Growth Strategy

The Group’s growth strategy to achieve sustainable revenue growth and profitability is based on four key pillars:

Developing the membership base and geographic expansion

During the Covid-19 pandemic, the Group, in common with broader trends across the consumer sector, experienced a pronounced shift in consumer preferences towards online shopping. The Directors intend to exploit this structural change by building upon the Group’s existing online sales channels and focusing on digital member recruitment initiatives. Additionally, the Group will look to enhance the membership value proposition of The Scotch Malt Whisky Society in order to increase member retention.

The Directors acknowledge that there is a significantly larger addressable market for the Group’s unique range of premium spirits outside the UK. In recent years, the Group has established operations in key international whisky markets and the Directors will seek to make further investments in high growth or emerging spirits markets.

The Company will also explore opportunities to expand the number of physical SMWS venues, on a selective basis, both in the UK and potentially overseas, provided that the Board is confident of generating an acceptable return on capital invested.

SMWS Members Map
SMWS Website

Enhance e-commerce channels

Much of the Group’s recent growth can be attributed to the success of its online platform. The Directors intend to make further investments in the e-commerce platform in the UK whilst rolling out this proposition to other territories. They also expect to replace the current CRM systems with an upgraded and integrated CRM platform equipped with the tools to facilitate more targeted marketing campaigns. Additionally, by continually developing online content and events, such as virtual tastings, they anticipate improved purchasing experiences and higher levels of member engagement.

Increasing margins and value creation

The Group generated a gross margin (excluding US tariffs) of 63 per cent. in the financial year ended 31 December 2020. The Directors believe that there is scope to improve this through a combination of financial and operational initiatives. Buying greater quantities of younger spirits, which are cheaper than aged stocks, will reduce the input cost per bottle. It is also expected that insourcing elements of the Group’s current supply chain could provide cost effective solutions which will also reduce stock movements. The Group also intends to increase the proportion of sherry cask maturation which the Directors believe is increasingly in demand and will result in higher priced products, thus further enhancing the value creation process.

Value Creation
JG Thomson & Co Logo

New brands

The Directors intend to extend the Company’s addressable market by launching new brands, each of which will be an independent concept with a differentiated product line, with J.G. Thomson expected to be launched shortly. The Company’s successful historical expansion of SMWS provides a blueprint for future growth.