Whisky has been a familial spirit from its earliest inception. The earliest distillers weren’t large corporations, but farmers making product for their own household, maybe their (small) communities. When the Scottish, and Irish, whisky world was changed in 1823, it was predominantly these farmers and their likes who started the great whisky boom. Some of these pioneers are still making whisky today.
The notion of the whisky-making dynasty is not confined to Scotland however. The Beams have been distilling whisky since 1788 when Jacob Boehm arrived in Kentucky. Seven generations on, Parker and Craig Beam are still making Bourbon at (family-owned) Heaven Hill while Fred Noe works ambassadorially for Jim Beam itself. Scratch almost any Bourbon brand or distillery and a Beam will have been involved at some stage. Elsewhere in Kentucky, the Samuels family (distillers since 1783) remain involved at Maker’s Mark, while the fifth generation of Browns still control the mighty Brown-Forman, owner of Jack Daniel’s, Early Times, Woodford Reserve and a host of other beverages.
In other words, while its easy to think that whisky is a playground for multinationals, family firms still exist at all levels: from the Grants of Dufftown, the Browns of Louisville or the Torii family of Osaka (themselves the founders of a whole new whisky style), to single distillery operations. This isn’t as surprising as it may seem initially. As Gavin Smith argues in his piece on William Grant & Sons whisky is suited for family investment.
“In a sense, the Scotch whisky industry is peculiarly suited to stable family ownership, as it differs from almost all other manufacturing enterprises in terms of the ‘lead’ times between production and point of sale. It follows that long-term strategies are usually preferable to short-term, profit-making expediency, but the executives charged with running public distilling ventures often do not have the luxury of taking a far-sighted approach to their businesses.”
Not being in thrall to the short-term driven demands of the City seems to promote a different mindset. I recall standing in the Forres warehouse of Gordon & MacPhail with David Urquhart looking at 70 Years Old casks, while listening to him outlining how his generation is currently laying down casks intended only for use in another 70 years time. As his brother Michael outlines to Martin Nouet in her piece on G&M: “As a family business, we know that what is laid down today will give us returns in the long future. We have a long term vision. A lot of the single malts we are offering today have been laid down by my father and grandfather.”
The same could be applied to the Grants of Ballindalloch, sixth-generation custodians of Glenfarclas whose Family Cask series is a liquid demonstration of a family laying down stock for long-term. These rare bottlings aren’t of casks found that have been lost in the gloom of a dunnage warehouse, they were planned. In a family business, you could argue, you are not just setting up a business to look after yourself and your shareholders, you are caring for your own flesh and blood.
This isn’t to suggest that family businesses are better, or make better whisky, rather that being family-owned gives the business a different dynamic: the issue of time is different, the ability to act and react can be quicker.
There are many more family stories to be told because whisky isn’t just about the people who own the firms, but the people who work for them: the third and fourth generation coppersmiths, stillmen, the mashmen and coopers, and in the case of Richard Paterson, blenders. At its heart whisky is about family.
Can this model survive? To answer that, look to Campbeltown and Springbank where ostensibly ‘old-fashioned’ values still hold sway, yet Springbank isn’t an anachronism, but acting as the template for a new generation of independent distillers.
As whisky faces up to the 21st century what do we see? A new wave of new, small-scale, independent and mostly family-owned distillers emerging globally. It’s the 1820s all over again. Maybe in 10 years time someone will be writing about the Lark dynasty of Tasmania, the Akutos of Chichibu and the Bells of Tennessee.
The seed of the idea which grew into Japanese whisky was first planted in the head of the young Shinjiro Torii when he worked with his uncle’s firm, Konishi, in Osaka in the late 19th century. These were the still early days for liquor imports, but already the demand for foreign spirits was such that firms like Konishi were replicating the taste with judicious additions of artificial flavourings to domestically produced products. Shinjiro Torii had other ideas however.
In 1899, he had his own store in Osaka, Torii Shoten, and was importing wine. By 1907 he launched his first brand, a port called Akadama, complete with rather racy promotional posters. Spirits were still, however, nagging away at him. In 1919, he launched a Scotch brand called Tory’s and four years later had built Japan’s first purpose-built whisky distillery at Yamazaki.
These days, the firm he started is now known as Suntory and has spread far beyond whisky. In whisky, it owns Morrison Bowmore, retains a stake in Macallan, and dominates the domestic Japanese market. It also remains 90 per cent family-owned and his grandson, Shingo Torii, is the firm’s vice-president and master blender.
He occupies what seems to be a floor of the company’s offices in Osaka, a hushed elegantly wood-panelled zone with offices, meeting rooms and his own blending lab. If the day-to-day work is done at Yamazaki, this is where it is signed off.
“For 86 years, while having a tremendous amount of respect for Scotch, Irish, Canadian whiskies, we have continued to pursuing the original style of producing the Japanese whisky which suits the Japanese palate.”
His answers are measured, deeply thought through and delivered in a fashion which manages to gently deflect the questions into an area where the concept of ‘family’ ceases to be simply about bloodline, but becomes one of values.
Given the importance of the founder’s principles, how important is tradition? Do you have a greater, or a different, understanding of legacy? “Creating and developing a positive tradition and culture is what makes the family firm ‘family’. Tradition, or what you could call ‘inheritance’, should be understood by everyone within the company. It is important this is handed down.”
So, the notion of ‘family’ is important in the mindset of how the company operates? “It is true that family management constitutes the backbone of the group today. However, it is the employees who actually generate the corporate activities by working hard and developing the ideas.” Is this an example of the guiding principles of a family firm being slightly different to that of a publicly-listed one? That, maybe, by being family-owned makes you view business in a different way?
“Just as all the faces of human beings are different, so the administration of every company is different depending on the histories and cultures they have experienced. I see family management as simply a form of style. However, it is also true that this style has enabled Suntory to pursue its dream for a significant period of time and makes the moral values which lie at the heart of the business a top priority in the firm’s values. The founder placed importance on challenging [people’s] spirits in business. On the other hand, he established a company vowed to act morally and ethically, espousing the words of Japanese sayings: ‘Unseen Virtue and Visible Reward,” and ‘Sharing Profit with Society.’”
This, it strikes me, is more than just some glib mission statement dreamt up by an over-paid consultancy firm, it suggests a depth and richness of intent which isn’t too common in most corporate boardrooms. Does that mean that a family firm can do things in business which others can’t? “Yes. To have a deep conviction for making products. In addition, having a long-term plan in terms of half a century or a century, and being able to keep a sense of humility.”
But these are changing times. What is the role for a family business in today’s globalised economy? “It is because we are a family firm that we can establish a lasting, confidential, relationship with business partners by showing to the world our unchanging philosophy and policy.” So there is hope for the family-owned drinks firm? “Yes. I believe it will continue and that there will be new family firms born, but there can be no next generation without cultivation of human resources.” For Torii-san, Suntory being family-owned doesn’t make it better, it does however make it different and that difference lies in the manner in which it has adhered for three generations to its personal founding principles.
The story of the creation of Glenfiddich during 1886/87 is one of a close-knit family working hard together, and it is testimony to how much of the task was undertaken by the Grants themselves that the total cost for the project came to the absurdly cheap sum of just over£700. When neighbouring Balvenie distillery was built in 1892/93 the expenditure was approximately three times as much, and William Grant had certainly not developed a reputation for throwing his money around.
Throughout the years that followed, whether the fortunes of the Scotch whisky industry were good or bad, the Grant family and the Gordons into whom they married kept a tight hold on the reins of what became William Grant & Sons Ltd.
This year Whisky Magazine’s 2011 ‘Whisky Distiller of the Year’ celebrates its 125th anniversary, and the firm’s life president is octogenarian Charles Gordon, great-grandson of William Grant, while the founder’s great-great-grandson Peter Gordon occupies the position of chairman, and represents the fifth generation of the family to head up the business.
According to Peter Gordon: “We have a board of eight people. Three are family shareholders, three are independent, non-executive directors and two are executive directors. This gives the balance of allowing management to operate, but also take into account the long-term view of family members and the skills they bring.”
William Grant & Sons Ltd is Scotland’s largest independent distiller, and Peter Gordon explains: “We have got to the size where we employ 1,500 people and sell to 180 countries. We are also involved in distribution of 80 per cent of our sales. We don’t have enough family members to cover all of that, even if we wanted to, so we need a professional executive team.
“We are conscious of the need to give freedom to Stella David (chief executive) and her team, but we also to ensure sustainability for the next 20 or 30 years. The benefits of the right level of family involvement include the capacity to attract quality people from outside who know they will be given the freedom to operate. The non-executive directors are sometimes amazed by the level of engagement and the pride felt by the shareholders.”
In order to secure long-term family ownership, a major share buy-back programme was instituted during 1986/87. As Peter Gordon explains: “There had been an element of ‘dilution’. By the time the company had been in existence for a century there were some 50 people who owned shares, and quite a few of them had relatively insignificant shareholdings. Around 50 per cent of the shares were bought back, and some 10 people now control 90 per cent of the company.”
With an eye to the next generation of family members in the business, there is a Family Council, an organisation described by Peter Gordon as “A collection of shareholders and members of the next generation of shareholders. It’s been in existence for 15 years and is a non-legal body where ownership issues are discussed.”
We tend to assume that family-owned organisations tend, by their very nature, to be conservative in outlook and approach to business. With no baying hoards of rapacious shareholders demanding quick returns to keep them on their toes, there is surely a tendency towards complacency and playing safe?
This has certainly not been the case with William Grant & Sons Ltd, which prides itself on innovation and a pioneering spirit. The firm was the first Scottish distiller to market a single malt in England and overseas in a coordinated manner, with Glenfiddich heading out of Scotland during the early 1960s, and in 1969 the country’s first dedicated distillery visitor centre was established at Glenfiddich.
More recently, William Grant & Sons Ltd has diversified into gin, vodka, rum and brandy, and proceeded to purchase the Hudson range of craft-distilled whiskeys from New York State’s Tuthilltown Spirits and also the Tullamore Dew Irish whiskey brand during a 2010 spending spree.
Given Grant’s much vaunted independent stance, which led to the construction of its own grain distillery at Girvan in 1963, building a new distillery to supply Irish whiskey for Tullamore Dew is a racing certainty. According to the whisk(e)y grapevine, a site in County Offaly is favourite for such a development.
“If you have long-term connections with people who have played a major part in the business in the past, you can still pioneer and be innovative,” says Peter Gordon. “Being a family company enables us to think like that. But there is also a belief that you have to do things properly. Quality is very important.”
In a sense, the Scotch whisky industry is peculiarly suited to stable family ownership, as it differs from almost all other manufacturing enterprises in terms of the ‘lead’ times between production and point of sale. The spirit currently being distilled will not see the light of day for a minimum of three years, and in the case of whisky destined for single malt bottlings, the timescale extends beyond a decade.
It follows that long-term strategies are usually preferable to short-term, profit-making expediency, but the executives charged with running public distilling ventures often do not have the luxury of taking a far-sighted approach to their businesses. Most shareholders are notoriously unsentimental, and chief executives may only be judged on their most recent quarterly results. The need to produce crowd-pleasing, eye-catching returns can often over-ride the long view of what is best for the enterprise’s enduring health.
Family members involved in William Grant & Sons Ltd operate within a prevailing ethos of pioneering independence and valued heritage. “There is the possibility of connecting today with the past,” says Peter Gordon. “It’s good for people to have a sense of continuity and good for the brands. There are lots of genuine stories to tell. We hoard, we have vast archives of material we can call upon. We look after those connections with the past.”
Some brands, both within and out-with the Scotch whisky industry feel the need to confect provenance, but in the case of William Grant & Sons Ltd tangible and positive links to earlier eras are all around.
One of the company’s most recent releases was just 11 bottles of 55 Years Old Glenfiddich, issued to commemorate the 110th birthday of Janet Sheed Roberts. Janet is the grand-daughter of William Grant himself, and she retains memories of him from when she was a young girl. Janet is Peter Gordon’s great-aunt and still lives close to Glenfiddich distillery.
The firm also has an enviable reputation for positive staff relations, boasting many long-serving employees. “We have genuine respect for our workforce,” insists Peter Gordon. “Long service allows us to hold onto things that are important, things that work. In 2010 seven people celebrated 40 years with the company, and this year two of them celebrate 50 years with us.”
So just how has William Grant & Sons Ltd survived as a family-owned entity in a predatory commercial world? “The concentration of ownership is really down to a combination of happenstance, good fortune and good management that have allowed it to be as it is,” says Peter Gordon, “and we share real pride in our assets – great people and great brands.”
One thing about family-owned companies, they generally don’t mind nepotism. They don’t endorse favouritism, of course, but they like the idea of multiple members and generations of families working together throughout the enterprise.
Heaven Hill Distilleries was founded in Bardstown, Kentucky, almost 80 years ago, just as the pernicious folly known as National Prohibition was drawing to a close. The Shapira family was there at the beginning and so were the Beams.
It has the ring of legend now, this story about how the five sons of Max Shapira invested in a new distillery, in those bold days just after Prohibition, when everything seemed possible.
They famously knew nothing about the whiskey business, but the Shapira brothers knew who Joe Beam was.
On the list of Heaven Hill’s original investors, Joe Beam’s name came first. Before Prohibition, when there were still dozens of whiskey distilleries in Kentucky, many had a Beam as master distiller.
Although the Shapira brothers knew nothing about making whiskey, they figured Joe Beam knew everything about it. What they knew was how to operate a business successfully. They had already built up a thriving chain of department stores begun by their father and were looking to diversify.
Heaven Hill Distilleries grew and became ever more successful, surviving many industry changes, even as the department store chain faded away. Originally a contract distiller, Heaven Hill began to concentrate on developing its own brands. Today one of those early brands, Evan Williams Kentucky Straight Bourbon, is the #3 American whiskey, after Jack Daniel’s and Jim Beam.
The Shapiras watched as other distilleries were acquired or went out of business, many during the industry’s sudden collapse in the late 60s and early 70s. Unlike many producers, who stayed in business by taking long distilling holidays, Heaven Hill never missed a season. As other companies looked to unload struggling brands, Heaven Hill was often the only buyer.
Heaven Hill is a closely held company, whose ownership is kept entirely within the Shapira family. They don’t reveal sales figures, let alone profits, but they claim to be America’s largest independent, family-owned and operated spirits producer, with the world’s second-largest holding of aging Kentucky bourbon whiskey, almost a million barrels. Heaven Hill is America’s seventh-largest supplier of distilled spirits.
Two of the Shapira brothers brought their sons into the business. One is current president Max Shapira. The third generation is represented by his daughter, Kate, his son-in-law Allan, and his son Andy. Kate heads marketing, Allan is COO, and Andy is director of sales analysis.
“Family ownership is the backbone of our corporate culture and vision here at Heaven Hill Distilleries,” says Max Shapira. “It allows us to have a clear long term perspective on our corporate positioning and strategy, free from outside influences and pressures.”
As with many family businesses, there is little distinction between home and work. “Every vacation we went on we went in liquor stores along the way or stopped to have a meeting with one of our distributors,” says Kate Shapira Latts. “It was all just family pride and the focus of our family.”
Like their father, who after college spent a few years away from the family business before joining the company, Kate and Allan cut their teeth at Proctor & Gamble, while Andy previously worked at Bank of America. The third generation has been responsible for introducing many ‘best practices’ to the company, and for getting the company more deeply involved in product innovation and brand building.
“Unlike many other successful family-owned companies that find the transition from one generation to the next increasingly challenging, the third generation of our family is firmly established at Heaven Hill,” says Max Shapira.
Today, Shapiras still own and run the business, and Beams still make the whiskey. Both families like the arrangement and do not plan to change it.
One of the families to enter the (legitimate) whisky business in the 1820s were the Mitchells of Campbeltown. Kintyre was famous for the volume and quality of its illicit hooch during the smuggling era - the records of plumber/still-maker Robert Armour attest to that. Records show that Archibald Mitchell Sr, was friendly with a local coppersmith (probably Armour) and operated an illicit still where today’s Springbank distillery now stands.
Indeed, the Mitchell family would be involved in establishing three of the ‘Wee Toon’s’ distilleries: Springbank, Glengyle and Riechlachan.
Campbeltown’s fortunes have waxed and waned since those days. Today, the erstwhile whisky capital of Scotland is quiet and the three score and more distilleries which so scented its air that folk wondered whether the loch could itself be made of whisky, have been reduced to a trio.
Incredibly, given the decimation of Campbeltown’s distilling stock, two of them (Springbank and Glengyle) are owned by the great-great-great-grandson of Archibald Sr, Mr Hedley Wright.
The ethos which formed Archibald Mitchell’s original vision still exists. “We have a reputation for producing a hand-crafted whisky,” says production director Frank McHardy. Springbank remains the only distillery in Scotland where the entire whisky-making process, from barley to bottle, takes places on the same site. “Mr Wright wishes that situation to continue for the foreseeable future in order to keep the traditional production processes in place. If we weren’t family owned it is doubtful whether that scenario could continue.”
Does this mean that a family firm is more attuned to traditional methods than a larger player? “Tradition in production methods should be all important for any old-established family company. At Springbank, we are all extremely aware of the legacy handed down through each generation of the founding family.”
This adherence to and belief in traditional values colours most people’s opinions of Springbank as an old-fashioned distiller. This insistence on the hand-crafted methods, direct fire, bottling in house un-chillfiltered and un-coloured can lead folk to think of them as idiosyncratic, iconoclastic even. Yet, when new distilleries set up, Bruichladdich,
Kilchoman etc., the template for their approach to whisky making didn’t come from other 21st century plants, but from Springbank, multiple styles of whisky from one site, local barley etc etc. In other words, rather than being out of touch with the whisky world, Springbank is at the centre of the new wave. Not that Mr Wright would be particularly bothered by any of that, you’d imagine. He makes whisky the way he wants to and is untroubled by the opinions of the wider industry and sundry commentators. If people wish to copy Springbank let them, if they don’t that’s up to them.
The downside of this hand-crafted approach, McHardy admits, is price.
“Our unit costs are higher than most other companies. However, we feel tradition in production is more important than cutting costs. This is only possible because we are family owned. Being an independent family-owned firm allows us to the opportunity to make decisions relating to the running of the business almost immediately.”
Springbank makes as much whisky as it can afford to make. When the cost of barley and oil rose steeply a few years ago, it simply extended its silent season. While ill-informed commentators were claiming that the distillery was closing down, the workforce were doing maintenance jobs and, when the price fell, they started distilling again, having saved money.
It’s called having long-term perspective.
And what of the role in of the family firm in the 21st century?
“Any family-owned company has a role to play in the current economic climate,” says McHardy. “We think that most of the general public rightly have the view that small companies who are family-owned will produce a product which is almost hand-made. If the family-owned drinks firm has a good product, refuses to compromise on quality and is not tempted to increase production beyond their capabilities, then we would say that they are not an endangered species.
“We’ll never compete with the bigger companies and therefore we take the view that there will always be a place for firms like us.” And the future? “We will always maintain family links within the structure of the company.”
Tradition, quality, consistency and working within your budget. All of these may seem conservative with a small ‘c’, though maybe the old Scots word ‘canny’ might be more apposite, but they have held Springbank, under the guidance of the Mitchell family, in pretty good stead for 184 years. Why change now?
John Urquhart, aged 15, started working as an apprentice at James Gordon and John Alexander MacPhail’s grocer shop in 1895. They are tea, wine and spirits merchants.
December 2011, Michael Urquhart, joint managing director of Gordon & Macphail, just comes back from a business trip in China, a new market the company is actively developing.
116 years between the two events; the small retail shop has grown into five whisky areas: retailer, wholesaler, exporter, bottler and distiller.
John Urquhart, who took over the Gordon & MacPhail business in 1915, was joined by his son George and his daughter Betty in 1933. George’s eldest son Ian arrived in 1967, followed by his two brothers David in 1972 and Michael in 1981, also with their sister Rosemary. George died in 2001. Ian retired three years ago, David will do the same in six months but will remain a non executive director. Now Michael’s four nephews have joined the board of directors : Neil, Ian’s son, Steven Rankin, Rosemary’s son and Stuart and Richard, David’s twins.
The fourth generation is present. Michael’s children, one boy and three girls, are doing “their own things” for the moment. There is also a non-family member in the board: Ewan Mackintosh, the whisky supply director.
This younger blood is welcomed by the eldest: “My nephews all worked in the company during their summer holidays when they were students,” Michael explains. “They had to get hands on at the bonded warehouse or the retail shop or the distillery. To know the company and to be sure they wanted to work here. It is important to have a younger perspective on how to develop the market and the distribution of our whiskies. The attitude of the society changes and we have to keep in tune with what attracts younger consumers. This is a blend of the old and the young and it works!”
Michael Urquhart considers that a family business can react more easily and more rapidly to the economic situation and to the demands of the market. And it is also an advantage in the whisky industry where time is an essential issue. In big companies, the shareholders want an immediate return of their investment and they can affect the marketing decisions negatively, for instance pushing the company to carry out premature bottlings. “As a family business, we know that what is laid down today will give us returns in the long future. We have a long term vision. A lot of the single malts we are offering today have been laid down by my father and grandfather. Like our “Generation” range, the 70 Years Old Mortlach we launched last year and the 70 Years Old Glenlivet we released a few months ago”.
Continuity feeding on patience is obviously one of the key to success in family businesses. Michael sums up the essence of Gordon and Macphail: “The future is shaped by what we do today, while today reveals what we did in the past”.
Judging by the figures of today, the future seems full of good prospects. In Gordon & MacPhails’ last financial year, export sales rose by 58 per cent, from £3.2 million to £5 million. This year, sales are up a further 26 per cent. “When you look at the Scotch whisky industry, you realise how much it is booming with the emergence of new markets and a growing demand.”
In 10 or 20 years time, the fourth Urquhart generation will thank their uncles and father for having taken the risk to invest substantially in good quality casks, to have carried buying casks from 80 distilleries and to own their own distillery; Benromach, which is also on the high with sales featuring a double figure rise. And like the previous generation, the fourth generation will have prepared the present of the fifth one.
In these times of uncertainties, this might be the perfect illustration of innovation.
If I ever need any guidance, who’s a better consiglieri than my father?” (The Godfather.) If one were to consider an example of a famous dynasty, it is unlikely that the humble history of a Speyside distillery would rank that highly on the list of images, which the word conjures up. In contrast, cinematic masterpieces such as The Godfather highlighted the turbulent and capricious dealings that came hand in hand with a certain type of dynasty- the family run ‘firm’.
However to go from one extreme to the other, perhaps there is bizarrely, a shared set of virtues which inextricably bind every family business, despite their origins: a fiercely independent spirit, a lack of compromise and above all else, a steely determination to succeed on your own.
Of course with tongue firmly planted in cheek, cross the Grants of Glenfarclas, and you’re more likely to find a hogshead in your bed than a horse’s head…
Glenfarclas is one of the last ‘true’ remaining examples of an independently run family distillery in Scotland and looking at its illustrious family tree it is easy to see why it has maintained such a highly successful tenure in an industry now dominated by corporation and compliance. Since 1865, Glenfarclas has been under the stewardship of the Grant family and today, the 5th and 6th generations (Chairman John L. S. Grant and his son, George S. Grant) are still as active in running of the distillery as the first generation John Grant was, when he acquired the distillery for £511 & 19 shillings, alongside the tenancy of Rechlerich Farm.
The distillery thrived, despite an unsuccessful partnership in the 1890s with Pattison, Elder & Co., which led the 3rd generation George Grant to proclaim the distillery was to never again rely on outside investors. It is a sentiment that runs as true today when I sit down with sales director and globe trotting Glenfarclas ambassador, George S. Grant to discuss what it’s like to be at the tiller of such a legacy.
An obvious question George, but how important is the independent spirit to how you run Glenfarclas in the 21st century?
“Being an independent distillery we can certainly react to the market place very quickly,” he explains. “For instance, because we’re not answering to a board of directors we can make decisions on laying stock down carefully for a longer period of time. Of course we want to make a living, but we want to make sure that everything is still going to be there for future generations.”
So what can independent family run distillers do that others can’t?
“With so many big companies, most directors will only be there a decade or so and they’re keen to make their mark quickly,” he continues. “But we’re looking at the long term. If we can’t do something now, we’ll do it in 30 years time.”
So being a family-orientated company makes you view things in a different way?
“Definitely,” agrees George. “We’re looking after No.1 and we want to be seen promoting family-style values. As well as our family, so many other families are a big part of what we do that have been here for generations too. One thing is that our distributors around the world are also family-owned companies.
“Coming from a company with a family heritage, you tend to understand how other family companies work. It’s also far easier to get answers – there’s usually just one person to ask.”
So do you think the relationship you have with the distillery is far greater than just ‘bricks and mortar’ as a result?
“You only need to walk around the place and think that most of the buildings have been in place for 200 years or so and you stop to think that your great grandfather used to walk past them, probably wondering whether they will still be there in another 150 years. The place really is steeped in history.”
As name Glenfarclas is derived from ‘Valley of the Green Grass’ I’m keen to find out from George whether there is an additional poignancy to missing the green, green grass of home when he’s travelling around the world developing international awareness of the family’s distillery.
“I suppose that when I’m here, I don’t notice it as much,” explains George “but one of the best aspects of the relationship I have with the distillery is that so much of the business we do these days is being away from home and it’s always really nice to have somewhere to come back to that is ‘home’. I live nine miles away and still remember all the bumps in the road from the days when I used to ride my bike around the distillery. My father [Chairman, John Grant] still lives in Glenfarclas House and I suppose it is inevitable that I will end up moving back here in the future, but how you expect someone like my father to move out is another matter!”
I ask George about continuing the legacy of the Grants and the especially noticeable fact that the tradition of naming their heirs John and George has been somewhat abruptly ended by having two daughters!
“I suppose it has,” he laughs, “but I guess its time for a change.”
So has your eldest daughter exhibited any interest in taking over?
“Well, not quite yet, she turned five in January, but she certainly knows what daddy does,” he jokes. “The first word she learned to read was ‘Glenfarclas’ which is a little embarrassing when you’re sitting on a barstool with her and she starts shouting ‘Daddy, Daddy! Look, they have Glenfarclas!’ Amazingly she’ll occasionally chip in that they only have the Ten Years Old and not any of the older ones!”
It must be a very natural process for you and your children to grow up together in that environment, more of a slow process of osmosis rather than learning the ropes?
“I remember being a child and playing hide and seek around the distillery and I learned so much about the place just by doing that; what does this do and where does that go, etc. With all the health and safety rules, this has of course changed, but back when I was a child, the distillery was my playground. There were lots of great places to hide around there.”
Are there any traditions that you’ve continued from the previous generations of the Grants?
“Well, my grandfather George had a huge passion for curling. We’d be working away in the offices and he’d burst in saying ‘the ice has frozen, we’re going curling.’ And he’d just shut the office for the day! It’s still something that has a lasting legacy for us, even today.
How so?
“My grandfather entered into the contracts saying he’d be a sponsor so long as there is a competition, which is basically in perpetuity, so you can’t really get out of them! But because we’re a family company, you feel you have to honour his pledge, whereas if you were a big business it would be different.”
As well as being an avid fan of curling, it was George’s grandfather who drove home the idea of laying down casks which has led to the wealth of stock the distillery has available to them today – perfectly highlighted by the Family Cask series.
‘We’re about to do our 9th release and they’ve been hugely successful,” explains George. “The oldest vintage is from 1953, which is truly sublime, but some of the vintages from the 90s are exceptional.”
So does George think it has helped highlight the house style of the distillery, or conversely, its versatility?
“Well, ironically, the biggest selling Family Cask dates from 1979, which was in a plain cask, so isn’t your typical Oloroso style, sherry influenced Glenfarclas.”
So what does the future hold for the Family Cask series? Is there still sufficient stock in the distillery to continue on George S. Grant Sr’s legacy?
“We definitely hope so,” explains George. “We ran out of our oldest vintage, the 1952 and there will be some years where we’re going to get holes unfortunately, but as far as we can, we’ll continue to release a new family cask each year. We’re releasing a new 1997 vintage next year. There’s certainly a huge demand for it and fortunately the number of younger people beginning to enjoy whisky means that there’s demand for whiskies from the 80s and early 90s, looking for vintages from their birth years.
So rather like the Corleone family, one suspects that when George fully takes over this ‘firm’ from his father, it will be an offer he simply couldn’t refuse.
The notion of the whisky-making dynasty is not confined to Scotland however. The Beams have been distilling whisky since 1788 when Jacob Boehm arrived in Kentucky. Seven generations on, Parker and Craig Beam are still making Bourbon at (family-owned) Heaven Hill while Fred Noe works ambassadorially for Jim Beam itself. Scratch almost any Bourbon brand or distillery and a Beam will have been involved at some stage. Elsewhere in Kentucky, the Samuels family (distillers since 1783) remain involved at Maker’s Mark, while the fifth generation of Browns still control the mighty Brown-Forman, owner of Jack Daniel’s, Early Times, Woodford Reserve and a host of other beverages.
In other words, while its easy to think that whisky is a playground for multinationals, family firms still exist at all levels: from the Grants of Dufftown, the Browns of Louisville or the Torii family of Osaka (themselves the founders of a whole new whisky style), to single distillery operations. This isn’t as surprising as it may seem initially. As Gavin Smith argues in his piece on William Grant & Sons whisky is suited for family investment.
"I recall standing in the Forres warehouse of Gordon & MacPhail with David Urquhart looking at 70 Years Old casks, while listening to him outlining how his generation is currently laying down casks intended only for use in another 70 years time"
“In a sense, the Scotch whisky industry is peculiarly suited to stable family ownership, as it differs from almost all other manufacturing enterprises in terms of the ‘lead’ times between production and point of sale. It follows that long-term strategies are usually preferable to short-term, profit-making expediency, but the executives charged with running public distilling ventures often do not have the luxury of taking a far-sighted approach to their businesses.”
Not being in thrall to the short-term driven demands of the City seems to promote a different mindset. I recall standing in the Forres warehouse of Gordon & MacPhail with David Urquhart looking at 70 Years Old casks, while listening to him outlining how his generation is currently laying down casks intended only for use in another 70 years time. As his brother Michael outlines to Martin Nouet in her piece on G&M: “As a family business, we know that what is laid down today will give us returns in the long future. We have a long term vision. A lot of the single malts we are offering today have been laid down by my father and grandfather.”
The same could be applied to the Grants of Ballindalloch, sixth-generation custodians of Glenfarclas whose Family Cask series is a liquid demonstration of a family laying down stock for long-term. These rare bottlings aren’t of casks found that have been lost in the gloom of a dunnage warehouse, they were planned. In a family business, you could argue, you are not just setting up a business to look after yourself and your shareholders, you are caring for your own flesh and blood.
This isn’t to suggest that family businesses are better, or make better whisky, rather that being family-owned gives the business a different dynamic: the issue of time is different, the ability to act and react can be quicker.
There are many more family stories to be told because whisky isn’t just about the people who own the firms, but the people who work for them: the third and fourth generation coppersmiths, stillmen, the mashmen and coopers, and in the case of Richard Paterson, blenders. At its heart whisky is about family.
Can this model survive? To answer that, look to Campbeltown and Springbank where ostensibly ‘old-fashioned’ values still hold sway, yet Springbank isn’t an anachronism, but acting as the template for a new generation of independent distillers.
As whisky faces up to the 21st century what do we see? A new wave of new, small-scale, independent and mostly family-owned distillers emerging globally. It’s the 1820s all over again. Maybe in 10 years time someone will be writing about the Lark dynasty of Tasmania, the Akutos of Chichibu and the Bells of Tennessee.
Rising grandson
Dave Broom interviews Suntory’s Shingo Torii
The seed of the idea which grew into Japanese whisky was first planted in the head of the young Shinjiro Torii when he worked with his uncle’s firm, Konishi, in Osaka in the late 19th century. These were the still early days for liquor imports, but already the demand for foreign spirits was such that firms like Konishi were replicating the taste with judicious additions of artificial flavourings to domestically produced products. Shinjiro Torii had other ideas however.
In 1899, he had his own store in Osaka, Torii Shoten, and was importing wine. By 1907 he launched his first brand, a port called Akadama, complete with rather racy promotional posters. Spirits were still, however, nagging away at him. In 1919, he launched a Scotch brand called Tory’s and four years later had built Japan’s first purpose-built whisky distillery at Yamazaki.
These days, the firm he started is now known as Suntory and has spread far beyond whisky. In whisky, it owns Morrison Bowmore, retains a stake in Macallan, and dominates the domestic Japanese market. It also remains 90 per cent family-owned and his grandson, Shingo Torii, is the firm’s vice-president and master blender.
He occupies what seems to be a floor of the company’s offices in Osaka, a hushed elegantly wood-panelled zone with offices, meeting rooms and his own blending lab. If the day-to-day work is done at Yamazaki, this is where it is signed off.
“Creating and developing a positive tradition and culture is what makes the family firm ‘family’. Tradition, or what you could call ‘inheritance’, should be understood by everyone within the company. It is important this is handed down”
“For 86 years, while having a tremendous amount of respect for Scotch, Irish, Canadian whiskies, we have continued to pursuing the original style of producing the Japanese whisky which suits the Japanese palate.”
His answers are measured, deeply thought through and delivered in a fashion which manages to gently deflect the questions into an area where the concept of ‘family’ ceases to be simply about bloodline, but becomes one of values.
Given the importance of the founder’s principles, how important is tradition? Do you have a greater, or a different, understanding of legacy? “Creating and developing a positive tradition and culture is what makes the family firm ‘family’. Tradition, or what you could call ‘inheritance’, should be understood by everyone within the company. It is important this is handed down.”
So, the notion of ‘family’ is important in the mindset of how the company operates? “It is true that family management constitutes the backbone of the group today. However, it is the employees who actually generate the corporate activities by working hard and developing the ideas.” Is this an example of the guiding principles of a family firm being slightly different to that of a publicly-listed one? That, maybe, by being family-owned makes you view business in a different way?
“Just as all the faces of human beings are different, so the administration of every company is different depending on the histories and cultures they have experienced. I see family management as simply a form of style. However, it is also true that this style has enabled Suntory to pursue its dream for a significant period of time and makes the moral values which lie at the heart of the business a top priority in the firm’s values. The founder placed importance on challenging [people’s] spirits in business. On the other hand, he established a company vowed to act morally and ethically, espousing the words of Japanese sayings: ‘Unseen Virtue and Visible Reward,” and ‘Sharing Profit with Society.’”
This, it strikes me, is more than just some glib mission statement dreamt up by an over-paid consultancy firm, it suggests a depth and richness of intent which isn’t too common in most corporate boardrooms. Does that mean that a family firm can do things in business which others can’t? “Yes. To have a deep conviction for making products. In addition, having a long-term plan in terms of half a century or a century, and being able to keep a sense of humility.”
But these are changing times. What is the role for a family business in today’s globalised economy? “It is because we are a family firm that we can establish a lasting, confidential, relationship with business partners by showing to the world our unchanging philosophy and policy.” So there is hope for the family-owned drinks firm? “Yes. I believe it will continue and that there will be new family firms born, but there can be no next generation without cultivation of human resources.” For Torii-san, Suntory being family-owned doesn’t make it better, it does however make it different and that difference lies in the manner in which it has adhered for three generations to its personal founding principles.
Family affairs
Gavin D. Smith looks at the William Grant & Sons story
The story of the creation of Glenfiddich during 1886/87 is one of a close-knit family working hard together, and it is testimony to how much of the task was undertaken by the Grants themselves that the total cost for the project came to the absurdly cheap sum of just over£700. When neighbouring Balvenie distillery was built in 1892/93 the expenditure was approximately three times as much, and William Grant had certainly not developed a reputation for throwing his money around.
Throughout the years that followed, whether the fortunes of the Scotch whisky industry were good or bad, the Grant family and the Gordons into whom they married kept a tight hold on the reins of what became William Grant & Sons Ltd.
“We have got to the size where we employ 1,500 people and sell to 180 countries. We are also involved in distribution of 80 per cent of our sales"
This year Whisky Magazine’s 2011 ‘Whisky Distiller of the Year’ celebrates its 125th anniversary, and the firm’s life president is octogenarian Charles Gordon, great-grandson of William Grant, while the founder’s great-great-grandson Peter Gordon occupies the position of chairman, and represents the fifth generation of the family to head up the business.
According to Peter Gordon: “We have a board of eight people. Three are family shareholders, three are independent, non-executive directors and two are executive directors. This gives the balance of allowing management to operate, but also take into account the long-term view of family members and the skills they bring.”
William Grant & Sons Ltd is Scotland’s largest independent distiller, and Peter Gordon explains: “We have got to the size where we employ 1,500 people and sell to 180 countries. We are also involved in distribution of 80 per cent of our sales. We don’t have enough family members to cover all of that, even if we wanted to, so we need a professional executive team.
“We are conscious of the need to give freedom to Stella David (chief executive) and her team, but we also to ensure sustainability for the next 20 or 30 years. The benefits of the right level of family involvement include the capacity to attract quality people from outside who know they will be given the freedom to operate. The non-executive directors are sometimes amazed by the level of engagement and the pride felt by the shareholders.”
In order to secure long-term family ownership, a major share buy-back programme was instituted during 1986/87. As Peter Gordon explains: “There had been an element of ‘dilution’. By the time the company had been in existence for a century there were some 50 people who owned shares, and quite a few of them had relatively insignificant shareholdings. Around 50 per cent of the shares were bought back, and some 10 people now control 90 per cent of the company.”
With an eye to the next generation of family members in the business, there is a Family Council, an organisation described by Peter Gordon as “A collection of shareholders and members of the next generation of shareholders. It’s been in existence for 15 years and is a non-legal body where ownership issues are discussed.”
We tend to assume that family-owned organisations tend, by their very nature, to be conservative in outlook and approach to business. With no baying hoards of rapacious shareholders demanding quick returns to keep them on their toes, there is surely a tendency towards complacency and playing safe?
This has certainly not been the case with William Grant & Sons Ltd, which prides itself on innovation and a pioneering spirit. The firm was the first Scottish distiller to market a single malt in England and overseas in a coordinated manner, with Glenfiddich heading out of Scotland during the early 1960s, and in 1969 the country’s first dedicated distillery visitor centre was established at Glenfiddich.
More recently, William Grant & Sons Ltd has diversified into gin, vodka, rum and brandy, and proceeded to purchase the Hudson range of craft-distilled whiskeys from New York State’s Tuthilltown Spirits and also the Tullamore Dew Irish whiskey brand during a 2010 spending spree.
Given Grant’s much vaunted independent stance, which led to the construction of its own grain distillery at Girvan in 1963, building a new distillery to supply Irish whiskey for Tullamore Dew is a racing certainty. According to the whisk(e)y grapevine, a site in County Offaly is favourite for such a development.
“If you have long-term connections with people who have played a major part in the business in the past, you can still pioneer and be innovative,” says Peter Gordon. “Being a family company enables us to think like that. But there is also a belief that you have to do things properly. Quality is very important.”
In a sense, the Scotch whisky industry is peculiarly suited to stable family ownership, as it differs from almost all other manufacturing enterprises in terms of the ‘lead’ times between production and point of sale. The spirit currently being distilled will not see the light of day for a minimum of three years, and in the case of whisky destined for single malt bottlings, the timescale extends beyond a decade.
“It’s good for people to have a sense of continuity and good for the brands. There are lots of genuine stories to tell. We hoard, we have vast archives of material we can call upon. We look after those connections with the past”
It follows that long-term strategies are usually preferable to short-term, profit-making expediency, but the executives charged with running public distilling ventures often do not have the luxury of taking a far-sighted approach to their businesses. Most shareholders are notoriously unsentimental, and chief executives may only be judged on their most recent quarterly results. The need to produce crowd-pleasing, eye-catching returns can often over-ride the long view of what is best for the enterprise’s enduring health.
Family members involved in William Grant & Sons Ltd operate within a prevailing ethos of pioneering independence and valued heritage. “There is the possibility of connecting today with the past,” says Peter Gordon. “It’s good for people to have a sense of continuity and good for the brands. There are lots of genuine stories to tell. We hoard, we have vast archives of material we can call upon. We look after those connections with the past.”
Some brands, both within and out-with the Scotch whisky industry feel the need to confect provenance, but in the case of William Grant & Sons Ltd tangible and positive links to earlier eras are all around.
One of the company’s most recent releases was just 11 bottles of 55 Years Old Glenfiddich, issued to commemorate the 110th birthday of Janet Sheed Roberts. Janet is the grand-daughter of William Grant himself, and she retains memories of him from when she was a young girl. Janet is Peter Gordon’s great-aunt and still lives close to Glenfiddich distillery.
The firm also has an enviable reputation for positive staff relations, boasting many long-serving employees. “We have genuine respect for our workforce,” insists Peter Gordon. “Long service allows us to hold onto things that are important, things that work. In 2010 seven people celebrated 40 years with the company, and this year two of them celebrate 50 years with us.”
So just how has William Grant & Sons Ltd survived as a family-owned entity in a predatory commercial world? “The concentration of ownership is really down to a combination of happenstance, good fortune and good management that have allowed it to be as it is,” says Peter Gordon, “and we share real pride in our assets – great people and great brands.”
A tale of two families
Heaven Hill’s families by Charles K. Cowdery
One thing about family-owned companies, they generally don’t mind nepotism. They don’t endorse favouritism, of course, but they like the idea of multiple members and generations of families working together throughout the enterprise.
Heaven Hill Distilleries was founded in Bardstown, Kentucky, almost 80 years ago, just as the pernicious folly known as National Prohibition was drawing to a close. The Shapira family was there at the beginning and so were the Beams.
It has the ring of legend now, this story about how the five sons of Max Shapira invested in a new distillery, in those bold days just after Prohibition, when everything seemed possible.
They famously knew nothing about the whiskey business, but the Shapira brothers knew who Joe Beam was.
"Originally a contract distiller, Heaven Hill began to concentrate on developing its own brands. Today one of those early brands, Evan Williams Kentucky Straight Bourbon, is the #3 American whiskey, after Jack Daniel’s and Jim Beam"
On the list of Heaven Hill’s original investors, Joe Beam’s name came first. Before Prohibition, when there were still dozens of whiskey distilleries in Kentucky, many had a Beam as master distiller.
Although the Shapira brothers knew nothing about making whiskey, they figured Joe Beam knew everything about it. What they knew was how to operate a business successfully. They had already built up a thriving chain of department stores begun by their father and were looking to diversify.
Heaven Hill Distilleries grew and became ever more successful, surviving many industry changes, even as the department store chain faded away. Originally a contract distiller, Heaven Hill began to concentrate on developing its own brands. Today one of those early brands, Evan Williams Kentucky Straight Bourbon, is the #3 American whiskey, after Jack Daniel’s and Jim Beam.
The Shapiras watched as other distilleries were acquired or went out of business, many during the industry’s sudden collapse in the late 60s and early 70s. Unlike many producers, who stayed in business by taking long distilling holidays, Heaven Hill never missed a season. As other companies looked to unload struggling brands, Heaven Hill was often the only buyer.
Heaven Hill is a closely held company, whose ownership is kept entirely within the Shapira family. They don’t reveal sales figures, let alone profits, but they claim to be America’s largest independent, family-owned and operated spirits producer, with the world’s second-largest holding of aging Kentucky bourbon whiskey, almost a million barrels. Heaven Hill is America’s seventh-largest supplier of distilled spirits.
Two of the Shapira brothers brought their sons into the business. One is current president Max Shapira. The third generation is represented by his daughter, Kate, his son-in-law Allan, and his son Andy. Kate heads marketing, Allan is COO, and Andy is director of sales analysis.
“Family ownership is the backbone of our corporate culture and vision here at Heaven Hill Distilleries,” says Max Shapira. “It allows us to have a clear long term perspective on our corporate positioning and strategy, free from outside influences and pressures.”
As with many family businesses, there is little distinction between home and work. “Every vacation we went on we went in liquor stores along the way or stopped to have a meeting with one of our distributors,” says Kate Shapira Latts. “It was all just family pride and the focus of our family.”
Like their father, who after college spent a few years away from the family business before joining the company, Kate and Allan cut their teeth at Proctor & Gamble, while Andy previously worked at Bank of America. The third generation has been responsible for introducing many ‘best practices’ to the company, and for getting the company more deeply involved in product innovation and brand building.
“Unlike many other successful family-owned companies that find the transition from one generation to the next increasingly challenging, the third generation of our family is firmly established at Heaven Hill,” says Max Shapira.
Today, Shapiras still own and run the business, and Beams still make the whiskey. Both families like the arrangement and do not plan to change it.
A model distillery
Springbank and the Mitchell Family by Dave Broom
One of the families to enter the (legitimate) whisky business in the 1820s were the Mitchells of Campbeltown. Kintyre was famous for the volume and quality of its illicit hooch during the smuggling era - the records of plumber/still-maker Robert Armour attest to that. Records show that Archibald Mitchell Sr, was friendly with a local coppersmith (probably Armour) and operated an illicit still where today’s Springbank distillery now stands.
Indeed, the Mitchell family would be involved in establishing three of the ‘Wee Toon’s’ distilleries: Springbank, Glengyle and Riechlachan.
Campbeltown’s fortunes have waxed and waned since those days. Today, the erstwhile whisky capital of Scotland is quiet and the three score and more distilleries which so scented its air that folk wondered whether the loch could itself be made of whisky, have been reduced to a trio.
Incredibly, given the decimation of Campbeltown’s distilling stock, two of them (Springbank and Glengyle) are owned by the great-great-great-grandson of Archibald Sr, Mr Hedley Wright.
“Tradition in production methods should be all important for any old-established family company. At Springbank, we are all extremely aware of the legacy handed down through each generation of the founding family”
The ethos which formed Archibald Mitchell’s original vision still exists. “We have a reputation for producing a hand-crafted whisky,” says production director Frank McHardy. Springbank remains the only distillery in Scotland where the entire whisky-making process, from barley to bottle, takes places on the same site. “Mr Wright wishes that situation to continue for the foreseeable future in order to keep the traditional production processes in place. If we weren’t family owned it is doubtful whether that scenario could continue.”
Does this mean that a family firm is more attuned to traditional methods than a larger player? “Tradition in production methods should be all important for any old-established family company. At Springbank, we are all extremely aware of the legacy handed down through each generation of the founding family.”
This adherence to and belief in traditional values colours most people’s opinions of Springbank as an old-fashioned distiller. This insistence on the hand-crafted methods, direct fire, bottling in house un-chillfiltered and un-coloured can lead folk to think of them as idiosyncratic, iconoclastic even. Yet, when new distilleries set up, Bruichladdich,
Kilchoman etc., the template for their approach to whisky making didn’t come from other 21st century plants, but from Springbank, multiple styles of whisky from one site, local barley etc etc. In other words, rather than being out of touch with the whisky world, Springbank is at the centre of the new wave. Not that Mr Wright would be particularly bothered by any of that, you’d imagine. He makes whisky the way he wants to and is untroubled by the opinions of the wider industry and sundry commentators. If people wish to copy Springbank let them, if they don’t that’s up to them.
The downside of this hand-crafted approach, McHardy admits, is price.
“Our unit costs are higher than most other companies. However, we feel tradition in production is more important than cutting costs. This is only possible because we are family owned. Being an independent family-owned firm allows us to the opportunity to make decisions relating to the running of the business almost immediately.”
Springbank makes as much whisky as it can afford to make. When the cost of barley and oil rose steeply a few years ago, it simply extended its silent season. While ill-informed commentators were claiming that the distillery was closing down, the workforce were doing maintenance jobs and, when the price fell, they started distilling again, having saved money.
It’s called having long-term perspective.
And what of the role in of the family firm in the 21st century?
“Any family-owned company has a role to play in the current economic climate,” says McHardy. “We think that most of the general public rightly have the view that small companies who are family-owned will produce a product which is almost hand-made. If the family-owned drinks firm has a good product, refuses to compromise on quality and is not tempted to increase production beyond their capabilities, then we would say that they are not an endangered species.
“We’ll never compete with the bigger companies and therefore we take the view that there will always be a place for firms like us.” And the future? “We will always maintain family links within the structure of the company.”
Tradition, quality, consistency and working within your budget. All of these may seem conservative with a small ‘c’, though maybe the old Scots word ‘canny’ might be more apposite, but they have held Springbank, under the guidance of the Mitchell family, in pretty good stead for 184 years. Why change now?
A blend of the old and the young
Gordon and Macphail’s generations by Martine Nouet
John Urquhart, aged 15, started working as an apprentice at James Gordon and John Alexander MacPhail’s grocer shop in 1895. They are tea, wine and spirits merchants.
December 2011, Michael Urquhart, joint managing director of Gordon & Macphail, just comes back from a business trip in China, a new market the company is actively developing.
116 years between the two events; the small retail shop has grown into five whisky areas: retailer, wholesaler, exporter, bottler and distiller.
John Urquhart, who took over the Gordon & MacPhail business in 1915, was joined by his son George and his daughter Betty in 1933. George’s eldest son Ian arrived in 1967, followed by his two brothers David in 1972 and Michael in 1981, also with their sister Rosemary. George died in 2001. Ian retired three years ago, David will do the same in six months but will remain a non executive director. Now Michael’s four nephews have joined the board of directors : Neil, Ian’s son, Steven Rankin, Rosemary’s son and Stuart and Richard, David’s twins.
"It is important to have a younger perspective on how to develop the market and the distribution of our whiskies. The attitude of the society changes and we have to keep in tune with what attracts younger consumers. This is a blend of the old and the young and it works!"
The fourth generation is present. Michael’s children, one boy and three girls, are doing “their own things” for the moment. There is also a non-family member in the board: Ewan Mackintosh, the whisky supply director.
This younger blood is welcomed by the eldest: “My nephews all worked in the company during their summer holidays when they were students,” Michael explains. “They had to get hands on at the bonded warehouse or the retail shop or the distillery. To know the company and to be sure they wanted to work here. It is important to have a younger perspective on how to develop the market and the distribution of our whiskies. The attitude of the society changes and we have to keep in tune with what attracts younger consumers. This is a blend of the old and the young and it works!”
Michael Urquhart considers that a family business can react more easily and more rapidly to the economic situation and to the demands of the market. And it is also an advantage in the whisky industry where time is an essential issue. In big companies, the shareholders want an immediate return of their investment and they can affect the marketing decisions negatively, for instance pushing the company to carry out premature bottlings. “As a family business, we know that what is laid down today will give us returns in the long future. We have a long term vision. A lot of the single malts we are offering today have been laid down by my father and grandfather. Like our “Generation” range, the 70 Years Old Mortlach we launched last year and the 70 Years Old Glenlivet we released a few months ago”.
Continuity feeding on patience is obviously one of the key to success in family businesses. Michael sums up the essence of Gordon and Macphail: “The future is shaped by what we do today, while today reveals what we did in the past”.
Judging by the figures of today, the future seems full of good prospects. In Gordon & MacPhails’ last financial year, export sales rose by 58 per cent, from £3.2 million to £5 million. This year, sales are up a further 26 per cent. “When you look at the Scotch whisky industry, you realise how much it is booming with the emergence of new markets and a growing demand.”
In 10 or 20 years time, the fourth Urquhart generation will thank their uncles and father for having taken the risk to invest substantially in good quality casks, to have carried buying casks from 80 distilleries and to own their own distillery; Benromach, which is also on the high with sales featuring a double figure rise. And like the previous generation, the fourth generation will have prepared the present of the fifth one.
In these times of uncertainties, this might be the perfect illustration of innovation.
Never taken for granted
Neil Ridley talks to George Grant of Glenfarclas
If I ever need any guidance, who’s a better consiglieri than my father?” (The Godfather.) If one were to consider an example of a famous dynasty, it is unlikely that the humble history of a Speyside distillery would rank that highly on the list of images, which the word conjures up. In contrast, cinematic masterpieces such as The Godfather highlighted the turbulent and capricious dealings that came hand in hand with a certain type of dynasty- the family run ‘firm’.
However to go from one extreme to the other, perhaps there is bizarrely, a shared set of virtues which inextricably bind every family business, despite their origins: a fiercely independent spirit, a lack of compromise and above all else, a steely determination to succeed on your own.
Of course with tongue firmly planted in cheek, cross the Grants of Glenfarclas, and you’re more likely to find a hogshead in your bed than a horse’s head…
Glenfarclas is one of the last ‘true’ remaining examples of an independently run family distillery in Scotland and looking at its illustrious family tree it is easy to see why it has maintained such a highly successful tenure in an industry now dominated by corporation and compliance. Since 1865, Glenfarclas has been under the stewardship of the Grant family and today, the 5th and 6th generations (Chairman John L. S. Grant and his son, George S. Grant) are still as active in running of the distillery as the first generation John Grant was, when he acquired the distillery for £511 & 19 shillings, alongside the tenancy of Rechlerich Farm.
"Of course we want to make a living, but we want to make sure that everything is still going to be there for future generations”
The distillery thrived, despite an unsuccessful partnership in the 1890s with Pattison, Elder & Co., which led the 3rd generation George Grant to proclaim the distillery was to never again rely on outside investors. It is a sentiment that runs as true today when I sit down with sales director and globe trotting Glenfarclas ambassador, George S. Grant to discuss what it’s like to be at the tiller of such a legacy.
An obvious question George, but how important is the independent spirit to how you run Glenfarclas in the 21st century?
“Being an independent distillery we can certainly react to the market place very quickly,” he explains. “For instance, because we’re not answering to a board of directors we can make decisions on laying stock down carefully for a longer period of time. Of course we want to make a living, but we want to make sure that everything is still going to be there for future generations.”
So what can independent family run distillers do that others can’t?
“With so many big companies, most directors will only be there a decade or so and they’re keen to make their mark quickly,” he continues. “But we’re looking at the long term. If we can’t do something now, we’ll do it in 30 years time.”
So being a family-orientated company makes you view things in a different way?
“Definitely,” agrees George. “We’re looking after No.1 and we want to be seen promoting family-style values. As well as our family, so many other families are a big part of what we do that have been here for generations too. One thing is that our distributors around the world are also family-owned companies.
“Coming from a company with a family heritage, you tend to understand how other family companies work. It’s also far easier to get answers – there’s usually just one person to ask.”
So do you think the relationship you have with the distillery is far greater than just ‘bricks and mortar’ as a result?
“You only need to walk around the place and think that most of the buildings have been in place for 200 years or so and you stop to think that your great grandfather used to walk past them, probably wondering whether they will still be there in another 150 years. The place really is steeped in history.”
As name Glenfarclas is derived from ‘Valley of the Green Grass’ I’m keen to find out from George whether there is an additional poignancy to missing the green, green grass of home when he’s travelling around the world developing international awareness of the family’s distillery.
“I suppose that when I’m here, I don’t notice it as much,” explains George “but one of the best aspects of the relationship I have with the distillery is that so much of the business we do these days is being away from home and it’s always really nice to have somewhere to come back to that is ‘home’. I live nine miles away and still remember all the bumps in the road from the days when I used to ride my bike around the distillery. My father [Chairman, John Grant] still lives in Glenfarclas House and I suppose it is inevitable that I will end up moving back here in the future, but how you expect someone like my father to move out is another matter!”
I ask George about continuing the legacy of the Grants and the especially noticeable fact that the tradition of naming their heirs John and George has been somewhat abruptly ended by having two daughters!
“I suppose it has,” he laughs, “but I guess its time for a change.”
So has your eldest daughter exhibited any interest in taking over?
“Well, not quite yet, she turned five in January, but she certainly knows what daddy does,” he jokes. “The first word she learned to read was ‘Glenfarclas’ which is a little embarrassing when you’re sitting on a barstool with her and she starts shouting ‘Daddy, Daddy! Look, they have Glenfarclas!’ Amazingly she’ll occasionally chip in that they only have the Ten Years Old and not any of the older ones!”
It must be a very natural process for you and your children to grow up together in that environment, more of a slow process of osmosis rather than learning the ropes?
“My grandfather entered into the contracts saying he’d be a sponsor so long as there is a competition, which is basically in perpetuity, so you can’t really get out of them! But because we’re a family company, you feel you have to honour his pledge, whereas if you were a big business it would be different”
“I remember being a child and playing hide and seek around the distillery and I learned so much about the place just by doing that; what does this do and where does that go, etc. With all the health and safety rules, this has of course changed, but back when I was a child, the distillery was my playground. There were lots of great places to hide around there.”
Are there any traditions that you’ve continued from the previous generations of the Grants?
“Well, my grandfather George had a huge passion for curling. We’d be working away in the offices and he’d burst in saying ‘the ice has frozen, we’re going curling.’ And he’d just shut the office for the day! It’s still something that has a lasting legacy for us, even today.
How so?
“My grandfather entered into the contracts saying he’d be a sponsor so long as there is a competition, which is basically in perpetuity, so you can’t really get out of them! But because we’re a family company, you feel you have to honour his pledge, whereas if you were a big business it would be different.”
As well as being an avid fan of curling, it was George’s grandfather who drove home the idea of laying down casks which has led to the wealth of stock the distillery has available to them today – perfectly highlighted by the Family Cask series.
‘We’re about to do our 9th release and they’ve been hugely successful,” explains George. “The oldest vintage is from 1953, which is truly sublime, but some of the vintages from the 90s are exceptional.”
So does George think it has helped highlight the house style of the distillery, or conversely, its versatility?
“Well, ironically, the biggest selling Family Cask dates from 1979, which was in a plain cask, so isn’t your typical Oloroso style, sherry influenced Glenfarclas.”
So what does the future hold for the Family Cask series? Is there still sufficient stock in the distillery to continue on George S. Grant Sr’s legacy?
“We definitely hope so,” explains George. “We ran out of our oldest vintage, the 1952 and there will be some years where we’re going to get holes unfortunately, but as far as we can, we’ll continue to release a new family cask each year. We’re releasing a new 1997 vintage next year. There’s certainly a huge demand for it and fortunately the number of younger people beginning to enjoy whisky means that there’s demand for whiskies from the 80s and early 90s, looking for vintages from their birth years.
So rather like the Corleone family, one suspects that when George fully takes over this ‘firm’ from his father, it will be an offer he simply couldn’t refuse.
