Staying Relevant In The Fast Paced World Of New Whisky Distilleries

Has the 74% increase in Scottish whisky distilleries from 2003 to 2024 fueled industry growth and innovation despite concerns of oversupply?
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Mark Littler contacted Nc’Nean, Ardnahoe and Diageo about the challenges and opportunities for new distilleries in the scotch whisky industry.

In 2013 there were 107 whisky distilleries in Scotland, as of October 2024 the Scotch Whisky Association says there are 150 and counting. That is 43 new distilleries in ten years, with more set to open throughout 2024 and further still in planning and construction. Many of the more recently opened distilleries still have their whisky quietly maturing, waiting for their time to shine. It’s an exciting time for the industry and fans of single malt.

There are also voices erring on the side of caution. The idea being that somehow the increase in both the number of new distilleries and the volume produced by existing distilleries will cause an oversupply and collapse of the industry akin to crashes we’ve seen historically. For me I feel it’s as much about how those new distilleries—and the industry as a whole—stay relevant with its expanding global market.

Interested to hear from the people at the forefront of this growth, I reached out to three distilleries, all new but in different ways, to hear their thoughts. Ardnahoe who released their first single malt whisky earlier this year; Nc’Nean who have been releasing their critically acclaimed single malt since 2020 and who are just launching in the USA; and finally Diageo, the biggest player in the industry, but who also has two “new” distilleries that have just come back online.

The Big Scotch Whisky Boom?

In 2003 there were 85 malt distilleries in Scotland. Today there are 148 and counting, which is a 74% increase over 20 years. Since 2013 total capacity of the industry has increased by just over 110 million liters of pure alcohol (MLPA). However new distilleries account for just 15.04% of that. Other than reopening Brora and Port Ellen in 2021 and 2024—two relatively small distilleries able to produce just 0.8 MLPA and 0.5 MLPA respectively—the industry’s biggest producer, Diageo, hasn’t significantly increased capacity since 2015.

All three spokespersons for the distilleries I contacted agreed that new distilleries were an important part of creating a thriving whisky market. Julie Bramham, Diageo’s Managing Director of Rare and Global Marketing Transformation Director explained, “New Distilleries play a crucial role in driving whisky forward through innovation and fresh ideas. The interest in new distilleries often leads to a greater appreciation for long-established brands, creating a dynamic interplay between the new and those longer established as well as driving tourism across Scotland.”

As Bramham went on to explain, new distilleries aren’t just about new whisky. As well as being important for the UK market in terms of sales, and exports, whisky tourism brings jobs and money to rural areas.

In 2023 Diageo alone welcomed 1.13million visitors across their various sites, including their (as then) latest distillery Brora, which opened in 2021. “This boost in whisky tourism sees great opportunities spread across all areas of Scotland, which benefits communities across the country and sees visitors discover more of its amazing culture, heritage and environment,” Bramham clarified.

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Too Much Of A Good Thing?

Every market is all about balance. Whisky is a thriving industry and even in the face of global economic unease the market as a whole continues to grow thanks to the hard work of the various industry players.

Nc’Nean distillery was founded by Annabel Thomas in 2017 four years after Thomas left her job to build a sustainable whisky distillery in remote Scotland. In 2020 Nc’Nean released their first bottles of whisky at auction. The first bottle sold for £41,000, easily breaking the record for most expensive first release from a new distillery.

Annabel Thomas founded Nc’nean in 2017, it was seven years between leaving her job and Nc’nean releasing their first whisky. Photo: Nc’nean

From an outside perspective, carrying on from that kind of huge success can be as daunting as the first release—we all know there’s nothing more disappointing than a lackluster second LP. But Nc’Nean has gone from strength to strength, with awards, fantastic review scores and now available in 18 countries including the USA. As a new distillery but with an established footing, I wondered if Thomas felt like there had been too many new distilleries opening?

“I think this all depends on how fast the category grows vs. how much capacity expands (and that relationship will be determined partly by how good a job existing and new distilleries do of making scotch relevant to the new consumer). I think if anything, it tells us, as an industry, that we must all be hyper-focused on remaining relevant to the consumer, on creating good value, delicious whiskies that deliver what the consumer wants.”

Sustainability is increasingly being cited as an important consideration for younger drinkers. The same generation who are also turning more toward non-alcoholic options. It is just as important for the industry to address these new expectations of future consumers, because they will determine the industry’s capacity to cope with new distilleries.

New Scotch Distilleries

The reality of being new to the scotch whisky industry is the need for patience, as scotch must be matured for at least three years. The Ardnahoe distillery produced its first whisky in 2018 and after close monitoring they felt this year was when the spirit finally reached the point they were happy with. 

While 2024 may have seen the inaugural release for Ardnahoe, the team behind the new distillery have been part of the whisky industry since 1949 and have been independent bottlers since the 1990s. The dream of Ardnahoe came from the founder’s desire to create their take on the classic Islay whisky, and that came through when I asked them about how they plan their releases.

“With Ardnahoe we start with the aim to represent the character of the spirit – fruity characteristics in combination with Islay peat smoke,” explained Andrew Laing, Export Director at Hunter Laing & Co. “We then look at what vattings and presentations are the best ways of creating that. Should there be more bourbon or refill or sherry cask influence, should the whisky be bottled at 50% or cask strength?”

Ardnahoe wanted to create their own take on the classic Islay style of scotch, part of that is becoming the first distillery in the region to use worm tubs. Photo: Ardnahoe

It’s a delicate balance of time, taste and the need to generate returns on the million pound investments required to build a new distillery from scratch. The dream of every new distillery of course is their own distinctive place in the billion pound global scotch whisky industry. “Eventually we expect to have a small range of Ardnahoe expressions, each different in their own right but all clearly “Ardnahoe” in character and spirit.”

Something Old And Something New

For Diageo 2024 is a poignant year as the first casks were filled at their new/old distillery Port Ellen. While at the equally new/old Brora distillery their first spirit has become officially classed as whisky after three years in the cask. Brora and Port Ellen are interesting from the perspective of new distilleries because they are rejuvenations of well known and well-loved distilleries that were closed in the 1980s. After their closure both went on to become icons in the single malt market and Diageo has invested heavily to bring the historic sites back into production.

I’m sure the restrictions to adhere to something old can be both positive and negative. After all Diageo are working with established brands, which gives them the surety to invest millions into what are essentially brand new, replica distilleries. It does also mean more expectations in terms of final taste compared to those new distilleries that are creating something completely original. But equally having those well-aged stock available to guide the process can act as an incredible springboard.

“The most important thing for us whilst waiting for the whisky to reach the point of its first release was maintaining a steadfast commitment to quality and tradition. In the cases of Brora and Port Ellen, we have the incredible quality of historic stocks as our guiding light,” explained Bramham when I asked about their process for creating first and subsequent new expressions.

“For Brora, this has meant meticulously recreating the whisky-making process step by step, drawing on the expertise passed down through generations of distillers. For Port Ellen, our focus was on both recreating the classic expressions and innovating with our experimental stills. Our ten-part spirit safe allows us to chart the Atlas of Smoke, blending tradition with modern techniques to push the boundaries of what Port Ellen can be. 

Brora is one of two distilleries reopened by Diageo recently. They are looking to honor the old and embrace something new. Photo: Diageo

“Throughout this journey, our primary goal has always been to ensure that our releases live up to the legendary reputations of these historic distilleries, providing whisky enthusiasts with products of unparalleled quality and depth.”

When you are the largest producer of whisky in Scotland it is easy to find money for innovations, but also necessary. So perhaps their ten part spirit safe, six-part roller mill and onsite whisky laboratory at Port Ellen will help them perfectly recreate the traditional Port Ellen style loved by all. But it will also allow Diageo as a group to push boundaries and keep creating the best scotch whisky they can. Ultimately that benefits the industry as a whole and in turn creates the space and opportunities for new brands to develop and flourish.

The Future Waits To Be Written

I think it’s fair to conclude that from the position of the whisky producers themselves, new distilleries are not an issue. Quite the opposite.

This is reflected in the SWA export results for 2024. The industry now contributes more than $9billion to the UK economy. The rest of the SWA data shows an evolving market for sure, but also one that is still strong and growing compared to pre-pandemic levels.

Diageo spoke to me for this article from the position of owners of new distilleries, but they are also one of the largest drink’s producers in the world. The nature of the industry and capitalism as a whole is the need for continued growth and expansion, which is partly achieved through buying smaller emerging brands once they have proven themselves. If new distilleries do not try and do not continue to innovate, then the risk of stagnation is as significant as unfounded growth.

Will all the new distilleries under development and those opening over the preceding ten years, survive? Probably not, but that is the nature of creating a new business; some work, and some do not. I’d argue not trying at all has the potential to stunt and harm the industry far more than failure of a few ventures.

This article was originally written by me for Forbes.com

Mark Littler

Mark Littler is the owner and editor in chief of the Whiskey Wash. He is also the owner of Mark Littler LTD, a prominent whisky and antiques brokerage service in the United Kingdom. Mark is a well known voice in the whisky industry and has a regular column at Forbes.com and has a popular YouTube channel devoted to everything whisky.

Mark completed the purchase of The Whiskey Wash in late 2023.

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