Whisky News, June 2011
by Gavin D Smith
The largest player in the Scotch whisky industry has sent out a clear signal that it expects growth to continue on a global basis for the foreseeable future with its announcement of an additional £1 billion of investment over the next five years.
Despite constructing a major new distillery at Roseisle, near Elgin, which opened in 2009, and adding extra capacity to several of its existing distilleries, Diageo intends to build a second distillery in an as yet unidentified location, on a similar scale to Roseisle, which boasts a capacity of 12.5 million litres per annum. It will also expand other distilleries in its portfolio, and in excess of 100 permanent jobs will be created in Scotland as a result of the programme.
Detailed plans will also be developed for a second new distillery, which will be built if global demand for Scotch is sustained at expected levels. The company also plans to invest in substantial new warehousing capacity to house the millions of additional litres of Scotch whisky which the distillation investment will produce.
During the last five years Diageo has reported 50 per cent growth in net sales of its Scotch brands, with total net sales approaching £3 billion in the current financial year. Scotch represented 23 per cent of Diageo's volume, 27 per cent of net sales and a third of gross profit in the financial year 2011. In the first half of the financial year 2012, Diageo's Scotch category saw eight per cent volume growth and 14 per cent net sales growth.
According to Diageo Chief Executive Paul Walsh, "This is a pivotal moment in the development of the Scotch whisky category for Diageo. Over recent years our brands have achieved remarkable, sustained global growth. Scotch whisky is Scotland's most celebrated manufactured export, led by brands like Johnnie Walker, resonating with consumers from Boston to Beijing.
"We expect that success to continue, particularly in the high growth markets around the world, which is why we are announcing this major investment in Scotch whisky production. Scotch whisky is a significant
manufacturing export industry in the United Kingdom, driving domestic investment and job creation through our success in exporting to high growth markets around the world. We look forward to working with both the
UK and Scottish Governments to realise the full potential of our investment plan, and to continue growing global Scotch exports."
And Chivas too
The world's second-largest Scotch whisky distiller, Chivas Brothers, clearly shares Diageo's optimism for the future, announcing what the firm describes as "A number of investments to underline its commitment to beating category value growth and achieving high single to double digit value growth."
According to Christian Porta, Chairman and CEO of Chivas Brothers, "We are committed to a capital expenditure of £40 million annually to further increase our distillation capacity and production facilities. This investment, allied to strong market growth, a continued commitment to innovation and the best suited portfolio to target the most profitable opportunities, will provide the basis for future value growth for our company."
Malt whisky distillation capacity will be increased, with expansions at Glenallachie, Glentauchers, Tormore and Longmorn distilleries, and the re-opening of Glen Keith distillery in April 2013, resulting in a 25 per cent capacity rise during 2012/13. New heat recovery technology is also being introduced to make stills 25 per cent more efficient.
Additionally, a new bottling hall will open in Paisley this summer, which will increase the emphasis on hand-bottling for prestige and ultra-prestige editions such as Chivas Regal 25, the Royal Salute range and high-end, limited editions of The Glenlivet single malt and Ballantine's blends.
This capital investment in production facilities follows on from a number of major projects over recent years, including the re-opening of Allt-a-Bhainne and Braeval distilleries, expansions at Glenburgie and
The Glenlivet distilleries, and a series of investments in bottling operations at its sites in Paisley and Dumbarton. Chivas Brothers will also continue to invest in its inventory, which already contains more
than six million casks. This includes increasing annual purchases of high quality Bourbon and sherry casks.
Glenglassaugh in the Black
Compared to the Diageos and Chivas Brothers of this world, Glenglassaugh is a veritable minnow, but the Portsoy distillery, owned by The Scaent Group, also has positive news to offer. Just three years after being restored to working order, following more than two decades of silence in the hands of The Edrington Group, Glenglassaugh has reported a turnover of £1 million in 2011 and a £100,000 profit.
Glenglassaugh distillery's Managing Director Stuart Nickerson says that "It had been expected that it would take at least seven years and possibly as much as 10 years for Glenglassaugh to turn a profit. That estimate was based on the performance of other distilleries which had recommenced production after a period of mothballing. However, none of the models we compared ourselves with had such a long gap between closing and reopening as Glenglassaugh, so that in itself makes the achievement even more surprising and exceptional.
"There are two distinct areas which, we believe, have enabled this to happen. The first is the extent of overseas sales and the fact that we are selling into 25 different countries. Glenglassaugh already had a loyal following in parts of Europe, but we built on that by working with specialist importers in our target markets. The second key to our success has been selling small casks - octaves - to both corporate and private customers. The barrels are filled with spirit and left to mature for up to seven years. Customers range from international whisky clubs to brides looking for a special wedding present for their husband-to-be. I don't know of any other distillery selling new-make spirit in this way and it has proved to be very, very good business for us."
Most recently, Glenglassaugh has released the aptly-named Revival expression, described by Nickerson as "The first whisky from the refurbished distillery. It is a mix of refill casks and first-fill casks which are then finished for six months in first-fill Oloroso sherry casks. We have plans for a second, limited edition young whisky, one that has had a different maturation profile and so will be a contrast to Revival. This will be followed in early 2013 by a peated version of Revival."
For more details of Glenglassaugh and its products visit www.glenglassaugh.com.
Ulster Drams (1)
Two new distilleries are planned for Northern Ireland, where currently only Bushmills operates, though the country has a long and distinguished whiskey-making heritage.
Peter Lavery, chief executive of the Belfast Distillery Company which produces brands such as Titanic and Danny Boy whiskey, intends to spend £5 million converting 'A' Wing of the historic, 19th century Crumlin Road Prison in North Belfast into a boutique distillery to provide spirit for the company's existing brands. There will also be a visitor centre, complete with tasting room, bar, restaurant and a retail outlet.
The prison closed in 1996 and is now the centre of a regeneration programme. According to Laverty, a Belfast man, the building was well suited to its potential new role, "Without compromise to the character or the architectural and historic interest" of the building." He notes that when in production, the new distillery will be the first in Belfast for more than three-quarters of a century, and will "Bring back to prominence an industry with which the city has long historical associations".
Given the amount of alcohol ingeniously and covertly made in Ireland's prisons over the years, it seems unlikely that this will be the first time spirit has flowed in 'A' Wing of what has long been known locally
as 'The Crum.'
Ulster Drams (2)
Meanwhile, Northern Ireland's second city of Londonderry is also getting in on the new distillery act, with the company that produces St Brendan's cream liqueur having applied for planning consent to create a £10 million industrial complex on the outskirts of the Waterside area of the city. Niche Drinks also wants to convert its existing plant, a former dairy on Rossdowney Road into a supermarket site.
In addition to St Brendan's Irish Cream, Niche Drinks produces other Irish cream liqueurs and ready-made cocktail drinks, with clients including Marks & Spencer, Sainsbury's, Tesco, Aldi and Asda in the UK and Ireland.
The opening of Niche Drinks' new distillery will revive the tradition of whiskey-making in Londonderry, which thrived during the latter years of the 19th century and the early years of the 20th, with Watts Distillery in Abbey Street once being the largest distillery in Ireland.
Noting that as well as producing spirit for use in the firm's range of liqueurs in the planned facility, a new brand of Irish whiskey might be developed in time. Niche Drinks' Managing director Ciaran Mulgrew says that "This area was the leading light in Irish whiskey production well into the early 20th century and we want to revive that tradition and create more indigenous jobs."
The announcement of such investment in two new Northern Irish distilling plants follows William Grant & Sons Ltd's announcement that it is to create a new Tullamore Dew distillery south of the border, on the outskirts of the eponymous County Offaly town.
New Macallan Snapper
Following successful collaborations with Rankin and Albert Watson, The Macallan has commissioned Annie Leibovitz as its third 'Master of Photography.' A Macallan spokesperson says that "The Macallan Masters of Photography: Annie Leibovitz Edition sees Leibovitz bring to life the essence of the brand through her unique photographer's eye, with renowned Scottish actor Kevin McKidd cast in the role of leading man.
"This year's limited edition, The Macallan Masters of Photography: Annie Leibovitz Edition, comprises 1,000 bottles of which there are four different single malt expressions crafted to reflect the mood of the signed Annie Leibovitz print that each is paired with. Shot against four dramatic backdrops in and around New York City, Annie Leibovitz captures the brilliance of a moment where everything comes together, showcasing the stature of whisky as an icon of taste and masculinity."
Leibovitz adds that "I am the first colour photographer chosen by The Macallan for its Master of Photography series; prior to this I hadn't realised how complicated and deep the distilling process is. That warmth and richness is what I tried to bring to the photographs. Kevin McKidd drove the imagery. Where Kevin comes from and his rugged good looks are what the photographs are all about. It wasn't casting, it's authentic."
Kevin McKidd, star of US TV drama Grey's Anatomy and cult film Trainspotting was born in Elgin, just a few miles from The Macallan distillery, where he even worked for a time as a young man. He says "This project is very special to me. Having worked at The Macallan distillery in my youth I remain a Macallan drinker to this day, so to be asked by The Macallan to be part of this campaign was a huge honour. Annie Leibovitz is a living legend so to be photographed by her is a once in a lifetime experience."
Further information about the project, and specific details of the four single casks of The Macallan chosen for it, visit www.themastersofphotography.com
After whisky and cigars, whisky and chocolate and whisky and Parmesan cheese (thank you, Glen Garioch) the latest such hot pairing is whisky and bread.
Word reaches us from Maxxium UK that the distributor is to host a unique series of Maker's Mark Bourbon and bread tastings "To demonstrate the flavour profile of premium handcrafted Bourbon Maker's Mark and its smooth characteristics that make it ideal for mixing in cocktails."
The Maxxium spokesperson continues "Inspired by the original recipe development process in the 1950s, 'Maker's Mark Born and Bread' will showcase the Bourbon's smooth flavour, derived from its unique recipe, using soft, red, winter wheat rather than traditional rye.
"Set in a 1950s style kitchen, mixxit manager and mixxologist, Patsy Christie will host sessions at Imbibe Live on 3-4 July, tasting different kinds of bread alongside Maker's Mark to demonstrate its soft and distinctive flavour. The sessions will explain how, post-prohibition in 1953, Bill Samuels dramatically burned the family's Bourbon recipe and through bread-making, using different combinations of flour, went on to conceive the Maker's Mark recipe. 'Maker's Mark Born and Bread' will also be showcased at Taste of London from 21-24 June."
Here at whisky-pages we like to keep things simple when it comes to pairings, and usually opt for a Rothman's King Size with our 50-year-old Glenfarclas and some of those nice Dairylea triangles with a dram or two
of Glenmorangie Nadurra…