Scotch whisky drinkers tend to be a difficult demographic: armchair-based, routine-driven, stuffy on a good day while downright grumpy on a bad, and very exacting when it comes to deciding what goes into their crystal tumblers. Trying to market a new brand to this lot is like trying to sell fillet steak to a penny-pinching vegetarian.
Diageo have neatly sidestepped that problem by developing —Haig Club–for an entirely different market. In addition, it looks like they have immediately gone nuclear with their marketing plan by employing every PR person’s wet dream–David Beckham. It looks as if the connoisseurs will be left to get on with their search for the perfect balance of peat and rutting stags in peace and quiet, while the hipsters will be targeted with a heady brew of tattoos, ice cubes, coke and street cred. Will it work? It just might.
Diageo is feeling thoroughly in tune with the whiskey market just now, having recently experienced considerable success with the rapid growth of its Bulleit brand. From a low base (for them) of 40,000 nine-litre cases five years ago, they hope to sell more than a million cases of this Bourbon yearly in the foreseeable future. According to the 2013 Annual Report, Bulleit, in combination with the Canadian Crown Royal brand, contributed no less than 45% of Diageo’s 2013 net US sales growth. Whiskey in the United States has been revitalised.
Why Single Grain Scotch? I would guess that the negative point about this for purists, which is its lack of 20-years (or whatever it might be) aging, is a bonus point for investors, because the capital will not be submerged in the barrel for a generation. The drink can be developed quickly and promoted slickly while the market is still hot. It will not cannibalise any of its existing Scotch whiskies, because it is in a new subcategory–Scotch for people of dancing age. Neither will drinkers feel guilty about tipping something without that intimidating 20-years aged label into a glass of Coke. Finally, Scotch is widely recognised as a high-quality product with an enviable heritage and so is ripe for reinvention, rather like that dusty old Rolls Royce sitting in an aristocrat’s garage. What better time to take it out and give it a bit of wax and a polish than when the whiskey market in the US is booming?
But will Haig Club succeed in gatecrashing the current Bourbon party? Well, if anybody can help it to achieve this, then that would be David Beckham and his trusty sidekick Simon Fuller (or should that be the other way around?) Beckham has, in the past, successfully marketed football shirts, the Olympics, underwear, aftershave, hair cream, mobile phones, and Pepsi, so Scotch should be easy.
And, if it fails? Well, the old boys in their armchairs will still be there, snorting I-told-you-sos and waiting for their tumblers to be refilled.
Disclosure: Long DGE
Disclaimer: This post is not a recommendation to either buy or sell. Please consult your investment advisor.