More to exporting than bagpipes and tartan

Published on Tuesday 8 January 2008 20:44

PAUL Walsh, chief executive of drinks giant Diageo, and newly appointed chairman of the Scotch Whisky Association, said last night that whisky still had "a long way to go" to maximise its appeal to the high-growth markets such as India, China, Brazil and Russia.

Walsh was speaking to The Scotsman before delivering the annual SCDI lecture in Aberdeen. He warned his audience of leading North-east businesspeople to "ensure that pride and passion don't lead to introspection" and to concentrate more on emerging markets.

As an example, he connected the recent rapid growth in global sales of whisky with a shift towards "lifestyle-oriented" marketing of long-standing Diageo brands such as Johnnie Walker, J&B and Bells.

"There comes a point that you are such a believer that you end up talking to yourself rather than ending up talking to a wider audience," Walsh said.

"I think the reason that Scotch languished as it did in the 1990s was that, as marketeers, we relied too much on the wonders of the product and we communicated those wonders through – forgive me – bagpipes, heather and tartan. Those are very important and relevant qualities but in today's world they are not enough to position the product to a new-age consumer."

In his speech, Walsh called on Scottish business to see corporate responsibility not as an "onerous burden" but as a source of long-term growth, saying that responsible corporate behaviour had a positive impact on performance, in terms of investor confidence, attractiveness to consumers and a more enthused workforce.

He pledged that there was "more that Diageo can do" to support the Scottish Government's drive against binge drinking, through better education and labelling.

Walsh also predicted that the spectacular growth in emerging markets would help ameliorate the impact of a "probable slowdown" closer to home in 2008, and confirmed that Diageo was already considering new distillery sites in Scotland, to be developed if demand from emerging markets continues.

The world's largest premium drinks company – ten years old last month – employs 22,000 people across the world, 4,000 of them in 40 disparate sites across Scotland. Diageo also owns Gleneagles Hotel, which is set to host the Ryder cup in 2014.

Last October, Diageo pledged to invest a further 120 million in Scotland, through the creation of a 40m distillery at Roseisle, between Forres and Elgin, due to open in 2009, with the first mature spirit being produced in 2012.

The new distillery will have an annual capacity of ten million litres, making it one of the largest in the world. Other projects include the expansion of the firm's grain manufacturing capacity at Cameronbridge in Fife and its bottling capacity at Shieldhall in Glasgow, as well as an expansion of warehousing and storage capacity across Scotland.

Last year, Diageo posted turnover of more than 9 billion.

Walsh was speaking to an audience of 250 business leaders, public-sector officials and academics attending the fourth annual SCDI lecture, held at the Marcliffe Hotel in Aberdeen.