Brugal majority share sold to Edrington

[Edward Hamilton]

£200m rum deal takes Edrington into new market
Source: The Scotsman
Feb 7th

FAMOUS Grouse whisky owner Edrington has made a foray into the rum market through the takeover of the Dominican Republic's leading brand, in a deal believed to be worth more than £200 million.

The privately owned firm has snapped up an 83 per cent majority stake in the family-run Brugal Company.

The brand, the Dominican Republic's best-selling rum with a market share of around 80 per cent, is Edrington's first foray into drinks other than whisky since it laid out plans for expansion in its annual report two years ago.

It is looking to boost Brugal's presence internationally, including potentially introducing it into the UK. The brand is already on sale in a number of European markets, including Spain and Italy.

Ian Curle , Edrington's chief executive, said the acquisition was the second largest carried out by his company, following its £601m buyout of Highland Distillers in 1999.

He said: "Rum is one of the most exciting drinks within the spirits industry and has very high growth potential. It fits very well with our existing Scotch whisky brands.

"We now want to look at the best way to grow the brand. There are no other major acquisitions in the pipeline, although we will keep our eyes open for opportunities."

Brugal, which employs more than 1,000 people and had sales of about $120m (£61m) last year, will continue to produce its rum in the Dominican Republic under the supervision of the Brugal family - a tradition that dates back to 1888.

The rum has export sales of around one million cases a year and is the fastest-growing rum brand in Europe, having expanded by more than 70 per cent from 2002-6.

Curle added: "Edrington will look to build upon the brand's strong growth in markets such as Spain, the US, Russia and Italy.

"In addition, Edrington will be reviewing further opportunities in markets in which the brand has not yet established a strong footprint."
The product is to be distributed through Edrington's Maxxium Worldwide partnership, which it set up with joint venture partners Beam Global Spirits & Wine, Remy Cointreau and Vin & Sprit.

George Arzeno Brugal, president of Brugal, added: "This new alliance, combining the heritage and skills of Brugal Company in the premium rum sector with the international premium brand marketing and distribution strength of Edrington, will bring significant benefits to the brand and to both partners."

The deal is being financed by a group of UK banks, led by Lloyds TSB Scotland, which has put up 40 per cent of the financing package.

Edrington, which can trace its roots back to the 1850s and also boasts whisky brands Highland Park and the Macallan among its products, is controlled by a charitable body, the Robertson Trust. The company, which had sales of £278m and pre-tax profit of £68.9m in the year to the end of March 2007, employs around 800 people at five distilleries and six other sites across Scotland.

[Paulipbartender]

I like the Edrington crew - good luck to them.

We worked with Edrington about 5 years ago in what could have been IPBartenders most dangerous assigment. Our London based English bartenders were employed to go to Scotland and train every member of the Edrington staff - from the grizzled warehouse team to the admin staff - how to taste, mix and serve (their own) whiskies.

Anyone who knows the natural suspicion (hatred) the Scots have for the English, and their pride in and love for their own whiskies, made it akin to plunging into a tank to teach sharks how to bite.

They only balked when we demonstrated rubbing strawberries round the rim of whisky tasting glasses to soften the sometimes oft putting aroma of full flavoured whisky. A technique that really works well for novice drinkers - it means they can taste without powerful aromas - but not on the Scottish Highlands supposedly!

We survived, so happy days

[Edward Hamilton]

That sounds like a dangerous assignment indeed. Does the person responsible for that outrageous assault to their pride still work at Edrington? I'm sure everyone is still talking about it, and by the end of the conversation, they admit that they learned something, even if they don't mention that the Englishmen came to show them how to drink their whisky. That was a bold move on their part but I'm sure everyone learned a lot and they are better for the experience of seeing how others see and drink the spirit that runs through their veins.

There are more than a few cases where a producer just doesn't see how their product fits, or doesn't fit into the export market they are trying to build. It's hard to swallow the fact that this or that product works in one market but doesn't work at all in another, sometimes simply because something on the label is laughable in another market. When Kentucky Fried Chicken went to Taiwan they were almost laughed off the island. "Finger lickin' good" was translated to "Eat your fingers, they're good." Not exactly what the Colonel was trying to say.

Fifteen years ago I discovered thousands of barrels of aged rum, the result of a government owned distillery producing rum that no one on the island wanted to drink because they drank overproof white rum and not dark spirits. No one ever thought they could actually export it, but because it was a government owned distillery, the costs associated with all that aged rum didn't matter. They weren't paying for it, the government was.

[Tiare]

They only balked when we demonstrated rubbing strawberries round the rim of whisky tasting glasses to soften the sometimes oft putting aroma of full flavoured whisky.

Wouldn`t this strawberry rubbing also make a quite refined cocktail?

[Paulipbartender]

Try it for yourself.

An often overlooked factor in todays 'mixology' liquid led market is that 80% of what is thought of as taste is actually smell (overall taste is 80% smell, 10% taste and 10% visual appeal and expectations). You can only taste 4 basic components of flavour on the tongue - bitter, salt, sweet, sour (and a 5th, umami that deals with mono-sodium glutamate). The mint in a mojito for example - the tongue cannot taste mint but you can smell it with the 5-6million olfactory receptors in your nose. The garnish is a key ingredient necessary for the aroma.

Playing with aromas with cocktails is a fascinating area very relevant with whisky. The reason Edrington employed us is because they found that 80%+ of their staff didn't actually like whisky, particularly the women, when they wanted them to be passionate advocates. Softening the heavy aromas as you approach the glass with a rim of fresh strawberries allowed more people to appreciate the flavours.

Ben Reed, my business partner, teaches a fascinating advanced mixology course that covers how to use aromas in cocktails

However, I dare anyone to walk into a Glasgow boozer and ask for a single malt with a strawberry rim :D

[Tiare]

And hence the mint in the Mai Tai...

I completely agree with you that the aromas is important as is the visual appeal..when i worked as chef i always payed great attention to the visual appeal..and the aromas of course!:D

I`ll try this with the strawberry..no doubt, i love those things...;)

" Ben Reed, my business partner, teaches a fascinating advanced mixology course that covers how to use aromas in cocktails"

Sounds VERY interesting!