PHIL PARNELL, chief executive of Drambuie, is predicting the group will next year reverse a steady 30-year decline in volumes, helped in part by the huge success of video-sharing website YouTube.

His forecast came as the Broxburn-based drinks company posted a strong rise in operating profit over its latest year.

In the year to June 30, Drambuie booked a near-50 per cent jump in underlying profit to £4.04 million, from £2.67m previously, on sales that were flat at £24.15m.

Since Mr Parnell - who previously spent 19 years with what is now Diageo - took the helm in 2005, the business has tried to pitch the liqueur drink at the 28-35 market to help steer it away from a heavy dependence on its traditional “after dinner” audience.

“The after-dinner liqueur market has been steadily declining since the mid-70s. We’ve managed to stop the slide, which is a pretty significant step,” said Mr Parnell.

He admits Drambuie was slow off the mark when a wider and more versatile range of mixed drinks, including spirits, took off in the mid-1990s, leaving the firm in “catch-up”.

Since his arrival, Mr Parnell has used devices such as slicker marketing and the “Drambuie Pursuit” challenge - where teams race each other over the rugged Highland terrain tracing the footsteps of the flight of Bonnie Prince Charlie - to help reach a younger market.

Linking the drink with this sense of adventure and the area where the drink has its roots is a key strand of Drambuie’s brand rejuvenation project.

“A lot of the teams that are entering are recording their adventures and putting them on YouTube,” explained Mr Parnell, who believes the modern medium is much more in tune with younger lifestyles and therefore potentially more effective in spreading the word on Drambuie than television advertising.

“We still have a lot of older consumers but the brand needs to be refreshed as generations move on. We’re competing with the fashion for longer drinks such as gin and tonic or bourbon and cola. The response to our change has been fantastic. In the UK, the rejection rate when younger people are introduced to the brand has halved and the rate of prospective purchase has doubled.”

However, as Drambuie is a global brand distributed in 200 countries around the world, Mr Parnell said the turnaround had to be on a market-by-market basis, which would take time.

“We’re seeing the decline stemmed and by 2008 we’d be looking for volume growth of around three per cent, with a little bit more by 2010,” he said.

“No brand has the right to be successful. It has to be right for changing consumer tastes.

“We missed the boat a bit but we’re starting to see some progress.”

Drambuie chairman Richard Stone said: “Our vision remains to be a highly focused, international brand marketing and distribution company, with a clear strategy.”

Source: Jim Stanton

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