Glenmorangie reveals investments worth 'tens of millions of pounds' per year

THE Glenmorangie Company has recorded its best-ever sales performance as it revealed plans to invest “tens of millions of pounds" per year to ensure it meets demand from whisky drinkers in the decades to come.

The Scotch whisky giant, which owns and makes the Glenmorangie and Ardbeg single malts, said its recovery from the pandemic is gathering pace, with its expansion in the online and direct-to-consumer markets helping it to overcome the downturn in the hospitality and travel retail sectors over the last 22 months.

And the company, which is part of the Paris-based LVMH luxury goods empire, is taking steps to ensure it can meet anticipated demand in the years ahead by making multi-million-pound investments in its production facilities around Scotland.

The investment follows what Thomas Moradpour, president and chief executive of The Glenmorangie Company, said had been a hugely successful year for the distiller.

Mr Moradpour told The Herald: “We just concluded our best year in recorded history in terms of sales... we have been doing great. The market for well-made and high-end, delicious products like Scotch single malt is very positive. And it has been positive through the crisis.

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“We have invested enough in our brands to gain share, to have momentum in the right markets and in the right market segments. So I think we are in good shape to continue our journey upward in 2022 and going forward.”

He added: “[For] 2022, we have for the short term a bullish plan. For both brands we expect to beat our record high that we established last year, and we continue to invest for the growth of our brands for the long term, through very strong investment plans in the tens of millions of pounds per year.”

Mr Moradpour said a new, high-speed bottling line is being installed at its facility at the Alba Campus in Livingston, which will double existing capacity, while near the Glenmorangie distillery in Tain it is planning to build 16 large warehouses to house whisky at a new site over the next eight years.

The plans follow a recent investment in a new still house at Ardbeg on Islay, which has doubled the distilling capacity at the distillery. Both the Ardbeg and Glenmorangie are now operating at full capacity.

The Ardbeg Distillery on Islay

“We are very optimistic… and putting our money where our mouth is, because we think in 10 years our successors will need far more whisky, and far more capacity, to sell even more [than today],” Mr Moradpour said.

Mr Moradpour highlighted “sustained” growth in mature whisky markets such as the US, Germany and UK, increasing demand in fast-growing areas like Japan and China, and a rise of consumer interest across geographies in “higher-end” whiskies among affluent buyers, who are keen to purchase rarer single malts.

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While he expressed his faith that the on-trade and travel retail markets will recover, and that Glenmorangie was committed to supporting customers in those channels, he said that in the last two years “off premise” and online sales have thrived as people shifted to entertaining at home.

Many whisky drinkers have used cash saved from being unable to socialise in bars and restaurants during periods of lockdown and restrictions by spending more on malts to consume at home.

Meanwhile, Mr Moradpour outlined the rationale behind The Lighthouse, its new distillery at Glenmorangie in Tain which has been designed to allow the team, led by the renowned Dr Bill Lumsden, head of whisky creation, to experiment with different distilling and wood management techniques.

Thomas Moradpour, president and chief executive, The Glenmorangie Company

Mr Moradpour said The Lighthouse has provided Dr Lumsden with a “real playground to imagine what Glenmorangie and what single malt could be in the future.”

But he added: “It takes a long time. It is a business where you have to plan ahead. Glenmorangie Original takes 10 years to mature.”

He noted that a key advantage of The Lighthouse is that it gives distillers the opportunity to experiment with new-make spirit. Much of the experimentation at present is focused on how mature spirit, stemming from the same new-make, responds to ageing and wood management. The Lighthouse will be able to produce new-make spirit of varying characteristics by taking different raw materials and fermenting it in different ways, “with more control over the duration and temperature” of the process.

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Mr Moradpour added: “We also have great opportunities to change the distillation itself through control of reflux, copper contact and the theoretical height of the still.

“We have the tallest stills in Scotland. The stills at The Lighthouse could be even higher because they have included a cooling jacket on the neck of the still… which can simulate what the still would be even if it was twice as high.

“All of this will impact the character of the spirit that comes out of The Lighthouse and will give Bill the opportunity to be even more creative for products that will come out in, say, five, 10, 15 years.”

In the meantime, Glenmorangie, like other Scotch whisky distillers, is having to contend with the impact of global supply chain disruption, citing longer lead-times for accessing dry goods and distribution challenges because of a shortage of delivery drivers.

Mr Moradpour noted that the issues were also affecting its peers and “we are doing our best to mitigate” them.