Post image for The Glenfiddich Millennium Vintage – Or How To Boost Your Profit Margin

The Glenfiddich Millennium Vintage – Or How To Boost Your Profit Margin

by Oliver Klimek on July 26, 2012

The latest addition to the the Glenfiddich product range is the Millennium Vintage, a World Of Duty Free travel retail exclusive bottling. It is a 12 year old distilled in 2000 and bottled at 40% after maturation in “European and American oak” and a two month finish in bourbon casks. 35000 bottles are suppossed to be released.

So apart from the fact that the casks for this release were personally selected by Glenfiddich Malt Master Brian Kinsman, we have basically the regular 12 year old whch has undergone a short finish in (probably first fill) bourbon casks.

The standard Glenfiddich 12 yo sells for around £26 in the UK, the Millennium Reserve has a price tag of £39.99 which means it is £14 or almost 54% more expensive. Of course fresh bourbon casks cost money, but how much will this effect the price?

Let’s do a rough estimate: You can get about 300 bottles of whisky at 40% out of a bourbon cask which should not cost more than £200, probably less. Re-casking takes some time, so it seems like a fair estimate that the cask finish increases production costs by about £1 per bottle.

For the 100 to 120 casks Mr. Kinsman selected for the bottling, he may have had to check 500 cask samples (just guessing), a task that an experienced professional should be able to do in a week, provided that spittoons are used – if the samples are actually tasted at all and not only nosed. I don’t know Brian Kinsman’s salary, but it is likely to be less than £35000 a week, so the special selection process should increase the bottle price by not more than another £1.

Is £140000 enough for the marketing campaign of the new bottling? I can’t really say but I would be surprised if it was much higher. This would leave Glenfiddich with £8 more net profit per bottle than they have from the regular 12 year old. Well done.

Of course the standard disclaimer has to follow: This is just about the business side of the bottling. I have not tasted the whisky. If it is better than the regular, then anyone has to decide on their own if it will be worth the additional money.

Update:

I finally got a chance to taste the Millennium Vintage.

{ 17 comments… read them below or add one }

Matthew Smedley July 26, 2012 at 6:20 pm

Well the Glenfiddich Snow Phoenix was only technically only 13yo but was well worth the extra money and it was a lot more than this. The Snow Phoenix was also a special selection of casks so if it delivers similar results I do not see the issue.

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Oliver Klimek July 26, 2012 at 6:27 pm

There is no ‘issue’, Matthew. It’s just a blueprint how to earn much more money with just a little more effort. I don’t blame Glenfiddich, quite in contrary, they are clever.

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Jordan July 26, 2012 at 7:25 pm

Well, we’ll see how well it actually sells. For all the hype, I’ve seen a surprising number of bottles of Glenfiddich’s Cask of Dreams left on shelves. Same goes for Glenmorangie’s Artein. Sometimes things are too clever by half.

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Matthew Smedley July 26, 2012 at 7:33 pm

If you bought an album of stamps would you sell them all at the same price, because you could say each stamp has cost you an equal amount?
I assume the answer to this is no you would not! You would select the best stamps and sell them at a premium which is what Glenfiddich have done. It is not about just getting more money, it is about getting a price that is fair for the product.

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Oliver Klimek July 26, 2012 at 7:57 pm

Of course it is a supply and demand issue. They have priced it like that because they suspect they can sell ot for that price. I have no problems with this. As I wrote in the last paragraph, if it is worth the money for you, you have decide on your own.

But what is a fair price? Is £2000 for a 20 yo Dalmore fair because there are people who will buy it for this price?

A problem may only arise if the price rise is not percevied as appropriate for the presumable rise in quality. But for that you’d have to taste it. There are enough exapmples of special release whiskies where people thought: It’s good but not really worth the money,

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Matthew Smedley July 27, 2012 at 4:03 pm

So exactly what point were you trying to make with the article then as I am now rather unsure

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Oliver Klimek July 27, 2012 at 4:48 pm

It seems you expected me to say someting like “this whisky is overpriced”. Sorry to disappoint you here. But bottlings like this can explain why prices for whisky keep rising.

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Matthew Smedley July 27, 2012 at 4:58 pm

So what you are saying is that bottles that are a result of extra care and attention are the reason that whisky prices go up?
Seems like a redundant point to me.

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Oliver Klimek July 27, 2012 at 5:12 pm

Simply to explain how a small change can justify a big price hike. Not more, not less. Such an observation may be redundant for you, for me it isn’t.

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Chris July 27, 2012 at 5:26 pm

The issue that this raises for me is “what are we paying for” when purchasing whisky. Everyone gets that age costs when purchasing a bottle. I also “get” that if the whisky is better it deserves to be sold at a premium. In this case it looks like a smaller parcel of casks (perhaps that have an atypical character) that can’t be used in the usual bottlings are on display here. If so, and the whisky is good – then well-done Glenfiddich! If this is trying to make a silk purse out of a sows ear (as other producers have tried to do through premiumisation) then its a harbinger of escalating prices.

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Frodo July 27, 2012 at 5:26 pm

Sorry – Frodo not Chris!

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PR July 28, 2012 at 3:26 pm

I actually tried this in WoW last weekend and passed on it. It’s not the standard 12 but is not better either, just different and not quite to my taste. I thought it was a bit of a cynical marketing ploy.

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Gal Granov July 29, 2012 at 8:25 am

Oliver,
This is a merkerting trick. and done by all distilleries.
they want to sell more, and if they can do that, they will.
special NAS bottlings, “hand selected” and so on.

I won’t buy this, but it might be a nice present to one who does not really know whisky, and will be happy to get a “special” fiddich.

oh well.

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MaltExplorer July 29, 2012 at 9:50 pm

If they would bottle it at 46% I would understand it (the price). But, as I suspected when I first saw the picture, they bottled at 40% …….. disappointing …… again. I’ll not buy it for sure, but that’s just my opinion.

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Jordan July 30, 2012 at 1:26 am

That’s the crux, in my opinion. Glenfiddich Distillery Edition shows just how good their whisky can be at higher strength. Especially for special releases, it’d be nice if they’d bump things up a bit.

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Piet August 1, 2012 at 4:33 pm

Thanks for the article. Nearly placed a bid on eBay for this whisky to the amount of £102!!

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Thom August 5, 2012 at 9:35 pm

Nice post. I find the business of whisky almost as interesting as the whisky itself (that might be a bit of an exaggeration) – the economics are fascinating especially when combined with the ongoing marketing opportunities that brand extensions via different expressions provide.

When I was first learning about Single Malt Whisky, as opposed to bourbon whiskey with which I was all too familiar, the numerous variations and expressions felt like marketing spin and the entry price to separate the wheat from the chaff was too high so I bypassed them all, to my palate’s loss and my wallet’s gain.

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