Macallan Parent Company Edrington Reports a Steep Sales Decline
The Macallan is one of the most popular and recognizable scotch whisky brands in the world, but even this esteemed single malt distillery might be facing some tough times ahead. According to a recent article that ran at the website Scottish Financial News, the Macallan’s parent company, Edrington, reported that its profits were down by 26 percent and core revenue down by 10 percent as of March of this year, part of a continuing trend of worrying news for the global spirits industry.
In financial terms, that is the equivalent of £274.4 million in pre-tax profits and £912 million in revenue, which the company is blaming on “reduced consumer demand” over the past financial year. “After several years of unprecedented growth for premium spirits and industry-leading results posted by Edrington, the business felt the full effect of the global economic downturn during the year,” said CEO Scott McCroskie, according to Scottish Financial News. “Looking ahead, the political and economic backdrop remains volatile, which we expect will continue to weigh on consumer sentiment in the coming year. We believe top-line growth will be difficult to come by in this environment, although adjustments to overheads and brand investment are expected to align net sales and core contribution more closely next year.”
Given this challenging environment, last week Edrington announced that it had finalized the sale of two of its popular scotch brands, yhe Famous Grouse and Naked Malt, to fellow Scottish company William Grant & Sons (owner of Glenfiddich, The Balvenie, and Hendrick’s Gin). The terms of the sale were not disclosed, but new the new owner expressed a great deal of enthusiasm about the acquisition, saying that it sees a lot of potential in the lesser known Naked Malt brand.
There were some bright spots for Edrington despite this news, however. Sales of the Macallan showed strength as the company said that its 200th anniversary year was the second-highest ever for sales, with Asia posting positive numbers in particular (specifically South Korea, Japan, and China, where the distillery’s 12-, 15-, and 18-year-old expressions remain popular), and Brugal Rum showed strength in the Dominican Republic where it is produced. Going forward, Edrington says it will continue its strategy of focusing on ultra-premium spirits and will “continue to… strengthen our brands and our business for the long-term benefit of our investors, our employees, and those who benefit from our own and our principal shareholder’s charitable activities.” It remains to be seen if that will be enough to boost sales over the coming year, but we will continue to report on this news over the coming year.
