THE HELMSMAN We are honoured to feature Turnbull Hutton of United Distillers & Vintners. UDV is the spirits section of Diageo’s GuinnessUDV, which is the new name for the merged activities of Guinness and Grand Metropolitan, soon to be a ‘Total Alcohol Beverage Company’. LFW: What’s your job? I am Operations Director of Distillation and Spirit Supply, which involves the production of all spirits right up to the point of bottling. I am responsible to the head of GuinnessUDV Global Supply which includes Guinness and all overseas spirit production. A wide range of spirits is now produced in Scotland, including gins (Gordons, Tanqueray), vodkas (Smirnoff) and others such as Malibu, all of which are produced at Cameronbridge in Fife. I have responsibility for 27 malt and two grain distilleries, three maltings and eight warehouse complexes holding 1.1 billion litres of alcohol. I also have a coppersmithing company and four cooperages as well as research and quality control facilities. We also have a half share in the North British Grain Distillery. My job is to interpret the predictions of our sales teams (and apply a sanity factor!) and to ensure that the goods are delivered to the packaging plant, on time and in good order. Efficiently. LFW: Do you have enough distilleries? Yes, I think I have the number just about right. If you look at the number of brands that we are supporting and selling we would be struggling with anything less. We have sustainable production levels, no surplus stock, distilleries in good condition and now are passing the tests which big businesses apply; best utilisation of assets, lowest costs in the industry and high quality products. We are a superb operation just now. LFW: What about Rosebank; any chance of re-opening? A fine distillery, but no chance. I’d rather retain the 27 we have. The investment required is too great. It has been considered because of the new canal project but how many more visitor-centre distilleries do we need? LFW: And Port Ellen? The vandals have done a pretty good job and I would rather remove it but we have a preservation order slapped on us “because it’s got pagodas”—yes, corrugated-iron pagodas! It’s a rundown eyesore of a place. As for selling it, we have a maltings sitting there which is important to the island and having a distillery at the back owned by someone else doesn’t make any sense. Lagavulin and Caol Ila are very important to us and I don’t see any benefits for UDV in doing anything with Port Ellen other than tidying the site. LFW: Have you any good news? I started this job with 27 malt distilleries and when I retire I intend there will be 27, all running efficiently plus two grain distilleries runningflat out. From the 1970s we had 30 years of closing things but that’s over now. We became a world class closer-down. Well not any more. I’ve seen growth and closure. My first job in the mid-sixties was for the Distiller’s Company as a bond clerk in South Queensferry, the best training ground as it was a blending and packaging plant for all the small DCL brands—a lot of variety. They gave me six months in each area: cooperage, bulk blends, bond department, warehouse rents etc. By the late 1960s they were shutting down various small plants around Edinburgh to move to Leven in Fife. I managed to wangle a job managing the bond department where I spent six years before I moved to production headquarters to work with Ronnie Martin who took a shine to me, despite our being very different. My job was stock scheduling and Secretary to the Production Committee. At that time DCL had 45 malt distilleries, all necessary because sales were growing at a constant 10% per annum. No one was going to cut back production with sales growing like that. Then there was an oil crisis, the Americans took up jogging and British youth rebelled against whisky—suddenly sales wereflat! Now everybody’s an expert on overstocking, but with decades of growth and the long delay between making and selling, it was inevitable we would get a whisky loch. We were an aircraft carrier going full pelt—if you have one or two distilleries you can be pretty quick and cut back production, but we had 45 and communities dependent on them. You can appreciate the company hoped this was a temporary hiccough; if not, then they had major social problems and they were well aware of their responsibilities. It was tough, very tough. It became clear we had over twenty distilleries and three packaging plants too many. We had to close some. We took two goes at closing them—we were hoping that the first closure might be enough but after two years we had to do it again. Eventually a total of 21 malt and three grain went. We then had a further ten years to manage the surplus stocks out of the inventory. I think we did that responsibly; we didn’t dump, we over-aged and sold surpluses instead. People had certain views on the DCL. They thought it a sleeping giant if somewhat disconnected. With hindsight maybe so but the management were hugely supportive of the operational side of things. They had built the business on acquiring production assets and they were very cognisant of their social responsibilities; the ordinary employee of the DCL thought it a good company to work for, sons followed fathers. They were gentlemen and in something of a time lock. I don’t think their alleged long lunches were a bad thing. There are a lot of good things in the whisky industry and long lunches—when you drank your product—was one of them. Now we eat sandwiches and drink fizzy water, it’s terrible. I try to resist that! LFW: Then along came Guinness. At that time DCL had five stockholding companies, Walkers, Buchanans, Dewars, White Horse and Torphold (the other brands) all effectively competing with each other. After Guinness we set about consolidating them, a plan we had drawn up prior to the takeover. Over four or five months we picked up one company per month, consolidated the stock, gathered the recipes, reclassified the malts and moved on. We then had control over inventory and realised the industry’s surplus was all ours! Everyone else was short of stock because they had over cooked their cutbacks or their markets had developed and they didn’t have the right stock profile. So we made quite a lot of money dribbling out our surplus and re-established trading links with the industry. After being so remote for twenty years we were to become a part of the industry and take on a leadership role. Soon people were willing to take malt fillings, grain whisky or warehouse with us and as a consequence the Inventory & Supply Department became quite a big profit centre. I established the Commercial Division which encompassed the inventory as before but also warehousing and coopering—the whole middle part of the process between distilling and packaging. In 1998 when the merger with IDV was proposed and Alan Rutherford was retiring as Distilling Director I was given the job of distilling as well. I’m no distillery technician, which Ronnie and Alan were, but I believe if you have the right people in the right structure you let them get on with it. If the boxes are right and the individuals are right then you’re okay. We’ve invested a lot in warehousing and produced big efficiency gains after a long lack of investment. We’ve looked at our maltings (we are the third largest in the UK) and the distilleries have been attended to. My team helped me decide our strategy for the business which is based on cost, quality and service. Cost is important because if we are not an efficient producer our owners are going to question the need for an operational side. Quality is vital; if we don’t maintain the quality aspect we have nothing to sell. Service—we have to make sure that orders can be processed timeously; if we are supplying the packaging plants who are our immediate customer, we have to be sure the goods are there at the right time. Now, three years since the merger, we believe that we have real cost and service advantages. There is belief that, because you are big, you are dumbing everything down, but I refute that absolutely. I think it works the other way, it’s because we are big we have the resources and capital to do the best job. We have the efficiency of scale and I don’t think there is anyone more stringent in terms of quality control than we are. LFW: Do you want self sufficiency? We have self sufficiency in terms of volume but we will always exchange with other producers. Each year we have about sixty distilleries represented in our stock. I don’t see any future in anybody becoming insular. It is too small an industry, too important and we all need each other. LFW: Don’t you need to increase production at some distilleries? Our flagship distilleries, the Classics and others such as Cardhu and Royal Lochnagar, are not designed to be volume sellers. I tend to look at these as Morgan cars, they are hand crafted. If demand exceeds production because of the hand crafted nature then the price paid is for a scarce commodity. I would always resist increasing the size of a distillery; I’m not going to bastardise a distillery by putting in extra stills. These distilleries are extensions of the marketing arm so we maintain them as showpieces where visitors are welcome. They operate on five days production and seven days fermentation and we rest the stills. Some distilleries can run full time without affecting the character of the whisky, but there are others where, if we run them for seven days, we get a nutty characteristic due to the shorter fermentation time. Not only will that manifest itself in the single malt but eventually it will bugger up every blend we’ve got. The proposition of quality is lost. Malts are a business within the business. J&B, Black and Red Label are high volume, fast moving, consumer goods. Malts are hand crafted and a different packaging proposition. We have a malt marketing team that we work very closely with; we’ve adopted each other into a seamless relationship. They focus on the higher margin malts that make better profits. We have the provenance, we own the distilleries and we have the stock in our warehouses. If a malt connoisseur wants variety we have it with things like the Rare Malts and Distillers Editions, legitimate niche products that are making serious money for us. LFW: And the other distilleries? My job, just now, isn’t telling the malt distilling team up north how to make whisky and it is not telling the inventory department how to make up the blends, they know that. My job is giving them all enough space to do their jobs and I have to convince those above that what we are doing is right. We’ve got flagship distilleries and we’ve got bloody efficient six still units, some of which are recognisablefirsts in any classification and will remain that, but they don’t have visitors in. Health and safety is paramount, quality is paramount and the focus is for consistency, but we ain’t necessarily going to whitewash the walls twice a year as we do at Lagavulin or its sisters. LFW: Will we see character changes? No. Clynelish will still be Clynelish, the character remains unchanged. There is a perception with newcomers to the trade that if you have been in it for 30 years you either must be some kind of fool or lack ambition. These guys arrive from other businesses and they’re confronted by some tetchy Scot; they think ‘luddite’. However there are enough individuals in the operations side who are way ahead of the game. If we present the facts robustly enough no bean counter or marketeer is going to take the chance of tampering with the nuggets that we have. I’m not against using technology at malt distilleries; I don’t buy the myth that if you put in sensors linked to a computer you take away some of the human craft element. We are giving the operators better information to make a decision. A stillman after a bad night or with his mind elsewhere is going to make some bad judgements so as well as all the training, experience & skill, some information that helps him get better and more consistent quality is a good thing. Technology is essential. Of old, people drank whisky and felt that it did you a power of good. Now some dickhead comes along and starts to analyse the thing to death—if you feed a rat a particular component then it becomes an elephant—so people begin to panic. If we just sit back and let some lunatic with a gas chromatograph bugger up our product’s reputation we deserve to suffer, so we have to understand. If in developing that understanding we learn more about the process, great! But we’re not going to take anything away. LFW: How do you prepare a blend? When we get the forecasts in we consider the best use of our stocks, we decide our forward distilling requirements and draw up a specification that reflects the recipe of each blend. That goes through to the sample room as a submission for the make up of that blend for the year ahead and we check that proposed blend against the previous years. Then the blend is checked throughout the gathering process; we do a sight check before we tip it, we nose samples when they are in tanks or vats and we have a final sample that comes in here which we compare with our standard blend samples. If a bottle finishes in Kuala Lumpur and someone tells us it is not quite right we can dig out our blend, tanker and cask sample and compare it with the ‘complaint’; we can go right back to the individual casks that went into that blend. We know from the forecasts how much whisky we need. We know how much stock we have at packaging plants and what the bottling line is producing, so spirit supply is a replenishment job. We should never hold up a bottling hall because we have stocks of blended whisky waiting in tank farms and we are working ahead of the game. There are peak months of July to September, when packaging deplete what blended stock we have, but we will try and even out our blending over the year. I try and avoid overtime at warehouses; why pay premium rates if you have sufficient blended storage and you know what orders are coming along? We make 35-40 different blends each week, varying in batch size. Blackgrange which is only one of our eight warehouse sites empties 10,000 casks a week,filling 120 tankers transporting to one of two tank farms and then to one of three bottling plants. We produce 35 million cases of Scotch every year; 120 products including 70 separate blends. LFW: You’ve seen a lot of change. There are a lot of prophets of doom in this industry. If you listen to some of the pronouncements, every time there is a minor change in duty somewhere hundreds of jobs are created and then because someone wants to check on the quality of water thousands of jobs are at risk! I don’t think we do ourselves any favours by these mad statements. LFW: Your desert island dram? Black Label is the finest blend. For malt, probably Cragganmore, that was until a while ago when I attended one of our tastings in New York. Talisker was last and enjoyable as always; then it was suggested to take a glass of ice and add another miniature of Talisker to see how the flavours profile had reversed. I was sceptical, I thought it stupid in fact—but it’s amazing! Now I’m a Talisker on the rocks fan, maybe that’s because I’m a young hip transitional! LFW: Thanks, man! Our interviews with Mr. Hutton’s predecessors, Alan Rutherford and Ronnie Martin, in the following pages.