The Geordie guide to selling whisky in Asia20th Feb '16
John Harvey McDonough used his knowledge of Taiwan and China to build a company – helped by Michael Owen. By Sophy Buckley
Company: Speyside Distillery Trading in: China, Taiwan Sector: Food and drink
“Knowing the language helps, too. I speak Mandarin, although with a Geordie accent. It helps build trust faster”
When a small company competes on the global stage with some of the world’s biggest and richest brands, it has to be better and smarter. Enter Speyside Distillery, the boutique whisky producer that recently sold one of its single malts for £80,000 in Taiwan.
“It was very special,” concedes John Harvey McDonough, chief executive. “It was distilled in 1956 to commemorate my birth.”
That Speyside Distillery can command such eye-watering sums for a single bottle is testament to the quality of its whisky.
Spey is matured for longer – 12 or 15 years – and is a single malt rather than a blend of lower-quality spirits. In global terms, the company is tiny, with annual revenues of £18m, of which China and Taiwan account for £2m and £10m respectively. It’s also a relatively new brand, with production that only started in 1990, albeit from very old roots.
Set in the Speyside region of Scotland, its distillery is beautiful but small – and was featured in television programme Monarch of the Glen. It was acquired in 2012 by Spey, which at the time was only storing and exporting whisky. The move restored production to a company that had started making whisky in the 18th century.
Yet despite its diminutive size, it competes with companies whose marketing budgets are many multiples its annual turnover. “The global market for whisky is big and to succeed we had to take a different angle,” Mr McDonough, who is distantly related to the Harvey sherry family, explains.
His was to exploit his knowledge of China and Taiwan, acquired while working in the latter for IDV, now part of global drinks giant Diageo, and to target the top end of those markets.
“I had lots of contacts and knew the market really well. Doing business in Asia is very relationship-led,” he says. “Knowing the language helps too. I speak Mandarin, although with a Geordie accent. It helps build trust faster.”
As for marketing, he copied tactics used by luxury perfume brands to promote his whisky, advertising in quality magazines and using brand ambassadors, such as former England and Manchester United footballer Michael Owen – who remains a big star in China.
But much of his marketing was below the line. “We worked with companies like American Express, Standard Chartered and HSBC, using their mailing lists to reach beyond our own network and invite wealthy individuals to private dinners where they could try our whisky, and, very importantly, buy our whisky,” he says.
He also worked with the British Council and British Chamber of Commerce, and the British Trade office was enormously helpful.
“The British Council, for example, keeps a register of foreign students who have studied in the UK and who have returned to Taiwan. These people often become very successful and are Anglophiles. They are a natural target market,” he says.
Innovative product packages that leverage heritage and family connections have also helped build its reputation for high-end luxury. “We run about two trips to the UK each year, bringing customers to our distillery, hosting a private dinner in the Tower of London, tea at Hampton Court and a stay at Seaham Hall in Northumberland, where Lord Byron married Lady Annabella Milbanke,” he says.
“These trips can’t be put together by a travel agent. They’re high prestige, unique.” And cost £60,000 to £70,000 a head, although that does include “quite a few bottles of whisky”.
But the company isn’t just focused at the top end. Today, the Speyside Distillery is establishing a retail distribution network for its products. Its entry-level whisky costs £55 and can be found, along with its higher-end bottles, in specialist shops around the world.
“We’ve succeeded by putting in a lot of hard work, delivering on every promise and trying to meet any requests made,” he says. “It’s about being better, smarter. It’s about making and then maintaining a good reputation.”