Mothballed in 2010, Tamdhu Distillery has recently been purchased from Edrington by much smaller independent, Ian Macleod Distillers. It’s only eight years since they bought Glengoyne, also from Edrington and they’ve had great success with that. It just feels like they’ve owned it for longer.
What would the impact be on the company and its existing brands of this second distillery? Why had it taken a while to buy another one and how would they use it? Tamdhu has capacity to produce over 4 million litres of alcohol per year and Macleod isn’t a massive company. Armed with my questions, I set off for their HQ near Edinburgh to speak to Managing Director, Leonard Russell.
Caroline Dewar - So why buy now and why this one?
Leonard Russell - The basic answer is that we have been net purchasers of whiskies to use in our own brands. We’re now selling over 1 million cases and need additional capacity. The mash sizes and labour costs per litre will be cheaper at Tamdhu than at Glengoyne, where we’re running at a level I am happy with. Also, the maturing stock profile of Tamdhu is perfect for us. Barley is fairly amorphous in the industry - we’re all using much the same types but I believe in good wood and Edrington’s wood policy with Tamdhu has been quite excellent. Quite a high percentage is in first fill sherry casks. [This seemed an exciting prospect to Leonard and it is to me, too.] It was such a straightforward and simple acquisition. We agreed a lot before we got lawyers involved and there was much mutual trust given our previous dealings.
CD - Tamdhu is already used in blends like Famous Grouse, Cutty Sark, J&B. I assume this continues and what about your own blends?
LR – Well, I hope it continues. We already use it and it gives us more confidence in having whisky to support our growth. It’s in quite a range of wood types – a consistency of supply up to about 10 years and the older stock is in various different woods.
CD - What will be the impact for your company otherwise? It’s a very large distillery and has been mothballed and expanded more than once. Will it follow Glengoyne as a top visitor centre?
LR – We need to get it up and running again but we’re not under huge pressure for the next few months. Edrington will get it going and have offered us engineering services and we’ll recruit the right staff to keep it going once we decide who and what is needed. Maybe nine people. We’ve already found a Head Brewer. I like the idea of people making whisky and enjoying their jobs – making it themselves and not just manning a computer. It won’t be too long – definitely up and running next year but not 24/7.
On the visitor centre, not for the time being at least. [We were agreed here that there are plenty of distillery visitor centres in that area]. I want to see it warm and lively again first. Though it has a railway station, waiting room and signal box which are great features.
CD - Does it need money spent on it for improvement maybe on the old maltings? I’d heard the effluent disposal system needs attention too.
LR – No, I don’t think it does need much. We may not continue the maltings but that’s still to be decided. If quality from own maltings were better than from a maltster we might think about it. Cost of own maltings wouldn’t be a problem as long as it was still a profitable plant. But unless there’s a genuine benefit in cost and quality, I can’t see it’s worth it.
On effluent disposal we’ll join in with others locally and send it for spreading on farm land. If putting in a new system were more environmentally friendly and cost efficient, fine, but not now.
CD - You bought stocks also – plans for those?
LR – Yes more than 2 million litres of alcohol, some of it under age spirit. As indicated, we’ll use some ourselves and some for trading with others. We’ll use some for single malt bottlings too.
CD - Yes, I wanted to ask about Tamdhu as a brand. What plans do you have?
LR – We still need to take lots of samples and look at the stock profile. We’re in the fortunate position of a blank sheet and a load of fabulous stock. We don’t need to eke stocks out. Personally, I’m not that keen on “finishes”. I want to offer the genuine article that’s the best possible.
CD – Will it add anything to your marketing/sales clout?
LR – I’m hoping quite a bit. We’ve always been quiet and never shouted much. There is no share price to worry about. We do care about our people and our whisky. We’re a family, Scottish and independent and so far we’ve grown sales organically with a lot of repeat purchase once people have tried our brands.
CD – Where would it be positioned in relation to Glengoyne?
LR – We’re still on that voyage of discovery. I’m itching to relaunch but I’m determined to get it right from the start. As I said, we have a blank sheet. We need to examine the whole package, see what would be interesting for consumers and give us a positioning different from others. We need to have the best possible liquid and communicate its main attributes in the best possible way. I aspire to be in amongst the ten single malts most consumers can name.
In a longer discussion on packaging we were agreed that the existing pack doesn’t give the consumer many clues as to what to expect. Plus, there is no age statement. Leonard is not keen on single malts not having age statements so you might expect one when it does relaunch. I wonder if they have done a little more on Tamdhu than I was told but then you don’t give away all your secrets at this stage. There is still plenty to do and, as a whisky marketer by trade myself, I’m quite envious of the job to be done. They’ll certainly have a ball doing it.
© Caroline Dewar 2011