A Dram with Simon Erlanger

Few distilleries matter quite as much to its local community as The Isle of Harris – now the island's biggest single employer which has helped turn the tide on decades of depopulation. It's an inspiring tale as Ian Fraser discovers, talking to its MD 

Simon Erlanger's introduction to the drinks industry was a baptism by fire. In December 1985, after he joined Distillers Company Limited (DCL) as head of Southern European sales for Johnnie Walker, Argyll Foods – owners of Safeway supermarkets, made a hostile £1.8 billion bid for his employer. Guinness then waded in with a higher offer, and a fierce takeover battle ensued, from which Guinness eventually emerged triumphant with a £2.6bn offer in April 1986. 

Over a metaphorical dram, Simon reminisces about the fall out of that battle. "When Guinness finalised the takeover, we were all moved out of our palatial offices in St James and into a stained-glass high-rise overlooking the A4 in Hammersmith." Responsibilities were also changed. Instead of each brand's sales and marketing people looking after a single brand across large tracts of the Earth, a matrix structure was introduced, with sales teams overseeing numerous brands in smaller territories. Simon was dispatched to Lausanne to run the sales and marketing for a portfolio of United Distillers' spirits brands. 

In 1993 he was headhunted by Glenmorangie, owned by Leith-based Macdonald Martin Distilleries, rising to become its commercial director in charge of marketing in 2000. Among his mentors, he cites the firm's MD, Neil McKerrow who "inspired me with his passion for quality and growth, his obsession with the effect of wood on flavour, and his integrity." Without McKerrow's input, he believes Glenmorangie would not have become a top-five single malt globally. After the group was sold to Paris-based Moët Hennessy for £300m in January 2005, Simon says "I spent three years on aeroplanes, integrating the business around the world and when I wasn't doing that, I was in Paris working on their concept of luxury."

From 2008 to 2015, Simon ran his own consultancy firm that focused on "hothousing and nurturing premium spirits brands" and worked on Welsh single malt Penderyn and James Espey's Last Drop Distillers. However, the Hebrides beckoned, and in 2011 he was cold-called by head-hunters about a startup on the Isle of Harris.  

The project was led by the Anglo-American musicologist Anderson "Burr" Bakewell, who had owned Scarp, a small island off the coast of Harris, for many years. Bakewell had seen Harris' population halve from 4,000 to 2,000 over the previous half century, and believed that building a distillery capable of offering young 'Hearachs' (people from Harris) gainful employment could be the antidote to depopulation. Simon recognised this as a fantastic opportunity, as did Ron MacEachran, a former KPMG consultant and former Whyte & Mackay finance director who also joined the fledgling start up.  

He says that, even though it is owned by external investors, the Harris distillery is firmly focused on the interests of the people of Harris. "Every single distiller and warehouseman is an islander – not from the industry. We recruit for fit rather than expertise, teaching them the skills they need. Forty-five local people are now employed at the distillery and almost half are under the age of 30."  

Asked whether billing itself as "the social distillery" actually means anything to consumers, Simon says: "People in Scotland adore the fact that our raison d'être is to create employment on Harris. It's a big part of the story we tell, and resonates with consumers all over the world. There are 'hooks' – such as the liquid, the bottle, and the packaging – which pull people in, but our aim is then to tell them the deeper story."

He credits brand consultant Mark Taylor, who advised the company in the early days before the distillery opened its doors, for getting the positioning right. "Mark spent a month walking around the island, spending time with local people and talking to stakeholders, and helped define who we are."

Isle of Harris Gin was launched on the day the distillery, located in the ferry port of Tarbert, opened on 24 September 2015. The Hearach single malt followed on 2 October 2023, selling an impressive 32,000 bottles on launch day. Unlike most island malts, it is distilled, matured and bottled in situ. Both the gin and the whisky were met with critical acclaim, winning scores of awards – and both are already being marketed and sold in 25 countries worldwide. 

A year and half from the Hearach's launch, Simon says he is unconcerned about the return of "age statements", a trend which could benefit larger players sitting on large stocks of aged whisky, and penalise relative newcomers such as Isle of Harris Distillers, which are not. "I don't see any issues with no-age-statement (NAS) single malt whisky in much of Europe or North America. Craft distilleries producing wonderful spirits without age statements are teaching people that age doesn't necessarily equal quality." 

However, he does warn that some recent entrants to the single-malt category – especially those which lack a credible "raison d'être" and whose founders haven't lived through past downturns as he has – could be vulnerable in today's more challenging environment, especially given the recent rise of quality single malts from abroad, which is putting increasing pressure on shelf space. 

He also admits to being "quite concerned" about the risk that president Donald Trump will reimpose tariffs on Scotch. "The USA is our biggest export market and has some of the greatest potential for growth. A tariff of 25% could put a dampener on our plans."

As for the wider market outlook for the sector, he reckons: "There are a number of factors behind the current downturn. The over-stocking – oversupply, the post-Covid hangover, whatever you want to call it – is something which will correct itself. What's more concerning is the global macroeconomic picture – the feeling of malaise around the world which means people are less likely to treat themselves to an expensive whisky. I don't imagine 2025 is going to be any easier than 2024 was."

For all the stormy headwinds buffeting the industry, Simon shows no sign of slowing down. He says that his ambition for the Hearach in five-ten years' time is for it "to be up there amongst the greats of the single malt world. I want it to be recognised and revered as a truly exceptional brand, a truly exceptional whisky."

And, as Herald business editor Ian McConnell wrote recently: "No one wants to see further depopulation of Scotland's islands. Therefore, as well as being inspirational, the Isle of Harris Distillers' tale has been uplifting."