Whisky Advocate

Whisky Advocate Award: Distiller of the Year

December 23rd, 2013

Diageo

Roseisle distillery

Roseisle distillery

Diageo moves in big ways, and that makes some folks uneasy. People scoffed when Diageo unveiled the massive new Roseisle distillery, for instance, fearing it would lead to the lights going out at affiliated distilleries all over Speyside.

Actually, what happened next was a $1.5 billion, five year investment program in Scotland, including a brand new distillery beside Teaninich. The numbers are big: 13 million liters per annum, sixteen copper stills, twenty new jobs, and a project cost of $76 million. Expansion projects and upgrades benefited distilling at Mortlach, Teaninich, Inchgower, Glendullan, Dailuaine, Benrinnes, Cragganmore, Glen Elgin, Glen Ord, Linkwood, and Mannochmore. The Cameronbridge facility has been revolutionized with a $163 million investment, endorsed by a site visit from the British prime minister. The company expanded the Diageo archive at Menstrie and realized improvements in their Leven packaging plant. The nearby Cluny Bond will have 46 new warehouses, each of which can store 60,000 casks.

Diageo also takes energy efficiency, water treatment, and renewable energy seriously. This investment in sustainability has added the latest green technologies to Glendullan, Dailuaine, Glenlossie, and Cameronbridge, with plans for a bio-energy plant at the new distillery in Alness. Roseisle is scaring nobody now.

Then there is Johnnie Walker. The world’s biggest Scotch whisky brand introduced Gold Label Reserve and Platinum Label into the United States, in addition to a freshly primped JW lineup in stores and Travel Retail. Odyssey tore up the rulebook on the perceived worth of blended malts. Those following the oceanic adventures of the John Walker & Sons Voyager across Pacific Asia and Europe were treated to a heady mix of glamour, celebrity, talent, and show-stopping spectacle with blended scotch as the guest of honor.

Now their single malt brands are returning to the fray. For starters, there are three new regular Talisker expressions, backed by the passionate people running the innovative new visitor experience on Skye, and there will also be more choices from Cardhu, Dufftown, and Mortlach.

The Diageo Special Releases 2013 contained some phenomenal liquids: the stunning Brora from 1977 with flavors that snapped into place with a droplet or two of water, and the beguiling, rounded flavors to be found in a glass of Convalmore 36 year old. The steep jump in some prices was in part justified as Diageo’s latest salvo on the war against flipping on the secondary market. Their attempts to snuff out the commoditization of highly sought-after limited editions may ensure that the purchasers are truly venerating the single malt whisky in the bottle. This stance extended to the festival bottlings of Lagavulin, Caol Ila, and Mortlach in 2013 from the Islay Jazz festival, Fèis Ìle, and the Spirit of Speyside festival. Bottling runs were upped into the thousands and prices were kept around £100 to prevent disappointment and curb profiteering.

Diageo is about whisky on a global stage. New innovations have bolstered their prospects across the Atlantic; Crown Royal Maple and Bulleit Bourbon 10 year old hit the ground running. Bourbon lovers will be intrigued to try the new Orphan Barrel whiskeys and Blade & Bow bourbon. Internationally, a pivotal moment was marked when Diageo gained control of India’s United Spirits Ltd. The prize was not Whyte & MacKay especially, rather the flourishing opportunities in accessing potential drinkers in the Indian subcontinent.

Sure, Diageo is huge, and their size makes some people nervous. But big moves require a big company. Substantial investment, a world-beating vision for future growth, and harnessing their guardianship of brand history to reach out to consumers have helped our Distiller of the Year deliver an incredible portfolio of whiskies to suit all pockets and preferences. — Jonny McCormick

photo credit: Keith Hunter Photography

26 Responses to “Whisky Advocate Award: Distiller of the Year”

  1. B.J. Reed says:

    I like their product and they make excellent whisky but that doesn’t change my dislike for their pricing structure or how they treat their customers.

    I have traveled to Scotland many, many times since 1998 and I have noticed how increasingly poorly we have been treated at Diageo distilleries. It is one thing to be “warned” about flash cameras pending doom in the still room but it is another to be treated rudely by guides and staff people.

    It was not always this way. There is also a “class” system for tours at Diageo distilleries and if you do not have the right “color” good luck.

    Other distilling companies have also moved in this direction but nothing compares to a Diageo experience.

  2. sku says:

    Sorry guys, you laid on this one. Worst. award. ever.

  3. Tim Read says:

    So “price hikes” have been sanitized and rebranded as a “war against flipping”? Diageo’s just looking out for the little guy when they set the price on Port Ellen 13th at £1500?

    Fortunately I’m waging my own war against constrained supply by not buying.

    • Jonny McCormick says:

      Tim, I’m not buying that Port Ellen either. Clearly, there is a market for it because there’s none on the shelves. Yet I don’t expect to see a lot of bottles of PE13 flooding on to the secondary market in the next month or two. There are still plenty of independent Port Ellen bottlings selling at auction for a tenth of the price.

      • Tim Read says:

        Have the decency to call it what it is. Demand for these items is high because price had been disproportionately low. Now that the industry is hot to overheating, Diageo have made the defensible business decision to take a lot more money that they’d been leaving on the table. This may make those of us who had enjoyed those lower prices unhappy at first but we’re a resilient bunch, we’re quite capable of finding alternatives (hence the “old Caol Ila and old Port Ellen are pretty much interchangeable” bit of self-deception some tried this year).

        Honestly, I didn’t care much and just laughed when I saw this year’s price. It absolutely has secondary effects on pricing for the independent and auction markets, though, so to pretend nothing happens there is a bit disingenuous.

        However, to cling to the sheer fantasy that a price increase to 1500 pounds is a “war on flipping” is the most ridiculous thing on this page. Diageo doesn’t care one bit, they just want every penny they can get in the transaction. They don’t care what they buyer does, just that the buyer is capable of dropping a ton of money on some whiskey. If it sits on a shelf and gets auctioned in five years, well, that’s the way the cookie crumbles. But to imply that this is in any way for the benefit of the consumer is just marketing varnish. It’s value extraction, no more, no less. Can we just call it for what it is and not wrap it up in some sort of dress that suggests well-intentioned benevolence on the part of a publicly held multinational conglomerate?

        • Jonny McCormick says:

          Easy there Tim – I’m not disagreeing with you. I reported that Diageo had part justified the reasons for their prices around the release because I think it was the first time I’d heard them acknowledge that the secondary market was influencing pricing. The rest of their justification was scarcity, the maturation age, the closed distillery status etc as you might imagine. The laws of supply and demand are in play as you describe, influencing retail pricing and the auction market. That’s not in dispute either.
          Distiller of the Year is not defined by one range, let alone one or two products. Thanks for your points.

  4. Louis says:

    My pet peeve with Diageo is that they keep on jacking up the price of Lagavulin to match the stock market. Also, the Johnnie Walker Platinum is essentially the previous Gold, and the Gold Reserve lost the age statement, so we have no idea how young it is. no doubt it will be even younger in a few years.

  5. Josh C says:

    The premise doesn’t make sense. It is like cutting off your nose in spite of your face. So now, instead of some customers having to pay huge sums for a bottle of PE on the secondary market, everyone has to pay huge sums of money for a PE at retail, plus tax, plus retail markup.

    Where do I send my thank you card to?

  6. two-bit cowboy says:

    A most disappointing award.

    Shareholders, not whisky drinkers, are thrilled with your pick.

    Beyond that, I’m dumbstruck.

  7. cato says:

    Diageo can go to hell. Someday this bubble will end. Until then I’m drinking my inventory.

  8. keith sexton says:

    I’ve been thinking that I wish Whisky Advocate would make Diageo the centerpiece of one of their issues, where all points- good and bad- about Diageo were laid out and examined more closely…I think it would be a really good piece, considering how polarizing Diageo can be.

  9. sku says:

    One of the best things Diageo did for American whiskey this year isn’t mentioned here which is the extension of the Dickel brand to 9 and 14 yo retailer expressions. I’ve had several of these and they have been very good.

    But I second what everyone else says about the price increases, forgive me for not sending a thank you note.

    And it’s odd to credit them for “innovation” based on Crown Royal Maple. Wow a flavored whiskey, how innovative. No one is doing those.

  10. sam k says:

    It’s Christmas! I’ve got four Bowmans of various ages and finishes lined up for the guests and Michter’s Whiskey Cake right beside.

    Regardless of your Diageo opinions, I hope you all have a Merry Christmas and an amazing 2014!

  11. Randy Perrelet says:

    Right company, wrong award. Diageo is a sort of corporate Pac-Man that gobbles up distilleries, wineries and breweries all over the globe. If you want to give it the Whisky Corporate Facilitator of the year award, fine, but an individual distillery like Glendronach or MGP or any of a hundred others are more deserving of this award. It is unlikely that anybody at the Diageo corporate offices in London is doing any distilling.

  12. molson says:

    I look forward to reading Diageo advertisements in the Whisky Advocate footnoting its achievement!

    • cato says:

      Ha! You’ve nail it. It is always about the money. All magazines do that now: puffy stories about companies that pump ad dollars into the same magazine. Pathetic revenue model.

      • Lew Bryson says:

        Diageo has advertised in Whisky Advocate for years, almost since the first issue. I don’t expect them to stop or increase their ads after this award. Believe it or not, that’s not how it works here. We have a very strong editorial/advertising divide.

        But like I said: believe it or not. Nothing I say will convince anyone, and it shouldn’t. Just keep reading the magazine, and let us know if you think you see bias. We don’t want it either.

      • John Hansell says:

        Molson, Cato, etc., This is the truth, whether you choose to believe it or not: Lew Bryson (our Managing Editor) and I (Editor) don’t even see the ads that go into the magazine until we get our copy of the magazine in the mail, just like you. And to be honest, I have no interest in who is or isn’t advertising. The owner of Whisky Advocate (Marvin Shanken) certainly does, but he and I have never had a conversation about advertising and I don’t expect we ever will.

        • Florin says:

          How about WhiskyFest, John, do you care to comment about the conflict of interest with Diageo on that side? They must be by definition the biggest contributors to the show.

          It seems to me, just based on elementary back-of-the-envelope calculations, that it’s actually WhiskyFest that produces the revenue for the Whisky Advocate enterprise, and the magazine is basically profit neutral, or a loss leader.

          I have noticed a change of tone in the magazine since the Shanken aquisition. There is still seriously good writing, such as Fred Minnick’s article on MGP (best one in years), but also puff pieces and awards, such as this Diageo award. Maybe coincidentally, another recent article on Diageo comes to mind, about the Singleton bottles, that read like a Diageo prospect.

  13. tom says:

    Congrats to Diageo.

  14. I don’t understand this award. With 30+ distilleries I find the number of bottlings interesting to me as a purchase incredible low from this producer. In fact I can hardly think of two bottlings.

    Steffen

  15. jm says:

    Diageo took over Bushmills. Since then, nothing new from the distillery. They seem to have no interest in Ireland whatsoever, either. They don’t bother turning up at Whisky Live in Dublin.

  16. mike says:

    Regarding Diageo “guardianship of brand history” didn’t they just nix an almost 200 year history between a small Scottish city and the JW brand? (not to mention JW was one of the major employers in Kilmarnock)

  17. george says:

    As a resident of Kilmarnock this article disgusts me and the author should be thoroughly ashamed of themselves. The line “and harnessing their guardianship of brand history” is offensive to the town and people of Kilmarnock.

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