John Dewar & Sons, Ltd.

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John Dewar & Sons, Ltd.

1700 London Road
Glasgow, Lanarkshire, Scotland G32 8XR
United Kingdom
Telephone: (44) 0141-551-4000
Fax: (44) 0141-551-4030
Web site: http://www.dewars.com

Wholly Owned Subsidiary of Bacardi & Company Ltd.
Incorporated: 1846
Employees: 204
Sales: $129.5 million (2006 est.)
NAIC: 312140 Distilleries

John Dewar & Sons Ltd. produces Dewar's White Label, the best-selling blended Scotch whisky in the United States and one of the top brands worldwide. The firm's other offerings include the premium Dewar's 12-Year and Dewar's Signature, five single malt scotches, and two William Lawson blended whiskies. The company is owned by the privately held Bacardi & Company Ltd. of Bermuda.

BEGINNINGS

Dewar's origins date to the mid-19th century. Founder John Dewar was born in 1805 in the small village of Dull, near Aberfeldy, Scotland, where he grew up on a farm. After an apprenticeship as a joiner, he moved in his early 20s to Perth, where he began working for his uncle's wine and spirits wholesaling firm. He became a partner in 1837 but in 1846 decided to go into business on his own and began blending whisky from several different producers to give it a mellower flavor. Dewar was one of the first to sell his beverage in a glass bottle with the brand name embossed on the front, rather than in a ceramic container.

One of Dewar's ten children, John A. Dewar, began working for the firm in 1871, and in 1879 he was made partner at the age of 23. The following year the senior Dewar died, and John A. inherited the business. The son was a skilled blender of whisky as well as a talented businessman, and he began to build up the company his father had founded.

In 1881 Dewar's 17-year-old brother Tommy joined the firm, and in 1885 he was made a partner in John Dewar & Sons. That same year the firm began distribution to London, where whisky had traditionally sold poorly next to spirits like brandy, rum, and gin. Tommy Dewar had a knack for marketing, and though he arrived in town with introductions to only two men, one of whom was dead and the other bankrupt, he made a splash by bringing a kilt-wearing bagpiper to the 1886 London Brewer's Exhibition. To capitalize on its new notoriety and to emphasize the whisky's heritage, the firm soon began using a depiction of a traditionally-clad Scotch Highlander on its labels.

In 1886 Dewar's whisky won a medal at the Edinburgh Exhibition, which was the first of many such awards it would receive over the years, and in 1888 the firm began exclusively supplying top catering firm Spiers and Pond, whose customers included railways, hotels, and music venues.

In 1891 the company was the recipient of some unanticipated free publicity in the United States when the wealthy Scottish steel magnate Andrew Carnegie gave a small keg of Dewar's to President Benjamin Harrison. When he was blasted in the press for not supporting American-made products, the Dewar's name appeared in papers around the country and orders for the firm's whisky began rolling in.

In 1892 Tommy Dewar began a two-year sales trip to 26 countries around the world. The journey resulted in contracts with 32 new sales agents and the publication of Ramble 'Round the Globe, an account of his travels that was spiced with the pithy sayings ("Dewarisms") he was becoming known for.

In 1893 Queen Victoria awarded a Royal Warrant to John Dewar & Sons, which officially recognized the firm as a supplier to the crown, and in 1895 the company established a U.S. office in New York. Three years later Dewar's commissioned the first-ever motion picture advertisement for a beverage, which was produced by the Edison Company and projected onto the roof of a building in New York's Herald Square. A few years later the company would also make films that documented the process of blending its whisky.

ABERFELDY DISTILLERY OPENS IN 1898; WHITE LABEL SCOTCH DEBUTS

Dewar's had traditionally purchased whisky for its blends from other producers, but in 1898 the company opened a distillery of its own in the small village of Aberfeldy. The custom-built facility consisted of a long row of buildings that allowed for continuous distillation, with barley coming in at one end and casks of whisky going out the other. The distillery utilized water from the River Tay and was positioned on a train line to the firm's headquarters in Perth. Soon after it opened the company introduced Dewar's White Label Scotch, which was a blend of ten whiskies with the Aberfeldy variety at its heart, created by renowned whisky blender A. J. Cameron.

In 1900 the increasingly prominent Dewar brothers were both elected to the British Parliament. Tommy, who had begun serving as Sheriff of London in 1897, represented the Conservative party, while brother John was a Liberal. A year later Tommy Dewar was knighted by King Edward VII, who also granted Dewar's its latest royal warrant. (It would receive one from each successive monarch.) Both Dewar brothers would ultimately be granted the status of Lords. The colorful Tommy Dewar, whose observations included statements like "a teetotaller is one who suffers from thirst instead of enjoying it," soon became the third Briton to purchase an automobile.

International expansion continued in the 20th century, with sales offices added in Sydney and Melbourne, Australia, and Calcutta, India in 1902. In 1908 the firm's new office, Dewar House, was opened in London's Haymarket, and three years later the company erected the largest mechanical neon sign in Europe on the Thames embankment. The 80 foot tall advertisement showed the firm's Scotch Highlander mascot "bending an elbow" with a glass of Dewar's.

In 1915 John Dewar & Sons merged with the large whisky-blending firm of James Buchanan to form Buchanan-Dewars. The company's new partner had been founded in London in 1884 and produced the popular Black and White brand.

In 1920 the United States prohibited the sale of alcoholic beverages, which put a damper on sales, but the company continued to grow, and between 1919 and 1923 bought a total of six distilleries to supply whisky for its blends, including facilities in Ord, Parkmore, Pultney, and Aultmore.

MERGER WITH DCL IN 1925

In 1925 Buchanan-Dewars merged with the publicly traded Distillers Company Ltd. (DCL). Created in 1877 by the merger of six distillers, DCL had grown over the next half-century to become Britain's leading spirits conglomerate. Following the subsequent acquisition of the John Walker distilling company (makers of Johnnie Walker scotch), Dewar's parent company would own the three leading blended whisky producers, and it continued to acquire other major names like White Horse Distillers over time.

In 1929 John A. Dewar died, leaving an estate worth some £4.5 million, and less than a year later his younger brother Tommy also passed away, leaving £5 million. The firm had recently recorded profits of more than a million pounds per annum.

COMPANY PERSPECTIVES

Whether you're in the mood for the perfectly balanced blend that "never varies" (Dewar's White Label) or full flavour and smoothness without compromise (Dewar's 12), Dewar's has something truly unique for every discerning Scotch whisky drinker.

The repeal of U.S. prohibition in 1933 returned Dewar's whisky to that major market, but with the start of World War II in late 1939 the British government ordered distilleries to produce only one-third of their previous year's production to conserve barley. The company was forced to lay off its sales force as it rationed orders at home and abroad, and production at the Aberfeldy distillery was later halted for a time. With the war's end in 1945, production began to return to normal levels.

In 1954 the company renamed its aged Victoria Vat brand of scotch Ancestor, which would go on to become one of Dewar's best-known brands. In 1961 new production facilities were opened in Perth, and during the 1960s the firm began to rebuild and expand its Aberfeldy distillery, completing the work in 1972.

In 1966 the company won a Queen's Award for Export Achievement, and in 1969 it began running print advertisements that featured photographs of celebrities under the heading "Dewar's Profiles." Playing off the phonetic spelling of the firm's name ("Doers"), the ads spotlighted their subjects' achievements with black-and-white photographs that featured a small whisky bottle in color.

By the early 1980s some 95 percent of Dewar's output was exported, with about half going to the United States. In the United Kingdom, where sales were dominated by the Bells brand, Dewar's had only a 1-2 percent market share, and in 1982 the firm shut down its internal marketing unit there and turned sales over to the firm of Hedges and Butler, who would sell it in part through 8,000 public houses aligned with Bass.

DEWAR'S BECOMES TOP U.S. WHISKY IN 1986

While Dewar's sales had tripled between 1960 and 1980, U.S. exports had increased fourfold during the same period, and in 1986 Dewar's became the top-selling whisky in the United States. In the fall of that year DCL successor United Distillers was acquired by the Guinness Beverage Group in a hostile takeover, after which the firm's international marketing offices were combined with those of James Buchanan and Company, John Walker and Sons, White Horse Distillers, William Sanderson and Sons, and Pimm's.

In 1987 the Dewar's trademark was secretly transferred from Guinness to Schenley Industries, a U.S.-based spirits distributor owned by Meshuklam Riklis. Schenley had been distributing Dewar's in the United States since 1936, and the whisky accounted for half of that firm's total profits. The company later claimed the move was made to combat lower-priced parallel imports of Dewar's from other countries. Though Riklis (who owned a 5 percent stake in Guinness) had been given the trademark for free, a short time later the brewing giant paid him $480 million to buy it back, along with his distribution network and the right to sell Dewar's in the United States.

In 1996 the company celebrated its 150th anniversary with a special bottling of whisky and the launch of a Web site that featured games based on the life of Tommy Dewar. The company's whisky continued to be the top brand in the United States, accounting for some 1.5 million cases of the 9.4 million total sold there during the year.

DEWAR'S JOINS BACARDI FAMILY IN 1998

In 1998 the proposed merger of Guinness and Grand Metropolitan to form Diageo plc came under scrutiny from U.S. and European trade regulators, and, to clinch the deal, in March John Dewar & Sons was sold to Bacardi & Co. along with the Bombay Sapphire gin brand for a total of $1.4 billion. Dewars' value was put at nearly three-fourths of the total.

KEY DATES

1846:: John Dewar begins blending whisky in Perth, Scotland.
1880:: Ownership of firm passes to sons John A. and Tommy Dewar.
1898:: Aberfeldy distillery opens.
1915:: Merger with whisky blending firm of John Buchanan.
1925:: Distillers Company, Ltd., acquires Buchanan-Dewars.
1942:: Production sharply curtailed during World War II.
1961:: New bottling facility opens in Perth.
1969:: Dewar's Profiles advertising campaign debuts.
1972:: Rebuilding and expansion of Aberfeldy distillery completed.
1986:: Dewar's White Label becomes top-selling whisky in United States.
1986:: Distillers Co. and Dewar acquired by Guinness in hostile takeover.
1998:: Dewar's sold to Bacardi; operations combined with Wm. Lawson Distillers.
1999:: Dewar's brand relaunched with $20 million advertising campaign.
2000:: Bottling plant in Glasgow modernized; visitor's center opens at Aberfeldy.

The firm's new owner had a colorful history of its own, having been founded in 1862 in Cuba and then moving to Bermuda in 1960 after Castro's revolution. Bacardi rum was the world's top selling spirit, and the company was the world's largest family-owned alcoholic beverage maker.

Following the acquisition, John Dewar was combined with earlier Bacardi purchase William Lawson Distillers Ltd. to form John Dewar & Sons, Ltd., which would be based in Glasgow. A smaller distillery, Royal Brackla, was purchased at this time as well and folded into the company. Diageo would bottle Dewar's through mid-2000, after which time this function would be taken over by Bacardi.

The Dewar's name had lost much of its luster in recent years due to Guinness' focus on the Johnnie Walker and B brands, which had stronger global sales. In October 1999 Bacardi relaunched the firm's whisky with new label graphics and new advertising targeted at younger drinkers. The $20 million ad campaign updated the "Dewar's Profiles" series and also used new ads depicting the familiar Scottish Highlander in various modern settings, such as shirtless, with a surfboard and sunglasses.

DEWAR'S 12 INTRODUCED IN 2000

In 2000 the premium Dewar's 12-Year Old Scotch brand was introduced to strong sales, and other deluxe variations followed including a 15-year blended malt. Less than two years after the Bacardi acquisition, the company had gone from ranking eighth in global whisky sales to fifth, with sales of Dewar's rising to 3.5 million cases per year and Lawson's to 1.1 million. In addition to its continuing U.S. sales leadership, Dewar's was also ranked near the top in several other countries including Spain and Greece. The Lawson brand was popular in France, Spain, Portugal, and Mexico.

In the spring of 2000 the firm opened a new £2 million visitor's center at the Aberfeldy Distillery. Dubbed Dewar's World of Whisky, it would play host to some 30,000 visitors per year. The year 2000 also saw completion of the company's £8.5 million refurbishing of a Glasgow bottling plant which had been closed for 13 years. When the Diageo bottling contract ended in June it began packaging Dewar's and Lawson's whiskies.

In late 2000 two shipping containers of Dewar's 12-year-old scotch were stolen from a dock in Scotland. The 24,000 bottles lost were valued at nearly $1 million. Dewar's subsequently joined a coalition of spirits makers that were working to combat similar thefts.

In 2003 the firm's sales declined by 10 percent, from 84.2 million pounds to 75.7 million pounds, due to poor results in France, Spain, and Venezuela. A year later Dewar's signed Scottish actor Sean Connery to appear in ads for Dewar's 12-Year Old Scotch. The 74-year-old former James Bond star would deliver the new slogan, "Some age, others mature."

The company celebrated its 160th anniversary in 2006. Dewar's was operating distilleries in Aberfeldy, Craigellachie, Brackla, Aultmore, and MacDuff to produce whisky for its blends, as well as limited-edition single malt scotches.

More than a century and a half after its namesake began blending whisky in Perth, Scotland, John Dewar & Sons, Ltd. continued to produce fine distilled beverages. The firm's flagship brand, Dewar's White Label, was the best-selling whisky in the United States and also popular in other countries around the world. With the backing and distribution muscle of new owner Bacardi, the company appeared well-positioned for many more years of success.