Pre-Orders, Oyster Beds and the 'Halo Effect' in Scotch Whisky

How does the much-sought 'halo effect' work in marketing Scotch whisky? Stories help sales, reports Ian Wisniewski for WhiskyInvestDirect...

EVEN during lockdown new whiskies are appearing, though some can only be pre-ordered with delivery made uncertain by corona virus restrictions.

One recent limited-edition is Tamdhu Iain Whitecross Single Cask Vintage 2003, on pre-order since May 11. But even before anyone receives it, this can still exert a highly desirable 'halo effect' on the mother brand.

It may sound mystical, but this marketing term refers to a human condition. A positive experience with one product/service prompts a belief that all products/services from that company are of the same calibre.

Within Scotch whisky, the halo effect typically stems from a prestige bottling that radiates an aura across the portfolio, adding value to less expensive (and so often younger) expressions.

That's quite a feat, with quite a pay-back for the brand. So what endows an expression with such super-power?

"The ultimate halo is a limited quantity, with an amazing story and of course a certain price point," says Gordon Dundas, international brand ambassador at Tamdhu's owners, Ian Macleod Distillers. "But it must relate to the brand overall, and to what's gone before."

Quantifying the halo effect is harder than defining it, not least because there are various aspects to consider. The level of interest it can generate, for example.

"What drives the greatest engagement on social media are rare, older malts," says Cara Chambers, marketing director, InverHouse Distillers.  

"Whisky fans want to know about every new release, whether they are purchasers of the core range or the prestige range." 

This raises a core issue. Does interest in such whiskies really promote sales of the overall brand? Given that the halo effect is just part of the marketing mix, who knows. For example, it could be tied in with the production story whose impact depends on the telling.

Isabel Graham-Yooll, auction & private client director, Whisky.Auction, explains:

"To have a halo effect the story must register in the popular imagination, which is why brands are so keen to appear in the media. It needs to be an ultimate accolade, the oldest, the rarest, the greatest, it doesn't have to be all three and it doesn't always matter which, but it's likely to be a combination of these things. However, there's no formula to guarantee this will generate press coverage."

The number of releases aged 40-50-plus is growing, but remains sufficiently limited to ensure rarity. And to maximise appeal a halo mustn't be over polished by filling diamond-encrusted bottles, etc. Anything perceived as confected rather than authentic can reverse the halo, known as the horn effect, potentially undermining the overall brand.

The distance between a halo brand costing thousands and the entry-level expression can be bridged by a ladder for whisky lovers to ascend: Johnny Walker Red, Black, Blue most famously, like Chivas Regal 12, 15, 18.

Such brands invariably began as entry-level bottlings, extending upwards as interest grew. Whether this builds in a microcosm – such as Johnnie Walker's 12-year old Black haloing no-age Red – is certainly possible. But the motivation can also be trading up to explore different flavours and appeal to the consumer's aspirations. And even relatively new distilleries can play the age game, by putting the numbers in context.

"We've been operational for 15 years so don't have whisky that's any older," says Anthony Wills, Managing Director, Kilchoman Distillery. "But everything is relative, so our limited-edition 14 year old has its own particular status, though the greatest halo effect for us is the 100% Islay bottling released annually since 2011, distilling malt cultivated on the farm where the distillery is located on Islay."

So can a distillery's credentials also be enhanced by the way it operates? "I think that is the case," says Wills. "People are more interested in provenance and tradition and our malting floor definitely adds hugely to the appeal of Kilchoman."

Extracurricular achievements, including eco-projects, play a similar role. "Regenerating the Dornoch Firth oyster bed was not conceived as a marketing project," says Caspar MacRae, Marketing & Communications Director, Glenmorangie. "But it can be as important as a prestige bottling, by building the right associations and awareness for core consumers."

Whisky-making needs people as well as marketing of course, and the term 'halo effect,' when coined and defined by American psychologists in the early twentieth century, referred to an attractive person whose appearance inspired confidence. This confidence automatically extended to every aspect of that person.

Does that aura apply to people in today's Scotch industry?

"People like the story and experience of the person behind a whisky," says MacRae, highlighting the key role of master blenders. "Dr.Bill Lumsden's innovation and creativity are a fundamental reason for people's interest in Glenmorangie. Bill absolutely adds to the halo effect."