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Merchistonian Business Breakfast – January 2018

"Diversifying for the next generation"

Presentation by Simon Hannah (88-95),

Managing Director of J.W. Filshill Ltd.


J.W. Filshill Ltd. is a fifth-generation family business (est.1875). Today, it’s a delivered distribution wholesaler. It also runs a franchise network of 175 convenience stores and has an online craft beer and spirit operation.

 It turns out you can teach an old dog new tricks. Even if it’s a fifth-generation family business that’s almost 150 years old. This was a central message in Simon Hannah’s presentation to January’s Merchistonian Business Breakfast.

But before exploring new opportunities, companies should examine their management structures to make sure they’re fit for the future.

Poor succession planning leads to political posturing, infighting and emotional turmoil. Family businesses are more susceptible than most to these problems and so it’s imperative to have the difficult conversations today, so the business can continue to prosper tomorrow.

Having completed these discussions and taken up the reins as managing director, Hannah has evolved the business significantly. 

Sweat your assets

In a business that operates on wafer thin margins it doesn’t take much to turn profit into loss. Therefore J. W. Filshill Ltd. has used its existing assets and skills to create new and higher margin income streams.

The company has an established expertise in warehousing. It stores, manages and distributes over 7,000 product lines, delivering 800,000 boxes to customers every month.  

It has built on this capability and created a platform for craft brewers and distillers to sell their products under a single consolidated brand – The Craft Beer Clan of Scotland.

Exporting Scottish craft beers and spirits lets J.W. Filshill Ltd. sail on the tailwinds created by the malt whisky industry, which has worked so hard to promote brand Scotland. It also gives it access to the support offered by the Scottish Government to help companies achieve ambitious growth targets for the food and drink sector.  

Only three years old, The Craft Beer Clan of Scotland exported 1 million bottles of beer in 2017 and won supermarket listings in the domestic market. It has shown that you can generate accelerated growth from new ventures by tweaking existing capabilities and building on the work of others. As the maxim goes – work smarter, not harder.

Open online   

Despite its commitment to bricks and mortar retail and its 175-strong network of convenience stores, J.W. Filshill Ltd. has built a complimentary online sales business.

It invested in Flavourly an online bottle store and craft beer subscription service. In so doing it has acquired a new online customer base and sales channel. To maximise its investment, J.W. Filshill Ltd. Plans this year to encourage its retailers to refer customers to Flavourly’s online bottle shop if they can’t find what they’re looking for in-store.

In return, store owners get a margin share  of the online business they refer as well as access to online sales data. This information enables them to change in-store product ranges to reflect changing trends and demands specific to their own customer base

In this way, the company has created an integrated online sales channel that compliments rather than cannibalises its business.

Business as a force for social good

J.W. Filshill Ltd. has also shown it’s a business with a social conscience, and it now backs Brewgooder. The social enterprise gives all its profits to charity with the aim of providing access to clean water for people around the world.

The Brewgooder lager is supplied at cost by BrewDog. In backing the social enterprise, J.W Filshill Ltd. has given it access to its online and in-store sales channels, as well as providing the logistical expertise to warehouse and distribute the product.

In 2016 it created access to clean water for 5,000 people and in 2017 / 2018 anticipates that number to be 40,000. The target is 1 million people and beyond…

J.W. Filshill Ltd. proves that old dogs can learn new tricks and do it quickly. When did your business last learn a new trick?

Business takeaways

  • Robust succession planning prevents political posturing, allowing business stakeholders to define their individual roles and work more effectively for the common good 
  • Sweat your assets and expertise to create new and higher margin income streams
  • Online and in-store sales channels can be complimentary 
  • Diversify your business to stay relevant, to retain your competitive edge and to explore growth opportunities  
  • Supporting social enterprise enables companies to become a force for good and to build a more positive brand image

Edward Murray (90-92) from confscribe attended our January Business Breakfast and kindly created the above content for us to share. Hopefully we will see Edward along at our next breakfast.

View Simon's slides here.


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