Learn Whisky Marketing with LVMH #1 – Glenmorangie

by Oliver Klimek on November 10, 2009

In October 2004, French luxury goods conglomerate Moët Hennessy – Louis Vuitton S.A (LVMH) bought Glenmorangie plc from the Macdonald family who had been in possession of the company since 1918. The portfolio included Glenmorangie, Ardbeg and Glen Moray distilleries as well as the Scotch Malt Whisky Society (SMWS).

This was not just another takeover like Pernod Ricard’s acquisition of several distilleries from Seagram. As it has turned out, this was not only an attempt to get a foot into the whisky business but also a strategic move to convert the somewhat dusty and folkloristic image of Scotch whisky into that of a luxury commodity.

What LVMH has done in recent years teaches us a lesson in marketing, whether you like the results or not. In this series of articles I will take a closer look at their actions.

Where did the Sixteen Men of Tain Go?

“Handcrafted by the sixteen men of Tain” was the motto of the Old Glenmorangie, utterly rooted in the tradition of artisan whisky making, refined by centuries of experience. Bottles were adorned with deliberately old fashioned looking labels that proudly showed the distillery as a drawing.

But this corporate identity was counterproductive for the integration of Scotch whisky into a portfolio of global luxury brands. The poor sixteen men of Tain with their callous hands, sweating in the still house or stacking up casks in dusty old warehouses could have never won a fight with glitzy supermodels holding chi-chi handbags and champagne glasses in their skinny hands.

So LVMH decided to do a major revamp of the Glenmorangie brand, turning the most popular single malt sold in Scotland into a brand of global appeal. Ditch the old still-necked spirit bottle, design trendy new labels and invent new names that will evoke a feeling of luxury for anyone from Sao Paolo to Shanghai.

Now the transition is finished, and we have a product range that displays the same nonchalant boredom as anything else that has been put through the grinder of a globalized marketing department: Perfectly marketable products called Original (aka 10 yo), Lasanta (aka Sherry Wood Finish), Quinta Ruban (aka Port Wood Finish), Nectar d’Or (aka Sauternes Finish), Astar (aka Artisan Cask) or Extremely Rare (aka 18 yo).

Luckily the whisky itself hasn’t changed too much. It was good before and it is good now. Just the prices are up to pay for the marketing expenses.

But Where is the Luxury?

Distilleries like Dalmore, Glenfiddich, Macallan and others regularily release very old whiskies for extremely high prices. Single malts aged 40, 50 or even more years can be sold with four or even five-digit price tags. Now you would have expected a dedicated supplier of luxuries like LVMH to come up with something along this line. But all they have to offer is their new Signet with no age statement (!) for €100+ and a 25yo for a measely €300. And we take notice that they already call their 18 yo “Extremely Rare”.

This is a clear signal that Glenmorangie – despite having been in contiuous operation for over sixty years – have no old stock to speak of that they could use for true luxury bottlings. If they had, they wouldn’t have hesitated a minute to offer it to the rich and famous. But who cares? Clever marketing will make up for that.

The series will continue with a look at Ardbeg.

Read on…

{ 3 comments… read them below or add one }

Lola November 20, 2009 at 2:19 pm

Hi

I am currently writing an advertising presentation to deliver this monday (23 November) on Glenmorangie 10YO using data on Glenmorangie 10YO sales from 2003. I am very interested to know more about the market positioning of Glenmorangie 10YO before LVMH took the brand over.

1) Before LVMH took over and turned scotch whisky into a luxury brand, did Glenmorangie still have a premium price tag?

2) Before LVMH took over, what was Glenmorangie target market (age/personality) ? Middle age high end consumers? Casual or more experienced single malt drinkers?

I am not a great whisky drinker and therefore do not know much about whisky. Any help would therefore be greatly appreciated.

Thank you very much in advance

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Oliver November 20, 2009 at 2:31 pm

Before LVMH, Glenmorangie has a much more traditional presentation, and the whisky generally seemed to have been reasonably priced. But this was before the time I got a deeper interest in whisky, so I can’t be too much af a help here.

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Ingo (WhiskySponge) November 20, 2009 at 9:27 pm

In the times before LVMH, the Glenmorangie Ten years old already was one of the top selling single malts in the UK. It even was on rank one in some years.
In the 90s they released a number of Vintage malts – beginning with a (now very rare and sought-after) 1963 vintage; followed by 1971, 72, several different 74 vintages (bottled 1997 to 2000, as far as I remember); I´ve also seen 75, 76 and 77. Pricetags for these were high, but on the other hand still reasonable, if compared to the 25 year old Quarter Century they sell now (what was that, 300 bucks? Oh dear!). The prices for these vintages were premium for the time they appeared on the market, everyone said “uh, thats expensive” when confronted with the idea of buying one of them; but that was ten or more years ago, prices have changed considerably since then!
So much for question 1).
Why dont they release older vintages now? Thats a good question. That they have not got the stocks to do so, may be one explanation – but hey, even at Ardbeg they could find older casks, and Ardbeg didnt run continuously for several decades like the Glenmo did! So its maybe a strategy decision, I dont believe in inherent necessities that would hinder the release of premium older stock.

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