From Casks to Riches: How The Macallan Became a Whisky Unicorn

There are only two kinds of investments: the ones that are cool to show off to your friends and the ones that aren't. Your stock and crypto portfolio should probably stay between you and your financial advisor, but that doesn't mean you can't have other investments that hang on your living room wall or live on your shelf for anyone to see. While scotch may seem more like a luxury commodity than an appreciative asset, an indulgence like a Macallan whiskey investment could make for a diverse addition to anyone's portfolio.

But how did a blender's scotch from Strathspey become the most lucrative luxury single malt whiskey? While we don't exactly know how far back the history of Macallan goes, the distillery was officially founded when Scotland legalized distillation in 1823. It was always popular locally, but you usually couldn't order Macallan at a pub since it was typically blended with other whiskies. 

Things began to change when the Shiach family that had inherited the Macallan brand enlisted the services of two London advertising executives named David Holmes and Nick Salaman. They published an artful pamphlet entitled "The Remarkable History of The Macallan-Glenlivet" In 1975 that chronicled the company's history alongside delicate watercolor paintings. It was the precursor to an advertising campaign that launched Macallan's transformation into the most coveted single malt scotch whiskey brand.

In 1974, Willie Phillips came to Elgin, Scotland to apply for a job at one of the local distilleries. He was staying in Elgin overnight and thought he should try his prospective employer's whiskey to know a little about it before his interview. Philips made his way to a nearby pub and placed his order with the chap behind the bar, but they weren't serving Macallan. At that moment he realized that this job might not be what he thought it was.

Phillips was hired as an accountant but quickly rose through the ranks of Macallan, becoming the finance director before company Chairman Peter Shiachbeing appointed him managing director in 1978. That same year, the Chairman and his brother Alan Shiach set out to grow the Macallan brand by hiring Hugh Mitcalfe as director of marketing. 

Even though Macallan had a nascent brand image, Mitcalfe realized upon joining that they knew abysmally little about marketing. Few beyond the local Speyside blenders who had heard of it from local marketing campaigns knew of Macallan, but those that were familiar with it had associated the name with the most expensive stocks of mature whiskey in Scotland.

When Mitcalfe heard these rumors, he decided to ask Phillips if this was true. Philip revealed a stock list detailing all of Macallan's pristine wooden casks filled with decades-old whiskey. 

In 1979, Mitcalfe and Phillips approached Holmes and Salaman—who since working with Macallan had formed the Holmes Knight Ritchie ad agency in London—to discuss a new advertising campaign for Macallan. While they could have bought a full-page color advertisement in The Sunday Times, they instead proposed a targeted campaign that would reach "opinion formers" (AKA influencers) through smaller ads placed in an eye-catching spot by the crossword section. 

Holmes and Salaman liked the idea and gave Mitcalfe and Phillips a £25,000 budget to run the campaign. They followed a similar format to the pamphlet published years before: the early ads gently tell the Macallan story accompanied by a watercolor illustration and concluded with the slogan "THE MACALLAN. THE MALT." The ads started out simple but they were increasingly creative as the brand's popularity grew.

The ads would diversify to include entertaining anecdotes, such as one featuring a dog named Macallan titled "Fetch." These would eventually expand beyond the Macallan narrative to include pop culture references, witty humor, crossword clues, and all sorts of memorable stories. One titled "The Complaint" was a gag letter sent to Macallan (which was actually from Phillips' brother) complaining that their cork stoppers are so loud that he can't drink without being overheard.

For 16 years, Macallan published their pithy vignettes on the pages of The Sunday Times. 

The carefully placed ads appealed to mindful, educated consumers while also engaging the whiskey crowd. Some ads featured stories of people who worked at the distillery or from their fanbase collectively known as the Advocates of Macallan.

While the ads took on a life of their own, they didn't forget to sell us their scotch, after all.

The advertising campaign played no small role in generating appeal for the brand, but the true source of the hype was Macallan's huge stock of whiskey. Mitcalfe never exploited the stocks in the sense of trying to get a huge investment from someone rich, but his genius lay in how he used it for publicity. Macallan was able to successfully launch their 25-year-old anniversary single malt and the 50-year-old single malt whiskey in the luxury market because they developed a voice that allowed their name to spread.

When Macallan's marketing campaign began in the early 1980s, the brand was intentionally positioning itself as a "first-growth" whiskey to parallel its Scotch to high-end Bordeaux wines.  After six years and many successful releases such as the handwritten label series, the Macallan brand had gained global notoriety. They reached a turning point when the esteemed Japanese whiskey company Suntory purchased a 25% stake in Macallan in 1986.

The brand experienced a renaissance after the partial acquisition from Suntory. Macallan had gained the Midas touch as every release over the next decade became astoundingly popular. The bottles produced between 1986 and 1996 are still coveted and highly appreciative in value. Macallan's bottle's have increasingly become collectibles with only those daring enough to open one praising the experience of a single dram.

In 1996, the most productive decade in the distillery's history came to an end when Highland Distillers bought the remaining stake in Macallan, making them the majority shareholder. Around the same time, the Golden Promise barley that was used to produce Macallan stock was in short supply due to reduced yields. The mixing of other barley varieties caused newer Macallan productions to lack their distinct definitive flavor. This led Macallan's new owners to restore the original Macallan farm, upgrade the distillery, and enable on-site cultivation of Golden Promise.

Highland Distillers was bought by Edrington in 1998 and resulted in the emergence of a new era for Macallan. The brand was now established and highly recognized all over the world, so Macallan's new owners decided to focus on expanding the operation and putting an emphasis on quality. New woods were imported to the distilleries and different oils and seasoning were used to finish the casks, resulting in a more diverse selection of flavor profiles that were much sweeter and lighter than Macallan's original single malt.

Macallan finished building its visitor experience in 2019. Around the same time, their Fine and Rare 60-year-old from 1926 reached an all-time high of over £1.45 million, setting a world record for whiskey price. Last year, a 30-year-old double-size ex-sherry cask filled with about 600 bottles worth of whiskey was sold for $2.3 million as an Ethereum NFT. All this seems fitting for the brand that has built its reputation on being outstanding in every way.

The Macallan brand has sort of become the Disney of whiskey investments: Macallan has taken on a life of its own and has integrated itself into a quintessential part of an identity and lifestyle beyond professional scotch sommeliers. Also, Edrington spent over 5 years and £140,000 to turn Macallan's Speyside distillery into a whiskey Disneyland that even won the Best Building in Scotland award.