Friday, July 13, 2012

Bruichladdich - the Power & Danger of Stories

Those plugged in at all to the scotch whisky infosphere will probably already have heard about the now public negotiations to sell the Bruichladdich distillery to the Remy Cointreau drinks conglomerate. Unsurprisingly, there has been quite a bit of noise generated by the decision - the distillery has prided itself on independence since its relaunch at the beginning of the millennium. While getting back on their feet was not an easy task - seven years of silent stills left a hole in the stocks of whisky remaining from the distillery's previous life - their phoenix story and iconoclastic production methods ensured a steady stream of attention and accolades.

The hole in their stocks was both a curse and blessing, forcing the distillery to get creative while they patiently waited for their own spirit to mature. One of the easiest ways to generate cash flow was to release a plethora of cask finished whiskies using the older stock. However this meant that prices were high and quality was not always stable. But the innovation was often appreciated and they had plenty of other tricks up their sleeve.


Bruichladdich became known for consciously being a part of the Islay community, employing a larger staff than most other distilleries on the island and sourcing their materials as much as possible from the local area. More than any other distillery than Springbank, Bruichladdich produced an enormous varieties of spirits, ranging from unpeated all the way up to the highest phenolic compound levels of any scotch whisky produced before. Unlike most Scottish distilleries, Bruichladdich didn't sell any of its whisky for blends, even though this is how many distilleries keep up the bottom line. All of these characteristics meant that there was a great amount of affection among the scotch whisky community for the distillery.

Which brings us to the present day. Bruichladdich appeared to be going from strength to strength. A number of younger whiskies such as the heavily peated Port Charlotte and extremely heavily peated Octomore range were released during the early 2000s, with much fanfare. In 2011 they finally released the first 10 year old whisky produced entirely under the new ownership, which brought hope for the regularization of the brand.

A couple of days ago, it was announced on Twitter that Bruichladdich was in talks with Remy Cointreau to sell the distillery. There was a significant amount of consternation, both because of the foundational perception of Bruichladdich as an independent distillery and because of statements last fall that the owners were not interested in selling. The reactions flew fast, furious, and furiously. While technically not a done deal, it's unlikely that the talks would have been announced if they weren't already in the final stages and mostly waiting for a few signatures.

I have no dog in this game. Even though I've thought about trying some of Bruichladdich's whisky, it hasn't been a priority and I still haven't tasted any. With that said, it has gotten me thinking about the ways in which a lot of distilleries are selling a story as much as they are a physical product.

New distilleries are, as I've noted before, in a very tough position. While cash flow can be generated by putting out white spirits, many have the ultimate goal of putting out aged spirits, whether it be whisk(e)y, rum, brandy or anything else that needs a long sleep in oak to fully mature. This creates a dilemma: while aging, spirit is worse than a sunk cost, given that there are expenses for space, taxes, etc. In the meantime, distillers can either wait, hoping that their capital will last long enough to see them through, or put out younger spirits.

In the second case, much of what the customers are buying is the story of the distillery. Are they the first in the area for decades or centuries? Are they using obscure production methods? Distilling spirits never seen before on earth? No matter what the story, it seems like that is all too often the main product on offer. There may be some hits, but there are usually quite a number of misses as well. But in many cases, fans are willing to shrug it off, hoping that by purchasing a less than fabulous product now, the owners of the distillery will be able to produce something magical down the road.

Bruichladdich is in an interesting position - a mixture of both old and new. The distillery has existed for well over a century and the managers were old hands in the business, but the story being told about its rebirth was all about newness. New methods, new experiments, new ways of running the business. And the fans bought that story. As I mentioned above, some of the whiskies coming out of the distillery were either only O.K., not great, incomprehensible, or bizarrely bad. But fans were willing to overlook the flops because the good stuff was just so staggeringly good. And that fed the story they were buying into - that supporting the distillery now would ensure better and better products as time went on.

Which brings us back to where we are now. Bruichladdich will, in all likelihood, no longer be an independent distillery by, say, this time next year. But what does that really mean? Part of the problem is that no one knows. Maybe nothing will change. RC will throw some cash in their direction and the distillery will keep being the innovative renegade that it's been for the last decade. Maybe RC wants a malt whisky distillery that they can expand to feed blends, turning Bruichladdich into another cog in the machine like Diageo's distilleries. Maybe it'll be somewhere in between, with changes being made to make the distillery a little more normal, but letting them tinker and put out wild experiments from time to time, rather than the flood that they became known for. The trouble is that not knowing makes it harder to buy into the story.

And as I mentioned above, a lot of Bruichladdich's business was built on people buying into that story. Sure, you were taking a risk by purchasing the latest cask finished 'Laddie, but if it was a dud, at least you were helping to support something new and different. So the question becomes whether they can maintain that kind of support under different ownership. Will they be able to garner the same kind of support for their experiments if the customers know that they money they're spending, on what is often pretty expensive whisky, is going to another big conglomerate.

Personally, I'm not sure how much I care. Business is ultimately about making money and I can't fault the investors in Bruichladdich for jumping on what is honestly a pretty sweet deal. While the managers and employees may have put more than just money into the operation, that was ultimately what it was supposed to generate. And if they can get a pile of cash without having to sweat over another mash tun or still, more power to them. Expecting more out of a business is a very tenuous position for a consumer to be in.

However, as I mentioned above, it's hard to ignore how often we're being sold a story as much as a product. And I'm not sure there's anything wrong with that either. If a customer feels better about buying whisky from a little guy instead of one of the corporate behemoths, it's silly to say that it's wrong for them to derive enjoyment from that part of the transaction. The problem is ultimately for the distillery, as the quality of their story needs to stay up to scratch just as much, and possibly even more, than the quality of their spirits. A business can fall apart just as quickly if one isn't up to snuff as the other, and as I explained above, a story can sometimes hold things together even better than good product. That makes the story as much an asset of the company as its buildings, equipment, and employees.

So where does that leave us? Ultimately I don't think there's a right or wrong answer. Each whisky drinker will have to decide where their priorities lay. 'Laddie may end up with more customers - more capital means more capacity and the advertising dollars of Remy Cointreau will also be behind them. But it could also go the other way. Will Bruichladdich continue to get the effusive praise from critics that it's garnered over the last decade? Will previously loyal customers become disgruntled, unhappy that the story they bought into is no longer the same? Small companies relying disproportionately on word of mouth and Bruichladdich has had some powerful mouths raving about its whisky. Only time will tell whether this is the beginning of a new chapter in Bruichladdich's success, with new capital helping to build the business, or a move that will destroy much of the goodwill that they have garnered, stymying grow. Or it could come out somewhere in the middle I don't know nearly enough about the business to make a solid prediction. Only you can decide how much the story matters.


  1. Nice commentary. I think it would be foolish to assume that Bruichladdich won't continue to do well and grow. They may lose a few whisky nerds along the way, but actually I'm fine as long as they A) continue to release "craft" whisky (rather than "branded") and B) stay active in the community and don't fire a bunch of "unnecessary" employees.

  2. Excellent post. Can't say that I'm a 'Laddie fanatic (yet), so I don't have a horse in this race either. I was rooting for them as an indie because I enjoy seeing small businesses thrive. The products, the employees, and the locale seem(ed) so closely intertwined.

    SKU phrased it well in a tweet, saying that Bruichladdich may seem like the indie bad that complains about being oppressed by The Man, then signs with a major label. Made me think of Rage Against the Machine signing with Sony.

    To the point, what fascinates me is what story will the Remy marketing department tell now? Under their ownership, what is the Bruichladdich brand? And, of course, will they make good whisky that I can afford?

    1. Yeah, I thought Sku's point was pretty spot-on. It may be the way the world works, but that doesn't mean that everyone has to forget the previous position.

      And yes, that's the big question in my mind. There's no way they can tell the same story and it's going to take some creative minds to spin it in an effective fashion. But making good whisky at good prices is ultimately the most important thing to me. A good story is nice, but not necessary.

  3. You should grab a bottle of the Laddie 10. One of my current favorites! If the whisky changes under Remy, it'll be years before the market notices.

    1. 'Laddie 10 and Rocks are both on my 'to buy' list. Might as well give them a try now and see what all the fuss was about.

  4. Wow! Super interesting, Jordy. Now I want to try it and see what all the fuss is about, too! Thanks for pointing me toward this post :-)

    1. Thanks, Athena. If I pick up a bottle, I'll be happy to share.