured Brora (£1,300/$1,980), The Cally (£750/$1,142), Clynelish (£550/$838), Port Ellen (£2,400/$3,654) and Dalwhinnie (£325/$495), among various others. “The volumes are small, but this is an amazing value stream,” Gates said. “It will generate about £15 million ($22.8m) in net sales this fiscal year.”

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