kilchoman

a magnificent example of perseverance and strategic intent – truly inspirational

My contact at Kilchoman was Bryony and she provided a guided tour of the distillery; her passion and knowledge were contagious and she gave us a great tour and an enjoyable tasting of their whiskies. We were fortunate to have in our little group, Trevor, a whisky expert and a partner in the Caledonia: Scottish Whisky Bar in New York. Trevor was on a ‘working holiday’ and his passion for whisky was evangelical, whisky is clearly a big part of his life, this was evident not only in the way he carefully examined every aspect of their distilling process but also in the questions he asked our host. It was nice to have Trevor along as he provided an opinion leader’s perspective.

After our distillery tour Bryony and I had a little chat and she provided a background to Kilchoman and Islay life.

According to Bryony; Kilchoman have had an amazing journey and their success is all the more incredible given that they have only been producing spirit for 10 years.  She believed that part of the Kilchoman success is due to the growing prestige of Islay whisky. She explains, that whisky is very much part of Islay – living on an island we [whisky producers] are geographically connected but we are also philosophically connected through out passion for fine whisky –  Islay could be described as a whisky community. Many of the people work for a distillery and it is not unusual for members of the same family to work in for the same or different distilleries.

She explains that Islay has a long history of good and bad times. Many of the people on Islay remember when the whisky industry was depressed, they know that distilleries can close, when we were working reduced hours, when there was high unemployment – and this impacted on the whole community.  She emphasizes that what has to be kept in mind, is that Kilchoman is the first new distillery on Islay for 124 years. Today, she explains things are different, because of the success of Islay whiskies there is new life on the island and a generation not forced to leave the island in search of work. This, she explains, is important because Islay is our home this is where we choose to live. Bryony believes that because they are all in this together they are competitive but also collaborative and she finds that the whisky community on Islay is incredibly supportive of each other primarily because it provides employment.

Bryony has a valid point. As we tour the island the remnants of abandoned crofter cottages, the stone and grass shadows of abandon villages, with decaying churches and thistle encrusted graveyards are dotted throughout. The abandonments are memorials to the depopulation of Islay. With the full belly of a modern tourist one can only attempt to imagine the stuggle, pain, sacrifice, hunger, and despair that drove these people from their land and homes. Often this exodus is described by the word diaspora – a time when large numbers of a population are driven from their communities not with the hope of a better life but the fear of what will happen if they stay. As Bryony outlines even in recent times if you had a job you stayed but if you didn’t have a job or lost your job you left Islay. I guess few communities have this sense of need to collaborate and perhaps as we hear often Islay’s future is its past.

I ask Bryony that it is one thing to work together and have a sense of community but why is there this new optimism? Bryony explains That drinking whisky has become more fashionable – people are more ‘involved’ in whisky –  it is an obsession for many, and they want to taste different whiskys – marketing practitioners refer to this as searching for epistemic qualities. She explains that this obsession for whisky has also generated what we call ‘whisky tourism’. We are now having people visiting Islay from parts of the world that we never had – and this brings people together. She explains that on her distillery tours she hears so many people, from so many different parts of the world, who have just met, talking and making friends – connections are being formed. Our visitors tend to engage in a style of conversation that I call a ‘happy banter’ – to compete for attention. They want to show-off their knowledge – what is their favourite whisky, what they can taste in the whisky, their personal preference for a particular whisky – perhaps a small drop of water to ‘open out’ the whisky or whether they prefer it neat. When people come to Islay their appreciation of whisky matures and I like to think that I play my part in that process and help them understand that at Kilchoman we have something that is quite unique, we are on a farm, there are advantages of being on this farm, it gives us a sense of who we are, and we have a founder, Anthony, his wife Cathy and sons George, James and Peter, who are all very much part of each bottle of whisky we produce – the staff at Kilhoman are family led and I guess it is about staying true to our roots. The boys all travel and promote Kilchoman – last year they did a European promotional tour, 7000 miles around European in the branded Landrover, doing tastings for our supporters, visiting and setting up distributors and stockist of Kilchoman Whisky.

As we walk around the shop, I complement her on the shop. Thank you – what is interesting is that when we first started the shop and the café were there to help support the business – to provide the needed cash flow. Now it is still important but as the business has developed it has a different role – it is still important as part of the overall Kilchoman experience but we are not so dependent on it now. I speak with a couple from Malaysia and I ask if they are buying gifts for their family and the tell me that they are gifts – but gifts for themselves. Perhaps these gifts will be purposefully ‘on show’ in their home in Kuala Lumpur, not as mementos of a whisky distillery tour but to identify them as collectors of epistemic experiences.

an interview with Anthony Wills

Bryony introduces me to Anthony Wills the founder and Managing Director of Kilchoman and we begin to have chat. He explains. Our philosophy is pretty simple and straightforward we target the premium end of the market and to do that we have to provide a uniqueness in our whisky – so we began the distillery on a working farm, the objective is to enable us to have much more control of the entire production process. Anthony explains that this appeals to whisky drinkers who want a product that is more carefully crafted and genuinely comes from Islay including the barley and the malting process. Thankfully our customers like what we produce and this has driven demand and our capacity. We produced 50,000 liters of pure alcohol in 2005 and this year we will produce 200,000 litres –  so that is a big step for us. At present we now have the capacity to produce 250,000 litres now that is 600,000 bottles at 40% alcohol and depending on the demand we will look at it and see where we will head – we just have be cautious and careful. Clearly with the whisky industry and the long production time you need to forecast and invest with the next 6-7 years in mind. Nevertheless, we have had great interest in our whisky and have increased production every year.

We built Kilchoman to take advantage in the increased interest in whisky, I think if we built this distillery 10 years earlier it would have been a different story, there would have been less interest and we would have struggled to get recognised – the market wasn’t ready at that stage. And they weren’t ready to try new brands they very much stuck to the known brands. Only in the last 10-15 years has this interest in new whiskys developed – this has led to new distilleries being planned in Scotland but also around the world. Scotland remains the traditional home for whisky and Islay whisky is iconic whisky producing region within Scotland and Islay has 7 other very established and respected brands and these two factors have played a key role in our success.  However, major conglomerates own all the other Islay distilleries. Therefore we stand out as the only family owned Islay distillery. We set out to have a different story and people have been very receptive and bought into that small niche premium, crafted, part of a farm and so we have been at the right place at the right time.  I have been in the drinks business my entire career and I saw a gap in the market and it was a leap of faith to move to Islay, my wife, Cathy has known Islay her entire life, her family had been coming to Islay when she was a child, and when we first met we would come to Islay and the when we were married we would come here, so I have been coming here for 30-35 years, so in some ways the story unfolded – but is was a big gamble as it is hugely expensive to set up a distillery. We did struggle in the first few years and we were fortunate that market demand changed to younger whiskys and consumers were also willing to experiment with younger whiskeys. If we had put our product on the market 20 years ago then – we would have been laughed at, 10 year old whisky was the youngest Scotch whisky that was offered to the market. I had noticed that younger whiskys were becoming more available and although 10 year whisky was and to some extent still is the benchmark people are now also willing to purchase whisky according to the quality and taste, rather than simply the age. This movement to younger whisky has a lot to do with the cask maturation process that distilleries have adopted, better wood and greater emphasis on quality, I think also the growing demand for whisky means that there is less older whisky available and older whisky is now more collectible – people have set up new businesses based on the scarcity of whisky and you now have auction houses and this can only be good for the industry as a whole. So really the consumer has changed, the market has changed, and therefore product that distilleries produce has changed. There were a number of people that drove this change before we did [it is interesting that a person who has achieved so much is willing to acknowledge the input of others].

Initially we rented the building on the farm and we only bought the farm in November 2015, and this will give us more freedom to do what we need to do – for example we can grow more barley, put up the buildings we need – without the constraints of a lease. So buying the farm and the family are the future. All the family is involved and our three sons are involved in all the sales and marketing and we now export to over 40 countries around the world and so it is important to visit those markets and taste and talk with existing and potential customers and through that build the brand.

We also understand that when you have the long term say the next 20, 30 , 40 years in mind – we cannot become greedy – we have to serve our customers and value the support of our customers and we have to realize that consumers will turn against us if we get it wrong and lose their trust.  We have to build the brand.

 

Tasks

Statement: in the interview with Bryony she talks about the spirit of collaboration on Islay, the recognition that the future of Islay as a destination/brand is in the hands of its people; in the interview with Anthony he talks about how the future of Kilchoman as a product/brand is in the hands of his family.

Task: Reflect on how you see this spirit of collaboration and competition.

Statement: Anthony’s experience in the wine industry and his knowledge of the French wine industry most likely influenced his strategic thinking – and his ideas on provenance.

Task: Reflect on how an organisational philosophy is cultivated and how it shapes strategic intentions & the strategic business & marketing plans.