Trying to lift spirits

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Kyndal Spirits - or Whyte and Mackay as the company will now be
known - is to invest £50m in supporting its core brands after
growing criticism of its policies. But is the investment, announced
earlier today by chairman Vivian Imerman, enough to revitalise the
flagging company?

Kyndal​, the Scotch whisky group which has been much criticised in recent months for its lack of brand support, has unveiled a new strategic vision - and indeed a new name - in a bid to counter its critics. But is the investment too little, too late?

The company is to be renamed after one of its main brands, Whyte and Mackay, and chairman Vivian Imerman said that the newly-named group would put into place a strategy designed to increase revenues, market share and profitability, including the necessary brand investment.

"It is appropriate we are naming the company after our founders, Whyte and Mackay, two Scottish businessmen who were highly focused on quality and customer needs. Their commitment to product quality is deeply entrenched in our culture and still garners our products industry recognition,"​ Imerman said.

"We have renamed the company in line with the new vision and strategic focus, which will, together with the significant investment, reverse our slowly deteriorating market position. The restructured company will enable the senior executive team and Whyte and Mackay's hard working employees to free the untapped potential of the company's own label and branded business."

The main element of the restructuring - which comes, it should be noted, just a couple of years after the company was first formed through the management buyout of the Jim Beam Brands business in Europe - is the investment of £70 million (€100m).

Some £50 million will go towards supporting the core brands - Whyte and Mackay, Vladivar and the malt portfolio which includes Isle of Jura and The Dalmore, as well as the group's own label business. The remaining £20 million will be spent on restructuring the company's operations to create a "lean and highly competitive company"​.

"Our portfolio of products, both branded and own label, have suffered from a lack of investment over the past five years and the £50 million that we will spend on strategic marketing will rectify this and help the brands to meet their potential,"​ Imerman admitted.

"Part of this process is already under way with, for example, Whyte and Mackay's new TV advertising campaign and similar initiatives will be put in place for Vladivar vodka. We will focus on brand extensions to support our portfolio similar to the recent launches of Isle of Jura Superstition and Isle of Jura 1984."

The restructuring of the company's operations will focus mainly on bottling, with the construction of a new bespoke bottling factory with high speed bottling lines. This will consolidate Whyte and Mackay's existing factories in Grangemouth and Leith into one of the sites, leading to around 200 redundancies.

The brand investment package will certainly do some good, but the fact remains that Whyte and Mackay's whisky brands are still minor players in a crowded market - which is of course one of the reasons why Jim beam Brands decided to sell the business in the first place.

But that is not to say the company cannot do well - products such as Glayva, Vladivar and L'ush certainly have potential, as do the single malts and the own label business - but the drinks industry is one which is notoriously fickle, and keeping brands at the forefront of consumers' minds is a lengthy and costly operation. The question is, therefore, will £50 million be enough for brand support, especially given the relatively weak position of many of the company's brands in the first place.

In any case, it is certainly refreshing to hear finally Vivian Imerman admit that the company had not spent enough on supporting its brands - something which was clearly apparent from the company's performance. For example, the first new brand launched by the company - vodka-based L'ush - came a year after the MBO - a painfully slow rate of development for the fast-moving drinks industry.

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