This article was initially published in the July issue of Global Drinks Intel magazine.
Earlier this year, Proximo Spirits officially opened a new distillery for its Bushmills Irish whiskey brand. The facility, adjacent to the Old Bushmills Distillery in Northern Ireland, is part of a sizable investment by the brand owner into Bushmills’ single malt distilling and maturation operations over the last five years. Global Drinks Intel spoke to Bushmills global brand director Donagh McHenry and Proximo’s global marketing director, Michael Cockram, at the event.
Global Drinks Intel: How did Bushmills get to where it is today, with the official opening of the second distillery?
Donagh McHenry, Bushmills global brand director: The acquisition [from Diageo] happened in 2015 and there were general plans in place to extend for some time, thanks to Bushmills’ growth. It took a couple of years for Proximo to assess the situation. About five years ago, we announced a general investment of approximately GBP60m [then-US$80.5m], which was to cover not just distillation but also warehousing infrastructure, which has been ongoing.
The last part was the distilling element. Construction began just before the pandemic, progressed through it and was finished about a year ago.
GDI: Prior to the acquisition, Bushmills seemed to me to be unappreciated by its previous owners.
Michael Cockram, Proximo Spirits global marketing director: My background is in single malt whisky. Bushmills is a malt whiskey distillery, so everything aligned to say we should be building a malt portfolio first. Blends are very important to us, but malt is the priority.
When I came with Donagh, we looked at the full stock profile, which the company hadn’t really done before. We found such a good pipeline for potential growth. It became clear that Bushmills should be not purely a leading Irish whiskey brand, but a leading malt whiskey brand, competing with the likes of The Macallan, Laphroaig, Glenfiddich and the rest.
We took that [Proximo CEO] Juan Domingo Beckmann, and he endorsed it. That’s why you’ve seen increased investment in innovation, including new packaging and older extensions.
I was surprised that Diageo and Pernod Ricard hadn’t done it.
GDI: Has Proximo brought its experience to Irish whiskey or taken learnings from the category?
DM: Once Proximo acquired Bushmills, it only took a year or two to get the right people in place in the global team, beginning with me as global brand director and Michael came with a huge background in whisky. We got down to business immediately and I’m sure we’ve brought our experience to bear.
It probably took some time to find our space within the culture of a company that’s been tequila-led. Bushmills is smaller than the Tequila business, but globally, we’re a 1m-plus-case brand that’s growing healthily.
GDI: Do you see Jameson as a competitor?
DM: We see Jameson as the Irish brand that must be respected, but we don’t look at ourselves in the same light. In its scale and in its make-up, Bushmills is completely different. We’re a single malt brand that happens to be Irish. That’s how we’re going to evolve.
MC: Take the analogy of blended Scotch, where there tends to be a number of people who transition from blended to malt. We compete with them at the blended level, but we’ve got this whole malt whiskey business they cannot replicate.
GDI: Who do you see as being Bushmills’ competition if not Jameson?
DM: We will join The Macallan, Dalmore and The Balvenie in due course. In our quality and our portfolio offering, we’re as good if not better. The only gap we have with them is scale.
MC: We see Bushmills as being high quality, visually distinctive and having passionate fans - but also easier to drink. I love Islay whiskies, but there’s no doubt they’re hard to drink compared to Bushmills.
DM: Following some tough years around the end of Diageo’s ownership and the beginning of Proximo’s, we’ve recovered to a 10% growth level. Of our around 1m cases, roughly 120,000 are single malt. The balance is very much held by our blended business, but single malt has doubled over the last three or four years.
We have to be realistic: Of course we’re competing with Jameson. We’re cool about that. But Bushmills can take the halo effect of our malt equity, which is already beginning to happen.
GDI: Has the resurgence of activity and revived consumer interest in Irish whiskey also provided a halo effect for Bushmills?
DM: We attribute Bushmills’ general health more to our course correction to emphasise single malts and accelerate brand equity building than we would to the fair wind of Irish whiskey. But, it’s a help.
MC: Irish whiskey looks big from the aspects of Europe and the US, but in Asia it’s very small. A lot of the world is still virgin territory for Irish.
GDI: What is Proximo’s wider portfolio strategy? I thought the aim was premium-plus, until you bought Conor McGregor’s Proper No. Twelve Irish whiskey brand two years ago.
MC: I’d say we’re very much into premiumisation. In the US, for example, the tequila plan has been led by 1800 and Maestro Dobel. Proximo’s backing of this distillery and our malt whiskey plan is a reflection of that premiumisation strategy.
Proper No. Twelve, in the US in particular, was an opportunity – with the way celebrity marketing works – to get a chance to play in the US and compete with Jameson in a different way. Bushmills could do it, but it would be slower. What Conor brings to the party in the US is a mass awareness – he has 76m followers on Instagram.
The future is going to be very much premium, both in Irish whiskey and tequila. Our tequila business in the rest of the world is really focused on premiumisation. We’ve also rebuilt Jose Cuervo, which is now a strong, powerful, revitalised brand in EMEA and Asia Pacific.
GDI: When do you see Tequila breaking out of the US and Mexico, and realising the worldwide potential that we’ve been talking about for so long?
MC: When I joined the drinks industry in 1996, the first thing I heard was that Tequila’s the next big thing. I’ve been hearing it forever! But, I’m very confident that it has finally broken out.
We saw two things. Firstly, Jose Cuervo had a step change when we moved its focus to refreshment and long drinks. That approach began to see traction: Spain, for example, is at nearly 200,000 cases, while Italy’s gone from 40,000 to 100,000 thanks to this strategy.
We’re also now seeing premium and super-premium Tequila break out for the first time. Our story in Japan is amazing – 1800 is doing really well. It’s really incredible. Elsewhere, Vietnam’s growing Tequila, while China will get there. So, finally, after 30 years, we’re actually seeing the breakout of tequila.
Bear in mind that tequila is only 1%-1.5% of the value of international spirits outside of the US [the US is closer to 18%]. Imagine the journey we’re going to be on if we get to even 5% share of spirits in the next 20-30 years.
GDI: A traditional brand owner question to finish with: There are a lot of gaps in Proximo’s portfolio. Is it a priority to fill those gaps?
MC: From my point of view, we’re in every single hot spot in the spirits industry. We’re making a virtue out of being a more agile, smaller company, with in-demand brands.
If we were in gin, for example, I’d be worried, because gin can be fashionable. Malt whisky/whiskey’s not going to go away, nor is Irish whiskey, while tequila is on the nascent part of its journey. Covering category bases is the old way of thinking – today, it’s about being focused, specialised and understanding your business well.
DM: In whisky/whiskey specifically, there are only two big stories right now: single malt and Irish whiskey. Back in 2018-2019, we looked segment by segment in the context of premiumisation. Since then, we’ve gone from a dusty couple of blends and the same threesome of malts that were around for decades, to being ‘fit-for-purpose’ in the two core segments in blends and in every relevant segment of malts; premium, super-premium and ultra-premium. In whiskey, we’ve been filling in the gaps thoroughly and meticulously.
MC: There’s more to come in the future. There’s no shortage of opportunities in terms of what we can do with what we’ve got.
This article was initially published in the July issue of Global Drinks Intel magazine.
