Learn Whisky Marketing with LVMH #3 – The SMWS

by Oliver Klimek on November 11, 2009

After looking at the distilleries of Glenmorangie and Ardbeg that LVMH received when buying Glenmorangie plc, we should also take notice of the fact that the acquired bundle also contained the illustrious Scotch Malt Whisky Society (SMWS).

Glenmorangie plc bought the SMWS just a few months before they sold everything to LVMH, plenty of room for speculations here. Anyway, what exactly is the SMWS?

Whisky Club or Independent Bottler?

The Scotch Malt Whisky Society was officially founded in 1983 in Edinburgh by some whisky enthusiasts who wanted to share their joy of single cask bottlings. They have always had excellent contacts to the industry because they have been able to do their own bottlings from just about any distillery. The price they have to pay for this is the non-disclosure of the distillery name on the bottles. Instead a number code is used, but as the code is publicly known it is no secret at all where the whisky in any bottle was distilled. Only SMWS members are allowed to buy the bottlings, currrently there are about 50000 of them. The SMWS owns buildings in various places that are open to visit to SMWS members, there are also accommodation facilities.

Opening up Another Sales Channel

In the first years after the takeover, everything went on as usual. LVMH concentrated more on the development of the distilleries than on the SMWS. But the latest bottlings, recently presented at the Edinburgh Whisky Blog, clearly showed that a wind of change began to blow. Colourful and “artsy” new labels, individually designed for each bottling, marked a distinct step away from the generic and uniform styling of the previous bottlings.

Why should LVMH invest lots of money into revamping the packaging of bottlings that are strictly members only? After all, these bottlings are the very reason why the members joined the SMWS. One should expect them to sell virtually on their own.

The reason is obvious, of course. Fancy design increases the chance of more whisky lovers joining the SMWS. By this, LVMH wants to create the same “wanna have” factor that made Apple’s iPhone a success. And don’t forget that it’s double payday whenever a new member joins. They pay their membership fee to be granted the right to purchase the exclusive LVMHSMWS bottlings. So it is not much of a surprise that the SMWS website is all about joining the club that brings you “the very best single cask, single malt whisky available to mankind anywhere in the universe”. That’s true British understatement as can be expected from a gentlemen’s club.

The final part of this series will put together the puzzle pieces.

Read on…

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