The Glasgow-based distiller announced its FY 2014 results this morning – group turnover rose 3% to $607.7m while pre-tax profit rose 3% to £174m.
But despite sustained growth over the past five years – the group’s turnover and profit have risen 45% and 84% respectively during this period – corporate affairs director Gerry O’Donnell acknowledged that growth had slowed – just 12 months ago Edrington reported sales up 6.3% and pre-tax profits up 13.3%.
“There’s no doubt that last year was a tough year when the problematic markets continued to be problematic, thinking in particular of Southern Europe,” O’Donnell told BeverageDaily.com.
Problematic markets and tough competition
“Also it was a very competitive year as well – so there was a slowdown versus 2012/13,” he said.
But O’Donnell insisted that this year’s creation of dedicated sales, marketing and distribution firms in high-growth markets such as Southeast Asia and the US were not short-term reactions to a tougher marketplace.
“They’re long term investments to secure control over our route to market. So they give us independence in the USA and a controlled approach to the biggest spirits market in the world,” he said.
“In Asia we’ve been planning for a while to take control of our distribution in Southeast Asia – to try and replicate the success we’ve had elsewhere in Asia. The potential of Southeast Asia is well documented,” O’Donnell added.
Edrington backs Snow Leopard leap into Korea
Discussing Edrington’s brand portfolio, O’Donnell agreed that low-calorie premium golden rum Brugal Suspiro was recently launched in Spain with new consumer segments in mind – since a lower calorie rum wouldn’t necessarily appeal to existing fans of the category.
“That’s absolutely right. It’s been out there for a couple of months and it’s been doing particularly well with men and women – so far it’s gone well and is performing as we thought it might do,” he said.
Brugal Suspiro is 20% ABV that blends Dominican rums of up to eight years old; the brand recommends drinkers combine it with bitter and gooseberries (Suspiro Rosé) or Coca-Cola Zero and orange (Suspiro Zero); it is made from all-natural ingredients, and with no added sugar contains only 50kcal per 50ml.
“Snow Leopard – after just over of getting to grips with the brand’s packaging and supply chain – we’re now in the process of investing behind it in the US and Asia, specifically in Korea,” O’Donnell said of the brand that Edrington bought in early 2013.
“The Korean market for vodka is forecast to grow steadily over the next few years. We recently put some launch activity into place in Korea – we’re starting to move on Snow Leopard and it’s got a lot of tarmac ahead of it,” he said.
Famous Grouse going strong in Angola
O’Donnell also talked down the prospect of Edrington making further acquisitions for the time being: “We’ve got a good portfolio in categories where we think we have long-term growth ahead of them,” he said.
He also disagreed with the suggestion that whisky brands such as Cutty Sark and Famous Grouse might have less international potential than The Macallan or Brugal.
“Cutty Sark and Famous Grouse have regional centers of strength – but can be wide-reaching in terms of appeal. Cutty Sark has done particularly well in the States – the Prohibition edition has been very popular,” O’Donnell said.
So I wouldn’t necessarily box in Cutty as a European brand. And we know with Famous Grouse too that some of the forays into fast-developing markets in Africa are very interesting,” he added.
Angola, for instance, has been doing particularly well for Famous Grouse – so these brands in their own right are beginning to make their way outside of Europe,” O’Donnell said.