With the public announcement today of a potential new micro distillery on the whisky isle of Islay, See article here one of three potentially in the pipeline and maybe fifty or so in Scotland.
We perhaps need to look at how all these potential distilleries are going to sell their product. Generally these businesses will be producing up to 500,000 litres per annum. On this basis they won’t be able to supply the bulk trade or travel trade, so this leaves specialist whisky bars and retailers. If each retailer took just one line from each distillery then they could potentially have to shed fifty lines to make shelf space, that is shed fifty lines that they know already sells in their stores. Of course that won’t happen, no level headed retailer would take that risk.
Of course local bars/retailers to the distillery will take the product out of local loyalty, but say would a small retailer based in Devon take a line from a distillery in the Lowlands? especially when their will be so much choice. With most of these new businesses are just that, they have no trade contacts, no trade history so I believe they face a tough sell to get their product on shelves.
Now there will always be a bit of hype once a craft distilleries first ten year old is released but a year or so down the line and there will be another new kid on the block stealing the PR and therefore shelf space.
Yes all these new distilleries will no doubt have a cafe and shop but there is no way that the in house shop is going to shift enough stock. Hunter Laing, behind todays announcement are in a slightly better position as they are already trading with retailers through their bottling operations but other newcomers such as the other two Islay projects, Annandale, The Lakes, Kingsbarns and Ardnamurchan and many others aren’t so fortunate and will have to work much harder in getting their whisky out there.
Also to be considered then are the new operators from outside of the UK, the sort of “new world” whiskies which are growing fast in reputation. The next ten years will be interesting times in the whisky market place.
Below is the site of (top right) Ardnahoe distillery subject to planning.