Simon Hunt says quality, international recognition, scarcity and authenticity are the features of a luxury spirit brand
Image: Amit Verma
William Grant & Sons, the world’s third-largest Scotch whisky maker, turns 130 this December. Its CEO Simon Hunt says the secret family recipe and attention to detail makes its signature brands like Glenfiddich single malt, Grant’s blended Scotch, The Balvenie single malt Scotch and Monkey Shoulder Blended Malt enjoy the status they have acquired today. Hunt, 46, has been with William Grant & Sons since 2007. He initially served as managing director, North America, before being promoted to chief commercial officer and then CEO in March 2016. During his recent visit to India, he spoke to Forbes India about the legacy of the brand, why innovation is key to the company and how it’s an entity with an eye on the future. Edited excerpts:Q. William Grant & Sons has a lineage of over a 100 years. How has it evolved and what has remained unchanged?
William Grant, the founder of our company, spent nearly 20 years working in a distillery before he set up his own in Scotland, with help from his family. Along with his sons and daughters, he built the Glenfiddich distillery and on Christmas day in 1887, they distilled the first drop of Glenfiddich. I am excited as it will be the 130th anniversary of the company this Christmas. Since its launch, the business has grown from strength to strength. William Grant set out to make the best dram (a small shot of Scotch); that underpins a lot of things that we do within the business. We are now five generations in [the business] and still privately held; we have a consistent history and an authentic story. We operate differently from many other companies—we take a long-term view because of the business we are in. In other words, a big part of our DNA comes from the fact that we plan way in advance. For instance, the Scotch whisky that we make now may be served only 40 years later.
I was in a meeting last week where we were discussing what people will be drinking in 2050, 2060 or even 2070 because accordingly, we will have to lay our drinks down today. So, if I look at the development of the company, it started with Scotch, went on to blended Scotch, then Grant’s and finally evolved into the single malt category. The success of the company is defined by its pioneering attitude. We are uniquely positioned as an independent, family-owned business that has global reach.
In the luxury market, we have seen quite a few significant changes in the last five years–today, the provenance, authenticity and quality of what people are buying into from a brand point of view is becoming incredibly important. Our products span a wide range and the unifying part is the quality of our liquids. That’s where the family ownership lies and we have a great story to tell about our brands.Q. Does a family-owned background help in building the legacy of a luxury brand? What are the advantages and challenges of such companies?
In the luxury business, craftsmanship is key. We, as a business, identify closely with that. Some [members] of our team have been working with us for about 50 years now. When we lay Scotch, we have to wait for a minimum period of 12 years before we can even start selling it. In that respect, we have to be patient. As a result, when we see changes in the market or see disruption in a particular country, we are well prepared as there are no external pressures. That’s the advantage of a family-owned business. It gives you the confidence and allows you to have the patience to build a brand in the right away. It takes time and commitment to build a brand.
With regard to the challenges, a family-owned business can be defined in many ways. To certain people, it can mean running a small store in the corner of the street and it could also mean becoming a huge conglomerate. The challenge is living up to long-term thinking. As a CEO, I know I won’t be here 40 years later. So the decisions that I am taking today—I don’t know if they are good or bad—put different expectations on the management. It is different from how most companies operate.
Q. When did you enter India and what do you think of the luxury market in the country?
One of our shareholders was in India in 1909 and spent about six weeks here. We formally opened our office in India in 2013 and since then have stocked up our team quite significantly. If you see our business here, it has grown by nearly 350 percent in the last four years. As far as the luxury market is concerned, there is an interesting balance. For any brand to attain grand status, there is a requirement to be a luxury player on the global stage. This is particularly relevant as the number of Indian consumers travelling abroad has increased. We have been running a strong programme in India for the last seven years—the artists and residents programme which is about celebrating local artists.
Such programmes help us capture the right audience as they resonate with the story and authenticity of our brands. We run selective whisky tasting sessions in India where we bring in our master distillers to explain the love, passion and care that goes into creating what we create. In today’s world, luxury is not about being expensive and/or scarce alone. Consumers today are far more discerning and better informed than what they were earlier. Q. How did brands like Glenfiddich come to acquire the status they have today?
Well, the biggest factor is maintaining consistent quality and being true to what we do. We have seen consumers, markets and technology change, but, we are still making Glenfiddich the way we were making it earlier. That gives consumers the confidence that they are getting the real deal. The second factor is to remain relevant. On the luxury side, it is about staying in touch with trends, and in some cases, leading them. We recently launched a new experimental series of Glenfiddich at more accessible price points where we have also broken some rules. And mind you, to break rules, you have to master them first. You can keep a brand relevant and exciting through innovation as new things keep consumers excited about what’s coming next.Q. What are the quintessential features of a luxury spirit brand?
The first is quality and the second international recognition. We are the No 1 single malt in the world. That gives us confidence from a leadership point of view. The third feature would be scarcity, while exclusivity is also extremely important. We are never going to have thousands and thousands of bottles in the market. The fourth feature, I’d say, is authenticity. These, combined with a ruthless focus, are key.Q. What are the product differentiations between the various brands in William Grant & Sons’ portfolio? Which are its largest selling brands?
The common thing in all our products is quality at different price points. That also makes it challenging sometimes in the markets we operate in. We have a diverse portfolio where our brands are priced between `1,300 and `32,000 per bottle. Our largest selling brand is Glenfiddich in terms of turnover. We also have The Balvenie single malt Scotch (handcrafted single malt) and Hendrick’s Gin. While the gin category has become boring in the past few years and many companies have given up on it, we have decided to reinvent it. It’s important to stay relevant in the market and for that, we carry out some experiments. For instance, in whisky, we have launched Monkey Shoulder. Unlike some traditional malts, it’s used in cocktails and bartenders love it. It’s increasingly gaining popularity. Q. What are the challenges in the Indian market? Liquor has been kept away from the purview of the Goods & Services Tax (GST).
There is significant opportunity in India. However, one of the biggest barriers that we have in the luxury side today is the fact that FSSAI (Food Safety and Standards Authority of India) has to take a sample of everything. Some of our bottles cost $25,000 each (around `16 lakh). I can’t afford to give them a bottle. Therefore, it sometimes becomes difficult for us to get our rarest whisky brands to India. Consumers pick them up when they travel abroad. I am not sure if this kind of a problem exists in other luxury categories, but we face it sometimes.
In terms of GST, the response is extremely positive. I would like to see a harmonisation of taxes and alcohol policy across 29 states. Our turnover globally is $1.1 billion, but the India turnover is small. But going forward, it’s a country that we want to focus on in a big way.
(This story appears in the 13 October, 2017 issue of Forbes India. To visit our Archives, click here.)