gavin smith

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Chivas' Regal Progress

by Gavin D Smith, 08/06

Chivas Brothers has come a long way from its origins as an Aberdeen grocery and wine merchant business to its present status as the world's second largest Scotch whisky distiller and current holder of the International Wine and Spirit Competition 'Group Distiller of the Year' trophy.

The firm was founded by William Edward in 1801, and that key date is commemorated in the telephone number of the company's Paisley headquarters in Scotland: 0141 531 1801.

Chivas family involvement in the firm began in 1836, when James Chivas joined the firm, and by the early years of the 20th century the 'house' blended whisky - a forerunner of Chivas Regal - was selling well in North America.

That North American link became much more tangible in 1949, when Canadian distilling giant Seagram & Sons Ltd acquired Chivas Bros for 85,000. Seagram's boss Samuel Bronfman was a shrewd and far-sighted character who respected Chivas Regal as a whisky and recognised that the post-war years would see a great boom in Scotch whisky distilling. He was determined Seagram would be at the heart of that boom.

Having bought Chivas Brothers, Seagram purchased Strathisla distillery in Keith on Speyside - now the spiritual home of Chivas Regal - before going on to build three new distilleries in the vicinity. Following its takeover of The Glenlivet Group in 1977, the Chivas' portfolio could boast some of the highest profile and finest quality single malt whiskies in Scotland, including The Glenlivet itself.

Famously the first distillery to be granted a licence following the highly significant 1824 Excise Act, The Glenlivet has an amazingly evocative heritage. Its reputation for making fine spirit led many rival distillers to add 'Glenlivet' to the names of their own whiskies. This provoked the ironic comment that Glenlivet was 'the longest glen in Scotland!'

The Smith family of Glenlivet went to court in 1880 to protect the integrity of their brand, and achieved a partial victory when the court ruled that only their distillery could use the definite article and call itself The Glenlivet.

The Glenlivet continued to be one of Seagram's prized possessions until 2001, when the company decided to divest itself of its drinks business. At this point Paris-based Pernod Ricard, already owners of the respected Aberlour distillery on Speyside, purchased Chivas for 5.7 billion. All its whisky interests were subsequently consolidated under the Chivas Brothers banner.

Greater change was still to come, however. In July 2005, Ballantine's Scotch whisky was added to Chivas Brothers' range following Pernod Ricard's 7.6 billion acquisition of Allied Domecq in association with US Fortune Brands.

   Having Ballantine's in the Chivas portfolio was a very significant development, since the blend is the third best-selling Scotch whisky in the world. According to Chivas' International Marketing Director Martin Riley, "We have ambitious plans for the Ballantine's brand, which is currently selling over six million cases a year. In terms of volume it's the world number three, and it's the number one Scotch whisky brand in Europe, excluding the UK. As well as Europe, it's big in Asia and South America.

"Diageo has over 30 per cent of the global Scotch whisky market, and we now have more than 20 per cent, says Riley. "We are the clear number two, significantly ahead of all the others."

Chivas is hunting down Diageo's international blended market leader Johnnie Walker Black Label with its Chivas Regal brand, which sells some three million cases annually.

"The gap between Chivas Regal and Johnnie Walker Black Label has been dramatically reduced," reports Riley. "The momentum has been extremely strong, and we are very determined it will become the number one premium blended Scotch in place of Black Label. It's just a question of when."

Chivas also has ambitions to take The Glenlivet to the world number one single malt slot ahead of Grant's Glenfiddich.

As Riley notes, "Glenfiddich was twice the size The Glenlivet was when we acquired it from Seagram. Now the gap is much less and we are growing at a fast pace. The Glenlivet is the number one malt whisky brand in the USA, and is making big gains."

Chivas' Distiller of the Year award reflects its overall strong showing in the most recent IWSC competition. The firm's flagship single malt, The Glenlivet 21-year-old Archive, achieved the highest award on offer when lifting the Morrison Bowmore Distillers Trophy for Single Malt Scotch Whisky (over 12 years old). According to Malt Advocate magazine editor John Hansell, this is the "Sean Connery of whiskies - mature, sexy, rich and debonair. Savour it after a long and successful day. Just don't rush the experience."

In addition to the Glenlivet 21-year-old, gold medals were also won by Chivas Regal 18-year-old (Scotch Whisky Deluxe Blend 18-year-old category), Ballantine's 30-year-old (Scotch Whisky - Deluxe Blend 30- to 35-year-old category), and The Glenlivet 12-year-old First Fill (Scotch Whisky - Single Malt Speyside 12-year-old category).

Christian Porta, Chairman and Chief Executive of Chivas Brothers, commented that "The painstaking investment of time and expertise is key to nurturing a consistently great dram and it is a fantastic accolade to achieve the IWSC Distiller of the Year title for the second time in just three years. This win really has crowned what has been a truly momentous year for us."

This "momentous year" has seen major expansion in emerging markets such as China. According to Paul Godfrey, Global Brands Director 'Chivas 12', "We have seen phenomenal success in China, and this has really been the engine for our overall growth. Chivas Regal is now the largest imported spirit in the Chinese market.

"In the last six months growth has been 19 per cent in volume and 28 per cent in value for the Chivas family. It's a brand that's hot and on the move. Chivas is in over 200 markets, and in the top five whiskies in most markets globally."

But there is more to Chivas than just The Glenlivet, Chivas Regal and Ballantine's, as Martin Riley points out.

"As well as our two principal single malt brands of The Glenlivet and Aberlour, we also have Longmorn and Strathisla, and we now have three new ones from Allied in the shape of Scapa, Glendronach and Tormore. Scapa, from Orkney, in particular, will complement our existing single malts portfolio very nicely, and we are currently undertaking a serious review of our single malts and the way forward with them.

Additionally, Chivas' Glenallachie, Miltonduff, Glentauchers and Glenburgie distilleries are currently in production, and Riley notes that "We were very pleased to be able to re-open Allt Bhainne distillery near Dufftown last May after a period of mothballing. This reflects the increased demand for blending malts as sales of Chivas Regal and other brands have grown."

Certainly Chivas Brothers has gone from strength to strength over the years, and shows no signs of losing momentum in the foreseeable future. Diageo would be well advised to keep looking over its shoulder.


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