Liquid gold flows at Glenfarclas, after five generations of prudent Scottish management. Charles Darwent paid a visit.
Even Directory Enquiries had conceptual difficulties with the name Glenfarclas. "Glenwhat?" said the voice. "Farclas". A doubt-filled pause. "How are you spelling fa ... what you said?" "f-a-r-c-l-a-s". "Oh. (Ill-suppressed tittering). I thought you meant something else."
Consider the importance of brand name to a product as allusive as malt whisky, and ask yourself whether you would willingly change places with John Grant, managing director of The Glenfarclas Distillery on Speyside. The answer, unless you are an Anabaptist, is that you probably would. Romantics among you might overlook any lack of Sassenach euphony in the name (which, in any case, means "green pastures") in favour of the distillery's situation, between the heather-covered mass of Ben Rinnes on one side and the swollen, silver Spey on the other.
Those of a more pecuniary turn of mind might appreciate John Grant's carefully concealed but obviously sanguine balance sheet. While other distillers have been subsumed into large conglomerates (not a few of them Japanese) or gone bust, Glenfarclas has happily turned burn water and malted barley into malt whisky for five generations of Grants, since 1836. "Of the three other Inverness distilleries, one is now a Beefeater Steak House, one is a supermarket and one's a car park," says Grant, looking very grim. "We've doubled our bottle sales in the last four years." What's in a name?
The story of how Glenfarclas has kept its head while all about were losing theirs is a lesson in good, old-fashioned Scottish prudence, a point that Grant-the-traditionalist is keen to underline. (Given the fate of the other Inverness distilleries, this Scottish common sense is clearly less common than he might think: but let that pass.) Standing in his gloomy, thick-walled warehouses, Grant is in the happy position of being surrounded by the fruits of his familial wisdom: some 80,000 barrels of Highland single malt, set aside against such very rainy days as those that saw off competing whiskies in the first half of the 1980s.
"Those were the days of the Great Whisky Lake," recalls Glenfarclas's MD, with the air of one narrating Glencoe. "People looked at all the whisky they had left on their hands and - sorry - liquidated their assets, sold it off at ridiculous prices. We", he notes with satisfaction, "did not. My father and grandfather were always of the opinion that whisky in the warehouse was like money in the bank. You didn't have to be a genius to see what was going to happen: if everybody got rid of their whisky then 10 years later, when it should have been maturing, there wouldn't be enough and prices would go whoosh."
In the event, it was not simply prices that went whoosh: for a complex variety of reasons, demand for malt whisky has also skyrocketed over the past five years, both on the domestic market and on the foreign market. ("If we knew all the reasons why," Grant beams, candidly, "we would be in an extremely happy position indeed.")
In part, the boom in malt has been the result of hard, educative graft on the part of the industry as a whole. "Fifteen years ago," says John Grant, a look of active distaste on his face, "we sent some market researchers down to London, to ask people in Oxford Street and so on for the names of their favourite malts. About 90% of them replied Chivas Regal or Johnny Walker Black Label."
For teetotallers among you, both of these brands are blends, not single malts. It is like replying "John Lewis" to the question "Which is your favourite couturier?".
Quick to spot trends, Grant opened a visitors' centre at Glenfarclas in 1973, becoming only the second distillery to do so. Attendances since have risen from 3,000 a year to 70,000, which makes it a nice little earner in its own right, quite apart from helping spread the word to Saskatchewan and Clermont Ferrand.
Another Grantian theory is that new neuroses about health actually worked in malt's favour: the imbibing public imbibes less, but consequently can afford to imbibe with a greater degree of sophistication. Along with such sine qua nons of unbridled yuppiedom as bottles of Mexican lager with slices of lime wedged in their necks, the drinking of malt labels the drinker as a person of taste. By these lights, the more recondite the malt, the greater its appeal, a curious form of hepatic snobbery that may actually make Glenfarclas's unordinary surname work in its favour.
Tight-lipped as ever about precise figures ("Our competitors may read your magazine," he says darkly), Grant nonetheless confirms that the percentage of sales as exports has increased "dramatically" over the past five years, notably to Japan and - "the jewel in our particular crown" - to France, where malt whisky is the ultimate "bon chic bon genre" (BCBG) tipple.
This last fact evokes a certain amount of hollow laughter at Glenfarclas. Having an unwieldy brand name may have done Grant's product no harm at all, but having a hinterland centred on Brussels' bureaupolis causes Grant to fulminate in a way that is mildly alarming. "The EC?" croaks Glenfarclas's MD, with obvious self-restraint. "It is a totally nonsensical, idiotic, illogical body."
"Are you sure you want to go on record with that, John?" says Grant's PR man, Malcolm Greenwood, clearly visualising BCBGs converting en masse to gin in the face of such potent Europhobia. "Absolutely," says Grant.
It is not difficult to understand his disaffection. Glenfarclas's success has been built on bucking trends rather than on being forced to conform to them: its marketing slogan is "The Spirit of Independence"; much of its product image relies on oddity.
More to the point, EC conformance has cost Grant a great deal (unstipulated, needless to say) of money. "Ten years ago," he says, "a bottle of whisky was 26 and two thirds fluid ounces, and a case was therefore two gallons. Then we went metric, and a bottle was 75 centilitres, a case nine litres. Now Brussels has decreed that a bottle of whisky has to be 70 centilitres. It's caused us massive problems. The US and Far Eastern markets don't want 70cl bottles: they want their traditional four fifths of a quart. So we now have to keep double stock, with double packaging. As for bottling" - Grant emits a wild laugh - "we're a small, specialist producer. Big bottle-makers would only do runs of 70cl bottles that were the equivalent of three years' supply, and that's a lot of money to keep tied up. Thank goodness, we found a small, family-owned glassworks in Kent who came to our rescue. The EC seems to me a most uncommon market."
Research suggests that distillers will have to sell an extra eight million bottles of whisky annually to compensate for the 5cl per bottle shortfall, and, says Grant, grimly, "I just don't see that happening".
As if the men in Brussels were not enough, John Grant has also had to cope with the recent attentions of the Chancellor of the Exchequer, and God. The former delivered a devastating double-whammy to whisky distillers by first hiking duty on spirits and then abolishing stock relief on warehoused liquor. For an industry whose business is setting side its product for 10, 20 or even 50 years, the implications are catastrophic. (Waving a weary hands at vats of ill-smelling barley mash, Malcolm Greenwood says: "Who else do you know who would manufacture a product and then set it aside for decades before selling it?") The Almighty has pitched in by visiting a drought on Speyside for the past four years - "We're now known as the Moray Riviera," sighs Grant - lowering the water table and reducing Glenfarclas's peat burn to a trickle.
Nonetheless, John Grant is evidently a happy distiller, and - considering his family's clear capacity for turning circumstances to its advantage - so he might be. A tour of Glenfarclas confirms that, for all its emphasis on tradition, Grant's idea of distilling is far from hidebound. Given the cachet of tartan and heather and a corporate video sufficiently full of bonny banks and braes to bring mist to the most resolutely Japanese of eyes, one might have expected shaggy Scots doing arcane things with ling and peat-smoke. On the contrary, Glenfarclas pointedly balances the appurtenances of traditional malt distilling - swan-necked copper stills at £60,000 a throw, brass-bound liquor safes invented by Heath Robinson on DTs - with emphatically unsentimental production technology.
Discovering that heated air from the stills was released into the atmosphere at 650 degrees F, Grant has harnessed the previously lost energy to pre-heat wash en route from mash tun to still. "We're very proud of our little system," he says. "It saves us £3,000 a week, and we're using a 20-year-old boiler that would otherwise just have gone to waste." Even so, there is still enough excess heat generated to warm three acres of greenhouses, and Grant has toyed with ideas of adding horticulture to Glenfarclas's other charms.
Similarly, where 2,500 tons of boiling ale effluent was once poured into the river, it is now passed through a condenser, housed in what was a redundant outhouse, then converted into a cloacal-looking sludge and sold to animal feed manufacturers. "It cost £350,000 two and a half years ago, and it's already paid itself back," Grant chortles.
All of this Scottish prudence only makes the indignities of EC-inspired diseconomies the harder for Glenfarclas's MD to bear, however. "On the one hand," he says wearily, "a recent cost analysis we commissioned showed that we now manage to produce a ton of syrup at just about £4.85 thanks to all the effort we've put into the plant. The nearest rivals we have on Speyside spend about £5.60 producing the same ton. On the other, we end up paying something like £295 a ton for malted barley." Glenfarclas, in common with most distillers, now buys in grain rather than malting its own - "while the Japanese get it for £160 a ton because they're allowed to buy it - the same barley mind you - on the world market".
Technological changes, Grant insists, do not affect the traditional quality of his product, nor do they threaten its perceived agedness. "Ten years ago we wrote everything in double ledgers with fountain pens. That's not traditional: that's old-fashioned. Now we use computers, and it doesn't alter the whisky one jot."
A concomitant balancing of tradition and modernity is evident in the distillery's marketing. Although anti the discipline per se ("People say that we should spend, spend, spend on marketing just now," growls Grant, "but something in my Scottish nature objects to the idea of giving a rising spend to a falling sales volume"), Grant obviously lends grudging credence to Greenwood's insistence on such modern desiderata as "aspirationalism" and "shelf image".
With the familial genius for turning nasty moments to advantage, the firm has elected to use the new, EC-enforced bottle as the fulcrum for a complete repackaging of its whiskies: 10, 12, 15, 21 and 25 years old, and a high-octane confection called, tersely, "105" for the good reason that it is 105 degrees proof, 60% by volume. The new bottles look, if anything, rather older and more quaint than their predecessors, corked, lead-foiled and bearing wax seals (the last are imported, to Grant's disgust, from Switzerland).
At the same time, neither Grant nor Greenwood has any immediate ambition for the name Glenfarclas to achieve the sort of ubiquity enjoyed by, say, rival products Glenmorangie or Glenlivet. "There's no point in creating more demand for yourself than you are able to supply," reasons Greenwood. "We're really concentrating on getting our distribution right first, and there's no real point in advertising until we've done that. Glenmorangie's sales may have been up 51% last year, but their marketing spend ... well, you'll have to ask them about that."
Glenfarclas's marketing spend was, by contrast, "let's say, slim. We only have one customer in the UK," says Grant enigmatically, "and that is H Sichel, the Blue Nun people. They do all our distribution for us, so that we don't have to have three sales teams servicing 10,000 outlets. We also have one customer in France, one in the US - all of them family-owned firms like ourselves. We feel it gives us the best fit." One senses five generations of Grants nodding in spectral approval.
John Grant voices what might stand for his family's motto in business: "We've never employed an accountant or a chemist, and we've always ploughed everything we've earned back into stock." It is a philosophy that has served his company well when other distilleries, at the behest of tortoiseshell-bespectacled consultants, have tried fancier footwork and fallen flat on their faces. This sense of corporate feistiness also fits in nicely with the air of rugged traditionalism that has "branche" Parisians swooning at the ethnicity of it all.
At the same time, Grant's avowed traditionalism should, like porridge, be taken with a pinch of salt. "You know," he muses, "even a decade ago malt was seen as something that could only be drunk with water, if that. Certainly not ice. Now we get Californians in our visitors' centre bar asking for 12-year-old and orange juice, 12-year-old and (the faintest wince) Coke. My own view is that it's better they drink 12-year-old and anything rather than never discovering malt at all."
(Charles Darwent is a freelance writer.)