Loch Fyne Whiskies - Scotch Whisky Review - Edition 19

THE SURVIVOR - (full version)

We lost track of time when in conversation with Bill Bergius; here’s a FULL transcript.

Note that that is a shorter version on the previous page

LFW: What is your job?
I am Head of Brand Heritage for Allied Distillers—part of Allied Domeq. My main functions are Scotch Whisky training for our people; organising visits to Scotland for ‘hearts and minds’ brand experiences, and helping our distributors worldwide to add value to our brands. My team organises about 150 visits every year working primarily for Ballantine’s but also Teacher’s and Laphroaig.
‘Brand Heritage’ came about in the early 1990s as companies in Scotland became production-only operations rather than production-distribution-sales-and-marketing. When sales and marketing was removed from Scotland we had to consider how to convey the imagery and knowledge of our product to those responsible for selling it. Promotion is very difficult these days—it is not ‘buy it now because there’s 10% off this week’, Scotch needs support from Scotland, personalities, gravitas, and heritage.
Most of my time is devoted to Ballantine’s, the great jewel in Allied’s crown, it sells 6.5 million cases every year. Teacher’s does well with 1.7 million cases, mainly in the UK and Brazil and I have a little time for our malts, Laphroaig in particular.

LFW: Describe Allied Domeq for us.
Allied Domeq has been formed by consolidations within the alcohol-beverage industry. Initially there were the separate businesses of George Ballantine, William Teacher and Long John.
In 1976 the Teacher family—of which I am a member, found it tough as a family company competing with the massive Distillers’ Company Limited despite our selling nearly 2 million cases in the UK. For both family and financial reasons, Teacher’s was sold in 1976 to Allied Brewers (Tetley’s and Skol).
In 1982 Allied Brewers bought Lyons, the famous 'Corner Shop' company but by then an international food company who gave the Brewers a lot of international expertise.
In 1988 after the acquisition of Hiram Walker’s drinks interests Allied Distillers was created to look after Ballantine’s, Stewart’s Cream of the Barley and other Hiram brands such as Maker’s Mark, Kahlúa, Courvoisier plus six malt and one grain distillery.
Then in 1991 Allied acquired Long John, the spirits interests of Whitbread Brewers including Beefeater Gin Long John and Laphroaig. Then in the following year was the major acquisition of the Domeq Company, the world's largest producers of brandy.
With Long John came our principal malt—Laphroaig, already well-recognised, individual and well-promoted single malt and since 1991 Whitbread have laid down enough stock so that we have been able to grow the brand, without Laphroaig it’s true that Allied has made no progress in the malt sector over the last ten years.
Allied Domeq is primarily a drinks business but we have some food interest, principally in North America most noted of which is Baskin Robins ice cram and Dunkin’ Donuts.

LFW: Why is Ballantine’s so succesful?
It was Hiram’s novel perspective on selling that took Ballantine’s to Europe’s number 1. The former owners, Hiram Walker of Canada, did all the right things from 1970 onwards. Their American market was struggling but they didn’t have the troubles of a declining and duty encumbered UK market. They realised that as they didn’t have much business in Europe they could go out and make some, they were early to establish good distributors and create a solid groundbreaking whisky marketing programme that suggested ‘the good life’. Even now, Ballantine’s ‘living the game’ style is not so far away from those ideas—it recognises a universal truth that men play in just about everything they do.

LFW: Was that a happy accident or the work of a genius?
It was part of the strategic plan. They moved the marketing team to Switzerland to be closer to the European market, unlike the rest of the industry that was still based in Scotland sending out ‘missionaries’.
Ballantine’s is a remarkable product range. They were only in the malt business until about the 1910's but by 1930 they had developed aged blends, long before any other—it was the 60s before the release of Chivas 12yo. Since then they have always planned to sell whisky of 17 to 30 years of age as a result we still fill in casks suited for developing an aged whisky. If you are planning a 12yo whisky you don't put it in the same cask as a 30yo, the cask would spoil the whisky by the time it was 30.

The aged brands are not available at home because we sell everything we can in Europe and the Far East where there is a demand for even more. In some markets where Ballantine’s is no 1 or 2 you can not buy 17 or 21yo, we only have what we made that long ago so we sell it where we can build the brand the greatest. The UK was an unaged market until the recent development of the single malts.

LFW: How long have you been in the Whisky industry?
I joined my father and grandfather's family business of Teacher’s Scotch Whisky in 1970 after a stretch in the army. We have been involved in distilling for the last 120 years.
My great-grandfather married the daughter of William Teacher, who founded Teacher’s in 1830. William was one of those remarkable Victorian men who grew up with very little to become a man of strong principles and be known as a great reformer. Even the anti-alcohol lobby saw him as somebody who; while he may be selling drink, did it in such a way that got their admiration. His pubs had rules such as no smoking, or no treating—you couldn't buy anybody-else a drink as this led to ‘drinking sessions’. He started in the shipbuilding areas of Glasgow and he knew that the wives would be more content if their husbands went to a Teacher’s pub.
William married Miss MacDonald whose mum had a grocery store which from 1830 William developed the drinks side, for whisky it was akin to an old tobacconist, if you couldn’t buy branded goods you’d get the specialist shop to match to the flavour you appreciated. So it was with malt whiskies, somebody would bring in a whisky and the trader would mix and match the flavour from those that were available, there would be casks coming in and jars going out. Teacher’s Highland Cream was one of the first to be registered in the 1880’s, prior to that there was little bottling or branding of Scotch. We have a bottle of Teacher’s that I understand is the oldest example of a glass bottle that is branded and labelled with a paper label. Apart from Highland Cream there have been other whiskies including ‘Australian Bonded Teacher’s—until the Matured Spirits Act of 1916 there was no requirement for distillers to age their product, but by shipping it round the world and back in cask the consumer new it wasn’t made last week! (I think that Australia was also a place to store casks without having to pay rates).
Teacher’s had two distilleries, Ardmore and Glendronach both always the heart of the Teacher’s flavour since the 1890's.
When I joined Teacher’s was a distiller, blender, bottler and shipper, totally self-contained. They originally had bottling facilities under the railway arches at King Street in Glasgow. A very Dickensian environment! In 1962 they opened a £1 million purpose-built operation at Springburn with a capacity of 4 million cases when, for the first time, they had enough whisky to meet demand and they went from 100,000 to 1 million UK cases by 1972, that put us into the no 1 spot.
Teacher’s had earlier been the United States no 1 in the 1930's but a shortage of whisky after World War II—which all distillers faced but Teacher’s was so restricted such that other producers were able to take business away that was never recovered. During my four years in the USA we arrested our decline but it was difficult against Johnny Walker and Dewar’s, whose UK sales method was to hold us out by keeping prices low. Even J & B and Cutty Sark had difficulties in the 1980's.
My first 4 years was in charge of selling in the US where I was probably the first to hold a single malt tasting. I wasn’t aware of anyone else doing it at the time anyway and people paid $30 to come and listen to me in New York. From that we rolled out a series of tastings to promote Teacher’s Scotch Whisky but we ended up being closed down by the Bureau of Alcohol, Tobacco& Firearms because, since prohibition, tasting of spirits was not allowed—you could taste beer and wine but spirits were thought to get your customers drunk and force them to sign orders they were not able to make in the first place.
One of my projects in the US was not only to maintain and grow Teacher’s volume, but also to introduce Glendronach. By the time I left in 1976 Glendronach was the no. 3 malt—a long way behind Glenlivet and Glenfiddich but on top of the rest.

LFW: Teacher’s has a very distinctive, bold flavour.
By comparison Teacher’s is always on the edge of the spectrum of all blends. Partly because it has always had a high proportion of malt, 45%, many people know that isn't necessarily what makes a great whisky but it is more that almost all other blends. What I think gives Teacher’s its extraordinary flavour is the range of malts but especially Ardmore. It is not so much that you can taste Ardmore in Teacher’s but Ardmore is one of those wonderful whiskies that as a single malt is quite exciting; buttery and oily, but it is a flavour that makes all other whisky characters change, a great aid to the blender—a bit like using vanilla in cooking, when we add Ardmore it creates the Teacher’s flavour, which is very difficult to describe—predominantly bitter with an overlay of sweetness that comes from sherry casks. You get a formation of ‘heavier’ sugar crystals from the sherry wine combining with the sugars of the wood that are extracted during maturation, quite different from the honey sweetness that comes from American oak, Teacher’s depends on sherry oak—resulting in one of the great traditional flavours of Scotch Whisky.

LFW: Has the flavour changed?
I think all blends have gradually changed, probably with every second generation there has been a small change; we don't peat whiskies as heavily as they used to, there aren’t the same range of whiskies available to the blender and the types of wood has changed. Whisky came in dark bottles because on a cold night the Scotch would cloud or haze, didn’t look great but it really didn't affect the taste.
With the invention of chillfiltering in the 1920s by Teacher’s to reduce haze there was a loss of some flavours that the blender has to skilfully blend in additional flavour to be able to give a match of how the whisky had been with just barrier filtering.

LFW: What? Teacher’s invented chillfiltering?
No, they pioneered it for Scotch in about 1924, the rest of the industry all caught up by the 1950's.
There is a strong inventive streak in the Bergius family. We’ve made Motorcars, marine engines, a method of making food from wood and there was one Bergius who won a Nobel prize for converting coal into oil. However these are all irrelevant when compared with my grandfather’s development of the modern cork in 1913! Before that, a bottle had a driven cork that required a corkscrew, he shortened the cork to reduce friction and topped it with a cap secured by a wooden dowel. Simple, but he got there first. It stayed with Teacher’s until the radical re-design of the whole presentation in the 1960s—the world was swinging, the board of Teacher’s was relatively young (and swinging) and went for swinging Scandinavian simplicity. They took the Cream label with all the detail and craft into a white background, black writing, minimalist branding with a very dramatic shiny gold ‘jigger-cap’—as big as a double measure and a joy to spin off. All of which helped Teacher’s to sell so well during the 70s.

LFW: I reckon Long John is pretty fierce.
It is, it is a blend that has heritage in heavily peated Laphroaig and that gives it distinctiveness but it is not the rich, deep style of Teacher’s or the sweetness of Ballantine’s. It doesn’t have the complexity of Teacher’s or Ballantine’s, which develop and change in the mouth, Long John is more in-yer-face.

LFW: Do you miss Teacher’s?
I very much regret that the family sold the business, even now I have such a strong affinity with the brand and its quality and I’m happy to devote the rest of my time with Allied ensuring a future for Teacher’s as well as building Ballantine’s which gets far more attention but there’s no point being disappointed about that. I occasionally am annoyed that many think ‘there’s Bill Bergius—he doesn't have to work’ or, ‘Allied’s being nice to him’. But not true. Teacher’s was sold for not very much, which was spread thinly between about 50 members so I have to work and want to work here.
I like to stay in touch with these people who do a great job for Teacher’s—like Australia, where the distributor is so good that he still a third party, or Brazil where it is the original company that Teacher’s set up to exploit that market—we were the first to bottle in Brazil.
I had great fun when we launched Teacher’s in India in 1994—I don't want to be somebody who is rolled out like some old Royal, but I do have skills that can add value and personality, we’ve built the aura of Teacher’s as a small niche company that Bill Bergius can come an see you—5th generation from Scotland who ‘owns the distillery’, that sort of story.

LFW: Teacher’s does well in England, but is hardly ever seen in Scotland, why is that?
I think because, from the 20s and the end of prohibition North America became the focus of business and some old Empire countries. When war struck and Teacher’s was unable to distil, everything was exported in order to repay national lease-loan arrangements with the Americans, Teacher’s lost control in terms of where they sold their product and even struggled to keep some whisky to sell to their shops in Glasgow. Once England took off as a market during the 60s they then had trouble coping with business that that shot from 100,000 cases to a million in 8 years. So Teacher’s did well in England but was neglected in Scotland.
I think we also made some enemies, when we tried to move in Scotland some publicans with long memories remembered that Teacher’s sold their whisky in the Teacher’s pubs—taking customers away from theirs.
Until the early 70's there had been no UK price increases for Scotch Whisky because the DCL figured that the way to keep competition out was to keep the price down and maintain market share. In 1972 Teacher’s announced they were going to increase the price of their product and that caused all sorts of ructions! At the next AGM of DCL some of their shareholders questioned why they were not making much money and why didn’t they increase the price as well. There followed an agreement to their shareholders to raise prices. In the intervening period while Teacher’s increased the price the other market leader, Bell’s were not keen to follow but they got some assistance from Teacher’s by the transfer some lost business so that Bell’s would realise that having no price increase for 20 years was a bad idea. Many distillers sold their product at a straight loss at that time.
With hindsight now, and I should have been smarter in 1976, the solution for Teacher’s was to put up the price even higher—they could still argue that it was a superior whisky, raise the price and diminish sales to a manageable level. It would then have been a profitable enough to survive on in the future as a family company.

LFW: We don’t see much malts activity from Allied.
Everyone knows that Allied has done nothing with it’s single malts, we are up a tree with our bottoms showing. Our core malts are the pungent Laphroaig, Scapa from Orkney (which is different) and Glendronach—100% sherry cask matured, those three are the strategy of malts as created by Jeremy Weatherhead before he moved on in 1994. Since then we have kept Laphroaig at the forefront of Islay malts. We have also had ‘The Caledonian Malts’, which included Tormore and Miltonduff but that project faded through lack of attention and the ‘Defenders of the Malt’, was a program brought together by the market (America) rather than us. Since Weatherhead was promoted we have had a rather appalling turnover of people in charge of marketing our malts, some lasting just 9 months before moving on ambitious for a more important or better paying job. That is no way to understand what is going on in the malt market let alone to develop a strategy.

Laphroaig has done well, it sells as much as we made 10 and 15 and 30 years ago but we haven't done anything with Glendronach except to sell all the sherry cask matured whisky we made 15 years ago. Scapa just about sells everything we made. That’s is not much of a strategy—to sell out. It is going to change now but somebody should have planned it 12 years ago.
Allied has been preoccupied with the nineties ethos of profit, consolidation-and-focus. We took marketing closer to the consumer and set out to make the business more profitable. Now in Dumbarton we have a world-class production plant running 24 hours a day with a multi-tasking workforce, the result of the drive for efficiency. Allied owns most of its distribution companies around the world giving focussed marketing of our brands. With all this we have forgotten about the single malts that are so important to whisky and Scotland, we are now addressing that.
The difficulty is having a distillery with enough ‘spare’ malt available; to be able to sell 20,000 cases let alone 100,000 cases. Laphroaig produces 3.5 million litres of alcohol per year yet it is struggling to supply enough single malt. Ten/twenty years ago there was enough ‘surplus’ laid down to produce the 112,000 cases sold, the rest goes into Ballantine’s and Long John, which are dependent on that spice and touch of smoke. You are left with only a little to be released as single malts.

However we are about to reverse all that.
The difficulty is having a distillery with enough ‘spare’ malt available; to be able to sell 20,000 cases let alone 100,000 cases. Laphroaig produces 3.5 million litres of alcohol per year yet it is struggling to supply enough single malt. Ten/twenty years ago there was enough ‘surplus’ laid down to produce the 112,000 cases sold, the rest goes into Ballantine’s and Long John, which are dependent on that spice and touch of smoke. You are left with only a little to be released as single malts.
However we are about to reverse all that.
For the last three years we have sold out of Glendronach. In future we are going to sell in Germany—the biggest market for Glendronach at the moment, then USA and UK about equal, plus duty free. All other markets will be dried up.
Glendronach Distillery is back in operation after nearly six years closure because it is needed for single malt, plus some for Teacher’s. When a business is being hard driven the mind-set is how to cut costs and it’s easy to make silly decisions and lose sight of the whole. Glendronach is an good example of this; one of the smallest distilleries in Scotland, with coal-fired stills and one of the more expensive to run, a simple calculation means it has to close. Now it has reopened with a plan not just to keep it open but also to introduce some heat recovery systems in order to optimise the flavour and also reduce costs. It is the last distillery with coal fires still operating but that will change too. Two years ago we converted Ardmore from coal to steam and afterwards I initially said ‘this is not Ardmore’ but after playing with the steam and the cut of the spirit I am happy that it is now identical to the old coal-fired Ardmore. We plan to do the same for Glendronach but it is too busy at present for the lengthy shutdown required.
The Teacher’s distilleries are run on a very different basis to Hiram Walker’s, initially each side argued they were doing it right but we have learned that they are the way they run best. If Teacher’s had owned other distilleries, we may have learned to run them differently. Both Ardmore and Glendronach have long foreshots, they’re slow to get started and the middle cut has to be run pretty slowly too. There is tremendous contrast between Ardmore and Miltonduff—one of the fastest in the industry, if you did that to Ardmore you would end up with a filthy spirit.

LFW: Hiram Walker developed some curious stills.
In the late 60s, and 70s some distillers, particularly those with a North American connection like Hiram Walker and Publiker (Inver House), were experimenting with a single still to produce both a rich, characterful malt and also something delicate and fresh. The Walker experiment with ‘Lomond” stills didn't work—it just produced one style of whisky. As a result either the still was taken out of production—such as Inverleven or the devices within in the still were removed so it reverted back to the old style of pot still such as at Scapa. Tormore has an interesting gadget at the top of the still that gives the opportunity to increase reflux by allowing some of the gases to return via what looks like a tiny condenser on the lyne arm of the still.

LFW: Tell us about your other distilleries.
We have 10 malt and 1 grain distilleries—Dumbarton grain distillery was closed recently.
Dumbarton was built in the 1930's and is a very unmodern distillery, very difficult to upgrade. The column stills go up through concrete floors and the structure of the building is difficult to expand. Strathclyde is much more flexible and is able to run on both maize and wheat.
You can use a wide range of cereals for making grain whisky; the industry has occasionally used the cereal that is the least expensive, if you use wheat you get light, delicate characters but also round tastes and smells. Maize or corn gives a delicate, crisp character that can be just that little sweeter.
For malt distilleries. we have got Glencadam and Imperial mothballed and Scapa working occasionally each year. Our other malt distilleries, Glenburgie, Glentauchers, Miltonduff, and Tormore are busy. They may not be 7 days a week but they are certainly 5 days +, as much as we would like. Allied was early to start closing distilleries in the 1990s because we foresaw an over production in the industry; we mothballed Scapa and Glendronach, slowed down some other distilleries so that production was balanced to meet the needs of predicted sales. But as Ballantine’s has been doing consistently well, compounding a 6 million case brand by 3 or 6% a year is an awful lot more whisky required.
Some might imagine a new company boss asking why don't we just make one big Ballantine’s Distillery (like Publiker have tried before). It hasn’t happened recently but when there is a new man at the top he will be immediately coached by his colleagues so that he understands from the beginning that Scotch Whisky is different from any other because of the range of flavours. The fact that we have got so many is the heart of it; even people who have joined in the last 2 years understand this very strongly.
When we come to fit new steam stills at Ardmore, you would think this would be a matter just for Distillers to look after. But no, the head of Global Operations gets on the phone and wants to be absolutely certain that we are going to get the same whisky.

LFW: Laphroaig is an acquired taste.
All the beauty of drinking Laphroaig is contained in the 10yo—but there are some fanatics who want more ‘raw’ Laphroaig. When you open it, it is not just smoky; it's like my granny's peat fire—blue peat smoke. Other drams are smoky but they simply don't smell like a peat fire. I will always praise the 10yo because that is the standard, an extraordinary whisky that smells like hospitals but when you first taste it, it gives a burst of incredible sweetness (from the first fill American white oak), then spice and smoke and eventually salt. It is nice to have 15 yo, that is what Prince Charles likes, it is easier to drink because the sweetness is more and the smoke less. (I suspect that some 15yo drinkers can’t stand the smell and taste of a peat fire—in fact they can’t stand Laphroaig!) But there is nothing like the 10yo.

LFW: Is the 10yo deliberately less pungent that the 10yo ‘Cask Strength’?
‘Cask Strength’ is only barrier filtered; the other is chillfiltered at about 2ºC. At below 50% alcohol you will get a haze, particularly in Glendronach and Laphroaig. Some people jump to conclusions that because it is chill filtered it is not good. I don’t agree—they are different. In ‘cask strength’ the smoke smell is not more intense but is deeper, there are more things going on. The taste is simply explosive! If you drink it at 57%alc., when you put it in your mouth that little bit of reduction releases so many different things. But I don't think most consumers yet are ready for the flocculation and with tax a burden in the price the 10 year old Laphroaig is a great representative product. ‘Cask Strength’ is there for those who want it, I don’t believe we are depriving anyone by chillfiltering Laphroaig.

LFW: Has the flavour of Laphroaig changed over the years?
Not by us, there are people who claim bottled Laphroaig was different 20 years ago but this is hard to argue. I don’t think so and I have tasted samples of Laphroaig from 1926 to the current time and I don't think we will ever be able to prove whether 20 years bottled Laphroaig is different from today’s—the distillery flavour is still based on the system that Betty Williamson set up in the 60s—the same standards for peating, still 30-35 parts per million and only first-fill American white oak. Glass is a good medium for storing whisky, but it is not perfect, I don't know whether that is proven but there is a slight reaction within the glass over time.
One thing I do wonder is; what does that big spirit still do for Laphroaig compared with the small ones? The new make is mixed out of the stills but I do wonder if there are recognisable differences.

LFW: Laphroaig has done well despite Allied’s lack of effort.
Allied owes the success of Laphroaig to two men, Jeremy Weatherhead and Iain Henderson, the young turk and the distillery manager, they created the Friends of Laphroaig with Iain not as the distillery manager but as the ‘head of the family’—it worked exceptionally well and Iain is also very adept at handling distillery visitors. (He also has the added benefit of Carol as an outstanding hostess—she could do anything from a quick sandwich to a gourmet lunch or dinner).
I am really sorry that we couldn’t have Ian continue as a sort of consultant. Allied’s retirement rules (somewhat cruelly) would not allow him to continue as a distillery manager but I’ll miss him and his support on the Heritage side. I suspect he’s happier now at Edradour, dirty hands and all that.
Iain’s replacement is Robin Shields who starts at Laphroaig about now and as I have worked with him for the last few months I am very comfortable that the future of Laphroaig and its public face are in excellent hands. Robin has the desire and personality to look after our friends and guests.
I’m a great champion of the Keepers of the Quaich and proud to be on the management committee. It is very important to ensure that the right people are brought forward as Keeper’s but occasionally there is a grumble of ‘how did he get in?’ and it is difficult to have criteria that cover every possibility. My parting gesture for Iain was to see he was a life member rather than annual as before.
The Keepers is part of the marketing mix, it shows that we can do something special for somebody who you want to show appreciation to and to strengthen a relationship. To give them access to a privileged club like the Keepers gives them more than that, they feel a relationship with all Scotch Whisky, they see us in a different light of image, quality, and ‘gosh! they can do things well’; not just kilts and heather but when you bring young Spannish nightclub owners who sell lots of Scotch they realise this is not just something to be poured out but a beautifully prepared drink with some mystique.

LFW: What does a glass of whisky do for you?
First of all it excites the taste sensation. Then there is a whole physical experience of ‘ahh!’ Shoulders collapse, I relax and it is one-on-one, it becomes that wonderful drinking occasion that is the reward at the end of the day. Taste and physical effect. I like drinking my whisky with lots of water—I like to think that when I leave the industry I won't have put on 3 or 4 stone and if I drink Scotch with 4 parts water—which has more flavour value than a rich white wine—then I am going to limit the amount of weight I put on.

LFW: Your desert Island dram?
Teacher’s Highland Cream. I can drink that on an everyday basis, enough to excite the palate but as with any good blend it fades away soon leaving my palate fresh and ready for the next sip. For a single malt; Ardmore—when it was bottled for Teacher’s Board of Directors from a sherry cask, a first fill Olorosso—a magic drink! And now Laphroaig—a reminder of granny’s peat fire!
For variety, I would hope somebody had hidden a bottle of Ballantine’s 17yo. Although Ballantine’s-sweetness in style, it is more sherry-like with fruit flavours developed—more up front, much more full of flavour and an absolutely beautiful blended Scotch Whisky.

LFW: Thank you.