Spirit producers raise a glass to sales growth and further distillery openings in Scotland
An increase in demand for craft gins and single malt whiskies is behind a rise in distillery openings, writes Chris Mccall
The number of new distilleries opening in Scotland continued to climb last year as spirit producers battle to try and deal with capacity restraints, an industry survey has revealed.
The sector is benefiting from a global trend among consumers to spend money on prestige drinks rather than ubiquitous globalised drinks brands, a report for accountants UHY Hacker Young Group found.
Of the 39 distilleries which opened their doors across the UK in 2017, 18 of them were in Scotland, producing high-end gins, rums and whiskies.
Scotch whisky remains one of Scotland’s most successful exports, but the long lead times for increased whisky production means more are required to meet growing demand.
Among the new openings in 2017 was the Clydeside Distillery, which is centred around a former Victorian pumphouse at Queen’s Dock in Glasgow.
With a capcity of 500,000 litres, it boasts a 1.5 ton mash tun, eight stainless steel washbacks, a 7,500 lire wash still and a 5,000 litre spirit still. Production began in autumn 2017 with the aim of producing a light, Lowland-style whisky.
Among other openings last year was the Isle of Raasay distillery, to the east of Skye, which boasts spectacular views across the water and a capacity of 200,000 litres.
“The explosive success of the UK’S craft spirits industry has allowed boutique brands to sell at higher margins,” said James Simmonds, partner at UHY Hacker Young.
“The sales growth of craft spirits is something that big drinks companies, who are suffering from low single digit sales growth, are looking at enviously.”
“More craft gin, rum and whisky distillers are riding the wave of the mixed drinks and cocktails trend, particularly among young people. Many innovative new distillers are experimenting in new and adventurous ways of producing these spirits.
“Craft and artisan gin in particular has seen surges in consumer demand, and new distillers are taking advantage of the relatively quick production process to cash in on the trend.”
There are already more than 100 distilleries licensed to produce Scotland’s national drink, ranging from commercial giants to tiny craft operations.
That figure is expected to rise by at least 10 in 2018, with several major projects set for completion.
The spate of openings reflects the growing confidence in the Scotch whisky sector, which accounts for a quarter of the UK’S total food and drink exports with 99 million cases being shipped overseas annually – or 38 bottles every second.
Industry figures say the Scotch industry is currently enjoying levels of investment last seen in the late 19th century.
2018 is expected to be the year that malt distilling returns to Edinburgh for the first time in almost a century. The Holyrood Park distillery is due to open later this year, housed in a former engine shed in the St Leonard’s district of the capital.
In June last year the firm launched a £5.5 million funding drive to help fund the balance of its ambition to create a distillery and visitor attraction, spanning 11,969 sq ft, in the historic building, which lies a short distance from Holyrood Park.
A joint development by David Robertson, former master distiller for The Macallan, and Rob and Kelly Carpenter, the new distillery will be the city’s first since the nearby Glen Sciennes was closed in 1925.
Further east along the Forth, distilling is also set to return to the Falkirk district. The long-awaited Falkirk Distillery is expected to open at a custom-built site near Polmont.