Considering that the recorded history of Scotch whisky goes back to 1494, surely very little can have happened in the industry during the paltry decade since Loch Fyne Whiskies opened its doors for business in the autumn of 1993, and the first four-page Scotch Whisky Review appeared the following spring.
Not so.
112 distilleries were represented on the first stock list of Loch Fyne Whiskies, and today’s list features malts from 119. Additions include the likes of newcomers Isle of Arran and Speyside, along with independent bottlings of Allt a Bhainne and Braeval, not forgetting ‘collectables’ such as the rare Ladyburn, from Grant’s Girvan grain distillery.
LFW reckon that the only permanent casualty among the malts has been Kinclaith, formerly distilled within the Strathclyde grain distillery, but there have been losses among some of the more bizarre whiskies on offer.
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During the mid-1980s, United Distillers was at the forefront of experimentation as the Scotch whisky industry faced up to the growing taste for white spirits and ‘novelty’ drinks. However, the lives of the new products which they developed tended to be short, and in 1998 Bell’s Red Devil, along with Bell’s ‘pre-mixes’ with coke or Irn Bru, were abandoned.
Red Devil – made using chilli peppers and other assorted spices - was championed by the radical proprietors of LFW after its launch in 1998, but even such heavyweight support failed to prevent its deletion. According to Diageo’s Dr Nick Morgan, “Of all those innovations that was the one that the guys at the distilleries absolutely loved”.
Unfortunately for most whisky-lovers, Loch Dhu lingered for a while before being put out of its misery. Mystery surrounds the exact process that turned an unspectacular but drinkable Speyside whisky – Mannochmore - into a near black, caramel and liquorice-flavoured confection. Nick Norgan is quick to point out when the subject of Loch Dhu is raised that he was not involved in developing it, but that he did have the honour of killing it off. “A misguided novelty”, he says.
During the last decade, whisky production levels have risen and fallen, as has always happened in the industry, but after several years where production slipped below 5m hectolitres per annum due to excessive stocks, this trend has been reversed, and volume is increasing once more as existing stock levels are lowered. One positive effect of the ‘whisky loch’ for consumers in the last few years has been that some companies have used higher percentages of malt in their blends than was previously been the case.
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Although the Scotch Whisky Association rightly complains that whisky is discriminated against in Britain compared to imported drinks, the last decade has been a remarkable one in terms of the way successive governments have treated what was previously perceived as a whisky ‘cash cow’. In 1993 duty on a 70cl bottle of 40% whisky was £5.94. Two years later it rose to £6.18, but in 1998 it fell to £5.87, at which level it has remained to the present day.
During the same period, there has been a general trend within the Scotch whisky industry for rationalisation and consolidation among the major players. They have closed a number of distilleries or sold them on to smaller-scale operators, who have proved that they can be viable, with the right commitment and vision. A number of the buyers have been independent bottlers, which says something about the increasing vigour of the market for more exclusive single malts.
In something like chronological order, these are the major changes in the structure of ownership within the industry during the lifetime of Loch Fyne Whiskies.
Benromach, near Forres, was the first distillery to be revived by an independent bottler, in its case the august Elgin establishment of Gordon & MacPhail, who acquired it from United Distillers in 1993. Five years later the distillery was officially re-opened by HRH Prince Charles.
Morrison Bowmore became wholly-owned by the Japanese giant Suntory in 1994/95, and not long afterwards the permanent closure of Glen Garioch distillery was announced. Anyone who feared the worst from Japanese investment need not have worried, however. Glen Garioch was revived in 1997, and the company has prospered, having the financial clout to market Bowmore extensively. As a result, the Islay malt has now moved up to occupy the number four position in terms of overall volume sales in Scotland, having previously held a market position outside the top dozen single malts.
The northernmost mainland distillery of Pulteney in Wick was sold by Allied Distillers to the dynamic Inver House Distillers in 1995, and some high-profile marketing of house expressions has seen sales of this much underestimated malt soar.
A year later, Inver House acquired Balblair from Allied, and in 1997 Balmenach was purchased from United Distillers. The Airdrie-based company had previously bought the Speyside pair of Knockdhu and Speyburn distilleries.
Having rescued and revitalised these distilleries and their malts, Inver House lost its independence in 2002 when the company was bought for £56 million by Pacific Spirits, a subsidiary of the Thai-owned Great Oriole Group. In July 1996 Macallan was taken over by Highland Distillers, and the following year, Glenmorangie acquired the neglected Islay gem of Ardbeg from Allied, investing heavily in the plant before starting to distil once again.
The £27 billion merger of Guinness and Grand Metropolitan in 1997 brought about the creation of Diageo, the largest drinks company in the world, with the Guinness spirits arm United Distillers and Grand Met’s International Distillers & Vintners operating as United Distillers & Vintners (UDV).
Bacardi bought the Dewar brand name and four distilleries from Diageo in 1998, and in 1999 the Edrington Group acquired Highland Distillers, giving it high-profile single malts such as Macallan and Highland Park, along with the Cutty Sark and Famous Grouse blends. A 30% shareholder in the venture – christened the 1887 Company - was William Grant & Sons of Glenfiddich fame.
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Scotland’s southernmost distillery of Bladnoch was reopened and began to distil on a modest scale in 1999, having been sold by United Distillers to Northern Irish businessman Raymond Armstrong. Following Glenmorangie’s lead in reviving a highly-regarded Islay distillery, the innovative London-based Murray McDavid company acquired the silent Bruichladdich from Whyte & Mackay in 2001, and began to distil again. They have brought a refreshing irreverence and element of ‘outside the box’ thinking to the Scotch whisky industry. New bottlings of Bruichladdich appeared at 10, 15, and 20 years of age, sold at 46% vol and bottled without chill-filtration or the addition of colour.
At the end of 2000, Seagram sold its distilling interests to Diageo and Pernod Ricard, in order to concentrate on its entertainments business. Pernod took control of the Chivas group, instantly becoming a leading Scotch whisky player with a total of 12 distilleries. To add to their existing trio of Edradour, Aberlour and Glenallachie, they acquired Glen Grant, Glenlivet, Strathisla, Longmorn, Benriach, Allt a Bhainne, Braeval and Caperdonich, along with the already mothballed Glen Keith.
Subsequently, the tiny Edradour plant was sold to the independent bottler Signatory Vintage Malt Scotch Whisky, and to nobody’s great surprise, in October 2002 Allt a Bhainne, Braeval, Benriach, and Caperdonich were closed, allegedly only on a temporary basis.
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In 2001, Scotland’s biggest ever management buy-out took place, when US giant Fortune Brands sold its JBB Greater Europe subsidiary. The new company followed the perplexing trend of organisations which ditched perfectly sensible names and acquired new ones with classical, or pseudo-classical associations, becoming ‘Kyndal’.
JBB Greater Europe’s assets included the Whyte & Mackay Group and Invergordon Distillers’ Dalmore, Jura and Fettercairn distilleries, along with the mothballed Tamnavulin and Tullibardine, not to mention the Invergordon grain distillery.
In 2002 Glendronach distillery near Huntly was re-opened by Allied after six years in mothballs, though during the same year, Allied closed its great redbrick Dumbarton grain distillery, investing instead in its Strathclyde grain facility, situated in Glasgow’s Gorbals district.
Allied has been taking a close look at its ‘malt strategy’ of late, and despite LFW having noted on a number of occasions that they have simply given up in despair regarding Allied, who knows what the future may hold? A revival of its house bottling of Tormore, for one thing, while a series of new releases of rare old malts is also being actively considered. Roll out the peated Glenburgie, Glencraig - distilled in ‘Lomond’ stills at Glenburgie distillery prior to 1981, and Mosstowie, made in Lomond stills at Miltonduff!
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Although the trend for ‘boutique’ distilleries and a perplexing variety of single malt expressions with real provenance has been a welcome one, Diageo has also demonstrated in recent years that being enormous does not necessarily mean being unresponsive.
The success of its Classic Malts range has been followed by the Distillers Edition of ‘finished’ expressions of the ‘Classic Six’, and continued releases in the Rare Malts series of cask strength whiskies. Most recently a ‘Super Premium’ series of cask-strength, limited edition expressions of older whiskies, and a ‘Hidden Malts’ range featuring Caol Ila, Glen Elgin, Glen Ord, and Clynelish have hit the marketplace. The bottom line is that these are excellent whiskies presented with integrity. It seems a long way since Loch Dhu and ‘Bells with Bru’, and the company has deservedly been rewarded with two ‘Distiller of the Year’ awards in the last few months.
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Already this year, there has been considerable activity on the distillery-dealing front. Edrington has sold Bunnahabhain on Islay and the Black Bottle brand to Burn Stewart Distillers, though the Scottish Burn Stewart company lost its independence in December 2002, when it was bought by the Trinidad-based conglomerate CL Financial.
Most recently, Edrington has also divested itself of Glengoyne distillery and the Langs brands, selling them to yet another bottler, in the shape of the long-established Ian Macleod & Co, proprietors of the Isle of Skye blend.
A new development in recent years has been the whisky industry’s equivalent of ‘hot desking’. A distilling team from Highland Park in Orkney has been known to head along the road to Scapa and distil for Allied, when stocks of Orkney’s second malt were running low. Similarly, a Springbank team has distilled occasionally at the other surviving Campbeltown distillery of Glen Scotia for owners Glen Catrine Bond.
In addition to the various revivals, one completely new distillery has begun production during the last decade. In 1995 Isle of Arran came on stream, the third new distillery of the decade after Kininvie and Speyside, and at the time of writing, there are more proposed new distilleries in the pipeline than at any time since the 1960s, though which of them will come to fruition is anyone’s guess.
Small-scale projects are currently being promoted in all corners of Scotland. In the east, a distillery may be built at Ladybank in Fife, in the west at Kilchoman on Islay, in the north on Shetland, and in the extreme south-west in Campbeltown, while a number of other similar ventures are being quietly considered behind closed doors.
Glengyle is being re-created by J&A Mitchell & Co Ltd in old distillery buildings close to Springbank in Campbeltown. Hedley Wright and associates hope it will be in production during 2004, helping to revive the great tradition of Campbeltown whiskies, kept alive for so long now by the reputation of Springbank alone.
There is a popular feeling that many distilleries have become much more automated and have lost the human touch during the past few years. However, Nick Morgan, speaking for Diageo, makes the point that the really big changes in staffing levels and practices came at the time when many on-site maltings closed during the 1960s.
What has occurred recently is the development of more flexible manning, the abolition of what Morgan calls “the strict hierarchies of functional staff”, which has led to the stage where most of the production staff can perform many of the functions within the distillery. Changing shift patterns have also helped to improve efficiency.
Morgan points out that where computerisation has occurred, it only performs functions such as opening and closing valves, it does not interfere with the actual processes. Diageo’s mobile warehousing team on Speyside, which visits distilleries to fill casks as and when required, is also given as an example of more efficient use of existing personnel.
So much for companies and distilleries, but what of the whiskies they produce?
New overseas markets have been developed for Scotch whisky in recent years, but as the overall demand for brown spirits has declined, the niche for cask-strength, single malts which have not been chill-filtered has expanded, giving new opportunities for long-established independent bottlers to extend their ranges, and allowing new players such as Jamie Walker’s Adelphi company to enter the fray.
Limited edition, cask strength single cask malts have become prized as the ultimate expression of the whisky-maker’s art, while another significant trend has been the growth of wood-finishing.
Glenmorangie has been among the most enthusiastic pioneers of this art, offering its Ross-shire malt after a period of ‘finishing’ in casks that previously contained fino sherry, port wine, Madeira, claret et al.
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Indeed, cask finishing became something of an obsession in the industry, but Diageo’s Ian Cockburn, commercial director for Classic Malts, perhaps sensed the way the wind is blowing when he noted at the time of the release of Diageo’s new Hidden Malts range that “Our decision now to expose these four [single malts] to a more general release reflects our view that malt aficionados are continuing to develop more sophisticated and discerning tastes, and are perhaps weary of some of the more exotic finishes being put before them. We believe that there is solid and growing demand for distinguished whiskies made and matured with integrity and respect”.
The role of whisky as a ‘collectable’ commodity, and/or as an investment has also been a significant feature of the past decade. Martin Green has been conducting specialist whisky auctions which have attracted growing interest, initially with Christie’s Scotland, and more recently with McTear’s of Glasgow.
The publication of Christie’s and McTear’s catalogues, and publicity associated with the whisky auctions, has given collectors and would-be collectors a valuable source of information and inspiration, and in December of last year, a 62 year old bottle of Dalmore sold at McTear’s for a world record of £25,877.50.
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In 1996 Macallan released a replica of an 1874 expression, and in 2000 established a ‘think tank’ – or ‘think vat?’ - to consider what it could do with its stocks of aged whiskies. The following year an 1861 replica was released, retailing at £99.99, and subsequently, a bewildering range of Macallans selling for up to £4,000 per bottle have been marketed.
Bowmore’s innovations have included the 1964 Bowmore ‘Wood Trilogy’, which consisted of very limited quantites of a trio of Bowmores distilled in 1964 and filled into diverse casks, retailing at just under £1,000 per bottle. Meanwhile, Glenfiddich has launched a 40 year old Rare Collection, selling at £1,000 per bottle, while a 50 year old Balvenie Cask 191 from William Grant’s sister distillery retails for up to £6,000.
Some exclusive releases have shown significant appreciation, with ‘Black Bowmore’ being a particularly good example. In the early days of LFW, bottles were selling for £95, but four years later they were fetching £1,000. Be warned, however, the value of investments can go down as well as up, as outlined in issue 18, where it was pointed out that the 1958 Highland Park initially offered at £990 per bottle is now available for £300 less.
The increased interest in single malt whiskies has been reflected in an increased interest of all aspects of whisky production, and nowhere is this more apparent than at distillery visitor centres, which are now patronised by more than one million people each year.
After acquiring Aberfeldy distillery in Perthshire, Bacardi set about developing a state-of-the-art ‘World of Whisky’ visitor centre, complete with a virtual blending experience and an impressive array of hands-on facilities designed to please members of the public of all ages.
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The ante has always, of course, to be upped by successive ventures, and the latest and most state-of-the-art of them all is the ‘Famous Grouse Experience’, located a few miles from Aberfeldy at Glenturret. Highland Distillers spent £2.5m in order to give its leading blend a suitable nesting site and take the business of visiting a distillery to totally new heights. Quite literally, as it happens, since the German ‘immersive technology’ employed in the ‘House of Grouse’ includes a virtual grouse-eye flight across Scotland, which gives a sensation not dissimilar to a flight simulator. Sick bags not supplied.
Whisky related events have multiplied, with tutored tastings being held all over the world, and in 1998 the Spirit of Speyside Whisky Festival was first staged. Along with the Islay Whisky Festival, it attracts hundreds of whisky-lovers from around the globe, and ‘WhiskyFests’, ‘Expos’ and ‘Whisky Lives’ abound.
The number of whisky books causing the LFW shelves to sag under their combined blend of glossiness and erudition has trebled in the last decade, while the launch of firstly the Malt Advocate in the USA, then of Whisky magazine, has given a valuable platform for exploration of the subject, even if both publications have followed where SWR fearlessly led!
In addition to whisky on the printed page, whisky on the computer screen has also burgeoned with the growth of the internet phenomenon. As one of Scotland’s first specialist outlets, Loch Fyne Whiskies also offered one of the earliest whisky web-sites.
The internet has unquestionably played a part in maintaining the expansion of interest in all aspects of whisky, providing up to the minute information and the opportunity to purchase products which aficionados might not otherwise even know existed.
And there is a lot of material out there, ranging from the fascinating and erudite to the tedious and frankly weird. There are even distillery web-cams showing whisky being made, or more usually showing nothing much at all happening. Entering ‘Scotch whisky’ into the Google search engine brings no fewer than 118,000 results!
Here’s hoping that the next ten years will see as much dynamism in the Scotch whisky industry as the last ten have, even if nothing much can possibly happen in one paltry decade…
