Ask William Grant & Sons CEO Søren Hagh about the great growth opportunities for Scotch whisky, and his eyes light up. Even against the backdrop of a tough trading climate for spirits in key regions, he remains bullish about some fast-emerging target territories and one category in particular.
“We really believe that single malts are in for a renaissance and we want to be the lighthouse of that movement with our brands.
“We want the whole category to be successful, but we think we are the right company to take a lead in creating the next big wave for single malt whisky.”
He makes that bullish claim against the backdrop of vast consumer potential in some of the world’s biggest drinks markets.
Hagh says: “India is very exciting. We see the strength and purchasing power of the emerging middle class in what is a predominantly whisky market. If you provide a relevant proposition to this emerging consumer group, who will pay a little more to get a little more, you can win. And we have brands that appeal to this consumer group.”
He adds: “The platform is there in China too. There’s already a strong appeal in the category among younger adult consumers. Now it’s about building the brands to enable that wave to grow.
“In the USA there is a big opportunity but we have simply not been good enough in grabbing those younger adult consumers. They reach for other categories today but once they try our brands we know we can interest and recruit them. It’s our job to make that introduction, and to do it at the appropriate price. People will pay a little more but money is tight and you have got to be really careful that you provide the right perception of value.”
Addressing what value means today, Hagh leans back on his days in the beauty sector, leading L’Oréal brand Lancôme in the European market before he moved onto senior roles at Heineken, followed by William Grant & Sons since early 2024.
“We are in the business of providing everyday luxury. In beauty we had what we called ‘the lipstick effect’, which is now more a ‘fragrance effect’. People will buy a fragrance rather than an expensive handbag from the same brand. For many, £50-60 for a bottle of good single malt is a lot of money, but in the grand scheme of things, it’s also what you pay for a night out. We need to present this in the right way.”
In communicating to the consumer audience about the company’s brands, travel retail has a critical role.
Hagh says: “Travel retail is a wonderful channel, one that has always been very important for our company, but it is becoming significantly more important at the moment. We are in the business of building outstanding brands, and you don’t do that without creating great experiences.
“The kinds of experiences you can create in airports and similar outlets are unique. That is both the experience you have at the back wall, and then there is activation on a grander scale, for example the Glenfiddich x Aston Martin Formula 1 campaign at Singapore Changi Airport. That creates a different relationship with our brand and with Aston Martin.
“We love digital, it’s extremely important, but let’s not under-estimate physical experience and the feeling that creates. And airports offer an opportunity for that.
“On top of that, travel retail is a business and an important one. That is why we are over-investing in this area. We are putting some of our best talent into this channel. We are investing in merchandising capabilities, in category management and in consumer insights to work with our partners in this channel to unlock more opportunities.”
Hagh also believes fervently in the power of differentiation in the sector.
“The channel should showcase exclusive products without question. But exclusives cannot just be created for their own sake. Do you also have such an outstanding liquid that you can wow the consumer?
“We are about to relaunch the entire range of Glenfiddich in travel retail. We are doing that because we have great liquids today and we can add even more value to the consumer. We’d like consumers to discover these remarkable expressions crafted just for the channel, delivering a taste of something unique.”
Travel retail can also be an excellent recruitment tool for new consumers in drinks, just as it is in beauty and other categories.
Hagh says: “Gen Z looks at brands in a completely different way. They are not impressed by big companies telling them about their beautiful brands. They are inherently sceptical. They rely much more on advice from their peers.
“The media consumption of younger adult consumers is different. They live their lives online. If you want to engage with them you have to go where they are. If a brand is not taking a social media first approach, it has lost. But those same consumers also want experiences. And that’s where we come back to engagement, such as our activation at Changi, where you can discover products, you can learn about whisky, about Formula 1, and your time there can be made valuable.
“That also means making the right connection between on and offline worlds. We have to be at the cutting edge of connecting with that younger adult consumer wherever they are. Online matters of course but there is nothing like getting a taste of the product, and that’s where airports play an absolutely critical role. If we can engage the consumer there, we are doing something very important. Recruitment is critical and we think airports play a big role in that.”
He adds: “It’s about resonating through story-telling. Simply putting a product in front of these emerging consumers and saying it’s a 12 Year Old, it’s nice, well, so what? What is the story behind it? Celebrity influence is one way, sport is another, but you have to tell stories that resonate in a fast-moving world.
“You have got to find the right partnership for the right brand. For us, Formula 1 is relevant. You have two iconic British brands, Aston Martin and Glenfiddich. We found a sort of kindred spirit in their approach. They wanted to engage differently with consumers, as do we, and we are bringing something new to the channel. We can do much more together.”
We also discuss the health of the company in a competitive global market and how William Grant & Sons is balancing its strong Scotch focus with other categories today.
“Of course in some parts of the world, the industry is going through a rough patch. Historically that is always how it was. But every time you go through a rough period, new opportunities and new winners emerge.”
Hagh adds that diversification remains a central part of the company philosophy.
“We are not a company that’s going to put every bet on black and pray for the best. In an uncertain world, having a balanced portfolio in terms of categories, brands, geographies and channels makes sense.”
William Grant & Sons is a family company that has seen many highs and lows, and Hagh repeats the mantra that the long-term view is what matters most.
“We are owned by a visionary family that has always believed that best is yet to come. And that’s why the willingness to lay down stock in good and bad times is where the beauty of a family company comes in. They make decisions for generations.”
In closing, we ask what a good partnership looks like today, especially in the travel retail sector.
Hagh says: “We become so overwhelmed with messages every day that unless what you experience is truly outstanding, you don’t really notice them. It takes a partnership to make a seven out of ten into a ten out of ten experience.
“A good partnership is one that is also honest. We make mistakes, everybody makes mistakes. A good partner is one who tells you when you make mistakes, then you learn from them and you move on. We are big believers in honest dialogue.
“We are lucky to have incredibly competent partners and we are very happy with those partnerships. Together we can better use data and insights to create experiences that surprise consumers.”
He concludes: “We are extremely bullish about this channel. We want to be the very best partner for airports and airport retailers around the world. And if we want to do that, they should expect us to lean forward and invest. We believe we are just at the beginning of unlocking the great growth that is out there. We want to work with our partners to create the next wave together.” ✈
