As the season of alcohol-induced jollity approaches, you might be considering a bottle of Scotch, either as a Christmas gift or for yourself; a pricey purchase, thanks to the steady devalution of the rand against the pound.
As the season of alcohol-induced jollity approaches, you might be considering a bottle of Scotch, either as a Christmas gift or for yourself; a pricey purchase, thanks to the steady devalution of the rand against the pound.
You may have seen bottle of Royal Salute Scotch whisky advertised for R2-million in recent months in one of those colour advertising catalogues inserted into newspapers like this one.
It’s an obscene sum for a consumable, but not for a marketing ploy to establish whisky as a luxury product. R2-million is a bit much even for wealthy parvenus interested in conspicuous consumption, but even the prices of not-so-outrageous Scotch whiskies advertised in those catalogues seem steep.
An aged malt whisky can cost from around R2 000 a bottle to around R4 000. As a somewhat whimsical exercise, I calculated the prices per milliliter or per sip, if you like, of a number of Scotch whiskies.
A standard blended whisky like Johnny Walker Red Label costing R173 works out at 23 cents a sip: 26-year-old Glenfiddich malt whisky costing around R4 000 is around R5.33 a sip. Is the experience of sipping the Glenfiddich 23 times better than sipping the Red Label?
The marketing phenomenon known as price discrimination is evident in the range of products. The Johnny Walker brand provides a good example. Between Johnny Walker Red Label and Johnny Walker Blue Label (around R2 000) are a number of Johnny Walker sub-brands.
Johnny Walker Black Label , according to one recent catalogue, costs around R260. Johnny Walker Gold Reserve costs around R530, and Platinum Label costs around R830. So if you are impressed by Johnny Walker Blue Label, but pressed for cash you can still buy a bottle of Johnny Walker whisky that fits your price profile.
The company gets the spendthrifts, the cheapskates and everyone in-between. There’s more to the Scotch whisky industry than that. Value is determined not only by quantity but by quality, which is as difficult to define as it is significant. An emotional and non-rational element governs the prices of all but basic commodities.
When we buy whisky we buy more than alcohol with a particular taste that comes from the peat-smoked malted barley. We buy a mythical Scotland of fens and glens and heather.
The taste for expensive malt whisky taps into that myth even more powerfully, with single malt whiskies identified by the geographical location of the distilleries that produced them and the tastes associated with distilleries in those regions.
Malt whisky, the pure and strong spirit with which a more neutral grain sprit is mixed to produce blended whisky, is relatively new, a fashion trend that has swept the world and boosted the exports of whisky from Scotland to the point that it is now a major export earner. We are not immune here.
Despite the mediocre growth we have had since the global recession of 2009, South Africa was the seventh biggest export destination for Scotch whisky in the first half of 2014.
By comparison, the brandy industry has not tapped its well of myth to sell the product. This is a problem for South Africa, which produces brandy of a high quality. KWV's 12 year Barrel Select Brandy has won the Worldwide Brandy Trophy Award seven times.
Brandy consumption has been steadily declining, according to a report by South African research company Who Owns Whom. The whisky industry has been good at creating “premium” products, underlining the old adage, “The more you pay, the more it’s worth”. Again, those products are based on the traditions and myths of Scotch more than taste.
A Tasmanian malt whisky recently won "world best" in the World Whiskies Awards. One of the smoothest whiskeys I have tasted is Bain’s, which is produced in the Western Cape. Other liquors have also gone the premium route.
There are now exotic and expensive rums and gins. In my youth rum was rum and gin was Gordon’s. In the main, brandy marketing has relied on the old formula of Rembrandt founder Anton Rupert: always link products to overseas, usually Europe.
The very name of Richelieu Brandy is an example. Brandy has no price edge despite its local origins. Economic pressures in South Africa have meant whisky drinkers have bought down to new whisky brands that are cheaper than local brandy.
No matter that some of those cheapies could have quite a lot of legally allowable caramel and not a lot of malt whisky.
The lesson of Bains is that local origin can be, if not a powerful marketing tool, at least no impediment to success.
Perhaps clever marketing can improve the image of brandy to the point it makes inroads into the market for Scotch. In the meantime, our whisky habit is moving towards being a R3-billion (or 164-million pounds) boon for Scotland.
