Learn Whisky Marketing with LVMH #2 – Ardbeg

by Oliver Klimek on November 11, 2009

After looking at Glenmorangie in the first part of this article series, let’s move over to Islay and LVMH’s second big distillery: Ardbeg

It’s Always Good to Have Fans

Glemorangie plc bought Ardbeg in 1997 and re-opened the distillery that had been mothballed since 1981, with just a low level production between 1989 and 1996. After the relaunch, Ardbeg managed to attract a huge following of whisky enthusiats because of various reasons:

  • An Islay distillery saved from death is always a big story. There are many fans of peated Islay whisky, and they will be happy when they are provided with the stuff they love. Because of limited stocks and the long period of being mothballed, Ardbeg’s regular expressions, namely the 10yo and especially the 17yo contained whisky that was several years older than the age statement suggested. This resulted in high quality bottlings for a reasonable price that peatheads eagerly jumped upon.
  • 1999 the “Ardbeg Ccommitee” was founded, where members are offered a chance to purchase limited edition bottlings.

When LVMH bought Glenmorangie plc including Ardbeg in 2004, they received a fully operational distillery with an enthusiastic community of fans. What else could you wish for when you buy a distillery?

Let’s Start to Milk the Cash Cows

Other than with Glenmorangie, the LVMH marketing department decided to resist the urge of a complete overhaul of the Ardbeg brand. The distillery had enough fans, so there was no real need to open up new markets for the whisky. The old Ardbeg design was inspired by celtic writing which gave it somewhat of a mystical touch. They gave it just a subtle facelift that emphasised the celtic connection while posing no danger of deceiving the crowd.

Inspired by the success of the committee bottlings that fetched ridiculous prices on eBay, Ardbeg now started a series of limited and special releases with hefty price tags:

  • Blasda – Lightly peated, chill-filtered, bottled at 40%, no age statement. Price: €50+
  • Supernova – Heavily peated, NAS, Ardbeg’s answer to Bruichladdich’s Octomore. Price: €85+
  • Coryvreckan – Sherried, NAS. Price: €60+
  • Single Cask 772 – 16yo, Price: €250, sold out online within 20 minutes

Although there has been quite some debate about the pricing, these bottlings have been selling very well.

And Finally We Have Some True Luxury

Even with the long period of being mothballed, Ardbeg seem to have more old casks in their warehouses than Glenmorangie. No true oldies though, but at least they found some leftover casks from the legendary 1974 vintage. They could have bottled these straight away, and they would have sold like hotcakes for €500+. But this time, LVMH thought of something very special:

They made two 1974 single cask bottlings and added as a bonus:

  • A handmade bespoke leather guncase
  • 8 handmade sterling silver drinking cups
  • A pen made from oak and sterling silver
  • 2 leather bound books for tasting notes
  • White gloves
  • A leather cleaning kit

This ensemble was called Double Barrel which of course is a pun on the double meaning of the two single casks and a hunting shotgun. Price tag: €15,000

Lesson to learn: If you have excellent but no luxury whisky, then sourround it with luxury items and sell it for a multiple of its true value.

After two years, there are still double barrels on sale, even at online shops. But this does not really matter. Ardbeg created an enormous amount of hype around this release that certainly had positive side effects on the sales of their more affordable bottles. And that’s what marketing is all about, isn’t it?

The next part of this series will focus on the Scotch Malt Whisky Society.

Read on…

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