South Africa - Johannesburg - 03 July 2019 - Glenmorangie Master brewer and Director of creation Dr Bill Lumsden in South Africa had a one on one with Independent Media in Parktown. Picture: Simphiwe Mbokazi/African News Agency(ANA)
JOHANNESBURG - The Glenmorangie Company is targeting South Africa as one of its top 10 growth markets.

South Africa was a great opportunity for premium spirits and Scotch malts, said Thomas Moradpour, new president and chief executive of the company in an interview last week. 

Moradpour was appointed to the role in August last year and is currently on a roadshow visiting South Africa and the other targeted markets, which he failed to disclose.

South Africa was a volume opportunity and should gain proportional share of Glenmorangie sales and develop their brands, he said. 

Glenmorangie brands in South Africa start in the R400 range for a 10-year-old single malt original up to R100 000. 

They target the 7 to 10 LSM (living standards measure) due to the price point – the top end of the market.

"In emerging markets, you could see a developing urban and middle class with resources to afford it. South Africa was one of those," Moradpour said. 
The company was also eyeing other countries in Africa, he said.

South Africa - Johannesburg - 03 July 2019 - Glenmorangie Master brewer and Director of creation Dr Bill Lumsden in South Africa had a one on one with Independent Media in Parktown. Picture: Simphiwe Mbokazi/African News Agency(ANA)
He said countries like the US and Japan were mature markets that had had an appetite for Scotch for a while.

But according to Moradpour, Scotch malts and single malt was still a relatively new idea for South African consumers and Glenmorangie wants to get into the country early ahead of their Scottish rivals.

“It is early stages for the category. Single malt has been around for a while, but you can see the premiumisation of the brand all around the world and South Africa in particular, “ said Moradpour, explaining the trends in malt whisky. 

He said two factors were desired by consumer in South Africa. First, a desire for prestigious choices and, second, an underlying growing desire for intrinsic quality. 

“Glenmorangie was well placed for both," he said.

“Glenmorangie is delicious,” said Moradpour. “It is less about the logos to how the product is made.”

To meet its growing sales, the company has recently doubled its production capacity via a multimillion-pound expansion plan by installing more stills at both its Scottish distilleries, Tain in Ross-shire and Ardbeg on the Isle of Islay.

“As a chief executive of Glenmorangie, the decisions you make today affect the company 10 to 15 years down the line due to the nature of the product," according to Moradpour.  

"What you distil today, you sell tomorrow.” 

Moradpour said the company was investing in additional sales, casks, warehouses and much more to ensure the firm could grow their distillation capacity. His role was to ensure Glenmorangie could produce on a higher level and prepare for the future, he said. “We are laying down stock today at a much higher rate than our current sales as we believe in building our brands and making them successful so that our sales reach our levels of our distillation that we are committed to," he said.

FILE PHOTO: Bottles of single malt scotch whisky Glenmorangie are pictured in a shop near Lausanne

Glenmorangie has a distribution model via its parent firm, LVMH, a luxury firm based in Paris. 

Within that stable, Moët Hennessy has an office for Africa and Middle East based in Cape Town. 

The Really Great Brand Company distributes the Moët Hennessy brands, which includes Glenmorangie, in South Africa.

When asked about the potential geopolitical disruptions that could be caused by Brexit, Moradpour said: “I don't have a crystal ball. We are preparing for potential implications.
It means a potential disruption of our supply chains coming in and out of the UK. 

"When this happens, the rules and paperwork will change."

He said to prepare for this disruption, the company had increased production and the shipping of its products out of the UK to its logistic supply chains around the world so that there was no disruption at the consumer's expense.  

A second implication was the long-term change in tariffs and taxation, which would be managed by the UK and would take years to settle. 

“However, our company is not massively exposed on that front and we don't anticipate big changes to tariffs,” he said. “We are part of LVMH and manage talents, mobility around the world.” 

LVMH saw its wine and spirits arm achieve organic growth of 9 percent in the first quarter of this year.

Total LVMH Moët Hennessy Louis Vuitton Group revenues hit €12.5 billion (R196bn) over the period, an increase of 11 percent, with growth achieved in all geographic regions.