BQ Scotland Spring 2018 by We Are UMi

A LOT OF BOTTLE LIQUID ASSETS

Stephen Russell lifts the lid on Inverarity Morton, Scotland’s largest independent drinks supplier

WHISKY GALORE

Edinburgh’s Scotch Whisky Experience is drawing the crowds

BUSINESS QUARTER Scotland: Spring 2018

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Business Quarter Magazine

Jo Graham turns bar staff into ambassadors for whisky

Scotland: Spring 2018

Raising a glass

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Celebrating and inspiring entrepreneurship

Bright sparks Hannah Fisher and Craig Strachan’s Lab supports craft producers

WELCOME

“Our interviews with entrepreneurs – which have characterised BQ Scotland and made it stand out from the crowd – will shift online. The same high-quality content will still be available free through the BQ Live website.”

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BQ, Spectrum 6, Spectrum Business Park, Seaham, SR7 7TT. www.bqlive.co.uk. As a dedicated supporter of entrepreneurship, BQ is making a real and tangible contribution to local, regional and national economic growth across the UK. We are unique in what we aim to achieve as a media brand, a brand that has established a loyal audience of high growth SMEs as well as leading business influencers. They wholeheartedly believe in BQ’s focus on people – those individuals that are challenging the traditional ways of doing things. They are our entrepreneurs. BQ reaches entrepreneurs and senior business executives across Scotland, the North East and Cumbria, the North West, Yorkshire, the Midlands, Wales, London and the South, in-print, online and through branded events. All contents copyright © 2018 BQ. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All content marked ‘Profile’, ‘Partner’ and ‘Special Report’ is paid for advertising. All information is correct at time of going to print, March 2018.

SPRING 2018

Our readers have been at the very heart of BQ Scotland since the magazine was launched in 2010. They have guided our story choices, inspired our redesigns and driven us on to celebrate and inspire entrepreneurship. Over the years, our readers’ demands have changed, stoking the popularity of our BQ Live website and daily BQ email newsletters. That led to last year’s changes, with live news and opinion pieces shifting to the website, allowing the printed magazine to concentrate on what it does best – interviews with entrepreneurs and their supporters. Now, those readers demand more changes – and we’ve listened. Our readers want our content to be delivered online and so BQ has expanded its website and newsletters. The revamped website will launch on 1 April, bringing readers even more news about entrepreneurs and high-growth companies. As part of that expansion, BQ will become a digital-focused publisher, concentrating on the online services that our readers want. That means this will be the last printed edition of BQ Scotland magazine. Instead, our interviews with entrepreneurs – which have characterised BQ Scotland and made it stand out from the crowd – will shift online. The same high-quality content will still be available free through the BQ Live website. Plus, BQ will continue to publish its popular printed special reports for its commercial partners, focused on specific geographies, sectors and issues affecting the entrepreneurial and high-growth communities in Scotland. So, in our final printed edition, we raise a glass to that most Scottish of industries – whisky. Yet whisky isn’t just about food and drink; this issue demonstrates how Scotch weaves its story throughout our economy. That story begins with distillers and few epitomise entrepreneurialism like Billy Walker. In 2016, he sold BenRiach to American giant Brown-Forman for £281m and now he’s back with GlenAllachie, set in a very special part of Speyside. It’s not just Scots who make whisky these days. In one of our interviews from south of the border, David Thompson introduces us to the Spirit of Yorkshire distillery. And it’s not simply about making whisky either. To do that, you need a distillery, and Scott Allen, managing director at engineering consultancy Allen Associates in Stirling, has made a few of those in his time. Once the Scotch is made, it’s time to sell it and Jo Graham, managing director of Glasgow-based Whisky Ambassador, trains people working in the hospitality industry to do just that. On the supply side, Stephen Russell, managing director at wholesaler Inverarity Morton, sees demand rising for spirits alongside wines and craft beers too. Meanwhile, Susan Morrison and her team at the Scotch Whisky Experience are busy inspiring wave after wave of visitors to fall in love with our national drink. Scotch isn’t just for drinking these days either; it can be an investment too, as Leo Scott-Francis and Craig Chidgey from The Whisky Market in London explain. Finally, for those who prefer a soft drink, Hannah Fisher – founder of Tongue in Peat Mixers – and Foal Drinks founder Craig Strachan have joined forces to launch Port Glasgow-based The Start-up Drinks Company, which will help manufacture craft sodas. Whisky extends into our lifestyle pages too, with a review of the latest English offerings, while our commercial content includes a look at how Tomatin distillery is collaborating with Eteaket and Dean’s of Huntley, and how exports are the foundation beneath the Angels’ Nectar brand. It’s been a privilege and an honour to edit BQ Scotland since 2015, following in the footsteps of the legendary Kenny Kemp and working with talented writers and designers. Thank you to all those readers who have provided feedback over these past four years – and I look forward to seeing you online at BQ Live very soon. Peter Ranscombe, editor

CONTENTS SPRING 2018 78

BACK ON THE WHISKY TRAIL Billy Walker reveals why he and his partners bought GlenAllachie distillery following his previous blockbuster sale to Brown-Forman

FROM THINK TANK TO BANK

LIBATION FOR THE NATION

INVESTING IN NEW HOMES

WHISKY GALORE

AMBASSADORS FOR SCOTCH

BQ meets Atom bank’s new chair, Bridget Rosewell

Stephen Russell opens the doors to Inverarity Morton, Scotland’s largest independent drinks supplier

YORKSHIRE SPIRIT The white rose county is producing its own whisky

Growth Capital Venture’s new investment model is providing much-needed homes

How Edinburgh’s Scotch Whisky Experience has become a major tourism asset

Jo Graham’s mission is to train bar staff to know their whisky

EXPORT YOUR WAY TO GROWTH Selling overseas has its challenges but it unlocks huge potential

Celebrating and inspiring entrepreneurship 86 30

18 72 54

EXPORTERS UNITED Businesses can reap enormous benefits by collaborating when it comes to export

CASK MASTERS The Whisky Market gives investors and Scotch lovers the chance to buy and sell barrels

Allen Associates designs distilleries around the world and business is booming

BRIGHT SPARKS Hannah Fisher and Craig Strachan’s Start-Up Drinks Lab supports craft soda makers

THE APPLIANCE OF MANAGEMENT SCIENCE

DISTILLING BY DESIGN

For UBS, ethical investment doesn’t have to come at the expense of good returns

A new discipline can take the uncertainty out of decision making

INVEST TO MAKE A DIFFERENCE

HIGH LIFE 63

The best in travel, equipment and drinks

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B U L L E T I N

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et me begin with a confession: Billy Walker is the man who got me into whisky in the first place. Sitting and sipping 30-year-old Scotch with Walker at GlenDronach distillery in Aberdeenshire was the moment when the switch was flicked, and I fell in love with our national drink. Even as a Highlander, loving whisky isn’t automatic. It takes time to move beyond the supermarket blends and find a whisky that is

packed full of flavour and doesn’t simply taste of raw spirit. And everyone should have a guide or two on that journey. I’ve been lucky enough that Walker was the first of many talented distillers who have shown me the path towards amber nirvana. So, when it was announced back in 2016 that Walker had sold his BenRiach Distillery Company to Brown-Forman – the American

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“I was a reluctant seller. We had built BenRiach into a successful business, but I still felt it hadn’t reached its full potential.”

giant behind brands including Jack Daniel’s whiskey, Finlandia vodka and Chambord liqueur – for £281m, I raised a glass in salute. Alongside South African investors Geoff Bell and Wayne Kieswetter, Walker bought the mothballed BenRiach distillery south of Elgin in 2004 from Chivas Brothers for £5m. He purchased GlenDronach distillery in Aberdeenshire four years later and a bottling plant at Newbridge on the outskirts of Edinburgh – again both from Pernod Ricardowned Chivas – and then in 2013 took over Glenglassaugh distillery on the Banffshire coast from Russian investors. By the time of the Brown-Forman deal, Walker had grown the company’s revenues to £41.5m and its headcount to 165. His achievement saw him honoured with the

title of “entrepreneur of the year” at the 2016 Scotland Food & Drink Excellence Awards. The sale could have been seen as the crowning achievement in a 40-year long association with the whisky industry. After studying chemistry at the University of Glasgow, Walker joined Dutch contraceptive pill maker Organon before switching to Ballantine’s, then owned by Canadian firm Hiram Walker, and launching a career that took him on to Inver House Distillers and eventually saw him become operations director at East Kilbride-based whisky maker Burn Stewart, which was listed on the stock market. When CL Financial, the Caribbean-based owner of Angostura Bitters, took Burn Stewart private in 2002 in a deal that valued the business at £49m, Walker’s 3% stake triggered

a payday that would have led to many entrepreneurs considering retirement. Instead, he built up the BenRiach Distillery Company and, when Brown-Forman came knocking, he could have been forgiven for retiring with his head held high – so why hasn’t he? “I was a reluctant seller,” admits Walker, who turns 73 this spring. “We had built BenRiach into a successful business, but I still felt it hadn’t reached its full potential, especially with Glenglassaugh. “There is so much good liquid in the casks at Glenglassaugh and it just needed longer to reach the right age. But Brown-Forman approached us with a very serious offer and so we gave it the appropriate very serious consideration. “GlenDronach will become a huge brand. But

it was going to take a lot of investment to build up the staff to the necessary size to do it.” Instead of riding off into the sunset, last year Walker announced that he had bought GlenAllachie distillery on the outskirts of Aberlour in Speyside. No prizes for guessing the name of the seller – Chivas handed over the keys to Walker, triggering a distinct sense of déjà vu. Yet GlenAllachie is a completely different beast to Walker’s previous distilleries. While BenRiach, GlenDronach and Glenglassaugh all have their roots in the 19th century, GlenAllachie is a relative baby. Designed by William Delmé-Evans – the architect behind Jura, Macduff and Tullibardine – it was built in 1967 by Mackinlay McPherson, the distilling arm of brewing giant Scottish & Newcastle. Set within a 20-acre estate, the distillery draws water from the Black Stank and Henshead burns. Walking around the distillery, it’s clear that this is a much more-modern operation than so many of Speyside’s Victorian facilities. All the major operations – the milling, the mashtun, the still – are located in the same main building to maximise output, instead of having grown up over time and being spread throughout the site. From a whisky geek’s point-of-view, GlenAllachie has some interesting quirks too. It has four stills and two spirit safes, one for each set of stills, which could give the new owner the opportunity to make both peated and unpeated whiskies on the same site. Even the 14 warehouses have a more-modern look to them, with a mix of racks and pallets holding the barrels of slumbering whisky. With its landscaped cooling ponds and wrought iron gates, the distillery has a lot of potential to become a tourist attraction, lying only a few hundred yards from the main A95 road and its Malt Whisky Trail. I always remember Walker explaining how one of the first things he did when he bought his previous distilleries and the bottling plant at Newbridge was to give them a fresh lick of paint to improve their appearance and raise staff morale. When I visited, the painters were already cracking on with the job. A whiteboard in the distillery’s kitchen was covered in a vast “to-do” list, ranging from big projects down to the minutia of painting, fencing and drainage. Once the paintbrushes have finished being wielded at GlenAllachie, I can well imagine it becoming a favourite with visitors. Operations director Richard Beattie – fresh from launching Torabhaig distillery on Skye during his previous role as director of distilling at Mossburn Distillers – is already busy drawing up plans for visitors’ tours of the site, highlighting the growing importance of tourism to the whisky industry at large, as well as steering production in the direction desired by Walker. For his investment in GlenAllachie, Walker has

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“Being privately-owned – as opposed to being backed by a private equity company – will allow us to run GlenAllachie for the long-term and not for short-term gains.”

teamed up with fellow shareholders Trisha Savage, who worked with him at both Burn Stewart and BenRiach, and Graham Stevenson, former managing director at Inver House Distillers. “I’ve worked with Trisha for more than 30 years,” explains Walker. “Having worked in the corporate world for so long, Graham felt he wanted to do something with a privately-held company – to have some skin in the game.” The trio’s deal with Chivas didn’t simply consist of the distillery alone. Also as part of the package came warehouses full of Scotch, allowing the new company to release its first bottles this spring. Walker is not only an entrepreneur but also a master blender. He’s spent the past six months sampling hundreds of casks from the warehouses at GlenAllachie and is preparing to unveil the results to the world. “GlenAllachie has a much more masculine spirit than many of the other Speyside distilleries,” he explains. “That means it can take wood very well and that’s what we’re seeing in the cask samples.” This June will see the launch of 12-, 18- and

25-year-old single malts from GlenAllachie, along with a cask strength expression. “These are very much high-end, boutique whiskies,” Walker explains. The deal with Chivas also included the MacNair’s and White Heather whisky brands. MacNair’s is being revived as a richly-peated blended malt Scotch whisky with 21-year-old and 12-year-old bottlings, as well as a non-age statement blend, while White Heather is being relaunched as a boutique blend, initially in a 21-year-old expression, but with 15- and 12-yearold bottlings expected to follow. The strength and depth of the stock that came with the distillery has given Walker the confidence that he can produce blends to suit many international palates, and so the UK, Europe, North America, and Asia are all on his hitlist. “South Korea has the potential to be a huge market, China is still bubbling away and Russia will make a comeback once its political situation settles down,” predicts Walker. “The United States and Canada will continue to be big markets, as will the UK, Europe – especially Scandinavia – and places like Ukraine and

Kazakhstan. And don’t forget the massive latent potential of the Indian market. “Japan is an interesting market and – although it’s very small – so is New Zealand. We’ll work with like-minded boutique businesses that share our focus on quality to bring our whisky to the market.” In the publicity surrounding the purchase, Walker made a point of highlighting that his latest venture would be under Scottish ownership. But he’s very quick to quash speculation that he found it difficult working with overseas investors. “Let me spell it out – my South African partners were a dream to deal with,” he says firmly. “Being privately-owned – as opposed to being backed by a private equity company – will allow us to run GlenAllachie for the longterm and not for short-term gains. “GlenAllachie was never marketed as a single malt brand – it’s always been a component for blending. It’s a beautiful place and a very special whisky. We’re on a journey with GlenAllachie. Whether we’re taking an express train or the scenic route, I don’t know yet – but the key thing is that we’re moving.” n

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“We’re on a journey with GlenAllachie. Whether we’re taking an express train or the scenic route, I don’t know yet – but the key thing is that we’re moving.”

Partner

FROM THINK TANK TO BANK Atom bankâ&#x20AC;&#x2122;s new chair, Bridget Rosewell, talks to Suzy Jackson about her career and her new role.

Partner

“CAN we just… I’m sorry,” Rosewell says, fiddling with a phone cable, “but it’s just not sitting straight.” And as she twists the phone cord into submission, she wryly adds, “…and that’s everything you need to know about me!” A few hundred miles from Atom bank’s Durham headquarters, I chat to Rosewell in its small London office, just off Oxford Street. It’s a beautiful period building, filled with modern fixtures and fittings to make it suitable for modern businesses, and by looking more coffee shop than office, it echoes Atom’s approach to banking – it’s as “unofficey” as Atom is “unbanky”. “Right! Shoot!” Speaking of unbanky, Rosewell is not what most of us would picture as a bank chairman in our mind’s eye. Friendly and welcoming, her words are considered and meaningful, not wasted, her thought processes quite obvious as she ends many discussions by finding something new she needs to do, or speak to someone about – some more unfulfilled potential. “I’ve been involved in Atom bank since the very beginning, before the company was first set up, and we were still talking about why this would be a good idea; to increase the number of civic institutions in the North East, and to attract serious people, and high incomes, into the region. “I think I was one of the first NEDs [nonexecutive directors] to be appointed back in 2014,” she says. “I’ve seen it from the germ of an idea, into something which is now a serious bank. So, we’ve been through those germ stages – coming up with a group of people, finding Mark [Mullen, Atom’s CEO]. We’ve been through the start-up phase – getting a license, beginning to put money on the balance sheet – and now we’re moving into a more grown-up phase. We are now definitely a bank, we have assets, we have to fulfil all of the regulatory requirements that go alongside it and we have to show that we’re capable of moving up to the next level – profitable, growing, more technology, more products… doing all of the different things that a bank will have to do. So that’s the challenge that now sits on my plate, and the executive’s plate.” Nothing too big, then. “I think for all of the challenger banks… well, it’s challenging! The route we have decided to go down is, some people might say, the most challenging – which is to be a full-service retail and commercial

bank, so savings, loans, transaction accounts – everything. And at the same time, build a balance sheet, because that’s what a bank is; it’s what they’re about. “If you look around the landscape, I think you can see that many of the other new banks coming in are either taking a niche, or they’re taking a technology approach and really building a technology rather than a bank. We’ve tried to go right through the middle of that and build a real challenger to the bigger banks. A very small ambition, but our own.” Atom’s founder and departing chair, Anthony Thomson, has been synonymous with the bank since its inception. Big shoes to fill? “Different shoes,” Rosewell smiles. “Not that I wear high heels, I’m usually to be found in trainers unless you can prise me out of them! Anthony was a great chair; enthusiastic, a big personality in that start-up phase and that’s what he enjoys doing. “Me? I like climbing; I do hillwalking. This isn’t the initial battle; this is the straight slog up the slopes of being a good, serious, respected, efficient bank. So, I’ve got my sticks out, and my boots, and it’s time to get up the path we’ve set out in front of us. We’ve got to get on and do it! “I’m looking forward to building a successful relationship with all our stakeholders; getting to know them and deepening relationships I’ve already got. I’m looking forward to supporting the executives as they develop the skills and capabilities they need to take Atom to the next level, both in terms of products and new technology. And on the exceptionally warm reception she was given by the Atom team, Rosewell says she was amazed. “It blew my mind. I was really emotional, really choked; the positivity with which people responded to my appointment was incredible.” But Rosewell is pretty incredible. Oxford educated, she did a degree in philosophy, politics and economics (PPE), followed by a master’s degree in economics in 1976. “And I stayed on and taught for another eight years at the university.” She was a lecturer in economics at St Hilda’s College, Oxford and at Somerville College, Oxford, then a tutor in economics until 1984. What made her take those qualifications? “It’s a very good question, I wish I could remember,” she quips. “I went to do PPE because I hadn’t done any of these subjects

CAREER PRIDE It’s only when pressed that Rosewell can start really listing her career achievements. She opens, coyly, with: “I’m quite proud of being attacked in the House of Lords by my former industrial relations tutor. “We were proposing the abolition of the dock labour schemes, and I’d done some analysis which supported that. There was a counter argument that the closure of the scheme would put people out of work, and I was arguing that it wouldn’t.” Rosewell won that argument, and a few years later when she visited one of those ports and was told that the scheme’s abolition had created jobs, she was happy to find that not only was it a successful piece of analysis… “BUT IT WAS RIGHT!” “Being asked to be on the ‘wise men’, the panel of economists who advised the Chancellor, that was great. And having the Queen pin the OBE on me, that was pretty amazing.” “And I’m very proud of Crossrail,” she continues. “I did all the economic analysis for that at the GLA. I had to fight against the normal way of doing analysis to show why it was good value for money. So when we got the decision to go ahead, that was a good moment. You had to think hard about how you won an argument, think hard about how you go around somebody… but we won.” As you can see, it’s winning an argument that really makes Rosewell happiest. “I’m proud of those,” she concludes.

Partner

FAIRER WORKPLACES “I think it is a big deal,” Rosewell begins. “It’s a big deal, the way many women get treated, and that’s definitely one of the reasons I went out on my own. “I haven’t noticed it, personally, so it’s a much more generic thing than a personal thing. Academic life is very dog-eat-dog, not very collaborative, and it’s the rules that are being written by the people who are already there which are difficult to deal with. “When I started out in my career, you pretended you didn’t have children. You didn’t ever want to say that they’d been ill, or anything, so you just pretended they didn’t exist. That’s changed; anybody can now say, man or woman, that there’s a nativity play, or a sports day, and that it’s important to be there. “Maybe there’s still some way to go… I don’t have any grandchildren yet, so it remains to be seen how my daughter will fare. “I think gender representation is quite good at board level, less good at executive level. You can spread available women over the non-exec roles, whereas the executive roles are full time. That’s where an improvement needs to be achieved. “And it’s a longer game, but it depends on making work, and the way that work is organised, more attractive.”

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“Challenge me to do something and I’m likely to say ‘oh, alright then!’.”

at school and I was fed up, I wanted something new, and this economics stuff? No idea. We hadn’t done it at school. “And I became fascinated by these questions, about how the world works… and can you make it better? Can you improve it? Are there ways we could manage things better?” When she finished her education, she applied to be a librarian, and was interviewed by her former tutor. “He said, ‘What are you doing here?!’ …‘it’s a job, I want a job...!’ ‘Don’t be so silly, go and do the M.Phil. in economics!’ So, I did!” And that’s the complete story of how Rosewell went on to become a leading British economist. “It wasn’t a career plan. Don’t think I’ve ever had a career plan, really. Do what interests you and do what’s difficult. Challenge me to do something and I’m likely to say ‘oh, alright then!’ and then think, ‘what have I done?!’.” She remained in education for eight years. “Academic life is flexible with small children, and my then-husband was also in Oxford, so it was obvious to stay. But then I started to realise that I didn’t believe many of the things I was teaching, which is a bit of a problem. So, the assumptions that underlie the principles of economics are misleading, if not wrong: that everyone is rational, that everyone’s got the full information. There’s a whole edifice of conclusions – even now, policy results from making assumptions about how people behave, which is wrong. “I always felt like I wanted to get to the bottom of that. I still do, and I still am.”

Partner

Those assumptions can be incorrect because they’re dated, but also because we just… know better, now. “In the late 19th century, when people started thinking ‘what is economics?’ and really doing it, choice was much more limited. Consumers were much less powerful than they are now, and there was no internet; none of that variety of choice, which does mean that you could imagine having information about all the possible products you might want to buy, which is one of the underlying assumptions of economics. “Some of the other things were always wrong, and sort of known to be wrong – like the assumption that you only care about yourself, and not other people, which is essential to making some of the maths that they developed tractable, so you could solve the system. If you abandon that it’s much harder because the whole thing feeds back all the time, because your decisions are affected by my decisions, and mine by yours, and so on. You need much more complex mathematics to deal with that, and we didn’t have it.” Rosewell moved into consulting. “That which I had seen of large corporate life was not attractive to me, particularly not as a woman. I didn’t fancy climbing the ‘greasy pole’, and back in the 80s the glass ceiling for women was very apparent. You knew you’d have to be at least twice as good to get half as far. So I thought, why bother? I can just set up my own business.” She established her first company, Business Strategies, with two partners. Twelve years in, they bought her out when she felt the pangs of boredom kicking in – “I’m easily bored,” she admits – and Volterra was born. “There was a material difference between the businesses – Business Strategies did regional economic forecasting, so it was very much around turning the handle on forecasting

models. I wanted to do project-based consultancy, decision-making stuff, rather than just sell a forecast – which, in any case, was wrong. I began to have ethical problems with what I was doing. So Volterra was to be more of a think tank.” Where did Rosewell find her entrepreneurial flair; what was the lure of running her own business? “I wanted to be in charge,” she concedes, matter-of-factly. “Yes, definitely. I wanted to be able to do the things I thought were interesting. The difficulty is, once a business creates its own momentum, it starts wanting to do things you don’t think are interesting. “People say, ‘oh, wasn’t that very brave’, but to be honest, it never felt brave. It just felt like the best thing to do. Here was an opportunity, a market opportunity I could see, I knew how we could fill it, I thought we could sell it, and we just… did! “It helps if you cut things into the next step. I never had the 30-year career plan, so you do what comes nearest. Take a thread and pull at it, and be willing to accept new opportunities, that’s really what it comes down to.” Asked how she balanced the pressures of being a working mother with a burgeoning career in education, the initial answer – ‘badly, probably!’ – doesn’t show her anywhere near enough credit, for doing this in an era where it really was the exception, rather than the rule. “I don’t think it’s changed either – tie and knot and go on, as Wellington said about his campaigns – and hopefully you find everyone eventually. There weren’t many working mothers. “There were occasions where I thought it might be nice to cut back, because I have this tendency to say yes to things, but when I thought about the consequences of stopping,

somehow, I… stopped stopping! “Interesting things came along… Atom came along!” Two things made her get involved in Atom bank in the first place. “Firstly, it was about supporting the North East economy. As you can tell I’m not from the North East, I’m suburban South East, me, but I came up to sit on the North East Independent Economic Review in 2012 – time flies! We had a conclusion that one thing lacking in the economy was new growing businesses but particularly, not just tech firms coming from universities, but bigger institutions which would see across the whole of the region and help to provide some finance deals that were lacking in the local community. “The other part was that I’d been sitting on boards from the late nineties, through the financial crisis, and I watched the emerging car crash and behaviours. So, another part of it was about showing how we could do banking better. More transparent, more fair, better deal for customers, not being burdened with the legacy of huge systems that had built over time and become incredibly opaque. Open banking is great news, we’re still working out how we respond to that. “So, there’s a bit about the North East economy, and a bit about how I do banking. That’s why I got involved.” Rosewell talks proudly and passionately about her other roles, on the infrastructure commission looking at transport links and connectivity in different parts of the UK, as well as chairing the “roads for the future” competition, which fits nicely with her role as chair of the Driver & Vehicle Standards Agency. “And in my spare time,” she says, a twinkle in her eye, “I sit in front of the television and knit. It’s very therapeutic!” So, why did Rosewell untangle the phone cable, right at the beginning of our conversation? Not because she’s fastidious or stamping her personal authority on a situation… but simply because she saw a way to make it better, and so she felt moved to jump in and do it. I rather suspect that could be the story of her life. n

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ith his smart three-piece suit and neatly clipped white beard, Stephen Russell may at first seem a little out of place striding between the towering shelves in drinks merchant Inverarity Morton’s cavernous warehouse in Glasgow. Yet nothing could be further from the truth. Russell joined the wine, beer and spirits specialist as an assistant accountant fresh from college in 1975 and rose through the ranks to become joint managing director in 1999 and sole boss six years later. During his time in charge, turnover has risen from around £28m to £67m today, with the company morphing from a supplier of bland international lagers like Budweiser, Rolling Rock and Sol into the largest independent drinks supplier in Scotland, with a vast array of exclusive wines, plus a rapidly-growing range of craft beers and premium spirits. It’s a world away from the business Russell knew in the mid-70s. “I came on board as the assistant accountant – only to discover that there was no

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Through acquisitions and organic growth, Inverarity Morton has expanded to become Scotland’s largest independent drinks supplier. Peter Ranscombe talks whisky, wine and beer with managing director Stephen Russell.

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“I came on board as the assistant accountant – only to discover that there was no accountant and that calling me ‘assistant’ was simply a way of keeping my salary down.”

Wholesa le

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accountant and that calling me ‘assistant’ was simply a way of keeping my salary down,” he laughs. “They wanted someone with experience in the licensed trade. My uncle owned a pub called the Pullman Bar in the Gorbals and, when he died tragically in his forties, my mum was the executor of his will. “I lived in Glasgow and the company was based out in Larkhall. I didn’t mind driving 45 minutes each way every day because I had a three-litre Ford Capri.” William Morton, the forerunner of the current business, was founded in 1945 and bought by Sandy Bulloch – one of the bestknown names in the Scottish drinks industry – in 1959. He sold it in 1974, but bought it back again in 1976 and merged it with three of his other drinks companies: A Bulloch Agencies; Classic Wines; and John Grant Blenders, the business Russell had joined the previous year. Russell switched to the buying department following the merger. “I had never been trained to know anything about wine,” he confesses with a smile. “The wines our company stocks have changed out of all recognition since those days. In the past seven years, we’ve quadrupled the number of wines we sell. “We’re now the exclusive Scottish and in some cases British supplier for most of our wines and that’s very important for our customer base. We even design the labels for some of our customers.” Strolling around the vast warehouse, it’s easy to spot some of the big-name brands, from Champagnes such as Deutz, Laurent-Perrier and Louis Roederer through to Chablis from Albert Bichot, Valpolicella from Tommasi and a host of bottles from Wente in California. It’s the sheer breadth and depth of the range that impresses the most though, with wines from Hungary, Romania and even England. “We operate in a very competitive market these days,” admits Russell, who is the largest shareholder in the business through his 25% stake, with the other stock spread between Bulloch’s children and grandchildren. “I look back over the past 40 years and, even though I felt things were competitive in the past, it was a much-more relaxed market. “Now, we’re up against two really big players in Scotland – Tennent’s, which is owned by C&C Group, which also owns Magners cider and is listed on the stock market, and Matthew Clark, which is part of Conviviality, a £1.4bn

company. What sets us apart is that we’re independent and we supply a lot of other independent businesses, like Caledonian Heritable, Di Maggio’s Restaurant Group, G1 Group and Montpeliers. “Being independent means that we can respond quickly to customers’ requests and offer a high level of customer service. I was in the office on Boxing Day and 1 January helping to get our clients what they needed.” Russell is clearly passionate about wine – especially when it comes to serving it with food. He waxes lyrical about cheese and chocolate, and about which wines he enjoys serving with everything from pasta to steak.

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“I look back over the past 40 years and, even though I felt things were competitive in the past, it was a muchmore relaxed market.”

He lists his “desert island wines” as: Château d’Yquem, a sweet wine made in the Sauterne area of Bordeaux in France; Bâtard-Montrachet, one of the “grand cru” top white wines from Burgundy; and Gran Reserva Riojas, Spanish wines that have been aged for at least two years in barrels and three years in the bottle, but often are held for much longer before being released. “But I love all types of wine, from sparkling wine through to sweet red wines,” he adds. Inverarity Morton’s specialism in wines is reflected in the acquisitions the company has made. After Mexican beer brand Corona withdrew its distribution as part of its tieup with Molson Coors, Russell wanted the business to build up its own brand instead of being reliant on other larger companies’ labels. William Morton bought wine merchant Inverarity Vaults in 2011 – re-branding under its current name – and then spirits merchant LA Wholesale in 2012 and Forth Wines the following year. In 2015, Russell consolidated the combined business’s three sites into a single warehouse with offices on the Thornliebank industrial estate in Glasgow. Russell is especially proud of the new office’s state-of-the-art tasting room, complete with a U-shaped, Corian-topped tasting table and

glasses supplied by Riedel. The whole range is stocked, from traditional Champagne flutes through to a new shape designed specifically for serving Coca-Cola. The company has grown to employ just over 200 members of staff, split between its head office and warehouse in Glasgow and its army of sales representatives on the road throughout Scotland, with a small team also based in the south of England. Would Russell consider making an acquisition in the North of England to fill-in the gap? “I’d never rule anything out,” he replies in a very even manner. “People buy from other people, not companies, and so that personal relationship is essential. “If you’re not getting on with someone then walk out the door and leave – you’re never going to do business together. That’s just as true in Newcastle as it is in Glasgow or Edinburgh.” While wine is at the heart of the business, spirits – and whisky in particular – are extremely important to Inverarity Morton. Sales of single malts by the company have risen by about 20% over the past year to around £4m. The firm now stocks 360 Scotch malt whiskies and a further 20 high-end malts from India and Japan, which are growing in popularity with its customers. Imported whiskies have also been given a boost by bartenders using them in their cocktails, while brand extensions such as Jack Daniels’ “Fire” and Jim Beam’s “Double

Oak” are also proving popular, with the latter enlisting the help of actress Mila Kunis in its adverts to appeal to a younger audience. Russell points to the innovation going on in the single malt segment, including Auchentoshan’s “Bartenders’ Malt”, which has been created with cocktails in mind, and Glenfiddich’s “Experimental Series”, including “Winter Storm”, the 21-year-old whisky aged in French oak ice wine casks from Canada that featured in issue 30 of BQ Scotland. Another strong area of growth has been gin. “When I started working at William Morton in the 70s, I could count the number of gins we stocked on one hand,” Russell remembers. “Now, we stock 200 gins and between 150 and 200 tequilas too. One of our clients, Topolabamba – which has Mexican restaurants and bars in Aberdeen, Edinburgh and Glasgow – is stocking 70 tequilas.” In contrast, Russell thinks distillers need to be more innovative when it comes to their blended whiskies. Sales of blends at Inverarity Morton are down around 20% and, while single malts tend to have better profit margins than standard blends, he says that reinvigorating the category needs to be high on the industry’s agenda. A wider challenge facing the drinks industry in Scotland is how to cope with the lower drink-drive limit, which was introduced in December 2014. “That cut our sales by 10-15%,” Russell says. “It won’t prevent a person who was going to

have 10 pints of beer and then getting behind the wheel from doing so, but it has changed a lot of people’s attitudes towards drinking. Some sensible, moderate drinkers are now scared to have a glass of wine or a pint of beer with their Sunday lunch for fear it will put them over the limit on Monday morning – which is a bit extreme.” Part of the answer for Inverarity Morton has been encouraging people to “drink less but drink better”. Often called “premiumisation”, the trend for customers to trade-up from cheaper to higher-quality drinks – usually with a better profit margin – is an important factor for wholesalers and retailers throughout the country. While government policies on drink-drive limits are out of the control of any company, Russell is preparing to sink his teeth into a project that will give him much greater control over his business. “We’ve been using the same computer system since I started working here in the 1970s,” he says. “We’re installing a new system that will give us a customer relationship management tool, e-commerce and greater stock management. Members of staff working in the warehouse will be able to use headsets, which will free-up their hands for lifting and carrying stock. “It’s a big project – it will cost around £500,000 and take between nine and 12 months to complete. But it will make a huge difference to the business and will allow us to give an even better service to our customers.” n

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THAT’S THE SPIRIT Mike Hughes puts down his Jack Daniel’s and reaches for the newest drink on the shelf – Yorkshire’s first single malt whisky – to toast Spirit of Yorkshire with its managing director, David Thompson.

troll through the fields of barley at Tom Mellor’s farm near Hunmanby and you can feel and smell Yorkshire. There is a spring on the farm as well, so I suppose if you were some sort of home-grown entrepreneur with a passion for brewing and maybe even a crazy idea to make Yorkshire’s first single malt whisky then you might have a game-changing combination. So, say hello to David Thompson, who has teamed up with his good friend, Mellor, founder of the Wold Top Brewery, to launch Spirit of Yorkshire and do just that. It’s early days – only one year on from the first still firing – but the signs are good; Mellor and Thompson may just have made not only the region’s first single malt, but a damn fine drink. But even though the visitor centre is open and Yorkshire folk with good taste are seeing

the product and eagerly snapping up preordered casks at £2,850 a go, no-one knows how the finished product will taste because it needs at least three years in the cask before it can even be classed as whisky. “We’re at the stage now where we know the distillate is spot-on and we’re very happy with the maturing malt and the way the new spirit is coming off the stills,” Thompson explains. “We have had reports from the top whisky writers that are very promising. “That is very encouraging because we were always very keen not to just replicate a Scottish distillery, we wanted to put a bit of a twist in there, so we have the traditional pot stills from Scotland, but have put a column still next to it to rectify the spirit to a level that is very fruity and very quick to mature. “It is a massive point of difference for us

and, as far as I am aware, there is nobody else with both a pot still and a column still linked together in tandem. When we do the tours and people get to taste the very young maturing malt they just want to buy it there and then.” In a way, the move to whisky may seem bold, but it has a certain logic to it. Mellor had plenty of experience of the brewing process, and when they were looking for a project together they were able to quickly rule out gin because it is one of the region’s booming smaller industries, meaning Yorkshire has lakes of the stuff. So, why not try whisky with the innovative double still process giving it the uniqueness they were looking for? “We also always wanted a traceability and provenance to what we made from the field to the bottle,” says Thompson. “The whisky market generally has become more

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sophisticated and younger people are drinking it, with whisky bars starting to open up, and it is one of those things that people are becoming more knowledgeable about – it’s not just the bottle of Bell’s that you picked from your dad’s cupboard and got a headache from. “Both Tom and I are of the age when maybe this is our last chance to set something up that is different. Unfortunately, with whisky we have this lead time issue, so perhaps we are doing something for the next generation, but it is very exciting. “A lot of surprised people will look at businesses like this and ask, ‘What are you doing?’, and we love that, we feed off that sort of challenge. If we just fancied ‘doing something’ we would have looked at gin because that has low capital investment, you buy your spirits in and that is why there are bootleg gin manufacturers out there. “We have banned the word ‘craft’ here because that builds a picture of a hobby and a garage-type operation, but the stills we’ve got are the biggest outside Scotland and future-proof us against the demand, although our consultant, Jim Swan, told us we would be needing more at some stage.” Swan is a deeply sad note in all this celebration. A revered legend to whisky makers and drinkers, he conducted ground-breaking

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“Both Tom and I are of the age when maybe this is our last chance to set something up that is different.”

research and was an adviser to countless distilleries, particularly helping start-ups, so his death in February aged 75 was a huge blow and many glasses of fine whisky will have been raised around the country in tribute. “We had Jim on board right from the concept, before we had even decided to do it we employed him to do some research and, to be honest, he was so infectious that once we had him with us there was no way back,” says Thompson. “His knowledge of the business was unbelievable and you put Jim Swan’s name to any new distillery and the credibility goes through the roof. He came up with the concept of the flavour wheel for whisky [a visual representation of how much of each flavour and taste is in each whisky], and we needed that knowledge and experience because we were starting from scratch with no idea of how to make it.” The friendship and experience that Swan brought to Spirit of Yorkshire is irreplaceable, and now his presence is lost. But what Thompson and Mellor learned and the progress

they have made since has been distilled into something he would be so proud of. So, here’s a big question – what does it taste like? “When Jim first started dealing with us he asked us what we wanted to create and we said something drinkable for the majority of people, so nothing too heavy or peaty, something light and fruity and from that we built our pot and column stills around that concept, which would become our signature spirit,” explains Thompson. “We are casking off the pot separately to the column and will bring them back together at the end to bottle it in a single malt marriage of the two distillates – body with the pot and lightness with the column – which will be uniquely Yorkshire. We are also going to brand our maturing malt as ‘Callow Spirit’, which will be on the shelves for Christmas. It will be a very small bottling and we can’t call it whisky because it isn’t three years old.” After that, the bottling of the whisky will take place in its own time, although the casks that are flying off the shelves come with a ten-year storage plan that can be extended to

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accommodate personal tastes, taking care to factor in the 2% “angel’s share”, which is lost each year as part of the process. Spirit of Yorkshire will be available to buy online direct from Hunmanby as well as through top-end stockists capable of providing a market for the £50-£55 bottles. As well as the perfectly-timed art of the perfect whisky, the recipe also asks for just the right amount of friendship. Too much and the business acumen loses its edge, too little and the working relationship is sour. Mellor and Thompson have put a lot of their own money into it, and have then had remarkable support from Yorkshire Bank, which became a key element of all the planning. The business model then needed the boost of the visitor centre, where events are also scheduled to draw in even more of the east coast tourists, to maximise the return on investment. There is a global market out there, with a sliding scale of “Yorkshireness” to be utilised depending on the market they are working in. These guys trust each other and wanted to work on this life-changing project together, and have even brought in their families to work with them: Mellor’s daughter, Katie, runs the farm, bottling and brewery side of the main business with her husband; Jenny Mellor is down in London doing the marketing; Max Thompson has done all the electrical work on the visitor centre and buildings; and his brother Harry, although based in France, has reported that the country is now the biggest drinker of whisky, so he has his eyes firmly on that market for his dad. “Tom and I are very close friends and one point that is often made is ‘Don’t work with friends or family’, so we wanted to prove people wrong and show we can work together and be successful,” says Thompson. “Also, we wanted to do all the distilling ourselves, at least for the first year-and-a-half because, unless you put your heart and soul into something, you can’t then then go out and sell it as being yours, so we have learnt the whole process from the bottom up and can pass on what we have learned from Jim. “Business-wise, I think you can sit in an ivory tower and look down on it all, but unless you physically get your hands dirty you really don’t know what business is about. One of the beauties of running your own business is that we don’t have to turn around a tanker each time we want to add something and our board meetings consist of me and Tom looking at each other over the stills with a bacon sandwich and a coffee saying, ‘That sounds good – yes, let’s do it’.” That might as well be the company motto at Spirit of Yorkshire and one for the walls of so many Yorkshire companies: “Is there a market? Do we believe in it? Then let’s do it.” n

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INVESTING IN NEW HOMES WHERE THEY ARE NEEDED Fintech firm Growth Capital Ventures, which raises finance for high growth SMEs and property-related projects through co-investment, is opening up new opportunities in house building.

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“The UK housing market is far more complicated than might appear at first sight, it is made up of many different regional markets, which often behave in different ways.”

GROWTH Capital Ventures (GCV), which has successfully raised capital for a number of high growth businesses and projects, has a new drive to revive the UK housing market with its co-investment model. It has already secured £400,000 of funding for a pioneering project building quality family homes in Chilton, County Durham. Through its innovative co-investment financing model, the project was oversubscribed within a month – 47 days before the scheduled close. Now GCV has a pipeline of similar residential projects to unlock development sites in a targeted approach which will contribute to addressing the UK’s housing shortage. GCV co-founder Craig Peterson says: “It is crucially important that the country starts to build the right homes in areas where they are needed and residential property investment opportunities will be a key sector for GCV in 2018.’’ Everyone knows that the UK has a housing crisis. Along with Brexit, it is at the top of the political agenda. At the core of the problem lies a shortage of housing and it has been estimated that we need to build at least 300,000 new homes a year to meet demand. “It is sobering to reflect that in the last decade we have only ever managed to achieve about half of that,’’ says Peterson. The inevitable result of the lack of supply has been a steep rise in prices – so much so that, since the early 1990s, house prices have more than doubled in real terms, despite the 2008 crash. However, Peterson argues that the problem is not only one of simple supply and demand.

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Certainly house prices are too high in some areas such as London where foreign investors have driven up prices, but indiscriminate building is not the answer. A number of European countries which have undertaken programmes of subsidised housebuilding have only succeeded in building up stocks of unoccupied homes. Less than a year ago it was reported that the number of empty homes in the UK was at its highest for 20 years. “The UK housing market is far more complicated than might appear at first sight,’’ says Peterson. “It is made up of many different regional markets, which are often behaving in different ways. If you aggregate them, you get overall figures but this can give a misleading picture and that can create problems if it leads to attempts to address the issue by taking the UK, or even England as a whole, and attempt to balance the overall national supply with the overall national demand. A one size fits all approach is not the way to tackle our housing crisis, it’s vital the right homes are built where people need them.” He argues that the regional nature of the market calls for targeted building by those with the specialised local knowledge who know what kinds of houses are needed and where they are needed. In the past this function was ably performed by the independent SME housebuilders but they were hit hard by the financial crisis when banks were reluctant to lend, driving many out of the market and others out of business altogether. The numbers of smaller regional house builders – those building fewer than 100 homes a year – halved between 2007 and 2014 to fewer than 3,000 – down from a

peak of 12,000 in the late 1980s. These small builders built just under 20,000 homes in 2013, compared with an annual figure of almost 51,000 a decade earlier. But, as Peterson points out, in its latest report, property expert Savills says that, if there is to be any step change in the UK’s housing supply, it is precisely these smaller independents that will have to shoulder the burden. “There are sites all around the country that could be unlocked for development but these don’t appeal to the larger builders because they are just too small for them. However, this is where SME builders could provide homes,’’ he says. GCV not only has an analysis of the problems behind the UK housing crisis but has also developed a model to help address them. Its development company, Homes by Carlton, has years of experience in housebuilding and development. It specialises in providing high quality houses on those kinds of smaller sites which the large builders find it uneconomical to develop but where there is still a need and a ready market. GCV works alongside Homes for Carlton as an a Financial Conduct Authority-authorised investment firm that can focus on structuring the funding packages and introducing these opportunities to its investor base. GCV’s coinvestment model, which it has pioneered over recent years, connects a range of investors to growth focused investment opportunities. Retail investors can use GCV’s GrowthFunders website to learn about carefully vetted businesses and then invest from £100 upwards, alongside professional

“A one size fits all approach is not the way to tackle our housing crisis, it’s vital the right homes are built where people need them.”

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investors and institutions and high net worth individuals who are part of GCV’s offline G Ventures Investor Club. Co-investing in this way allows independent housebuilders, which have been starved of capital by the banks, to gain access to the funds that will allow them to unlock sites throughout the country that have great development potential. It can bring them back into the market to do what they do best – apply their local knowledge to provide homes where they are needed. “Co-investment also gives everyday investors access to those parts of the UK housing market where demand far outstrips supply, so that they can share in the returns which have always been the preserve of the larger investors, but with the assurance that they are investing alongside professionals,’’ says Peterson. “It also allows them to diversify and balance an investment portfolio as such a residential property investment will typically make a return over an 18 to 24 month time scale.’’ In the Chilton development, investors bought shares in the special purpose vehicle (SPV) Homes by Carlton (Chilton) Limited. The project is targeting a base case of a 1.5 times return on money for investors. Mike Priestley, a founder member of the GCV investor network, says: “I’m delighted to be investing in this scheme. Quality regional housebuilders need innovative funding solutions and I am particularly interested in solid alternative investments that have the potential to deliver better returns than mainstream opportunities’’.

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“We will be creating over 200 direct jobs and 150 indirect jobs within the supply chain. Skills and training is high on our agenda and apprenticeships will feature heavily.”

David Nixon, also a founder member of G Ventures, adds: “I understand property development and the opportunity to back residential development projects that have the potential to deliver a decent financial return, create jobs and enhance the local area makes this type of investment compelling.” The site, on which there will be 14 homes, will include three CoreHaus homes, which are built using a standardised modular core that reduces the onsite construction process by up to 50%, providing sustainable developments that deliver both economic and social value. CoreHaus is backed by national procurement organisation and social enterprise Fusion21, which co-invested and anchored the equity round. Fusion21 helps people buy smarter in the public sector and make a difference in communities across the UK. The organisation has saved its 400-plus members more than £177m

Partner

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“Co-investment also gives everyday investors access to those parts of the UK housing market where demand far outstrips supply.”

with fully compliant procurement frameworks and created more than 4,000 jobs, while the social value of its projects currently stands at £68m. Dave Neilson, chief executive at Fusion21, says: “Working with Homes by Carlton and GCV provides us with a fantastic opportunity to pilot our sustainable CoreHaus modular housing solution, whilst building much needed new homes and generating social value in the form of job creation and apprenticeships.” The Chilton site will comprise three-and four-bedroom homes ranging from townhouse style terraces to semi-detached and detached homes for families and professionals. Work is scheduled to start on site later this

year, with an estimated 18 month rolling build and sales programme. GCV is encouraged by the success of the Chilton scheme as it is just the first of four planned sites in the North of England, which will see the creation of more than 300 new homes. Peterson points out that investors in these projects will not only have the potential to realise market beating returns, they will also be helping Growth to address the nation’s housing crisis Capital Ventures and make a positive social impact. He adds: “We will be creating over 200 direct jobs and 150 indirect jobs within the supply chain. Skills and training is high on our agenda and apprenticeships will feature heavily.

We are keen to support the local supply chain and we will be going out to tender with local subcontractors and suppliers to create more jobs in the North East.’’ n

Growth Capital Ventures

Growth Funders Co-invest in deals with real purpose. To find out more about investing into property projects or high growth businesses, visit www.growthfunders.com or call 0330 102 5525.

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THE EXPERIENCE OF A LIFETIME

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Susan Morrison began her career as a tour guide at The Scotch Whisky Experience in Edinburgh and has worked her way up through the ranks to become director of this £8m-a-year tourist attraction, as Suzy Powell reports.

lending the traditional with the futuristic is something that The Scotch Whisky Experience is skilled at. Susan Morrison, director and general manager, describes it as “contemporary with a twist of tradition, or traditional with a twist of contemporary”. Either way, the Edinburgh visitor attraction is celebrating its 30th year in good spirits. On the Monday morning that I am given a guided tour, there is a meeting taking place with a futurist.

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For a tourist attraction about Scotland’s most celebrated product, relying on the past can only go so far – the team here has one eye firmly on the future. And it needs to; just as whisky producers plan many years in advance – it takes a minimum of three years to make whisky and often far longer to produce a decent malt – The Scotch Whisky Experience wants to move with the times, preferably keeping one step ahead. One way it has been able to do this since opening in 1988 is by continuing to develop the former Castlehill Primary School site. With the recent acquisition of the old janitor’s house – “the final piece of the jigsaw” as Morrison describes it – plans are well underway to transform the three-storey tenement into a VIP suite, with much needed extra office space and additional room for meetings, tasting and the whisky school.

With neighbouring popular attractions including Edinburgh Castle and Camera Obscura, The Scotch Whisky Experience is in a prime position to attract passing trade. Daily visitor numbers on peak days from Easter to October are an impressive 800-1,000 with 22% from the United States, 21% from the UK, 8% from France and 7% from China. The domestic market was overtaken by the US last year. To reflect the diverse nationalities, the tours are available in 18 languages, six with subtitles. More than £50,000 was recently invested into audio guides, which feature interpreters conducting tours in both British sign language and American sign language, making it the first tourist attraction in the capital to offer both. It was seen as an important addition to enhance accessibility. Apart from the whisky school – aimed

at the trade, but which has proved just as popular with enthusiasts – the other aspect of the business where pressure is felt is the three tours. Lack of room for queuing at peak times and maintaining the quality of tours so that people do not feel rushed are issues that Morrison and the 80-strong team are well aware of; discounting tickets and offering cheaper tickets for off-peak visits is not a route they are keen to travel, but greater use of IT could offer solutions. Harnessing technology and investing in the future have been key over the past 30 years to the experience’s growth and its ability to remain relevant. Turnover in 2017 was just under £8m, compared with £2.9m in 2007. In that year, an eight-minute barrel ride was introduced to widen the attraction’s appeal: there is commentary by a hologram in the shape of Douglas McIntyre – he’s fictitious

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although instantly recognisable as a jovial whisky-loving Scot – and a “spot the cat” game created for younger children. A 180-degree film exploring the five whisky-making regions of Scotland – Lowland, Highland, Speyside, Islay and Campbeltown – was commissioned in 2016, going live at the end of that year. “It wouldn’t have been possible for us before drones were available because the cost of hiring a helicopter for filming was too much and with the weather, you are not always guaranteed to film,” explains Morrison. “When we first showed the film to our staff, one of our tour guides burst into tears. I thought she didn’t like it, but she loved it.”

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“It’s about finding effects that don’t date too quickly.”

It is a breathtaking journey through hills and glens and over rivers and lochs, which takes visitors far from the cobbles and tenements of Edinburgh’s High Street and gives them a taste of the land that has shaped one of our most famous exports. The idea for an immersive film experience came about after customer feedback that there was a desire to see more of Scotland during the tour. “It is designed to whet people’s appetite to travel further and possibly visit a working distillery,” says Morrison. A scratch-andsniff card is handed to visitors which, when activated, releases the key aromas of whiskies of each region, ranging from dense and smoky, to romantic Highland scents of heather. The film theatre leads onto a recreated blenders’ sampling room from the late 1800s. Here visitors perch on a bar stool while the guide takes them through the blending process, explaining the differences between malt,

grain and blended whiskies and letting visitors choose from a variety of whisky from each region to find their favourites. To bring it to life, the technology used here is based on a Victorian visual effect called “Pepper’s Ghost” to create illusionary mini firework displays, among other eye-catching visuals. “We have to be careful as we don’t have the budget of Disney,” smiles Morrison. “It’s about finding effects that don’t date too quickly.” Morrison started as a weekend guide at what at the time was called the Scotch Whisky Heritage Centre when she was studying German and Russian at the University of Edinburgh. Initially it was her interest in languages, rather than a love of whisky, which attracted her to the role. After graduating, Morrison became a whisky buyer and then moved through a variety of roles over the following eight years, including visitor experience manager and retail and tastings manager, before becoming general manager in 2000. She is one of only five female “Masters of the Quaich” – Julie Trevisan Hunter, her head of marketing, is another – an industryawarded accolade given in recognition of promoting the industry to the public and she

is also vice-chair of the Association of Scottish Visitor Attractions and chair of the Distillery Visitor Centre Managers’ Forum. Nearing the end of the tour – there are three tours in total – is the world’s largest collection of Scotch whisky, purchased by Diageo in 2006 from Claive Vidiz of Sao Paolo, who had collected an impressive array of bottles of all shapes and sizes, from a full chess board with each piece a bottle, to birds, busts and golf balls. “Claive was not snobbish about whisky so there are supermarket blends amongst the 3,384 bottles,” Morrison points out. When he wanted to return his entire collection to Scotland, industry giant Diageo purchased the collection on the proviso that The Scotch Whisky Experience build the stunning vault to house the bottles, which are displayed in alphabetical order at the correct temperature. The vault is well used as a venue and has been hired by “rich Russians” and others for birthday and wedding celebrations, as well as by the shareholders to entertain guests. There are two other spaces that are hired for private functions, which recently underwent a £500,000 refurbishment.

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The industry has supported the experience from the outset. Started by a group of 19 producers, there are currently 26 distillers representing 90% of the industry. After an initial £2m investment, the experience had to be self-funded and has made a profit since 1991. This is partly down to ongoing growth of the business including the restaurant and whisky bar, opened in 1998. Amber restaurant and whisky bar now sells 450 single malts, blends and liqueurs. “When we opened the experience, we were turning people away for a coffee,” says Morrison. “When we started with the restaurant, it was a challenge. “At first, we sub-contracted the catering but that didn’t work, so we started running it ourselves in 2001. After 2005, it began to make a profit. “We have a great in-house team, led by executive-chef-and-father David and head-of-department-daughter Wendy Neave. I love the restaurant – it’s got a reputation as a hidden gem and over the years has gained an international reputation with great Tripadviser comments.

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“If you can get people to sit for 20 minutes and try it, we can usually convince them there is something they will like.”

“If we haven’t convinced visitors about liking whisky on the tour, the way to do it is with food; 79% of our visitors say they do not like whisky but we aim to change people’s perceptions. If you can get people to sit for 20 minutes and try it, we can usually convince them there is something they will like.” For those who want to take home a souvenir or two there is an impressive shop, stocked with more than 470 derivations of whisky. Customers, it would appear, can’t get enough. “We had one Chinese visitor who bought a £27,000 bottle, and another who wanted to buy several bottles, worth £40,000,” says Morrison. “We were concerned about duty free limits so pointed this out to him, but he had his own private jet so that wasn’t an issue. “As part of the 30th celebrations this year, we will be bottling 550 bottles of 30 year old for sale so we expect there to be a high demand for those”, she adds. With the popularity of whisky shows no signs of slowing, it looks like tourists will continue to flock to The Scotch Whisky Experience for many years to come. n

Media Partner

Young Enterprise Scotland helps celebrate the Year of Young People Geoff Leask, chief executive at Young Enterprise Scotland, explains why his organisation is at the heart of 2018’s Year of Young People. SCOTLAND’S “themed years” have always captured the imagination, from the Year of Natural Scotland through to the Year of History, Heritage & Archaeology and the Year of Food & Drink. This year’s theme strikes a slightly different chord though. That’s because 2018 has been declared by the Scottish Government and its partners as the “Year of Young People”. Based around six key themes, activities taking place over the course of the year will focus on culture, education, enterprise and regeneration, equality and discrimination, health and wellbeing, and participation. Geoff Leask, chief executive at Young Enterprise Scotland (YES), is busy making sure that his organisation will support the enterprise and regeneration theme. YES is best known for its company programme – which gives secondary school pupils the chance to run their own businesses – but it also offers a range of opportunities spanning from primary school, through secondary school and on to college and university, taking in prisons, residential and secure units, and community groups along the way. “At the very heart of our work during the Year of Young People will be our Festival of Youth Enterprise,” explains Leask. “That will

take place at Hampden Park in Glasgow on 5 and 6 June and will be the culmination of our company programme, including the final judging and presentation of our annual awards. “The Year of Young People is a great opportunity to celebrate achievements from throughout Scotland. Our Festival of Youth Enterprise is one of the flagship events for the Year of Young People and this year we’ll be holding a Forth Valley fringe event at Codebase in Stirling on 13 March and a Tayside fringe event at Dundee & Angus College on 27 March.” Leask adds: “Learning about enterprise is one of the key entitlements for pupils under the ‘I Can’ statements drawn-up by Developing the Young Workforce, from primary school children believing they can succeed in any area of work through to secondary school students evaluating the risks associated with developing their own business ideas. But it’s not just about entitlement. “Taking part in YES activities helps young people to develop the core skills like problem solving and working together in teams that employers are looking for. Throughout their lives, young people will retrain again and again to learn new technical skills, but those core skills will sustain them across so many jobs.

“YES is also a great enabler because it’s not only the academically-gifted pupils who do well on our programmes. Young people who have struggled academically grow in confidence when they take part and learn new skills.” His comments are borne out by the evaluation of the company programme. Its 2017 impact report found that participants’ employability competencies progressed in core skills such as communication, problem solving and teamwork, as well as in areas like aspirations, confidence and self-esteem. Speakers at this year’s event – which is sponsored by partners including QTS, Royal Bank of Scotland and the Scottish Government and for which BQ Scotland is the media partner – include Black Circles founder Mike Welch, women’s empowerment champion Sylvia Douglas, Facebook advertising consultant Gavin Bell and social entrepreneur David Duke. n Find out more about the Festival of Youth Enterprise at www.yes.org.uk/events.php

bqlive.co.uk

Ambassador, with this whisky you’re really spoiling us… Karen Peattie meets Jo Graham, whose training and events company – The Whisky Ambassador – is helping bar staff to market Scotland’s national drink.

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ack in a chilly Glasgow after a holiday in Tenerife – where the average temperature was 19°C – Jo Graham is feeling the cold. “A dram would be the perfect winter warmer right now,” says Graham, the managing director and co-founder of The Whisky Ambassador, provider of the UK’s only accredited whisky course. Rubbing her gloved hands together approvingly as she scans the excellent range of Scotch whisky brands behind the bar in McPhabbs, the popular pub across the road from her office near Glasgow city centre, she settles for a sparkling water. “I’m not on holiday now,” she laughs, exchanging pleasantries about the weather, cats and handbags before moving on to her professional passions: whisky and training. Why combine the two? “I started my training and human resources (HR) consultancy in 2006 and it is still going well,” says Graham, referring to People Solutions, her company focusing on small and medium-sized enterprises. “We were providing training for the

licensed trade and after I started working in a partner’s late bar I became more interested in whisky and how it was sold. “The bar was popular with tourists – customers were always asking for whisky but it struck me that I didn’t really know much about Scotland’s national drink. I could read the label on the back of the bottles and chat away to people, sharing the little knowledge I had about Scotch and I could see that even at that quite basic level people were engaging with me – they stayed longer and spent more money.” Graham put her Scotch storytelling on the back burner until a conversation with a potential partner who was organising whisky experiences and described the basis for a training programme, prompting her to start doing some research. “I searched online for bar staff training and there was nothing specialising in whisky,” she explains. “There’s no doubt that producers and distributors are doing a great job as far as their own brands are concerned but there was

nothing for the whisky category and I found that quite remarkable. A sommelier can wax lyrical about wine and a mixologist will nail the art of creating cocktails, so why can’t bar staff undertake training to hone their knowledge about Scotch whisky?” The Whisky Ambassador came to life in 2012, the idea having matured slowly over time – rather like a good malt. Graham and her team decided that a one-day course targeted at anyone who serves or sells whisky would best suit the industry’s needs. “It’s about giving people the confidence to engage with their customers and provide a great experience for those customers, at the same time increasing sales and making the business more profitable,” she explains. Initial trials with the bars at the Radisson Blu and Grand Central hotels in Glasgow saw the premises provide sales data before and after the training. “Both saw an increase in the quality of the whisky sold, which contributed to a 64% increase in one and 25% in the other,” Graham points out.

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“Why can’t bar staff undertake training to hone their knowledge about Scotch whisky?”

“The results told us that if staff are enthusiastic and knowledgeable about Scotch whisky then a bar will sell more. Hospitality is also a people-facing industry so when a customer asks questions then hears the story behind it, clearly that is going to stay with them and have a positive impact on their visit – not just to that particular bar but to Scotland.” While provenance now plays a big role in the Scottish food and drink industry, there’s something about Scotch whisky in particular that strikes a chord with visitors, Graham suggests. “The Chinese, for example, are really big on the history of Scotch and the mystique around it but they do understand that it’s not all rolling hills, heather and Whisky Galore,” she says. “People have heard a lot about whisky but might not be able to distinguish between a blended Scotch and a malt,” she continues.

“A customer might ask for a mainstream blended brand but a knowledgeable bartender can explain the difference, make a recommendation and upsell.” As the first accredited course designed exclusively for the licensed trade – it has British Institute of Innkeeping Awarding Body (BIIAB) accreditation – The Whisky Ambassador’s initiative is not affiliated to any brand. The programme is mapped to National Occupational Standards, can be used for continuing professional development (CPD), has been checked by the Scotch Whisky Association, is backed by VisitScotland and was approved by Skills Development Scotland as a vocational course – giving it considerable clout within the hospitality industry. While UK clients have included top-end hotels such as The Gleneagles, the course is also delivered globally. It launched in China –

one of the world’s fastest-growing markets for Scotch whisky – in 2013, with the course being taught in Mandarin. The Whisky Ambassador later struck a deal to train employees at DFS duty free stores in Asia, the luxury travel retailer owned by the Moët Hennessy Louis Vuitton (LVMH) conglomerate. With the number of distilleries opening in Scotland reflecting the growing confidence in the Scotch whisky sector, Graham expects demand for the course to increase in the coming years. The fact that Scotch whisky exports increased in value by 3.4% in the first half of 2017 to £1.8bn suggests that the world’s thirst for Scotch isn’t drying up any time soon. Boosted by the continuing growth in popularity of single malts across the globe, Scotch whisky remains Britain’s biggest food and drink export, making up almost one-fifth of the sector’s overseas shipments.

Scotch whisky, Graham suggests, touches so many parts of the hospitality industry that it deserves a starring role. Along with some other drinks categories – gin and craft beer, for example – it is benefiting from an injection of enthusiasm from innovative bartenders and mixologists who are unleashing their creativity on cocktail menus. “There’s much more interest in the hospitality industry as a career now,” she says. “People will always use the sector as a stop-gap or part-time job while they’re studying but we’re seeing much more recognition now that bartending and hospitality is a legitimate career with long-term prospects. “I think it’s a really exciting industry to be part of just now and there’s a lot of innovation going on, thanks in part to the entrepreneurs who are investing in new distilleries and the forward-thinking bar and restaurant owners

bqlive.co.uk

who want to equip their staff with the skills to help them develop and, at the same time, grow their businesses.” Food and whisky pairing is also growing in popularity, Graham says, with many bars and restaurants partnering with brands to offer suggestions while food and drink festivals across the country are tapping into consumer demand. Events like the long-established Speyside Whisky Festival in May attract aficionados from all over the world and there are many other smaller events contributing to local economies across the country. The Whisky Ambassador itself, in addition to training, can create tailored events ranging from small corporate affairs to drinks festival for hundreds of visitors. “We want to encourage the industry to look at whisky as something much more lucrative for your business,” says Graham. “When you serve a whisky you’re not pouring a standard pint of lager – you have the potential to upsell, at the same time giving your customers a great experience. “Our training is carried out by qualified staff who are passionate about whisky, which is important because the course is interactive and has to be an enjoyable experience for the people participating – they’re the ones who are engaging with your customers and maximising sales opportunities. They complete our course and leave as a certified ‘Whisky Ambassador’, armed with information on how whisky is made, nosing and tasting, its history and its culture along with how to sell it.” It’s also cost-effective at £200 plus value-added tax, with the course delivered in Scotland at venues including The Whisky Ambassador’s offices plus locations such as the Tennent’s Training Academy in Glasgow and Summerhall in Edinburgh. Courses are also available in England and in Europe, in countries including Spain, Denmark, France, Germany, Ireland and the Netherlands. Add Australia, the United States, Canada and Asia to the mix and The Whisky Ambassador truly has gone global. “Our network is growing all the time,” says Graham. “We don’t operate on a franchise basis but we license people to deliver the course and they must adhere to our very strict criteria. They pay us per delegate and it is a very cost-effective business model – we are looking to expand into other territories.” There can be no question that Graham, who is chairman of the British Institute of Innkeeping in Scotland (BII Scotland), is herself an outstanding ambassador for Scotch whisky. Her company’s mission statement is to “enhance knowledge and skills, one bar at a time”. The Whisky Ambassador is certainly living up to its name. n

Profile

More employers getting behind apprenticeships More businesses are backing new apprenticeships, with many more to benefit this year.

More information about how employers can get involved with apprenticeships is available at www.apprenticeships.scot

More than 3,500 new foundation and graduate apprenticeship opportunities are to be offered in 2018; helping to boost Scotland’s economy and give young people a head-start in their careers. Skills Development Scotland (SDS) works with the Scottish Apprenticeship Advisory Board (SAAB) to ensure there is a demand-led, responsive and adaptive work-based learning system for employers and the Scottish economy. Steven Grier is country manager at Microsoft and member of the SAAB Equalities Group. Grier says: “It is hugely important for Scotland as a country that we look at every possible career journey that can help bridge some of the skills gaps we can see appearing in the technology and digital landscape. “The popularity of the modern apprenticeship programmes has been inspirational and it’s really encouraging to see foundation apprenticeships and graduate apprenticeships adding to the possibilities.” Industry bodies such as the Scottish Chamber of Commerce, CBI Scotland and the Centre for Engineering Education & Development (CeeD) support the apprenticeship drive. Liz Cameron OBE, Chief Executive and Director of Scottish Chambers of Commerce, says: “With more businesses committing to taking on apprentices and young people, Scotland will be ready to grasp the future economic opportunities that lie ahead.” SCDI chief Mark Bevan says: “Apprenticeships allow individuals to work, learn and earn whilst allowing our membership to develop the correct skills for success - now and in the future.” David Watt, executive director of the Institute of Directors Scotland, says: “The IoD in Scotland really values the role that SDS plays in upskilling the workforce – particularly our young people. It is fantastic to see such a large number of them engaged with employers.” Andy Willox, Scottish policy convenor of FSB Scotland says: “Developing skills is always important and apprenticeships offer a great way for small

businesses to provide on-the-job training for their staff.” SDS is supporting around 2,600 foundation apprenticeships for pupils and approximately 900 graduate apprenticeships in 2018. As Scotland’s skills body, SDS already works with industry and employers, supporting more than 26,000 modern apprenticeships last year, set to rise to 30,000 per year by 2020. The new foundation and graduate apprenticeships have been developed by SDS with support from the European Social Fund and are backed by employers, universities, colleges and schools across the country. SDS chief executive Damien Yeates says workbased learning and apprenticeships are vital for Scotland’s future prosperity. He says: “Scotland has great ambitions to increase productivity and generate inclusive growth, all against the backdrop of an ageing population, rapid technological change and real pressure on public spending. “This means finding new and innovative ways, such as Foundation and Graduate Apprenticeships, to match the skills people develop with the ones employers need.” Modern apprenticeships are jobs where people can work, learn and earn towards an industry qualification. New foundation apprenticeships are for pupils to take alongside their school subjects, while graduate apprenticeships are for employees to benefit from work-based learning up to degree level. Engineering firm GE Caledonian’s apprentice leader, Stephen McNab, says foundation apprenticeships give young people a vehicle to take them from a school environment to the workplace, while gaining vital skills. He says: “It is also about foundation apprenticeships giving us a solid talent pipeline a year in advance. We get an idea of people’s potential a year earlier and, without a doubt, it helps us find the right people.” n

International Trade

The Scottish Export Awards 2018 sponsored by HSBC and in association with Scottish Enterprise and Highlands and Islands Enterprise brings together exporters from across Scotland. The Scottish Export Awards, sponsored by HSBC and in association with Scottish Enterprise and Highlands and Islands Enterprise, brings together exporters from across Scotland to celebrate their entrepreneurial export

achievements as well as encourage others to increase their export potential. Exporting and international trade remain central to the Scottish Governmentâ&#x20AC;&#x2122;s growth agenda and these awards are about recognising

the excellence in those emerging and wealth creating companies that are selling their products, services and expertise into scores of overseas markets. It is vital that we appreciate and recognise

To find out more about the winners of the Scottish Export Awards sponsored by HSBC and in association with Scottish Enterprise and Highlands and Islands Enterprise sign up to receive the BQ Scotland daily email bulletin at www.bqlive.co.uk or visit www.scottishexportawards.co.uk

International Trade

the emerging companies who have made the transition from being great local companies to potentially world class exporting businesses based in Scotland. Now more than ever, we have an opportunity to improve our trading momentum across Scotland and this event, now in its fifth year, aims to add further momentum to the exporting agenda right across the Country. And we’ve certainly achieved that with entrants from the Highlands down to the Borders in the 2018 shortlist representing over £520 million of export turnover. BE Group and BQ would personally like to thank all the exporters who entered this year and look forward to hearing many of their stories throughout the evening of 22 March at the Glasgow Hilton. Dave Townsley, BE Group account director said:

“We’ve been overwhelmed by the level and quality of entries into the 2018 awards. With 88 Scottish exporters taking part this year, we’ve seen a significant increase in supporting the campaign and the judges and shortlisting team had a very difficult time in choosing who should progress. We’ve had a great mix of entrants with companies employing as little as four staff to those in their hundreds and we’ve had as much satisfaction in uncovering some of Scotland’s newest export talent as we have recognising those more mature export businesses.” “The team at BQ have worked tirelessly over the last 12 months to ensure we continue to play a part in supporting the export agenda across Scotland and we hope our campaign has provided further impetus to Scotland’s export growth”. n

SPONSORS AND PARTNERS Sponsored by

In association with

Category sponsors

Event partners

THURSDAY 22 MARCH 2018

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“We’ve been overwhelmed by the level and quality of entries into the 2018 awards and we’ve had as much satisfaction in uncovering some of Scotland’s newest export talent as we have recognising those more mature export businesses.”

International Trade

THE AWARDS ECOMMERCE EXPORTER OF THE YEAR Sponsored by

The winner of this category must be able to demonstrate how they have used e-commerce and trading online to significantly enhance their export growth or potential for growth. Trtl RSVP Design Scotclans Ltd Asgard Freeze Pro Shop TEFL Org UK

MOST ENTREPRENEURIAL EXPORTER OF THE YEAR

The winner will show an extraordinary approach to reaching new markets where creativity, innovation and tenacity has resulted in success. Scottish Salmon Company Trtl Glencairn Crystal Speyside Distllers Scotclans Ltd SST Sensing Alba Power Create LMS

MICRO EXPORTER OF THE YEAR

The winner’s success will be measured by growth in sales and market penetration together with the application of innovative market strategies to extend export potential. Bio Technics Ltd Keith Brewery Quarch Technology Scotclans Ltd Cut Media TAG Digital Swannay Brewery JW Filshill International

SHORTLISTED FINALISTS SMALL EXPORTER OF THE YEAR

The winner will be measured by growth in sales and market penetration together with the application of innovative market strategies to extend export potential. Aqualife Services Trtl Glencairn Crystal Powerphotonic St James Smokehouse Kettle Collective Mrs Tilly’s Dean’s of Huntley

LARGE EXPORTER OF THE YEAR Sponsored by

The winner will be measured by growth in sales and market penetration together with the application of innovative market strategies to extend export potential. Scottish Salmon Company JFD Quiz John McGavigan Marine Harvest Scotland Bridge of Weir Leather

EXPORT TEAM OF THE YEAR

The export team of the year award will recognise a team who can demonstrate significant added value to their business through implementation of the company’s export strategy. Pure Malt Products Ltd Speyside Distillers St James Smokehouse Isle of Arran Distillers John Ross Jr Aberdeen Ltd Exchange Communications Bute Fabrics Add Energy

HIGH GROWTH MARKET EXPORTER OF THE YEAR

Awarded to a company demonstrating impressive export growth in high growth markets including Bahrain, China, Hong Kong, India, Kuwait, Macao, Oman, Qatar, Saudi Arabia, Taiwan, UAE. Keith Brewery Marine Harvest Scotland Teknek UK Albacom

EMERGING MARKETS EXPORTER OF THE YEAR Sponsored by

Awarded to a company who can demonstrate impressive export growth across one or more emerging markets, including Argentina, Brazil, Chile, Czech Republic, Hungary, Indonesia, South Korea, Malaysia, Mexico, Philippines, Poland, Russia, Singapore, South Africa, Turkey. Bio Technics Ltd Pure Malt Products Ltd T30 Fitness Training Stoneridge Electronics

SCALE UP EXPORTER OF THE YEAR Sponsored by

A company that has shown significant growth as a direct result of its export activity where exporting has played a fundamental role in the scaling of the business. John McGavigan ARX Maritime

Non-stop from the middle market to the global market. We're not just auditors, tax advisers and consultants. At RSM, we make it our priority to understand your business so you can make confident decisions about the future. Experience the power of being understood. Experience RSM | rsmuk.com

The UK group of companies and LLPs trading as RSM is a member of the RSM network. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm each of which practises in its own right. The RSM network is not itself a separate legal entity of any description in any jurisdiction. The RSM network is administered by RSM International Limited, a company registered in England and Wales (company number 4040598) whose registered office is at 50 Cannon Street, London EC4N 6JJ. The brand and trademark RSM and other intellectual property rights used by members of the network are owned by RSM International Association, an association governed by article 60 et seq of the Civil Code of Switzerland whose seat is in Zug.

Special Report - International Trade

Widen your horizons Innovation comes in many forms. Alison McGregor, chief executive at HSBC Scotland, outlines some of the ways in which it can be adopted.

Special Report - International Trade

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“Every business has to adapt to changing circumstances - the more innovative you are, the more unique the change may be.”

Innovation is a nebulous idea in the context of business. Walt Disney chief executive Bob Iger may have described innovation as “the heart and soul” of his company, but how easily applicable is it to businesses with fewer creative products and services than those available to the world’s largest entertainment conglomerate? The truth is that innovation has begun to lose meaning for many. Too ubiquitous and too wide-ranging, the word doesn’t help most businesses to get to grips with the process of change. Because that’s what innovation is really about: progress. Every business has to adapt to changing circumstances – the more innovative you are, the more unique the change may be. One of the most important facets of innovation is not to expect instant results. Vertical farming has been an agricultural revolution some 10 years in the making, but the concept and the commercial reality have yet to converge on a sustainable, mass-market solution. Thinking big may reap rewards, but you may not see returns quickly. So what makes business innovation successful and how can businesses harness it today? One of the most common ways to rethink your business strategy is to export. The world is getting smaller and expanding your business into new geographies is an exciting – and, now, realistic – prospect. Exporting is no longer the preserve of mid-market and large corporates, either. Selling overseas is now the preserve of any business, with many start-ups having the flexibility to export “from birth”. The banking

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industry is investing heavily in distributed ledger technology – commonly referred to as blockchain – to try and change the way financing international trade happens, too. It will soon be easier, and even safer. Secure and verifiable ways to exchange information will help to break down trust barriers and encourage more businesses to open their eyes to the potential of trading beyond their domestic marketplace. New product innovation is another common method of change. Diversifying your portfolio, investing in new talent or creating a new service can all widen your revenue streams and improve your bottom line. But many business owners view such a process with trepidation. It can often be expensive and difficult to implement. And the very fact that new products are not yet universally adopted means the risks may outweigh the rewards. Virtual reality (VR) is a good example. Until fairly recently, VR was the stuff of Hollywood movies. Now, it is being used in commerce as much as it is in entertainment. It can help customers to fully immerse themselves in your products and they don’t even need to be on location. You have to wonder what the lifespan of the PowerPoint presentation is when VR can transport your audience to a fully-immersive world you have created for them. However, VR won’t be right for everyone and it’s clear there is little point investing in the technology for the sake of it. Another product being adopted across many industries is three-dimensional (3D) printing. Also known as additive layer manufacturing, 3D printing is no longer the preserve of

school science classes. Products of the highest specification in some of the world’s most complex industries are being created using this method, including the aerospace and automotive industries – F1, always at the vanguard of innovation, is already on board. Working with a variety of metals, ceramics and polymers, 3D printing can manufacture to almost any design. It is very popular for new product innovation because it is flexible – you can experiment with a 3D printer before you discover glitches to your new widget on the production line. Such is the uptake of the technology globally that experts estimate the industry will be worth US$10bn by 2021, while the productivity of 3D printing machines will improve a hundred-fold in the next 10 years. The ultimate innovation for many businesses is adopting artificial intelligence (AI). Finding opportunities to automate processes and improve data analysis are a continual challenge for business, and many view AI as part of the solution. From reconciling invoices to simultaneous, multiple spreadsheet analysis and other “big data” problem solving, AI can offer business a fact-based approach to administrative and time consuming tasks, liberating human resources for more valuable roles. Indeed, whether you choose to adopt AI or not, understanding the role of data, and creating process efficiency, will transform business in future. This is particularly true in the professional services industry. To use the legal industry as an example, our research shows that 59% of law firms increased their technology spend by up to 20% last year. Around a quarter of that

“The world is getting smaller and expanding your business into new geographies is an exciting – and, now, realistic – prospect.”

Special Report - International Trade

investment was specifically allocated to new, innovative technology. Notably, this trend is not exclusive to legal services. All professional industries are facing widespread change driven by data and new technology. The statistics paint a vivid picture of how critical the digital and technology agenda has become and it makes you wonder how sustainable that level of investment really is. That said, new approaches to pricing and billing might help to differentiate one firm from the next – and a competitive advantage could be crucial at a time of great change. It is also often the case that innovation is conflated with technological change. Yes, technology is integral to many business innovations, but that needn’t be the case. We often encourage businesses to keep their change management processes simple and realistic, and to integrate forward thinking into all aspects of business. One business leader with experience of almost perpetual innovation is Tom Davies, of the eponymous Tom Davies Bespoke Opticians. Tom Davies is one of very few eyewear brands in the world to manufacture its own product. With the responsibility of doing so

also comes great flexibility, and the almost constant internal expectation to innovate. However, Innovation isn’t limited to eyewear products. Process innovation is just as important. Tom Davies has created its own cloudbased customer relationship management (CRM) system as well as software, which it calls “Supertool”, to integrate the entire frame manufacturing process. Opticians can design frames in-store with customers before sending precise metrics to a production facility, where computerised cutting machines create the frames. The business estimates it has saved around eight hours of programming time and a further six hours of manual labour, though all of its products are eventually finished by hand to give it a skilled end result. 3D printing has also been carefully considered at Tom Davies. The company is working with a Danish supplier to explore a new composite material for use in sportswear, in order to provide a super-strong yet lightweight frame. The interesting thing about the Tom Davies example is how well integrated innovation appears to be – it has decided that creating

new ideas is part of its ethos, helping the business to stay ahead. If the sheer cost of innovation – both in terms of time and money – seems daunting, then financing the process should help to liberate you from those constraints. And while smaller businesses might enjoy their ability to be nimble, they also feel keenly their constraints on time and resources. HSBC works closely with many businesses to unlock time and cash flow for small and medium-sized enterprises (SMEs) in particular. Term loans, for example, can buy a business valuable time to research an idea and test it in a marketplace before committing to a full production and sales process; receivables finance can help to improve cash flow; and credit protection can guard you against late or bad payers overseas, ensuring you can manage to trade, and innovate. Whatever your sector and whatever your business need, one thing is certain: progress is vital to business success. Being ready to innovate could be half the battle. n

Special Report - International Trade

Why exports are crucial to business success Companies from throughout Scotland are discovering the benefits of exporting – from growing sales to minimising risk – while learning how to conquer challenges. WHEN business is going well, it’s all too easy to put your feet up and enjoy your success. But what happens if sales start to slow or a big customer suddenly stops placing orders – where will growth come from then? For many companies, the answer is overseas. Again and again, Scottish companies have found that exporting their products and services is an important way to grow their business. While some businesses develop exports at a later stage, overseas sales were always

part of the plan for Robert Ransom, who founded his company, Highfern, in 2014 to launch the Angels’ Nectar blended malt Scotch whisky. Ransom had spent ten years working at Glenfarclas distillery and had previously exported food, with 75% of Angels’ Nectar’s sales now coming from overseas. “Even though I’d worked in exports since leaving university, I’d been sheltered from some of the bureaucracy,” Ransom says. “Some countries will have different hurdles to overcome, but these hurdles break up the

market, creating niches to explore and develop, so think positively – if you can overcome a hurdle that’s put your competitors off a market, you’ll have that market to yourself. “Without exports, I would have a very different business model. For whisky, the UK is the most competitive market. If I didn’t export then I couldn’t bottle whisky at the volumes I do and get the accompanying economies of scale.” Ransom’s tip for companies considering exporting is to tap into the expertise of

Special Report - International Trade

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“I went on a market visit and I learned a lot about the market and got a few leads too. I’m pleased to say that Angels’ Nectar is now available in France.”

Scotland’s enterprise agencies – which include Scottish Enterprise (SE), Scottish Development International (SDI) and Highlands and Islands Enterprise (HIE) – including their export adviser. He also recommends the events the agencies run, especially the overseas market visits. “Although I’ve travelled extensively through my export sales jobs over the years, I’d never had that much experience of France and so I went on a market visit organised by SDI,” he says. “I learned a lot about the market and got a few leads too and I’m pleased to say that Angels’ Nectar is now available in France. “We’ve also taken part in the Showcasing Scotland event at Gleneagles. From the most recent one, we are working on an order to go to China, and Angels’ Nectar is now listed with a wholesaler in the south-west of England.” Like many entrepreneurs, Cass McNamara, the founder and chief executive of BirthSparks,

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didn’t set out to become an exporter. “I didn’t have a particular vision about exporting – in my mind, we were going to sell predominantly in the UK,” she explains. McNamara, who worked as a midwife for the National Health Service (NHS) and then in private practice, launched her Comfortable Upright Birth (CUB) support in 2014. “I didn’t intend to turn the invention into a business, I just wanted to prove the concept would work, but then I was fortunate to be one of the first Edge Fund winners, which helped me to develop the prototype,” she says. McNamara launched CUB at the Triennial International Event for Midwives in Prague and, to her surprise, came back with £200,000-worth of orders from 40 countries. “I thought our business was going to be born in Britain, but we were born global,” she laughs. “It was a bit of a baptism of fire because I

didn’t know a lot about exporting or customs regulations, so I had to learn pretty quick. It was a process of trial and error learning how to export, but now it’s very easy for us to do and we export to 68 countries at the moment, with distributors in nine countries.” Early hurdles to overcome included finding out how to generate the necessary shipping documents. BirthSparks now uses an automated system via FedEx, which generates customs documents for each market. McNamara praises the four-day introduction to exporting course run by SDI as “phenomenally helpful” when she was starting out, as was being able to pick up the phone and ask questions of her account manager. Now, mainly down to export growth, BirthSparks employs a team of five people, with turnover expected to hit the £1m mark this year. “If we’d only been selling in the UK then

“About 70% of our business is international, so if we’d not exported then we would be a much smaller business.”

Special Report - International Trade

we would have been limiting ourselves to a country with a relatively-low birth rate,” explains McNamara. “About 70% of our business is international, so if we’d not exported then we would be a much smaller business. “You’re not going to know everything before you start exporting – you really just have to start doing it because there will always be things that you don’t know about. I’d recommend people find a good system that generates all the correct customs documents and clearances, depending on the country they’re exporting to. “If I had to give advice to somebody when they’re thinking about exporting then I’d say it’s like everything else in business – you just have to do it and take the step. Sometimes you’re not 100% sure about the step you’re taking, but businesses are like babies and learn by experimenting; sometimes you’re going to fall down and sometimes you’re going to take a step, but that’s how you learn and grow.” Both McNamara and Ransom have enjoyed the benefits of exporting and have avoided the disadvantages of being reliant on a single market. Focusing solely on domestic customers instead of having a global outlook could lead to a saturated market, stagnant sales, falling profits and threats from external factors such as the entry of rivals. “From a company’s point-of-view, the benefit of exporting is that they can expand their market overseas and so become lessdependant on any single market,” explains Kristell Clunie, an international senior executive at SDI. “That helps companies to spread their risk – instead of putting all their eggs into the same basket they have more sources of income coming from different markets. “Through more exporting, they will hopefully get more production going and so have economies of scales and better margins. Potentially there will be less competition in some markets while, for seasonal products, they would have the seasonal offset of going to markets further afield.” Clunie also points to the benefits of the trade visits that the agency organises to overseas markets. “Over the past two years, we’ve taken companies to European markets like Belgium and France, we’ve been to Scandinavia and the most-recent one was to the US,” she says. “The visits are for companies that are new to exporting or are new to specific

markets. They’re cross-sectoral visits, so the companies can come from different industries and, because the visits are cross-sectoral, it means companies aren’t travelling with their competitors. “Because of that, I find that companies open up to each other and it can actually lead to future business collaboration. They are often willing to share their contacts with each other

and they keep in touch afterwards as well to share ideas.” n For more information on the export support available visit scottish-enterprise.com/exportadvice or if you are based in the Highlands and Islands region visit hie.co.uk/exportadvice

Already running a successful business in Scotland? Why not build on that success in international markets We can help you: Research fast-growing emerging markets Find a route to market Explore your export finance options Unlock commercial opportunities at Expo2020 Dubai, including build and delivery phase

Get a handle on customs, licensing and regulations Know what sales and service contracts are needed Connect to live export opportunities worldwide Participate in market visits -next visit â&#x20AC;&#x201C; Ireland - 24 April

For free export advice visit scottish-enterprise.com/export or if you are based in the Highlands and Islands region visit hie.co.uk/exportadvice

Special Report - International Trade

WHY TWO HEADS ARE BETTER THAN ONE Businesses in the Highlands and Islands are being encouraged to collaborate with one another to grow their sales and explore overseas markets. Exporting can sometimes feel a wee bit daunting. With so many overseas markets to choose from, entrepreneurs could be forgiven for not knowing where to start. That’s why Scotland’s enterprise agencies – which include Highlands and Islands Enterprise (HIE), Scottish Enterprise and Scottish

Development International (SDI) – are helping businesses to work together when dipping their toes into international waters. This can help to minimise the risks associated with targeting new markets and maximise the benefits, allowing small firms to pool their resources and face challenges together.

And whisky companies are no exception when it comes to reaping the benefits of collaboration. Tomatin Distillery has enjoyed a long history of overseas success, having become the first fully Japanese-owned whisky producer in Scotland back in 1986, and now the company is helping other firms to export too.

Special Report - International Trade

Free export advice for all Scottish SMEs To help Scottish companies like yours grow internationally, Scotland’s enterprise agencies provide an export advisory service that offers an unrivalled breadth of expertise across key sectors and global markets. It also offers an international market research service that can help you scope out potential partners, distributors and agents in your chosen market, whilst connecting you with up-to-date market intelligence. The export advisory service will help you: • identify the best opportunities; • understand what’s involved; • develop the resources and skills you need to trade abroad; • and prepare an export plan. Dedicated advisers will provide tailored guidance on what your business needs to do next to export successfully. From ecommerce solutions and market entry to cultural intelligence, export finance and logistics, they’ve got the answers. Get in touch with their experts today. “We began working with Dean’s of Huntly in 2012 to develop a whisky cake,” explains Jennifer Masson, marketing manager at Tomatin. “We realised that we could both benefit – we were strong on exports, which was an aspiration for Dean’s, while Dean’s was very strong in the UK, which was an aspiration for us. “We both have recognisable brands and so by bringing them together each of us can reach a new set of customers. The cake has been on sale within Dean’s gifting range for the past two years and last year Dean’s made production changes to the recipe to extend the shelf life from one to two years – that gives us the opportunity to promote the cake in new ways, perhaps as part of a gift pack with our whisky. “HIE and SDI have been a great support to us with regards to our export activities. They provide us with invaluable market intelligence and assist us in expanding our distribution

network through introductions to potential distribution partners and involvement in industry fairs.” Tomatin has clearly been bitten by the collaboration bug. As well as working with Dean’s, the company also collaborates with several local businesses including Story Chocolates, which is based in the Victorian Market in Inverness, and – thanks to HIE – it is currently working with a local candlemaker to develop candles that complement the aromas of its whiskies. Another of its collaborations has taken whisky into a whole new arena. “Eteaket, the Scottish leaf tea company, approached us last year to develop a barrel-aged whisky tea,” says Masson. “At first, our distillery manager thought it couldn’t be done, but seeing the potential exposure that both brands could benefit from, I was determined this would succeed,

If you are from the Highlands and Islands visit hie.co.uk/exportadvice For the rest of Scotland visit scottish-enterprise.com/exportadvice

Special Report - International Trade

so we carried out a few experiments and worked with our cooper to develop a cask that would enable Eteaket to produce the tea on a larger scale. We succeeded and Eteaket now produces the tea and we supply the barrels, along with a regular supply of whisky to keep the barrels’ aromas strong.” It’s not just the whisky sector that’s benefiting from collaborations either. Mey Selections – the food and drink brand of the North Highland Initiative (NHI), which was

launched in 2005 by Prince Charles, the Duke of Rothesay, to grow the economy – has been working with Loch Fyne Oysters to export its range of goods. “Loch Fyne has an exemplary track record in exporting premium Scottish seafood and that makes it an ideal partner for Mey Selections where the target market is ex-pat communities or where there’s an affinity with the royal family,” says David Whiteford, chair of the NHI. “We’re regularly selling consignments of

beef, smoked salmon and other products into markets including Singapore and Hong Kong, and the opportunities are significant in places such as the United States, whilst not forgetting Europe as well. “In terms of exports, SDI has been great at helping ourselves and Loch Fyne get into the high-end markets where we want to be. It has people on the ground in the right places around the world, while HIE has been supporting the businesses that create products

Special Report - International Trade

for the Mey Selections brand.” A broad range of companies are involved in making products under the brand, from Ashers’ whisky cake, to Maclean’s biscuits and oatcakes, and Struan’s honey and marmalade through to Dunnet Bay Distillery’s traditional Scottish gin, Highland Fine Cheeses and Johnstons of Elgin’s tweed and tartan. NHI through its trading company, North Highland Products, also markets £17m-worth of livestock at farm gate value per year through processors ABP and Dunbia into Sainsbury’s where they can be found under the “North Highland” brand at “serve-over” counters. Whiteford is also quick to point out the link between the North

Coast 500 – the now world-renowned touring route – and the amazing food and drink that’s produced there. “Mey Selections is effectively the ‘Food of the Five Hundred’,” he adds. Susan Beattie, head of food and drink and textiles at SDI, highlights the many benefits that businesses can reap from collaboration, including increased sales, innovation, brand exposure, cross promotion, additional market opportunities and new product development. “There are many small businesses in the food and drink sector, particularly in rural areas, that have strong product offers but they don’t necessarily have the resources to go out and explore the opportunities in export markets,” she says.

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“Exporting is increasingly important to the growth of most businesses, but for many it can be tricky finding their way through the complexities of reaching overseas markets.”

“If they can work with others and share resources then it can make exporting possible for smaller businesses, or it can make it easier or faster for bigger companies that want to work together with others in more challenging markets. There’s often a value in presenting a collective Scottish offer.” Beattie gives the example of the Made in Scotland collaboration, which brings together ten companies to offer a range of products to overseas customers. “Buyers like it because they get a choice of products across different categories without that choice being overwhelming, so it makes it easier for them to pick a basket of products from Scotland and have the convenience of just one invoice,” she explains. Collaborations are also taking place in other sectors, including those organised by the Dairy Growth Board, Scottish Bakers and the Craft Beer Clan of Scotland, which also handles craft spirits. “Companies can access a lot of support through SDI, both from our teams here in Scotland, which can help with preparing to export, and our specialists who are based in our eight top prospect overseas markets,” Beattie says. Martin Johnson, regional head of sectors, inward investment and international trade at HIE, adds: “Exporting is increasingly important to the growth of most businesses, but for many it can be tricky finding their way through the complexities of reaching overseas markets. With this in mind, we offer a wide range of support including information, advice and funding for businesses of all sizes and sectors looking to dip their toes into international markets. “Through this support businesses can find out about opportunities in countries that might be of interest to them and how to go about pursuing these opportunities.” n

bqlive.co.uk

y created e g id h C ig is and Cra e way for investors c n a r F t t iv e Leo Sco n innovat a , t e k oviding th r r a p M o ls y a k is e il The Wh casks, wh bottom brand, e d a r t d n to buy a heir Higgin orts. t r o f l ia r e be rep m raw mat o c s n a R as Peter

didn’t even like whisky to begin with,” laughs Craig Chidgey. It’s quite an admission for the chief executive of The Whisky Market, a London-based drinks company founded in 2014 to give investors the chance to buy and trade casks. “My earliest experiences were being sick after drinking blends like Bell’s when I was 18. Now I love it and my wife enjoys a tipple most nights.”

“I think that’s true for a lot of people,” agrees fellow director Leo Scott-Francis. “A lot of people’s first experience of whisky is a supermarket blend. “But when they try single malt Scotch whisky for the first time, they realise that it’s something completely different. And that’s what we’re dealing with here.” The Whisky Market buys casks from distilleries through specialist brokers and then

sells those barrels on to its clients. Most of the casks are stored at a special facility at Newton Stewart in Dumfries & Galloway run by a company called The Whisky Broker, with a small number kept at distilleries dotted around Scotland. “I do the business side of things, while Leo chooses the casks and actually goes out and sells the whisky,” says Chidgey. “It’s a good combination.”

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Scott-Francis is very exacting when it comes to selecting the casks he wants to buy and offer for sale to his clients; he’s primarily looking for first-fill sherry or bourbon barrels, most of which contain liquid that’s more than five years old. Current highlights in the warehouse include: barrels of Laphroaig, a peated whisky from the island of Islay being aged in Port wine casks; Bruichladdich, also from Islay, in 20 barrels that previously held first-growth Bordeaux wines from chateaux Haut-Brion, Latour and Margaux; and a 1991 single grain whisky in a sherry cask from Cambus distillery in Alloa, which closed two years later. “Only about 15% of the whisky ageing in Scotland is over five years old,” Chidgey says. “It means that older whiskies are rare and so the rules of supply and demand push up their value over time.

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“The key factor is that we offer our clients a guaranteed exit. We will buy the cask back from them after an agreed period.”

“The minimum time for which we recommend clients hold their casks is three years, but we can be very flexible. Figures compiled by Whisky Invest Direct suggest that investors are making a return of about 7% per annum across the wider whisky market and our clients are getting a return of up to around 9%. “Whisky is treated like wine by Her Majesty’s Revenue & Customs (HMRC) because it’s a ‘wasting asset’ or ‘chattel’ and so it’s exempt from capital gains tax if its predictable life is less than 50 years and the investors earn less than about £6,000 per transaction. We’re not regulated by the Financial Conduct Authority (FCA) because we’re not selling financial products, but we are regulated by the strictest regulator on the planet – the taxman. “The key factor is that we offer our clients a guaranteed exit. We will buy the cask back from them after an agreed period.” Once Scott-Francis and Chidgey have bought back those barrels, their bottling business – HAH Whisky – will bottle or blend

bqlive.co.uk

“

“It’s nice to have this genuine heritage. It’s not something that we’ve had to make up.”

them to create its brands. The first, “The Higginbottom”, went on sale last autumn and is a 27-year-old single malt Scotch whisky from the Bunnahabhain distillery on Islay. The brand is named after Scott-Francis’s grandfather, David Higginbottom, who – under the penname Nicholas Fisk – wrote science fiction books for children, including “Trillions”, “Grinny”, and “A Rag, a Bone and a Hank of Hair”. He died in 2016 and the packaging for the whisky features many tributes to him, including images of his trademark pipe. The brand’s heritage stretches back even further. Higginbottom’s grandfather owned a large brewery and a chain of pubs in Newcastle and bottled whisky for the army during the First World War. “It’s nice to have this genuine heritage,” nods Scott-Francis. “It’s not something that we’ve had to make up. “But I didn’t know about the family connection with whisky when I started the business. It wasn’t until two years later that my grandfather showed me his own grandfather’s silver 1920s business card case, which had his ‘AHH’ initials on it and that prompted him to tell me the story.” The company’s next bottling, a blend called Club 8, follows this spring. Scott-Francis is clearly excited by its mixture of whiskies from Highland Park, Glenrothes and The Macallan, which have been married together in a Pedro Ximenez rich, sweet sherry cask. Other whiskies in the initial “Fine & Rare” range include a 27-year-old grain whisky from Strathclyde distillery and a bourbon from Heaven Hills in the United States, which is the firm’s first foray into overseas spirits. The next steps include plans to buy casks from Ireland and Japan, as well as brandy, gin and mezcal, the broader category to which tequila belongs. Clients have another option too. Instead of selling the casks back to The Whisky Market to be turned into HAH Whisky brands, the customers can choose to have their whiskies bottled themselves. “If we hold a whisky for three years then in effect we’re buying a five year old and bottling it as an eight year old,” Scott-Francis explains. “So, following that through, we could buy a 25 year old and bottle it as a 28 year old or hold it for longer and bottle it as a 30 year old – in that range between 25 and 30 years old, whisky really increases in value dramatically.” Chidgey adds: “We’re aiming to sell most of our whiskies priced at between £100 and £200 a

bqlive.co.uk

bottle. We want people to feel they can drink these whiskies and not just collect them. Club 8 will retail for around £45 a bottle and we’ll bottle about 10% of them at cask strength of around 60% alcohol by volume. “Some of our other casks will sell for more like £400 or £500 a bottle. These are really special barrels.” Scott-Francis and Chidgey met through their involvement in the wine trade. Chidgey had previously worked for estate agency Foxtons, but got into the drinks business when a company that had sold wine as an investment to his father ceased trading. “My Dad had a list of creditors who all owned wine through this company,” he explains. “A lot of them wanted help to sell their wine and so I contacted Leo, who I’d met before. “After we helped the investors to sell their wines, they asked if there were similar ways of investing in drinks. That’s where the idea came from for The Whisky Market.” Their wine business morphed into One Vine Day, which now mostly sells investors’ wines to Bordeaux Index. One Vine Day’s revenues

peaked at around £1.5m three years ago, but have since slid to £500,000 as the market has become more crowded, with its profit margin reduced from around 15% at peak to around 8% now. In contrast, The Whisky Market has surged ahead. Revenues stand at around £1.4m and profits at about £87,000. The company’s clients hold around 800 casks, with the stock value at around £3.5m. The ultimate aim is to build the brand to the stage where it will become attractive to one of the larger players in the drinks industry. It’s come a long way from the first batch of barrels that Scott-Francis bought. That initial purchase consisted of 50 casks from Tullibardine distillery in Perthshire, which had previously held 2010 Chateau Talbot, a fourthgrowth red wine from Bordeaux in France. “Back in the 1990s, consumers used to be able to buy casks directly from distilleries,” Scott Francis says. “But distilleries are working sites and it was time-consuming if investors wanted to come along and try individual barrels, so the practice died out. “Then I found a broker that could get us

casks from distilleries. When I went and visited the broker for the day and saw the casks, that’s when I knew that we could make this business work.” Scott-Francis had been introduced to fine wine collecting by his grandfather and brought One Vine Day to consumers at just the right time, when the market was flooded with sellers. His track record in selling wine has led many of those investors to follow him into whisky. “Leo has this knack of getting predictions right,” smiles Chidgey. “He predicted the growth of drones and now he’s been right about how whisky has become much more mainstream.” “The growth areas are among women and younger consumers around 35 years old,” Francis-Scott adds. “Whisky is no longer seen as an old man’s drink. “Just go into the whisky clubs in London and they’re full of women and younger drinkers. Although Haig Club might not be the besttasting whisky, it just goes to show what can be done if you launch a brand targeted at people who aren’t traditional whisky drinkers.” n

HIGH LIFE SPRING 2018 TRAVEL

EQUIPMENT

DRINKS

HIGH LIFE

CHANG NG T MES Josh Simms travels to Geneva to find out how modern technology is influencing the world of watch design – for both traditional and modern brands.

he fact is that the watch customer is less and less sold on history,” argues Jean-Marc Pontroue. “They’re less interested in the fact that a company has been around for 150 years. “They don’t want to wear the kind of watch their grandfather wore, any more than they want to wear the clothes he did. Sure, the share of the watch industry cake is still massively in favour of the historic brands – but our share is growing.” Pontroue is chief executive of Roger Dubuis, a Swiss watch manufacture founded in 1995, making it a relative youngster against esteemed names like A Lange & Sohne, Jaeger Le Coultre

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or Cartier. And that shows in its product: its latest, the Excalibur Aventador – unveiled at January’s Salon International de la Haute Horlogerie (SIHH), the annual high-end watch show in Geneva – is a collaboration with Lamborghini: it’s all bold blue carbon fibre case and sci-fi skeleton movement, one with five patents to its name, including the likes of an autonomous stability program and g-force antiejection reinforcement. But never mind what they are – and Pontroue concedes that most customers, while reassured by the advanced tech, won’t much care either. It’s the look that matters.

It’s about as far away from the traditional, tasteful style of most watches, ones that could have been designed at any point in the last century. It would be too much to call the Aventador part of a trend, but certainly SIHH revealed that the watch industry is increasingly split between the elegantly classical and more statement-making avant garde designs. The former remain aesthetically conservative – round dials, unfussy indices or Arabic numerals, tried and tested materials, even if these are getting mixed up in more adventurous ways – as with the likes of Baume & Mercier combining brushed steel and bronze

“They don’t want to wear the kind of watch their grandfather wore, any more than they want to wear the clothes he did.”

HIGH LIFE

on the same case – or include the use of titanium or ceramic, as at IWC, a pioneer in both, and for which both have become more or less standard. And this is not to say that the more traditional camp does not continue to push the boundaries of both artfulness and mechanical watchmaking either. SIHH saw Cartier’s latest “metiers d’art” involving a dial of gold leaf marquetry sandwiched between two layers of ebonised wood, while Vacheron Constantin’s Les Aerostiers series of five models each depict – in stunning relief, and using plique-a-jour enamel, so thin it’s transparent – one of the earliest balloon flights. Similarly, on the mechanical front, Panerai revealed its Lo Scienziato, made with the company’s pioneering, patented use of direct metal laser sintering, which uses lasers to produce a part layer by layer using powdered titanium. The result is a watch with a middle case that’s 30% lighter than usual. Meanwhile Audemars Piguet launched its RD2, the world’s thinnest self-winding perpetual calendar, and Greubel Forsey unveiled the first complete timepiece with its Differential d’Egalite invention – that’s a spherical differential that regulates the energy released by the mainspring so that the exact amount of torque required is delivered smoothly to the escapement, rather than in jerky pulses as has been standard since watchmaking began. It is now working on its Nano Foudroyante, a project that aims to deliver a watch with an incredible 120hour power reserve.

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“We’re more conscious of consumers looking for a visual point of difference in the watch they buy now.”

It’s all impressive stuff – at least for some; the few who both really understand the difficulties involved in pulling off such feats, and the minuscule advancement in precision that they bring. But Pontroue is not alone in the contention that a younger audience – one, in particular, that has grown up with the amazing mobile technology of the information age – now wants to be bedazzled more by distinction in looks rather than the watchmaker’s age-old craft. Hermes’s stand-out piece for 2018 is the Carre H, for instance, a minimalistic circular dial inside an atypical square case, which, the French luxury goods house insists, is not as easy to achieve as it might at first seem. It’s the kind of watch you can expect to see professionals in the design and architecture worlds fight over to get on their wrist. “We’re more conscious of consumers looking for a visual point of difference in the watch they buy now,” explains Hermes’s head of watch design, Philippe Delhotal. “You can go around a watch fair and you don’t feel that you’ve really found brand new products. “I think a lot of watch companies feel the identity of their

products is closely linked to the brand, and that the brand has certain codes that have to be kept to. Some are still just scared that something new won’t work. “And perhaps in taking a risk you do have to accept fewer sales. But our aim with this watch was to recruit a new clientele altogether – people who would look at the watch and exclaim ‘Hermes is doing that?!’.” Of course, on the periphery of the watch world is a band of niche brands – hard to find and sometimes harder to finance – that are now routinely creating the kind of watches that provoke exclamation: the likes of Ressence, purveyor of ultra-contemporary designs, with its new Type 2 e-Crown Concept, a mechanical

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watch containing an electronic component that, with a double tap of the crystal, resets the time if the watch hasn’t been worn for a while; or Urwerk, with its UR-210 Dubai, its case and bracelet entirely engraved in a rococo style. Richard Mille, another such brand – the average price of its watches is a cool £135,000, but then we are talking about a world in which Roger Dubuis has managed to sell a few Lamborghinis, bought off the cuff by clients just to match their new watch – has long been inspired by its working relationships with sports stars and the insistence that they can actually perform wearing their watch. So, its new polo-inspired piece, created in collaboration with player Pablo Mac Donough

– who, as a 10-year-old, had a sizable part of his skull bashed in by a mallet – not only suspends its movement on steel cables to increase shock resistance all the way to 5kg, but comes with a triple layer sapphire crystal and polyvinyl glass that, like a car windscreen, makes it shatterproof. Tellingly though, while such advances serve a purpose if you actually play polo, Richard Mille – like Richard Rogers with Paris’ ground-breaking Pompidou Centre – also lets them dictate the visual appeal of the watch. And the result is absolutely nothing like your grandfather might have worn. That means it’s not for everyone. But at least it’s a watch for today. n

“Perhaps in taking a risk you do have to accept fewer sales. But our aim with this watch was to recruit a new clientele altogether.”

HIGH LIFE

Bottles join the books in a very special library

Few words excite Peter Ranscombe more than “wine” and “library”, so bringing the two together at the heart of the new Wine House Hotel 1821 in Edinburgh was more than enough to pique his interest.

dinburgh has a long and illustrious history as an important city for wine. In the days of the “Auld Alliance”, merchants from Bordeaux would ship their finest claret to the Scottish capital through the port of Leith, leaving the dregs for the “Auld Enemy” south of the border. With such strong vinous roots in the city, perhaps it’s not such a surprise that Italian wine company Zonin chose Edinburgh as the location for its first Wine House Hotel 1821. The family-owned business – is best known for producing prosecco, Italy’s flagship sparkling wine, but it also owns nine other wineries in its homeland, along with Barboursville in Virginia

in the United States, and its new Dos Almos property in Chile. The wine hotel concept is being rolled-out worldwide, with San Paulo in Brazil the next city on the firm’s hit-list. The interior of the Edinburgh establishment – set in a Georgian townhouse on Picardy Place, opposite the Omni centre – was designed by architect Claudio Silvestrin, with each of the four bedrooms named after one of Zonin’s estates. Sitting at the heart of the hotel is its “wine library”, where guests can go to find out more about the bottles made on the family’s estates and sample wines from Italy and beyond. With its long central table and blonde wooden

panelling, the library feels cosy without bring claustrophobic and creates a relaxed atmosphere in which to explore wines. Visitors don’t have to be experts or wine geeks to enjoy the library though. Ladis Basta – the hotel’s in-house sommelier or wine expert, formerly of chef Tom Kitchin’s The Kitchin restaurant in Leith and The Samling Hotel in the Lake District – is on-hand to help guide guests through the extensive wine list and to make recommendations. Basta has already begun to organise tasting events in the library and is planning to stock some older vintages of Zonin’s wines too. He can also provide platters of delicious cheeses

and cured meats to accompany the bottles. All the wines served in the library and bar are also available to buy to take home. The takeaway prices for the bottles are all £10 lower than their prices in the bar; either way, they represent great value for high-quality wines being served and sold in the centre of Edinburgh. Highlights amongst the range include the 2010 Oltrenero Brut Nature (£33.50 a bottle in the hotel or £23.50 to takeaway), a sparkling wine made from pinot nero grapes – also known as pinot noir – and produced using the traditional method, in which the second fermentation that creates the bubbles takes place inside the bottle, as opposed to inside a pressurised tank, as with prosecco. The Oltrenero spends 38 months ageing on its lees – the dead yeast left over from the second fermentation – which creates a deliciously creamy and textured mouthfeel to balance its fresh acidity and its crisp red cherry and raspberry flavours. It’s a step up from prosecco – even from Zonin’s very wellmade prosecco. The 2014 Tenuta il Bosco Pinot Nero (£24.50 or £14.50) illustrates how good the red grapes can be on their own without being turned into sparkling wine. Wood smoke and damp earth join the red cherry and redcurrant aromas on the nose, while the concentrated red cherry fruit flavours are paired with lush sweet vanilla on the palate. The classic 2012 Cossetti Barolo (£42.50 or £32.50) is packed full of the signature Barolo aromas of leather, cigar smoke, rose petals and tart redcurrant and cranberry. The fruit on the palate is much darker and lusher, with blackberry, blackcurrant and a twist of liquorice on the finish. One of my favourite styles of Italian wine is Valpolicella and the 2014 Zonin Valpolicella Ripasso (£25 or £15) didn’t disappoint, with its dark chocolate and black cherry on the nose leading into blackberry, sweet vanilla and more black cherry flavours on the palate. Sweet and lush, but with enough acidity and fruit to balance the warming alcohol. For those seeking a simpler experience, the bar also serves wines – and beers – by the glass in a relaxed atmosphere. Yet, even for those who just visit for a glass or two, it’s worth having a nose around the wine library to capture some of the excitement. Nestled on the second floor, the bedroom in which I stayed was called Albola and was named after the Castello di Albola estate in the Radda hills above Chianti. It was really spacious, with floor to ceiling cupboards tucked away in the vestibule and a fine view out across the rooftops of the New Town towards the Firth of Forth. The bathroom was equally impressive, with a separate bath and walk-in shower. Scottish Soap Company products ticked my all-important “local supplier” box, but the towels could do with being upgraded from standard sized to full-blown bath sheets to maintain the luxury boutique hotel feeling that runs throughout the rest of the fixtures and fittings. Albola was on the back of the building and so well away from any road noise. The Altemura bedroom also caught my eye when I toured the hotel on the opening night back in October, with its similarly-generous proportions. Moving down to the first floor, the dining rooms have space to seat 70 in comfort. The Edinburgh branch has been opened in partnership with Sep Marini, the restauranteur behind the Tony Macaroni chain, so a return visit to sample the food once it’s up-and-running is high on the agenda. Down in the basement lies the cocktail bar, which I can see becoming a popular destination during nights out in Auld Reekie. With the prosecco flowing, it could be an interesting alternative to bars on George Street or in the West End. n Rooms at The Wine House Hotel 1821 in Edinburgh start from £150. Find out more at www.winehousehotel1821.co.uk

HIGH LIFE

Stepping into the light Peter Ranscombe was impressed by the dishes and décor in the recently revamped restaurant at Glasgow’s Malmaison hotel.

ew sights strike fear into the hearts of diners like a complicated wine list. Terms like “Bordeaux” and “Burgundy”, “tannins” and “length”, are bandied about as if everyone’s an expert – and that’s before anyone’s even glanced at the prices that sit alongside the complex descriptions. Malmaison may have the answer. I read a lot of wine lists – and I mean a lot of wine lists – in my role as a drinks writer and I was very

impressed with the new-look drinks menu at the hotel chain’s restaurant in Glasgow. To begin with, the wines are organised into price brackets – starting at £20 and moving up in £5 increments to £45 – and, if we’re honest, the cost is going to be the deciding factor for most diners. A list of two or three short descriptions is then given for each wine, from “Clean acidity/Delicate aromas/Intense fruit” for The Oddity Royal Tokaji Dry Furmint from

Hungary to “Refreshing/Peachy, apple & pear/ IWC winner” for the Laurenz V Gruner-Veltliner from Austria. I opted for an old friend: the 2016 Creation Wines Pinot Noir – “Elegant vanilla/Red berries” – from South Africa. Full of wood smoke, spun sugar, cloves and cinnamon on the nose, it morphed into complex and concentrated red cherry, cranberry and redcurrant on the palate and, at £45, was great value in a restaurant. Plus, the Creation Pinot Noir was the ideal accompaniment for the tasty meal that followed the arrival of the wine list. After trying the Italian-style Altamura and Frenchinspired pain de campagne, I opted for the buttermilk fried chicken wings, which were fragrant, sticky and offered contrasting textures between the crunchy coating and soft meat. The restaurant’s Signature Côte du Boeuf – a rib-eye steak cooked on the bone – was the star, perfectly cooked medium-rare. Chef is clearly a perfectionist; when the first chocolate fondant failed to rise, a second entered the oven – it was worth the wait, made with Valrhona chocolate from France and served with scrummy mint choc chip ice cream. Last year, Malmaison’s hotel in Glasgow switched the design of its restaurant from “The Honours” – which was opened by Michelinstarred chef Martin Wishart in 2014 – to the “Chez Mal” brand already used at its other sites. The choices on the menu are excellent – especially on the seasonal fixed-price selection – but what was equally-impressive was the revamp of the restaurant’s décor, offering more light to see what you’re eating, which I remember being an issue. Hopefully the refit will extend to the accommodation soon too; although my bedroom was well kitted out – four 13-amp sockets and another four USB charger slots above the desk are a travelling writer’s dream – the room was still just a few lumins short of being bright enough. Despite the changes, Malmaison has done well to retain its trademark tongue-in-cheek humour: although I’d always prefer to see Scottish toiletries, when the products are called “The Best Shampoo You Will Ever Steal” and “Better Shower Gel Than You Have At Home” then I’ll chortle and turn a blind eye. What still frustrates me though is when Scottish drinks aren’t in the room’s fridge. It’s especially galling because Malmaison’s bar stocks an impressive array of Scotch, plus beers from Brewdog. n Dinner, bed and breakfast in a double room at the Malmaison hotel in Glasgow starts from £149.

HIGH LIFE

TIME IS AT STEAK Edinburgh’s Steak Brasserie has launched an express menu that promises to serve a two-course lunch within 30 minutes. Peter Ranscombe got his stopwatch out to put the claim to the test.

unch is the bane of many entrepreneurs’ lives: we all need to eat and squeezing in an extra meeting during a meal break can be useful, but not if it takes a bite out of the afternoon too. What if an entrepreneur could squeeze-in a two-course lunch in the space of just 30 minutes? That’s exactly what’s on offer from the new express menu at Steak Brasserie in Edinburgh. It’s a set menu consisting of a classic French onion soup, followed by a minute steak that’s been tenderised and then served with pomme frites or French fries, which diners can ask to be served in only 30 minutes – time to put the claim to the test, methinks. 12:55: Start the clock. I’m seated and led through the set menu by Matthew, the maître d’, who also shows me the wine list, from which I select a glass of Luis Felipe Edwards Gran Reserva Pinot Noir from Chile (£8 for 175ml) – although the wine isn’t included in the express menu, it seems rude not to give it a shot too. 13:00: My order is already away to the kitchen and my glass of wine has arrived. It’s full of juicy red- and blackcurrant aromas, with light smoky notes, leading into lush red cherry and sweet vanilla on the palate, along with a kick of acidity and gentle tannins – an ideal

lunchtime companion. 13:03: The French onion soup arrives. Rich and salty, it’s served with a cheesy crouton made from a slice of baguette; the onions still have a crunch and the soup is served piping hot, ticking all the boxes for me. 13:10: I’ve polished off the soup and the bowl is whisked away. I’m left with time to admire the exposed stone walls, the roaring fire and the gorgeous La Guiole steak knife by Jean Dubost – I wouldn’t normally go a bomb on foreign cutlery, but I’ve always had a soft spot for this implement. 13:15: It’s time for the star of the show. I seldom get excited about a minute steak but this one blew me away thanks to its marinade

– the same mix of veal stock, cooking red wine, English mustard, Worchester sauce, cinnamon, nutmeg, coriander, ginger and cloves that’s used on the grown-up dishes in the main Steak Restaurant next door. 13:25: My clean plate vanishes and is replaced by the bill, hitting the 30-minute deadline spot on. I linger a little longer to enjoy a pot of breakfast tea – again, not part of the express menu, but much-needed on a cold day for girding the loins ahead of my return to Auld Reekie’s bitter winds. n The express lunch menu at Steak Brasserie, Picardy Place, Edinburgh, costs £8.95 per person. Find out more at www.steakedinburgh.com/brasserie/

HIGH LIFE

hink whisky, think Scotland. Few other countries could lay claim to be the ancestral home of the dark spirit that’s captured the world’s imagination for the past 150 years. Scotland has even spawned its own category within the world of whisky: to be called “Scotch”, a spirit must be made in Scotland and aged for at least three years in oak barrels. But Scotch isn’t the only game in town. Hot on the heels of the craft beer movement, craft distilleries are popping up all over England. Should Scottish distillers be worried about the competition from the auld enemy south of the border? It’s early days – after all, it can take eight, 10 or 12 years to age a single malt to a desirable level of quality. Yet some of the initial indications are very exciting indeed. To bring in cash while their whiskies age – and to generate the buzz and excitement required to pre-sell casks and bottles – some distilleries are releasing grain spirit. It can’t be called “whisky” because it hasn’t undergone those first three magic years of maturation in oak, but it does indicate how each distillery’s underlying spirit will taste. For me, one of the most exciting examples is Son of a Gun (£31.25 for 50cl, Master of Malt) made by the Copper Rivet Distillery at Chatham dockyard in Kent. Don’t be fooled by its translucent colour, which belies its intense and complex flavours. It’s got a really fruity nose, with gin-like citrus flavours of grapefruit and lime, plus spicy cloves and sweet mandarin. And it’s those orange flavours that carry on through to the palate, mixing with chocolate notes that remind me of Dalmore single malt Highland whisky – high praise indeed. Distillery Project 001 (£39.95, spiritofyorkshire. com) from the Spirit of Yorkshire Distillery has

SCOTCH

on the rocks? More and more English distilleries are producing their own whiskies, so should Scotland be worried? Drinks writer Peter Ranscombe eyes up the competition.

the more classic aromas of grain and honey. I found it thinner and less mouth-coating than the Son of a Gun, but the sweet caramel and honey flavours still hit the spot. While some distilleries chose to release their new-make spirit, others went down the blending route, including The Lakes Distillery, which created The One (£29.95, lakesdistillery. com), a British blended whisky, using spirits from other producers. The nose has light wood smoke and green apple aromas, which lead into honey, raisins, toffee and those TCP notes from a peated component. The One has an enjoyably smooth and rounded texture, but its flavours are more muted, as would be expected from a blend. A second version of the whisky, which has been finished in Pedro Ximenez (£39.95, lakesdistillery.com) sweet sherry casks, is much more distinctive and nails its colours firmly to the mast, with flavours of golden syrup and fruitcake accompanying the smoky notes. The Lakes’ own maiden single malt is due to be released later this year. Yet there was whisky in England before

the current craft distillery boom; the English Whisky Company opened its St George’s Distillery in Norfolk in 2006. The Original single malt whisky (£36.99, englishwhisky.co.uk) has become something of a benchmark, with a big hit of dried fruit and a touch of smoke on the nose, then a lighter mouthfeel full of caramel, honey, raisins, and a savoury element reminiscent of roast pork and apple sauce. The English Whisky Company also produces Marks & Spencer’s own-label Fine Single Malt English Whisky (£35), which has lighter lemon, cereal and spun sugar aromas and a surprisinglysweet toffee depth given its light colour. Tourism is another big dimension to its business and its distillery is well-worth the short train ride from Norwich. Another early entrant was Adnams in neighbouring Suffolk, best known as a brewer and wine merchant, but with a distillery that’s so advanced its design has made it into spirits textbooks. Its Single Malt Whisky (£34.99, adnams.co.uk) is packed full of lemon, apricot and vanilla flavours – sweet and honeyed like a Speyside malt. n

WE’RE GOING DIGITAL FIRST

MORE CONTENT, MORE OFTEN From this edition we’re going digital first - BQ will continue to fly the flag for entrepreneurship across Britain. From Glasgow to Guildford and Cambridge to Cardiff, we stand alone in creating a UK wide buzz around entrepreneurs. BQ’s daily email service is packed with all the big news stories and insights from across Scotland, but also available in another six editions across the UK (North East, North West, Yorkshire, Midlands, London & South and Wales). So, as a valued reader of BQ, we’d encourage you to sign up to receive your BQ daily digital update for Scotland and continue to visit us at bqlive.co.uk. As this is our last edition of BQ Scotland Magazine in print we wouldn’t want you to miss out.

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IT PAYS TO LOOK

before you leap The appliance of management science takes the uncertainty out of decision making as Professor John Quigley explains. MANAGEMENT science is a relatively newly recognised field; literally applying science to the study of management in a business context. Through developing plans and models, it allows organisations to successfully anticipate the consequences of courses of action, and avoid the need for expensive trials. The department of management science at the University of Strathclyde works with industry to do exactly that, collaborating with major organisations on how to deal with complex decisions. Professor John Quigley, who heads up the department, explains: “For an organisation, experimenting can be expensive or even impossible. In reality, you can’t just test your ideas out in an unstructured way. “What a model allows you to do is explore a lot of ‘what if’ scenarios prior to actually implementing your decision or your strategy. By doing this we expose weaknesses for an organisation and then develop more robust strategies. If someone has an idea and wants to go ahead with a particular idea, we run it through the model and say, ‘this is what we are anticipating is going to happen from this course of action, and these are your vulnerabilities.’” Management science is implemented across all kinds of sectors and organisations, with decision support models helping to manage

everything from staffing levels in hospitals, to assets and investment strategies for large companies. “We engage in a lot of different activities,” says Quigley. “My colleagues are involved in a big project right now with Smart Mature Resilience, which is a multi-disciplinary research project creating more resilient cities in Europe. “Within this project they are developing a big systematic risk model. It involves a number of cities such as Glasgow, San Sebastian, Kristianstad, Rome, Riga, and Bristol. The idea here is to work with cities and city planners to enhance cities’ capacity to resist or recover from hazardous effects such as climate change.” But management science – also known as operational research – can be applied to any sector. While working on a project with Rolls Royce marine engines, Quigley spent time developing models to help manage the supply chain and suppliers through risk assessment. He explains: “We were identifying which suppliers were vulnerable, anticipating the better performers and finding some of the weaker ones, who we needed to invest in, and

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decide on the optimal levels of investment. We were trying to anticipate when we invest in a particular supplier, what the outcome would be: are we going to benefit from the intervention, and is it going to be worth it?” Quigley is currently working on a project with Scottish and Southern Energy (SSE) and ScottishPower. He explains the process of how a model can take shape, and how it can ultimately deliver enhanced performance for a business: “On the SSE project we are looking at issues concerning hydro plant repowering and big investment decisions about the level of repowering in these big hydro plants. “We’re working with a variety of different stakeholders, we’re eliciting views, organising these views to then inform a model. This model is a kind of collective view on what the issues are, what the relationships are between the different options, and what the consequences would be. “What separates us from other quantitative modelling disciplines is that we’re very much focussed on the decision,” Quigley explains. “When there’s a decision that needs to be made, we’ll look at everything from the more

qualitative aspects, we’ll have processes for bringing groups of people together, to structuring the problem, to understanding what the issues are. Then we will develop a model and use techniques for quantifying and making use of statistical methodologies, mathematics, probability, and structuring approaches. “It looks at the whole picture, and that’s also what separates us from some of the other disciplines like mathematics. There is a lot of mathematics involved in this, we do a lot of statistics, we do a lot of mathematic modelling - but we also do the softer side as well, like the problem structuring.” Quigley continues: “Once we have the model developed we identify the best way forward where we make use of optimisation techniques. Sometimes optimal means the most cost-effective way of doing something, or in the case of a hospital for example, optimal could mean being able to see the highest number of patients. “It depends on what’s important to a decision maker, and that’s why it’s not just about data analysis but about involving the stakeholders for the organisations. A perfect

“My colleagues are involved in a big project right now with Smart Mature Resilience, which is a multi-disciplinary research project creating more resilient cities in Europe.”

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example of the importance of this is when I worked on a project for the paediatric intensive care unit at the Children’s Hospital of Wisconsin in the United States, where stakeholder involvement was able to enhance the quantitative data analysis bringing issues such as staff stress levels and burn out into the model, ultimately resulting in a more broadly acceptable solution.” Quigley has spent his entire career working in management science. Originally from Canada, he graduated with a degree in mathematics from the University of Waterloo, and had planned to become an actuary before coming to the UK to undertake a doctorate (PhD) in management science at the University of Strathclyde. “The PhD was very interesting because it was working for a company called Lucas Aerospace, which designed engine controllers for aircraft engines.” Quigley says. “They wanted to know when they could stop developing, and when an engine was reliable enough to release it into the market. “At the time there was no model that was satisfactory to give them that kind of decision support, so they sponsored a PhD to help them deliver this model. Over the course of three years I developed a model for them, and it is now part of the international standard for reliability models, so it was a very fruitful project. “It was also around this time that Rolls Royce had introduced an idea called ‘Power by the Hour’, where they were transforming the aerospace industry so that the cost of unreliability for their aircraft engines was going to be borne by Rolls Royce and their supply chain. This was really exciting because it created an incentive for the aerospace industry to provide much more effective decision support on how to develop the reliability of aircraft engines and their supply chain. “We got involved in a project that was funded by the Department for Trade & Industry developing these models to inform decisions like finding the best way of improving the reliability of an aircraft engine and its parts. That was a six-year project, and we created many different tools, techniques and processes for developing these models.” Quigley’s career took him from assessing the reliability of engines to branching out into a wide range of sectors. “A core theme through my career has been work on decision making

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“I have worked with a lot of engineering companies and gone beyond aerospace.”

under uncertainty, and developing ways to help people make more effective decisions when they are faced with these uncertainties. “I have worked with a lot of engineering companies and gone beyond aerospace, I’ve worked with the Ministry of Defence, Rolls Royce, ScottishPower, Scottish Water and a lot of the big utility companies – all having in common this decision making under uncertainty.” Now he is also working on training the next generation of management scientists, providing specialist teaching for a number of programmes at the University of Strathclyde including operational research and business analysis and consulting. Two new master’s degree (MSc) programmes have recently launched at the university, aimed at equipping graduates with the skills they need to enter the growing industries of fintech and data analytics. The MSc programme in financial technology (fintech) aims to go beyond teaching finance theory and technological skills, and instead takes a blended learning approach that combines theory, intensive practice and industrial engagement. “There is a lot of activity at the moment

within fintech - the coming together of technology with applications in finance.” explains Quigley, “so to reflect that, this is a collaborative programme between ourselves, the department of finance, and the department of computer science. “We are drawing on this range of skills to equip our students with a good understanding and a good basis in finance along with the necessary computing skills. From us, they can access expertise in problem structuring, data analytics, risk analysis and risk management.” He says these skills we be valuable in terms of future career prospects for the graduates: “We need people with those skillsets who are not just familiar with analysing or working with computer systems, but are able to interpret this in a meaningful way to develop decision making strategies. “As far as fintech is concerned, this is a new area. This is one of the first MSc fintech programmes in the world, and the students who will graduate from this have now got a good breadth of understanding across these three core disciplines. Fintech is a global phenomenon so I see lots of opportunities for the graduates.” Alongside the new fintech programme, a

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“What has been really fun about this is that my whole career has been spent working with industry.”

data analytics MSc is also currently in its first year. The course focuses on the use of data analytics techniques within business contexts, making informed decisions, and extracting knowledge from data. The programme has been specifically designed to address the current and future challenges that organisations face across a variety of sectors. Quigley says: “Data analytics is such an important topic at the moment, and one that transcends more than just one application area. I’m hard pressed to think of any industry that couldn’t make use of data analytics, whether that’s an engineering organisation that needs to understand the reliability of their systems for warranty reasons, in the health sector to look at patient data and reduce waiting times for services, or in the finance industry, identifying new services for banking in a crossover with fintech. I am currently supervising an industrysponsored PhD project that is concerned with developing methods to assist companies in managing their on-line complaints through improved data analytics.” Quigley has been passionate about data analytics and operational research since the beginning of his career, but explains that it

is currently more relevant than ever: “We have seen an explosion in data analytics with access to data, the development of artificial intelligence techniques and data mining. Management science can clearly play a role here in structuring our problems, and making use of data analytics to inform decision making. “We do a lot of collaboration within our department, so we work with a lot of different disciplines. We don’t just work with industry but we have a lot of collaborative projects with other departments in the university. MSc data analytics is a collaborative programme that we put together with management science, computer science, mathematics and statistics.” One key component that is core to both the fintech and data analytics programme is a module called “becoming an effective practitioner” – it gets the students out of a classroom setting and into a situation where they can tackle real industry problems. He says: “We have an integration module here where we bring in practitioners in fintech, and for data analytics we bring in practitioners from data analytics, and we give industrial problems to the class relevant to those areas, and we seek to meaningfully bring in these tools and techniques to solve industrial problems.

“Throughout the year we’ve got industrial cases running right from day one, and they typically work on a two-or three-week cycle where industry will come in and give them a problem and then the class will go off and work on that and come back with presentations. “Quite often we find that you don’t just have one standalone solution, so the answer doesn’t just reside in one discipline, it’s not just in some artificial intelligence solution or not just understanding the financial situation. It’s actually often bringing these disciplines together, using a multi-disciplinary approach.” As the university brings in organisations through the effective practitioner modules, it seeks to maintain its relationship with them so students can continue to work alongside them after graduation. Quigley says: “We are providing industrybased projects for the data analytics students, and we are looking at developing similar projects for the fintech programme where the students would be put into organisations to do their final project. As far as opportunities afterwards are concerned, there are a lot.” They are opportunities well worth pursuing, according to Quigley: “What has been really fun about this, and what really got me excited about doing management science, is that my whole career has been spent working with industry. I have had a very close relationship with organisations, being informed by problems that they have and then going back and developing methods to support those problems. “The kind of problems they have been challenged with is always decisions under uncertainty. The types of decisions they have differ, the types of uncertainty they are faced with is different, the types of data problems that they are dealing with is quite different, so that always creates new challenges and the need to develop new techniques and new models.” n

Contact details www.strath.ac.uk/business 0141 553 6000

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“Scotch whisky has an amazing reputation throughout the world and we’ve been able to capitalise on that.”

n g i s e d A for the

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Scott Allen’s engineering design firm has worked with some of the biggest – and smallest – whisky distilleries in Scotland. Now, it’s following in the footsteps of our national drink by finding fans as far away as Australia and the United States, writes Peter Ranscombe.

ome meeting rooms have motivational posters; others have brightly-coloured walls. Scott Allen’s meeting room has bottles of whisky. “That’s just a selection of the distilleries we’ve worked with,” explains Allen, pointing to the bottles of Scotch and other spirits lined up on shelves at the far end of the boardroom table at Allen Associates in Stirling. All the major players are there, from Glenmorangie to Highland Park, but there are plenty of new distilleries too, including Raasay, just off Skye, and the new Tullamore Dew facility in Ireland. A quick glance at the design engineering firm’s list of clients tells a similar story. As well as big names like Beam Suntory, Diageo, Edrington, Glenmorangie, Whyte & Mackay and William Grant, the company also works with a raft of start-ups, including Ardross, Holyrood and the prestigious revival of Rosebank. Following its success in Scotland, distilleries further afield have now come knocking too. Allen Associates has worked on European projects in Finland, France, Spain and Sweden, and has spread its wings across the Pond to Canada and the United States, and as far as Australia, China, Russia and Singapore. “Australia is one of our biggest overseas contracts,” says Allen. “We’ll have someone based out there for the best part of a year, managing the project. “We’ll also do some business development out there while

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the project is underway – strategically, it’s an important piece of work for us. I visited Tasmania last year and you can feel the buzz of the new distillers. “Scotch whisky has an amazing reputation throughout the world and we’ve been able to capitalise on that because we’ve worked with nearly all of the distilleries in Scotland,” Allen points out, gesturing again to the bottles lined up along the shelves. “We’re the biggest specialist distilled spirits process design engineering company in the UK and we have the potential to be the biggest in the world – we are certainly not far away from that position and could in fact be already there. “There are much bigger drinks design engineering firms out there, but they work in other industries as well as distilleries. There’s no-one else who can match our expertise and experience.” The global thirst for Scotch shows no sign of abating. Figures from the Scotch Whisky Association (SWA) trade body showed that exports grew by 3.4% during the first half of last year to £1.8bn. Whisky is the UK’s biggest drink or food export and accounts for about 20% of the sector’s overseas sales. That popularity has sparked an interest in distilling local whiskies too. Traditional whiskymaking countries like Ireland, Japan and the US are being joined by newcomers in France, Sweden and even Taiwan. Working on distillery projects around the world can create challenges when it comes to the length of time it takes to travel to visit clients and projects. “But the pace we can work at – thanks again to our expertise and our experience – means that we more than make up for the travel time,” says Allen. “If an overseas client chooses a local business then that company will have a steep learning curve ahead of it to get up to speed on distillery design engineering. We don’t need to go through that same process because of our long track record working in this sector.” Another way in which Allen Associates is overcoming the distance to its overseas clients is through the use of virtual reality (VR). Allen leads the way through to the design studio and picks up a pair of VR goggles and what looks like an electronic magic wand, a handset that allows the user to move through the design for a distillery. Allen loads up the three-dimensional (3D) model for the eponymous distillery on the island of Raasay, off the coast of Skye, which

was officially opened last autumn. Slipping on the VR goggles allows the wearer to look around themselves and see the distillery’s still room, mash tun and pipe work in superb detail. “This is a really useful tool for when we’re explaining to clients about how all the equipment will fit into the space,” Allen explains. “Distilleries also need to look good these days for tourists too.” Flicking through the company’s portfolio, it’s easy to see what he means, with pipework being tucked away underneath mezzanine floors, leaving still rooms minimalist and spacious for when visitors come on tours. His assertion is borne out by the latest figures from the SWA, which showed that a record 1.7 million tourists visited distilleries in 2016, up 8% year-on-year and leading to £53m in visitor spending. Using VR and travelling to Asia and North America feels like a long way from Allen Associates’ origins. The company was founded by Allen’s father, Bill, in 1994 after he retired from his role as a chemical engineer with The Distillers Company (DCL), which became part of Guinness and eventually Diageo, Scotland’s

largest whisky producer. Bill was joined by his friend and fellow chemical engineer Stephen Ryde in 1999 and Allen came to work for the growing business in 2001, having studied at the University of Strathclyde and worked in the process industries. Allen Associates initially focused on designing yeast systems and cleaning in place (CIP) equipment for distilleries, but has since expanded into a wider range of areas. “We can now design every part of the distillery, from the grain coming in to the spirit being filled into casks,” says Allen. “We go far beyond that too – we designed a system for emptying the casks and preparing the whisky for blending and bottling. “We’re involved in each and every step of the process, both inside and outside the distillery itself. And it’s not just whisky either – we’ve work with most other distilled spirits including gin, vodka and rum. “Part of the growth has come from the increased capital expenditure by large companies expanding their production and craft distilleries being set up. But customers are also becoming more aware of the work we

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can do to help them optimise their processes, which saves them money in the long-term, and the advice that we can give over regulatory compliance, which now accounts for about 20% of our business.” Including consultants, Allen Associates now has 20 members of staff and Allen himself was last year appointed as a visiting professor at the University of Strathclyde’s Department of Chemical & Process Engineering. Allen has previously delivered lectures to third- and fourth-year students, but the three-year appointment puts his relationship with his former university on a more formal footing. The expansion of his company is reflected in its financial figures too. Turnover has risen from £1.25m in 2016 to £1.5m in 2017 and is poised to breakthrough the £2m mark this year. Growth for Allen Associates means growth for the wider whisky industry supply chain too.

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Where possible the firm uses Scottish suppliers and contractors, which can mean extra work at home and abroad for other businesses too. “People don’t realise how inter-connected the whisky industry is,” Allen reflects. “It’s not just the distilleries themselves – there are coppersmiths, pipe fabricators, tank fabricators, electrical contractors – the list goes on. “We like to use Scottish companies when we do work abroad too. But if a client chooses to use a local company instead then we have to make sure they are up to the same standard and that their work is of the same quality as our Scottish suppliers.” It’s nearly 25 years since his father founded the company and, looking back over the past quarter of a century, Allen picks out lots of memories. “Having a great relationship with my staff has been a key highlight, we are friends as well as colleagues, and the company would not

be where it is without them. “In relation to projects, one of the most exciting moments is when the distillery is being commissioned and spirit is coming off the stills for the first time. That was especially true on Raasay last year – it’s such a stunning location, with the view of the Cuillin hills on Skye from the still room. “Back in 2004, Speyburn sticks out a bit for me as it was the first project I was in involved in where production was being increased – before then it was mainly production efficiency projects. It was exciting as you could feel the enthusiasm for the increased demand for spirit. “Installing the Famous Grouse solera tank farm for Edrington on Great Western Road in Glasgow was an exciting project and so was the new Tullamore Dew distillery in Ireland for William Grant & Sons. The team at Grants was really great to work with.” n

“Having a great relationship with my staff has been a key highlight, we are friends as well as colleagues, and the company would not be where it is without them.”

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What is sustainable investing and can it really make a difference to the world? Debjani Raffan, head of UBS Wealth Management Scotland, tells Bryce Wilcock why the company is committed to helping its clients make an impact as well as a profit.

SUPPORTING a positive social or environmental impact as well as achieving compelling financial returns is at the heart of sustainable and impact investing. Social impact and sustainability aren’t usually the first two things that pop into your head when you think of wealth management, however they could be set to play a much larger role in the future. UBS, as the world’s largest wealth management organisation, (Scorpio Partnership Global Private Banking Benchmark 2017) is acutely aware of the challenges facing the world around us with the global population expecting to reach more than 8 billion by 2030; a population that will require 35% more food, 40% more water and 50% more energy than

2015, according to The Millennium Project. This is why, at the World Economic Forum (WEF) in Davos last year, UBS announced ambitious plans to position itself at the forefront of sustainable and impact investing over the next five years. Now, just a year on from that announcement, the industry has reached a point where institutional grade investments are being made available at scale to more investors than ever before. In fact, according to the Global Sustainable Investment Alliance Report 2016, the total number of assets invested using at least some form of sustainability criteria is now estimated to be around US$22tn. However, despite this progress, that figure

only accounts for 8% of the overall global household wealth of US$280tn, so there is still work to be done. As Debjani Raffan, head of UBS Wealth Management Scotland, points out: “The way companies operate has a profound effect on society and the environment and over the years we’ve seen this become an increasing focus for UBS stakeholders, from clients and employees, to shareholders and the nations in which we operate. “Across the globe, there is a growing interest in market solutions to ensure that companies have a positive impact, and more investors are looking to incorporate environmental, social, and governance factors into their investment decisions, not just to align their values with

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their investments, but to get exposure to some of the fastestgrowing trends in society, such as ed-tech, healthcare and renewable energy and storage. “As a result, impact and sustainable investing is becoming a force to be reckoned with, and we expect the financial community to play an ever more important role in contributing to a more sustainable society.” As part of UBS’ ambitious five-year commitment to increasing awareness of impact investing, the company is aiming to educate as many of its clients as possible about the benefits impact investing not only has on society and the environment, but also the financial benefits. UBS currently manages approximately £2tn worth of its assets on behalf of its clients across the globe and as part of its plan, hopes to increase the volume of impact investments primarily private equity - to US$1bn a year. So, you might be wondering, what makes an investment have an impact on society? Previously, it was said that in order to be a sustainable and impactful investor, one should avoid simply “sin investments” such as companies involved in the arms trade, tobacco or gambling for example. However, now it has shifted to a focus on the opportunities for outperformance through leveraging sustainability megatrends. Impact investing now seeks to generate a positive social or environmental impact alongside a financial return for wealth holders comparable to that of traditional returns – indeed if impact investments are not fully competitive in terms of financial, they will not scale and will not achieve the desired impact. This explicit strategy spans asset classes. Whether investing venture capital in an application that provides mobile learning solutions for under-resourced schools, private equity into emerging markets healthcare companies or financing the transition to a clean energy future through renewable energy infrastructure, this approach seeks commercial solutions to social and/or environmental challenges. UBS helps monitor such impact by drawing upon the United Nations’ Sustainable Development Goals (SDGs): 17 goals that need to be achieved in order to address society’s biggest challenges between now and 2030. However, while there is significant interest in SDGs from investors, there is little understanding of exactly how to invest in these themes in ways that can generate real impact. While investment in listed companies that contribute to the SDGs is relatively straightforward, investment in private markets is more challenging. This is where UBS comes in. “As with any new approach to investing, there are always going to be barriers in terms of familiarity and understanding,” Raffan adds. “The amount of jargon and some at times unnecessary complexity has meant that investors are often left uncertain about new initiatives. “This is why we want to help our clients navigate this brave new world of investing and have published a guide to explain and used this year’s UBS Forum, our annual conference for investors, to explain what it is all about. We have divided it into sections devoted to some simple questions. What is sustainable investing? Would I lose out financially? How do I

UBS’ attempt to bust impact investing myths As with any new investment approach, there are a number of myths around impact investing. Here’s our attempt to bust them: Portfolio profits and impact are mutually exclusive Some individuals and institutions view their investment portfolios in two distinct buckets: one dedicated to returns and one to philanthropy, the former subsidising the latter. Impact investing offers an investment approach that seeks to deliver both attractive returns and a defined social and environmental impact, negating the binary “make impact or make profit” mentality. Impact investing is philanthropy Impact investing is investing with an expectation of financial return. It is not giving money away to solve social or environmental problems. It is neither philanthropy, nor based on grant-making. It is also not dedicated to funding public sector projects. However, it can cater to different risk appetites within the same structure and draw investors from both the public and private sectors to encourage innovation. Impact investing means making financial sacrifices Impact investing need not entail sacrificing financial returns for social or environmental benefits. A range of expected financial returns can be achieved depending on the particular investment, and the great majority of impact investors and impact investments seek market-rate returns. If we are to really grow impact investing, larger institutions should focus on market-rate return strategies, as it has a much greater capacity to scale and address big issues. High returns imply low impact Higher financial returns need not have a negative effect on the quality of the impact investment. For example, a 2011 study by Grabenwarter and Liechtenstein found that it cannot be implied that financial returns are inversely correlated with impact generation. Indeed, if a company is able to scale quickly with high impact products, and is highly profitable, the problem it is seeking to solve may be solved much faster. Impact investing is only in poor countries While poverty is more glaring in rural Sub-Saharan Africa than in Western Europe, developed countries also have challenges that impact investing can address. For example, the financial crisis resulted in high rates of youth unemployment in parts of Europe, cut off capital to many small businesses, and reduced investment in critical infrastructure. There are also significant environmental challenges in developed markets around the world, such as ongoing use of fossil fuels and an underinvestment in public transportation. These problems are often less visible than contaminated water supplies or slum dwellings, but impact investing can focus on any social or environmental problem regardless of geography.

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“Investing is no longer just about financial gains, but it can also generate social and experiential returns.”

go about it? What difference can I make? “We want everyone to be able to engage with an approach to investing that must become the norm if it is to fulfil its potential and society is to address its biggest challenges. We have a real opportunity, collectively, to engage more people in investing sustainably and in ways that can make a genuine difference to society while also delivering financial returns comparable to that of traditional returns. We want investors to simply think ‘why not?’” Also driving the impact investment revolution is the changing demographic of the typical investor. The rising influence of the millennial generation – those born between the early 1980s and early 2000s – is a major driving force behind this shift. Having grown up in a digital age with a constant flow of easily accessible information and increased transparency, millennials’ expectations of public and private organisations are higher than their previous generations’. Younger wealth holders are more socially and environmentally conscious and expect others to act accordingly. According to UBS and Oppenheimer Funds surveys with Campden Wealth in 2017, around 69% of ultra high net worth millennials say they want to align their investments with their social

values, along with 88% of women surveyed. “We know from our in-depth research that women and millennials are driving the adoption of sustainable and impact investing,” said Raffan. “And as they strengthen their skill-sets and assume more control of assets, we fully expect to see this theme continue to take hold. “That’s why we’re working alongside our clients to explain the potential benefits of sustainable investing and also dispel common myths. Investing is no longer just about financial gains, but it can also generate social and experiential returns. “Through impact investing, we’re seeing more people than ever before become interested in wealth management and are helping our clients preserve a legacy. Even family members with no interest in finance are getting involved.” So, you may be wondering, what makes up a sustainable investment? UBS breaks it down into three areas by looking at the environmental, social and governance (ESG) factors, as a way of determining whether companies are sustainable. Environmental investments for example look at those helping tackle climate change, pollution and waste as well as those who are

pro-actively looking for ways to improve the environment. As for the social factor, it could be businesses that promote and invest in workplace safety, tackling discrimination or those boasting sustainable supply chains. And for governance, investments look at those that are helping tackle corruption, cartel behaviour, tax gaps and promoting business ethics. And whilst this piece only skims the tip of the iceberg, UBS has released an in-depth report looking into the benefits of impact investing. Investors are keen to understand this new investment trend and the release of the report is UBS standing by its brand values of helping its clients find the answers to life’s questions. n

ab To find out more about the guide or to download it, visit www.ubs.com/forum-2018.

UBS Wealth Management is a business division of UBS AG, which is authorised and regulated by the Financial Conduct Authority. As with traditional investments, capital is still at risk.

How can I see the bigger picture? By looking beyond the obvious. Only then can we see the true value. Together we can establish strong, open and long-lasting relationships. With the expertise and resources of our truly integrated, global approach. We’re here to bring the bigger picture into focus. For some of life’s questions, you’re not alone. Together we can find an answer.

The value of investments can fall as well as rise. You may not get back the amount originally invested. UBS Wealth Management Wemyss House 6-8 Wemyss Place Edinburgh EH3 6DH Debjani Raffan debjani.raffan@ubs.com Tel: 0131 247 5891 © UBS 2017. All rights reserved.

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Mixing it up

Launching their own soft drinks businesses helped Hannah Fisher and Craig Strachan to spot gaps in the market not only for contract bottling but also for product development. Now, they’re joining forces to open The Start-Up Drinks Lab, which will help other entrepreneurs to follow in their footsteps.

ike all the best entrepreneurs’ ideas, the concept for The Start-Up Drinks Lab came from Hannah Fisher and Craig Strachan’s experiences of setting up their own businesses. Both had a passion for creating soft drinks, both had a desire to work for themselves – but both came up against the same challenges when it came to manufacturing. Strachan launched Glasgow-based Foal Drinks in April 2016, picking an acronym of its first flavour – “fresh orange and lemonade” – as the name of his business. His products

were initially manufactured by a contractor in London, but Strachan wasn’t pleased with the poor level of customer service and so switched to using a bottling line at a brewery near Birmingham. Despite getting on well with the brewer, his ambition has always been to move at least part of his production to Scotland. Yet Strachan – who trained as a chartered accountant at PwC before cutting his teeth in business as a group and operational accountant at car dealer Arnold Clark – couldn’t find a contract

manufacturer and bottler that could make the drinks in the right quantities to suit his business model. Fisher encountered the same issues when she was beginning to set up Tongue in Peat in 2016. She came up with the concept for her products during her 11 years working in marketing and innovation within the drinks industry at brewer Tennent’s and distillers Morrison Bowmore and Beam Suntory. “I wanted to produce my drinks in Scotland, but I soon realised there was no-one who

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could help me,” she explains. “I realised that I’d have to solve this more basic and wide-spread problem about a lack of contract bottling before I could launch my own range.” And the key to solving that problem has been collaboration. Both Fisher and Strachan were participants in Entrepreneurial Spark’s business start-up programme at its incubation centre in Glasgow – or “chiclets” at its “hatchery” in E-Spark’s unique lingo. They were each being mentored by Helen Glass, a well-known consultant in the Scottish food and drink industry. Glass encouraged many of the start-ups she was mentoring to consider working together and told them about the collaboration prize being offered by Cooperative Development Scotland (CDS), part of Scottish Enterprise, which was designed to encourage companies to team-up to tackle common obstacles. Fisher and Strachan entered the contest with their concept for The Start-Up Drinks Lab, a business that could support clients at each stage of the process from coming up with the idea and ingredients for a soft drink all the way through to manufacturing the liquid and bottling it. They won one of six prizes of £5,000 in cash and £5,000 in business support from Scottish Enterprise. “We won the prize in March 2017 and, since then, we’ve both been

“I wanted to produce my drinks in Scotland, but I soon realised there was no-one who could help me.”

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“Once the craft soda operation is up-andrunning, we’ll be able to look at other opportunities too.”

working full-time on the business to develop the idea and raise funding,” explains Strachan. “Winning the prize validated our idea. “Scottish Enterprise had recognised the same gap in the market as us. We’re receiving around one inquiry a week, which proves what the formal market research told us about the demand for these services.” Those services will begin in the company’s “product development kitchen”, the laboratory at the heart of the business. Customers with an idea for a soft drink will be able to use the firm’s library of ingredients and its specialist equipment to create their recipes, all under the watchful eye of a food scientist, who can also offer advice as and when needed. Once the recipe is completed, the company will also manufacture the soda and bottle it for clients, storing small quantities if needed too. The next step is distribution, with The Start-Up Drinks Lab offering services that cover the whole of Europe, as well as sales through its own website. The company is also in discussion with partners in the on and off trade in the UK and abroad to help its clients reach a broader customer base. “We’re doing this at the right time because a lot of bars and restaurants realise that they are falling behind when it comes to craft soda compared to their offerings in craft beers, ciders and spirits,” Fisher says. The Start-Up Drinks Lab has secured premises at Kelburn business park in

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Port Glasgow and is renting units from Riverside Inverclyde, the urban regeneration company created by Inverclyde Council and Scottish Enterprise and which has a partnership with port owner Peel Holdings to redevelop former industrial sites. “We looked at locations within five council areas and Riverside Inverclyde was brilliant,” says Strachan. “The regeneration company wants to put Inverclyde on the map for food and drink companies. It’s offering a lot of support to people who want to set up their businesses here. “We’ve been very fortunate in that we’ve received a lot of free-of-charge support, both from people working in the food and drink industry and in the wider business community. We probably have five or six advisors between us.” Fisher and Strachan are due to move into their premises in April and aim to have the business open for orders by mid-summer. Initially, the company will employ a team of six, but its headcount is expected to rise to 11 within three years. “Our client base has already grown to include larger companies as well as startups,” Fisher points out. “After we won the collaboration prize, we were contacted by larger businesses that had their own capacity to handle large quantities of liquid but weren’t able to bottle on a smaller scale for their craft products. “We’ve had lots of inquiries from Scotland, but also from further afield. About 40% of our clients are based in London and we’ve even been approached by potential customers as far away as Belgium and Canada. “We explained to the Canadian client that the transport costs would be high, but she said it would still likely be cheaper to have her drinks made here in Scotland in the smaller quantities she required, despite the shipping cost. She also liked our ethos – we’re a small business helping other small craft businesses.” A typical bottling run at The Start-Up Drinks Lab will be around 500 litres, which will make the facility very attractive to craft drinks makers, which currently have to contend with 20,000-litre batches at other bottlers. That can equate to around 100,000 bottles of mixers, which – if it only has a 12-month shelf life – can be difficult for small companies to shift. “Some of our customers will choose to opt-

in to use us for the manufacturing and bottling parts of their production process,” she adds. “Others will approach us with an initial idea and then we can help them from start to finish through the process of creating the recipe and then making, bottling and distributing their drink.” In the run-up to Christmas, Fisher and Strachan were busy speaking to five potential investors, including a number of syndicates and high-net-worth individuals. In the end, they decided to accept funding from a slightly more unusual source – convenience store chain Scotmid, or the “Scottish Midland Co-operative Society” to give the organisation its formal title. Scotmid has invested a six-figure sum in the business. Chief executive John Brodie and chief financial officer John Dalley have offered advice to Fisher and Strachan. “They are happy for us to go to them with questions, but they feel strongly about ensuring Craig and I have the autonomy to run the company,” says Fisher. “Scotmid wants to expand their business into complementary areas that offer diversification from their existing operations. “As a retailer with a wide drinks portfolio, this is a natural move for them. We may even develop and bottle some bespoke products for them.” As well as working with Scotmid, Strachan and Fisher have moved into Strathclyde Entrepreneurial Network’s (SEN’s) incubator centre. SEN is one of the ways in which the

University of Strathclyde helps students and graduates to develop their ideas for businesses. Fisher studied marketing and finance at Strathclyde, while Strachan holds a degree in accounting and finance from the university. Both live in Glasgow and so were excited to find a suitable facility right on their doorstep in Inverclyde. It’s not all work and no fun though – the two entrepreneurs are already looking for ways to diversify their new business. “We think the product development kitchen will be utilised about 20% of the time by clients, so that gives us opportunities to bring in other types of customers,” says Fisher. “Lots of cruise ships dock at Greenock and then their passengers are bussed off to distilleries in other parts of Scotland. It would be great to keep some of those tourists in Inverclyde so that they can make their own soft drink in a day with us. “We’re also looking at using the kitchen for corporate away days, team-building exercises and perhaps even alternative hen nights. There are lots of great opportunities for us.” Although the focus is very firmly on craft soda, The Start-Up Drinks Lab has already been approached by distillers that want to create ready-to-drink (RTD) products by blending their spirits with mixers. “We’re not against alcohol – far from it,” laughs Strachan. “Once the craft soda operation is up-and-running, we’ll be able to look at other opportunities too, whether that’s packaging RTD products or even bottling for craft breweries.” n

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Forget the conventional and experience more at Fraser Suites. Receive a warm welcome in either of our Scottish properties and make your stay a memberoable one. We pride ourselves in gold standard service and making sure our guests have the best stay possible. Relax and unwind in luxurious, stylish surroundings. Plan your next stay by visiting www.frasershospitality.com We have everything you need to make you feel right at home.

-19 Albion Street, Glasgow G1 1L H Tel: +44 (0)141 553 4288 Email: sales.glasgow@frasershospitality.com

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