16.07.2024
How
How the Scotch whisky industry went from collapse to boom
New distilleries are popping up and old ones are reopening and modernizing; some vintages are going for £10,000 a bottle. It’s a new golden age for scotch
On the eighth floor of the Port of Leith distillery, the latest chapter in the story of the boom and bust of Scotch whisky is being built. This week, elevators are being installed at what will soon become the UK’s only vertical whisky distillery. The copper stills were supposed to come from Elgin, but this team is used to delays, just as whisky makers wait for their spirits to mature. “No one has ever built a building like this before,” says Port of Leith co-owner Jan Stirling.
If you’re looking for a symbol of the rise of the Scotch whisky industry, this bold black column rising 40 meters into the sky above the historic port in north Edinburgh is it. It took four years and £13.5 million to build the distillery, with all the funds coming from individual private investors. In the meantime, Britain has left the EU (many of the largest exporting countries for Scotch whisky) and we have witnessed a pandemic, the worst cost of living crisis in a generation, and an energy crisis that has hit the UK harder than anywhere else in the world. Western Europe. And whisky takes a huge amount of energy to make. Still, the spirit flows. “As Britain’s economy falters,” read a recent headline in the New York Times, “one sector is booming: whisky.
“It’s a really exciting time,” says Stirling. “We see ourselves as part of a new wave.” In 2012, when he and his flatmate (and now co-owner of Port of Leith) Paddy Fletcher started “tinkering with a copper still” in their garden, Edinburgh hadn’t had a distillery in almost a century. Now Port of Leith is the third.
At the moment, like many of the new wave distillers in Scotland, Port of Leith produces gin. So far, it has exported to 24 countries, including Germany, China, the United States, New Zealand, Australia, and Japan. “But my God,” says Stirling, “everyone is dying for our whiskey. Once Brexit happened, we couldn’t get our bottles into the country, then we couldn’t get them out. It was a real nightmare, but in general, the weak pound almost compensated for these losses. This summer, we’ve had crowds of Americans visit us.”
About 60 miles to the northwest in Perthshire is Glenturret, Scotland’s oldest operating distillery, founded in 1763. In 2019, it was acquired by French glassmaker Lalique and Swiss entrepreneur Hansjörg Wyss. This magnificent old place is now full of crystal chandeliers and blackened barrels, as well as a Michelin-starred restaurant. Here, overlooking the river from which the whisky’s water comes, the revamped Glenturret – now housed in 70 ml Art Deco Lalique glass bottles – is dispersed throughout the 15-course menu like the finest mist of Parisian perfume.
“There have been so many twists and turns in Glenturret’s history that have kept it going,” says managing director John Laurie. Glenturret was the last distillery in Scotland to hand-mix barley in hot water to leach out the sugar, a process known as mashing. “We liked to protect that tradition, but we were using three times as much natural gas,” he says, stroking his newly installed mash pot as if it were a dog. “We changed it to a carbon footprint. If we had known the energy crisis was going to happen, we would have had more reason to do it.”
Is this a new golden age for whisky? “Oh, definitely,” says Laurie. “Since the relaunch, we have exported the brand to 11 markets around the world. We release new whiskies every year, and every year we sell out.” At the bar, he points to a showy decanter illuminated like a star. “This is a Lalique crystal with 33-year-old Glenturret,” he says. “We sell it for £10,000 a bottle. We’ve just launched in Singapore and have had incredible orders because of the weak pound.”
Meanwhile, distilleries continue to pop up or reopen across the land. In the last six years alone, 20 have opened, bringing the total number in Scotland to 141. In 2021, whisky exports grew by almost 20%.
During the 1983 “Lake Whisky Crash”, overproduction led to a surplus of single malt wine and dozens of distilleries were mothballed. Many are now reopening. “An industry professional recently said we are headed for the next whiskey lake,” says Laurie, “and we are in dangerous territory because of overproduction and energy prices. He mentioned all the distilleries opening up in China and India; it feels like our major markets are producing their own whisky.” Laurie disagrees. “There are 122 distilleries in Japan, and it’s still one of our strongest markets. You cannot replace single malt scotch. It’s the gold standard, and it can only be produced in Scotland.” For whisky broker Blair Bowman: “Everyone is just riding this wave and you have to enjoy it while it lasts. Historically, the whisky industry is cyclical and has gone through a series of booms and busts.”
Perhaps there is no greater symbol of the whisky rebound than Johnnie Walker’s Princes Street – not a distillery, but an “experience” spread over eight floors of a magnificent Art Deco building on Scotland’s main shopping street. In 2018, Diageo – the biggest player in scotch – invested a whopping £185 million in its distilleries, which will be 30 when Port Ellen on Islay reopens later this year. The vast majority has been poured into this building, which has welcomed 350,000 people from 112 countries through its doors since opening in September 2021. On the “fascinating journey of taste” tour I joined, my group includes tourists from China, Japan, the Netherlands, Canada and Singapore.
Elsewhere, the boom is expressing itself in less obviously dramatic ways. At InchDairnie, built on a new site in Glenrothes, Fife, the focus is on exploring raw materials, fermentation and method, as opposed to maturation, in whisky production. “Futuristic” is the word that comes up whenever someone mentions InchDairnie. One distiller calls it “a bunch of rocket scientists”.
“We respect tradition, but we don’t abandon it,” says managing director Ian Palmer, who has been in the industry for four decades. “We are a modern distillery with no heritage. That gives us a lot of freedom.” Next year’s first release of InchDairnie, he says, will be an innovative five-year-old rye whisky, “true to Scottish tradition. And we’re buying a hydrogen boiler that will run on natural gas, but as soon as hydrogen becomes available, we’ll make the switch.”
Back in Port of Leith, we head downstairs so Stirling can show me the production floors where the whisky will “flow down the building”, eventually reaching the distillers. Looking outside, he points down the East Lothian coast. In the foreground is the thriving shore of Leith, where its history as the capital of the Scottish whisky industry is written in customs warehouses converted into apartments and creative businesses. This is where the vast majority of Scotch whisky – brands such as Vat 69, Bailie Nicol Jarvie, Hankey Bannister, Glenmorangie and Highland Queen – was blended, bottled, matured and shipped out into the world. “We are trying to buy some of those old bottles produced here to sell at the distillery,” he says. “We are looking forward, but we really like the heritage. That’s why we’re here.”