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Independent Bottlers Roundtable
In our continuing series of whisky roundtable interviews, we pulled together five independent bottlers at WhiskyFest New York. Independent bottlers: a breed apart, and a business cloaked in a certain amount of mystery. We did what we could to pierce the veil and find out where the whisky comes from.
Andrew Gray: sales director, representing Murray McDavid and Jim McEwan’s Celtic Heartlands, both owned by Bruichladdich
John McDougall: bottling Bladnoch, and in partnership with Jay McDuff with the Golden Cask range
Michael Urquhart: representing Gordon & MacPhail, 3rd generation, been bottling single malts longer than some of the distillers
Brett Pontoni: Binny’s, representing Cask & Thistle
Lorne Mackillop: representing Mackillop’s Choice, also has a brand called Montgomery’s
John Hansell and Lew Bryson, Malt Advocate
Malt Advocate: Why an independent bottler roundtable? There’s so much ignorance about independent bottlers. Who are they, what does “independent bottler” mean, how did the products evolve, all that sort of thing. The novices need to understand more of what’s going on. For the more experienced whisky drinker, they may think of independent bottlers as second-class, inferior, because it’s not an official distillery bottling, so maybe we can dispel that myth.
Michael Urquhart: We appreciate that. It’s great to get the opportunity to dispel some of the myths.
Malt Advocate: We did want to define, for the purposes of this interview, what an independent bottler is, and it’s not a clear-cut thing. I have two mental categories. One I call ‘branded whiskies,’ something that wouldn’t identify the distillery the whisky came from. But there are other bottlings that actually identify a distillery name on the label. That’s our focus today.
Many whisky enthusiasts (especially those just getting into whisky) are confused by the independent bottling concept and don’t understand how it works. How do you source whiskies? Where do the casks come from? [Bottlers draw back from the table, start darting glances at each other.] Not specifically, but generally? How does an independent bottler do what they do?
Andrew Gray: I would say that with us, we have our sources, but we’d always like to—if we could—develop additional sources. The problem we have is getting enough stock. The stock we have, we sell through pretty quickly. Needless to say, we’re always on the lookout for more sources, more contacts. There are some distilleries that have agreed to supply us direct, but a lot of it is through brokers. There are a lot of distillers who take a distinctly negative view; they see us as parasites, and passing off if we were to bottle their brand. Because we’re declaring where that malt came from, and they see that as their brand. They’d rather that we didn’t bottle their malt. It is a problem, but it is something we are spending a lot of time on.
Malt Advocate: Sourcing whisky is a problem?
Andrew: It is. We’re getting more sources gradually, but I’m sure that everyone around this table couldn’t say that they have a perfect range of sources or a perfect stocklist. It’s something everyone’s always trying to improve.
Malt Advocate: Let me ask a question. Of all of you that are here, how many of you are getting whisky directly from a distillery which you don’t own, and not through brokers?
John McDougall: I do.
Lorne Mackillop: Typically, but on odd occasions.
John: My situation is probably different from Michael’s and Lorne’s, because this is fairly recent for me. I’m sourcing whisky directly from Raymond Armstrong at Bladnoch distillery, who has given me a glorious opportunity to market Bladnoch, which is the official Bladnoch in the USA, under my label. So I’m very fortunate in that respect.
Michael Urquhart: We’re a lot different from the other independent bottlers, because we’ve been doing it for a lot longer. The majority of the independent bottlers came in the early 1980s, late 1970s. Whereas, when we were first established back in 1895, the two original partners, James Gordon and Alexander MacPhail, were involved in the whisky industry at that stage, principally James Gordon. He’d built up a lot of contacts with the distillers in the Speyside region in his previous job. We were filling whiskies from the majority of the distilleries, and of course, at that time, the majority of whisky would have gone for blending. So they were quite happy to sell that extra bit of whisky, and they were quite happy for us to bottle it as single malts. But principally, we’d have been using a distillery label.
If you fast-forward a wee bit, to the late 1950s, my father, who started in 1933, started the original generic range, Connoisseur’s Choice. This was to go and show some of the whiskies that would not otherwise be seen, some of the lesser-known names: Benrinnes, for example. That range we gradually built up, and we developed a label as we went through. Although we had one or two blinds, we were principally involved in going and buying new spirit from most of the distilleries, laying it down, and bottling it when we thought it was ready.
Malt Advocate: But the stuff you’re sourcing now, are you still buying that from the distilleries?
Michael: Yes. We’re buying new spirit. We’re filling it into casks of our selection. We’re looking to when we think we’ll go and bottle it. Then we’ll match off the cask type, the type of spirit, whether it’s a light, medium, or heavy spirit, to when we’re going to bottle it, and hopefully we get the balance right. That’s where we’re a bit different from the other independent bottlers. We’re not necessarily having to go into the market, to go and pick up through the brokers. You’ll get shortages in your portfolios and have to go out, but the amount that we’ve had to go buy in the mature market is very small in proportion to the total.
Malt Advocate: Let’s talk about that. You’re looking at either getting them directly from the distillery—which seems to be the minority. The majority of independently bottled whisky seems to be purchased from brokers. Is that right?
John: But Michael’s talking from a situation where he’s running the largest independent bottling company.
Michael: [quietly, with a smile] Thank you, John.
John: And I mean that! I’m running the smallest independent…something, because it’s not a company, it’s just John McDougall. But it’s the smallest. We only do 7,500 bottles in a year, right across the board.
Picking up Michael’s point, it is difficult from time to time to source good casks, but being the smallest, I think it’s actually easier. Because I only bottle 25 casks a year.
Malt Advocate: Okay, if you’re sourcing it from the distillery, that’s pretty straightforward. They’re going to let you have some samples, they let you have the one you want, and you’ve got an agreement with them. Let’s get back to the broker thing, because I believe a lot of our readers don’t understand what the whole broker thing is. Who are these brokers and what are they doing? How does that happen?
John: Well, that’s the key.
Malt Advocate: Are these brokers who would normally be dealing with blends, buying casks from the distilleries, selling the casks to blenders, and you’re intercepting that process and tapping off some casks on your own?
Michael: The number of brokers around today is limited. If you look back at, say, the 1970s, there were quite a few of them.
Malt Advocate: “Limited.” Relatively speaking, how many is that today? 20? 12? 5?
John: Well, not 20!
Andrew: No, one or two.
Malt Advocate: So all of you are sourcing from one or two brokers?
John: It’s not just brokers, though, John. There are other people who have access to casks, or they know where casks are, perhaps casks that were sold to private individuals, etc. It’s known as “having the network.”
Andrew: I agree.
Malt Advocate: So would it be fair to say that there are a couple of major brokers, who…
John: Maybe three or four.
Andrew: Maybe not as much as that. I also think that there are some distilleries who are willing to sell, but who want to do it at arm’s length. They know that it’s going to be sold to an independent bottler, but for whatever reasons, they don’t want to sell it direct.
Malt Advocate: So they’ll set up a sale with a middleman? A broker?
Andrew: Correct.
John: There are makers who do, if you can get it.
Michael: If you look back in time, the broker was acting as a middleman when the distillery would have too much stock of a particular year. And here talking principally about stock being ready for blending. So they’ll say, well, we’ve got enough of this year, and too much of the next year, let’s turn that into cash. How do you do that? In comes the broker in between. Again, this goes back to the blending: if you’ve got a recipe that’s got 40 different single malts, the broker acts as a middleman for A selling to B, and he takes it and then sells it out to B, C, and E.
Malt Advocate: Are these brokers intentionally trying to be incognito, out of the limelight? Who are these brokers?
John: Oh, no! They’re right up front!
Malt Advocate: Is there one main broker? Who are the top two, the top three? Can you tell us who they are?
John: It’s difficult to say, it’s difficult to say. One or two’s my guess.
Malt Advocate: So there’s just a couple and everyone’s open about this. Who are they?
Andrew: I don’t think we particularly want to reveal who—
John: No.
Malt Advocate: So you’re not answering my question?
John: We’re not going to answer that question.
Malt Advocate: Okay, that’s the answer.
John: That’s the answer, we’re not going to answer it. We have our sources.
Malt Advocate: Okay. That’s good, that’s what we needed to hear.
Brett: That goes for me, too. I use a company. I’m not nearly as well-connected as you guys are, I’m not in Scotland. I just wanted a label we could carry on our own, and that clarifies things. So I have a guy that sends me distillery-labeled samples that I have a chance to try, and if there’s something particularly good, unique from a retail perspective, that has a fighting chance of doing well, that’s what I buy, and design the label and design everything off of that.
I haven’t said anything up till now because to me, this is fascinating.
John: How about you, Lorne, you’re not saying much.
Lorne: Yes, I’ve adopted the confusion principle about keeping my mouth shut—
[laughter]
John: No, no, open your mouth!
Lorne: I will, indeed. I have no problem in sourcing a cask of whisky. I get offered much more than I need. I actually have a tasting program. My original training was as a master of wine, so I came to it from the wine trade, not the whisky trade. I’ve lived and been trained on taste and smell over many years. I use that training to taste samples in a wine way. I look for certain things and approach it from a wine point of view. I turn down 80% of the samples I look at as not good enough for Mackillop’s Choice; I have that luxury, I can do that. I pay £10 for each little thing sent to my office; that’s about $18 in your real money.
Malt Advocate: So you actually pay for the samples?
John: You bet! This is good stuff.
Lorne: Sometimes. Not always, but sometimes.
Brett: What is the rejection—you said you reject 80%, how many do you get in a year?
John: I get 300 samples every year, average. If I had more money—which I don’t want to spend anyway—but if I had more money, I might bottle more. But I only bottle 25 casks out of 300 offers. So that’s a fairly high rejection rate.
Malt Advocate: It’s funny. It’s almost as if someone says “We don’t want those,” then they send 290 samples to you then, and then on to the next one…
John: I don’t get that. We all have different sources, you see.
Malt Advocate: But there are only one or two brokers.
John: Ah, but hang on. We were talking about networks a minute ago, and we all have networks. I can zero in through networks to a family somebody knows who invested in whisky, or bought whisky ten or fifteen years ago. So that way you bring out that. At my level you can do that. Maybe not at Michael’s level, because he’s far bigger.
Lorne: Certainly you get distillery’s samples; you might get X Distillery’s March, 1971, Cask #1001, 1002's missing, then you get 1003, so you know that someone’s been picking at this parcel. As I don’t buy any cask without tasting a sample, it doesn’t really worry me too much. If I’m still interested in the parcel, I’ll still taste it, I’ll still pay £10 to accept or reject it anyway.
Malt Advocate: Where are the casks of the brokers being stored?
Lorne: Anywhere in Scotland.
Malt Advocate: Could you be more specific?
Lorne: Ah, anywhere in a warehouse in Scotland.
[laughter]
Malt Advocate: Do the brokers actually have their own warehouses?
Michael: Not necessarily. It will be in the distiller’s warehouses.
John: Most likely.
Malt Advocate: So it’s actually still being stored in the distiller’s warehouses?
Malt Advocate: With a note on it, “This belongs to…”
John: That’s right, belongs to him, or to me.
Brett: Where does the broker purchase take place? Is this something they have on the side, is it sporadic, or is it steady, that Broker X goes to…Macallan, or whoever, and says, okay, this year I want to buy ten casks. And then he buys it and lets it sit, and then he goes out and starts selling. Is that how it works?
John: Not necessarily.
Michael: I think you’d have to ask a broker that. We’re not trying to dodge the question. We don’t know exactly how the sale of a particular brand will work. It kind of harks back to the original way the broker worked, in the 1960s and prior, there’ll no doubt be still an element of that. At the end of the day, when the distillery goes and makes the new spirit, how do they know how much whisky, or spirit they’re going to need in X years time to go and satisfy their particular brand, be it a blend or a single malt?
John: They don’t know.
Michael: They don’t, no one knows. If anyone’s got that crystal ball, could I borrow it please? I’d like to check the lottery numbers. That is a problem. It’s not got a finite or definitive answer to it, because there is so much that can come through. Trends change. Thirty years ago, you couldn’t give Islay whisky away.
John: That’s right, I’m glad to hear you say that.
Michael: Now you can’t get enough of it. It’s become a cult whisky.
John: I’ve been in this business for nearly 44 years; quite a long time for a single individual to be in it. I know I don’t look my age.
Michael: Yes, I thought you were only 27.
John: Having said that, I’ve seen three great downturns in 44 years, three massive downturns. Michael touched the point, just now, that you could hardly have given Islay whisky away. I went to Laphroaig as manager there in 1970, and Islay whiskies were not at all popular, at that stage, in the world market. Other whiskies have gone through the same problem. The distillers will never, ever, I don’t think, cut off the supplies totally, going out, because at the end of the day, when a downturn comes, they need cash. They always sold out, and they needed cash. And people like Michael, Andrew, and myself, if we have cash, we’ll buy it at that point.
Malt Advocate: So the distillers are aware of the brokers, and they know that the brokers have casks at their warehouses?
John: I think the independent bottlers do perform a service. I seriously believe that. We are actually promoting their products. We’re not talking them down. Why would we talk them down? We’re trying to sell their whisky!
Andrew: It’s not so much the brokers have casks that they own, a large portfolio of casks that they own, in distiller’s warehouses. They have clients, who will buy. The casks are still owned by the distillers themselves, But, as John is saying, when a distiller wants to unload some stock, he will go to a broker, knowing that the broker has clients and can probably sell these casks to them.
Malt Advocate: But then why did Murray McDavid get sued by Allied and have to change the name on the bottle from Laphroaig to Leapfrog if Allied knew they were providing the whisky to brokers to begin with?
Andrew: Because of what I said at the start. There are some distilleries who react very negatively to this. They see us as parasites, passing off their brand. Allied Domecq happens to be one of those companies, but J&G Grant is another one, with Glenfarclas. They reacted very strongly.
Malt Advocate: But then how are they knowingly selling to brokers?
Andrew: These companies are not necessarily selling their brands, but other distillers are. I think a number of distillers have reduced significantly the number of malts that they are putting into their blends (and therefore cutting the supply to the brokers). They may have had 40 different malts, or 50, or 60, whatever, but they don’t now.
Malt Advocate: Really? Has it gone down a lot? That’s something that’s unknown. Is that a fair statement?
John: It has.
Andrew: The major distillers had shed a few in the late 70s, early 80s, hence you had a lot of distilleries closing, about 1982, 83. Obviously the bean-counters were looking to make efficiencies. Everyone had to go look at costs. And a lot of it, you get recessions, and people go and cut the cloth they have to make it fit. Some of these companies are plcs, they’ve got to satisfy their shareholders. The financial aspect comes out. It would be nice if it was all romanticism and there was plenty of money just rolling in, but alas, life’s not like that, you have to make a profit. When they went and cast their slide-rules over the distilleries, I’m sure a lot of what was happening at that time was, “How can we be self-sufficient, from within our own group?” Then you get your distilleries working efficiently, you get a good cost base coming through, and they can then go out and sell.
Lorne: The problem there, of course, is that so many distilleries start changing hands, you have to keep changing your blends, because obviously as you sell it and buy it, you have to make it for yourself.
Michael: Or you have some deal that goes on where you’ll take so much of their output.
John: It may be rather easier for a very small guy, like me, because I’m looking at a very few bottles a year. I can be more selective because of that.
Michael: That’s where we’ve got this luxury, the fact that we fill the spirit from new, we fill the casks. We’ve got the casks we like to match off with the profile of when we think we’ll bottle it. The one challenge we have with that is getting the casks in. We’re also a wine merchant, back in the UK, we used to bottle sherries, ports, brandies, and we could get good quality casks. But with the sherry industry in decline, the number of sherry casks just aren’t there.
We have a program where we go and buy new casks, in Spain, made to our specification. We leave them out to a bodega, where sherry matures in them for three or four years, then take them back to Scotland and put them into our aging program. That’s how we ensure we’ve got good quality wood coming through.
At the end of the day you’re talking about getting the balance right. You want the quality of the spirit to come through, and you want the character of the cask coming through; you don’t want to have one overpowering the other. That’s where knowing what sold in the past, how whiskies have matured in the past, we’ve got that benefit, of knowing those facts. That’s how we’ve met that challenge. Luckily we don’t have to go and pay too many £10 sample fees.
Malt Advocate: You’re in a very fortunate situation.
Michael: Very much so.
Lorne: I’d actually disagree with that, because in fact if you’re filling new spirit into barrels, you’ve got to have a prediction on how that spirit’s going to turn out in 10, 20, 30 years’ time.
Michael: But that’s the benefit we’ve got.
Lorne: I’m looking at my rejection rate, and you can have ten barrels that laid side by side in the same warehouse, filled on the same day…
John: Exactly.
Lorne: …and you’ll find the good, the bad, and the ugly all in there. In fact, I’ll show you right now, if you want.
Malt Advocate: So what you’re saying is that you get to pick without filling the cask, building the warehouse…
Lorne: Right. I just take the cream off the top. That’s what I do. Here, I’ve got four samples of Caperdonich distilled in March, 1971. I’ve got them for a meeting I’m going to, you might as well see them. It will demonstrate my point precisely. Cask #417, 418, 419, and 420. All aged side-by-side for over 30 years in the same room, filled on the same day…and you can see that the colors are different.
You can smell them all. They all fail as Mackillop’s Choice, they’re not good enough. But you can see my point precisely: all casks are not the same, and that laying them down over a period of time…I would think, you’d be right to hazard that.
Michael: To be fair, Lorne, I think you’ve got to be sure you get good, quality casks, and if you’re selecting the wood, then you’ve got a good chance. You’re not selecting that wood. The other thing is that each cask will have its own profile on how it matures; some will be quicker than others. If you look at our Connoisseur’s Choice selection, for example, you might have like a vintage 1980, That’s not to say you then go to the 1981 and say, Well, that’s not matured. If it still needs more time in the cask to mature, maybe ten years. Each cask needs its own speed to mature. That’s where I disagree with what you say, because we have the luxury of following each year. Then we can go and look at them and see how they’re maturing: that one’s ready, that one needs more time.
Lorne: But you’re still running a bit of a lottery, because as these four samples will show, you could have four in a row that are not good whiskies.
Michael: But you’re not selecting the cask it goes into, and the taste from the cask will be at least 50% of the taste coming through.
Lorne: I grant you that. But I like to think Caperdonich would take the time to check its casks, and to buy good casks. And most distilleries, I think, do have a good wood policy, must have a good wood policy.
Malt Advocate: Lorne has a good point. When Jim McEwan was back with Bowmore, we went through the same thing: 12 year old Bowmore casks, same distillation run, same types of casks, everything done identical, sitting right next to each other in the warehouse, and we went through six different samples. They were all completely different, some good, some not good at all.
Lorne: I think that’s pretty literal on my point.
Michael: But at the end of the day, what we do is, we look at the samples, and if we don’t think they’re up to standards, we don’t bottle. That’s the important thing. What you’re looking to do is get a nice balance of the spirit character, and the character of the cask. It’s something that, hopefully, the consumer will enjoy. That’s something that was normally kind of touched on, the consumer.
Malt Advocate: We’ll get to that. But Lorne’s point, which is a good one, is that if you find a cask that’s not a good one—Lorne can just reject it. Whereas yours is in your warehouse, you have to deal with it somehow. You own the cask.
Andrew: But as Michael was saying, he can hold it back, he can rejuvenate it by re-casking it, he can do a number of things.
Lorne: Even more so, you get casks where you say ‘Pass,’ and then once in a while, every two, three months, you’ll get one cask that’s like the sun coming out from behind a cloud. You almost want to go on your knees.
John: At this time last year, I’d spent a lot of money—for me—getting money into market for Christmas, when I got offered two magnificent casks, absolutely magnificent casks. And I had no money. And you say like the sun coming out, you want to go on your knees. I went on my knees and borrowed the money from my wife. This is what you do.
Lorne: A very rash thing to do!
John: It’s what you do! And she said she’s still waiting on her return on the casks. But they were magnificent, absolutely superb casks. It’s just wonderful when it happens.
Lorne: When that happens, it is quite extraordinary.
Malt Advocate: You talked about it being difficult to source casks. What it’s coming to, is that the companies are becoming larger and fewer, and they can do their blends internally. We have talked about them using fewer malts in the blends, and trying to use their own malts, with less of a need to deal through brokers. If so, does owning a distillery give you some clout to be able to negotiate?
Michael: We can call ourselves distillers.
Malt Advocate: Does that help you source casks?
Michael: No, not really.
Andrew: Marginally. For instance, if we were supplying Bruichladdich to other companies for blending purposes, that may generate interest with those companies to supply us with a range of malts, but we’re not. We know everyone there is, Jim McEwan has excellent relationships with many companies in the industry. Some companies are willing to supply, and some are not, regardless of how strong their relationship with Jim is.
Michael: We’re just producing small quantities, principally for our own single malts, building up our particular brand, and then using the blends as well. We’re not out to produce huge quantities; we’re only producing about 150,000 liters a year. It’s really kind of small, hand-crafted production, whereas if you were producing hundreds of thousands of liters, you’ve got to find an outlet for it, you’ve got to find a blend or whatever, all doing reciprocals. We don’t have that problem. Again this is a luxury we have from being in the business for so long; we have good relationships with the distillers, so that they know roughly what we’re going to be filling. We just give them an order, and they’re happy to go and supply it.
Lorne: Throughout the spectrum, distillers are producing the clear liquid coming off the still that is not legally Scotch whisky yet, and we’re looking 20 or 30 years down the line at a brown liquid that is now in barrels, that is now mature. We’re looking at two different ends of the spectrum completely.
Michael: Lorne’s right. It’s almost like you can come up with some terms which are quite global, in a sense. But if you break them down, there’s a lot there. And you will come out with two different paths to come back to that one generic term.
John: In my own small way, I buy casks that are maybe four, five years old, because I think they’re going to be good. I’ll keep them, I’ll sit with them, till they’re ten, twelve years old.
Malt Advocate: You say you’ll keep them, but they’re not actually moving.
John: They’re not moving, right. They belong to me, but they’re sitting in a distiller’s warehouse. This is investing for the future. I get 300 samples to look at for today, but I do also invest in the future. When I’ve got any money, I’ll buy casks, if I think they’re good, from good distilleries. But also from distilleries, as you said earlier, Michael, perhaps from distilleries that are not so well known, to give the consumer a chance to have other opportunities. I don’t have a load of money, I don’t have any money at all, actually. I have two investors: my wife is one, and my best friend of 44 years is another. They invest in me, and I buy casks. That’s the way it works.
You’ve got a very good point there, Lorne. New spirit is one animal, maturing spirit is another, and mature spirit is another.
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Other Interviews & Round Tables Classics:
Rye Roundtable |
Bourbon Roundtable
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