WHISKY may be an iconic Scottish product and popular around the world, but marketing it internationally isn’t easy.
That is especially the case if you happen to be a smaller independent producer without the firepower of the really big drinks companies.
With the right approach, though, exporting breakthroughs can be made, sometimes with spectacular results. One Scottish producer which is now selling into more than 40 different markets around the world is East Kilbride-based Burn Stewart Distillers, maker of household name brands such as Scottish Leader, Black Bottle, Bunnahabhain, Deanston and Tobermory.
Last year, Burn Stewart exports drove an increase in turnover of more than £10 million to £57.4m, with gross margin up to £23.2m. With double-digit growth over the last four years, the company anticipates continuing expansion of sales ahead of industry trends.
“There’s little scope for expansion in home markets at present, so we have to look abroad for increasing turnover,” says Sara Bishop, the company’s finance director.
Burn Stewart operates a number of different business models and had a small and sporadic international distribution when it was acquired in 1988 via an MBO.
It first invested in its international infrastructure in 1995, when its Taiwanese branch was opened to provide in-market sales and marketing resources.
This was followed in 2001 by investment in International Beverage Corporation, its US importer. In South Africa, it operates via a joint venture, and in most other countries it works though strong and trusted partnerships with local companies.
Bishop says that the company picks its territories carefully, focusing on growth areas such the Baltic States, Indo China and Russia.
“Understanding the market is critical. Not all our products work in all territories at all times – for instance, we only put Bunnahabhain into Taiwan three years ago,” she says.
“It’s a case of identifying places where there is an opportunity to grow while recognising that our size means we can’t be everywhere. We’re not presently operating in China, for example.
“We look for countries which offer exciting opportunities for our business, but which aren’t as attractive in terms of scale for our larger competitors.”
Finding really good partners, Bishop says, is essential. “It’s something on which our commercial team are very focused. By forming good relationships, we grow our brands and they grow their business. It works for us both. Targeted marketing, which takes account of local cultures, is also very important, and our commercial people and distributors feed into this. In general, it’s difficult to beat face-to-face research.”
Burn Stewart has received support from RBS with currency and interest rate hedging products, which Bishop says has helped a lot in easing trade. “We’re now very confident about the future. Of course, we’ve made mistakes along the way, but lessons have been learned and that has helped us to move forward.”
What advice would she offer to Scottish firms seeking to export? “Understand your products, the target consumers and markets you want to go into.
“Be determined, and be proud of what you’re offering. It’s too easy to be self-deprecating – you need to believe in what you do.”