Penderyn's Global Ambitions -
Simon Roffe Interviewed
Peter Marshall (PM): Simon, welcome to trunblocked.com. Penderyn is the first commercially available whisky in Wales. Can you briefly walk us through the history of the company?
Simon Roffe (SR): A pleasure Peter. The original Welsh Whisky Distillery Co was first established in Frongoch, Bala in North Wales in 1889. By 1805 it had already received Queen Victoria’s approcal for its Royal Welsh Whisky. Then the company actually ceased trading in April 1903, following pressure from the Temperance movement in Wales and the Scotch whisky industry. 96 years later, in 1999, the new Welsh Whisky Company formed. It was founded by a group of friends in Penderyn, South Wales and was the first distillery in Wales for over 100 years.
Today, the Welsh Whisky Company remains an independent company and is still owned by a small group of passionate shareholders. Penderyn’s Brecon Gin, V Vodka and Merlyn Cream Liqueur were all launched in 2020 – one year after the company’s formation. Then, in 2004, our first single malt whiskies were launched. I have to say it, as pure and precious as Welsh gold (!) and exports to France started that year.
2022 celebrates Penderyn’s 21st birthday. Our product is now sold in over 50 countries around the world. The company is recognised as a true pioneer in the ”world whisky” category. Ours is one of the top single malts in the UK off-trade and we are proud to enjoy the fact that Penderyn has multiple, award-winning brands.
PM: So what are the main challenges a Welsh Whisky distillery company faces when it comes to Travel Retail? After all, Wales is not the first country you think of when it comes to the word ”whisky”. Yet, as you have said, The Welsh Whisky Company has won many awards. Do you think it is a cultural issue here amongst the category buyers?
SR: Well, my response to the challenge falls into a couple of areas. First, irrelevant of who and where Penderyn is, the Travel Retail industry – with good reasons maybe as it plots a recovery path following the pandemic – is largely focused on security. Safe decisions on range, working with brands owned by multinationals able to invest, taking the easy option etc… and often lagging well behind its domestic counterparts in consumer trends. For a channel where historically consumers have a longer dwell time, are excited to seek out gifts and explore new things whilst obviously building on the value opportunity that ”duty free” is perceived to offer, the opportunities for smaller brands and enterprises are still limited these days. There is – and this is irrelevant of the ”Trinity” thinking – a structural barrier to entry. And whilst that’s not applicable to all, in my view it is a fundamental issue.
Big brands, big retailers. In real terms the polarisation within the industry acts as a genuine barrier to consumer choice. Without the deep pockets of global brands, how can the challengers in any category unlock this conundrum? There is definitely a part of the Travel Retail community that is open, but a sizeable community seems unwilling or uncertain about grasping change.
Secondly, and from a specific category point of view, the challenge is related to the access issue, but more so one of education and knowledge. Across our industry we’ve seen organisations rationalise, leading to the well-publicised issues in airports right now. For retailers this has led to fewer stores open, smaller ranges, rationalised supply chains and staffing. And even less opportunity for the innovation, differentiation and excitement that shoppers might be looking for. Where there are opportunities to influence or to demonstrate where there is growth, the very nature and pace of category development has been lessened as a result. Buyers are struggling to keep up with even the basics, so in most cases a chance to discuss the phenomenal growth of ”world whisky” doesn’t exist.
It is sad to think that some international duty free retailers believe that ”world whisky” – that is, non-Scotch – is simply another way to merchandise Irish or American whiskies!! Whisky from 30 or more countries outside Scotland was actually the fastest growing segment of the category pre-pandemic, and that trend has only been enhanced as online retailers in particular have opened up to the new world of whiskies. All the cues that travel retailers should be attracted to are there- premium products, innovative styles of distilling/maturation and the flexibility offered by smaller producers. This is a truth now widely recognised across the globe. But, alas, the TR community – as was the case with craft gin – has fallen behind. Again, this is based on safe decisions – driven by the insecurity of the concession model they currently work under.
Surely, at a time when excitement, experience and innovation are core parts of the recovery thinking, widening the offer is part of that. Simply replicating the supermarket in a duty free shop to me isn’t always the full solution. This is my view, having had the privilege of working for many years in the TR business with multinational spirits brands, luxury brands and now challenger brands.
In terms of product, whisky accounts for about 55% of our sales, with gin another 30%. The other spirits are useful to assist in offering a wider portfolio and especially in the Welsh off-trade. Certainly rum is amongst the fastest growing categories and, as with gin, is highly competitive. Our Siddiqui Rum offers a unique story and product which we see as having real growth potential. Our investment in this brand along with the brand founders will surely open up some market potential.
Importantly, the addition of the new Swansea Distillery later this year alongside the Llandudno operation (which opened in May 2021), will mean that Penderyn will have effectively doubled its capacity. This will enable us to look at how we can use the stills to widen the styles of spirit we are distilling as well as the range of whiskies we’ll be able to offer in the future. The top-of-the-range element in our whiskies are becoming a key growth lever. As consumers demand evermore unique products and our distributors seek to differentiate/drive premium sales, the emergence of our limited edition, single cask releases are a notable feature. And, ultimately, a unique opportunity for the travel retailer in all channels. Especially when we can create a personalised offer from just 60 bottles!
Penderyn will have opened two new distilleries in 18 months
Penderyn is unique in many ways, including an all-women distilling team