News that Philippine-based spirits business Emperador Distillers Inc (EDI) has acquired Scotch whisky brand Whyte & Mackay came out of left field on Friday.
In the line-up of private equity firms and drinks businesses rumoured to be throwing their hat in the ring for the star of United Spirits Ltd’s portfolio, Emperador was virtually nowhere to be seen. But the Edinburgh-based subsidiary Emperador UK, which was only registered at Companies House on Tuesday last week, beat the likes of Gruppo Campari and a healthy smattering of private equity firms to snap up some of the most successful spirits brands in the UK.
Against an overall spirits category showing 3.6% growth on declining volumes, Whyte & Mackay’s brands have put on impressive growth – W&M itself saw 31.9% value growth on volumes up one third [Nielsen 12/10/13], while vodka behemoth Russian Standard saw sales grow nearly 40% to £19m. Currently more than two thirds of Whyte & Mackay sales come from the UK.
“Most people are not sure who they are, it all happened quite quickly,” one whisky specialist told me – a sentiment that seems to be echoed from several other drinks quarters. So who is Emperador?
The business is part of a huge family-owned conglomerate in its native Philippines, with subsidiaries in food and beverages, property development and quick service restaurants.
The company has remained relatively unknown outside Asia, although it has had ties with Diageo, which has owned a majority share of Whyte & Mackay’s owner USL since 2011; Emperador acquired the spirit giant’s facility in Biñan in 2012. Last month it cemented the ties further by signing a deal to take Diageo brands to the Philippines’ middle classes.
Until now Emperador has had no presence in the UK – but this may be about to change. It currently has three Emperador brandies – Emperador, Generoso Brandy and Emperador Light – and BaR, a range of flavoured gin, vodka and tequilas. Emperador Brandy is currently only available in the Philippines but it is already the world number one by volume, racking up an impressive 30,000 9L cases in 2012 [IWSR 2014], more than double the amount of its nearest competitor, USL-owned McDowell’s.
But volume sales of EDI brands are expected to double in the next five years, and Emperador International Ltd has already announced its intention to pursue “rapid international expansion” and boost its share of the world brandy market to around a third within the next five years.
It is Whyte & Mackay’s established, attractive global network that is likely to provide the key to unlocking this growth potential around the world.
As one drinks analyst put it: “We were aware of them being huge in the Philippines – but we had not been sure of their global domination plans.”
We might be hearing a lot more about them now.
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