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The rise of the independents

A couple of years ago there was a spate of takeovers of Scottish distilleries and independent buyouts. What happened to them? Ian Buxton investigates
By Ian Buxton
Once upon a time, almost all Scotch whisky was made by independent companies. Then, over time, the twin pressures of economics and competition forced rationalisation and, one by one, the independent companies merged, amalgamated or were taken over.They, in their turn, were swallowed by other corporations and so the worldwide drinks giants were born. Globalisation brought us Diageo, and Bacardi (a rum distiller controlling some really fine Scotches), and Pernod Ricard (a pastis company with a superb Scotch portfolio).All very well in its way, and it doesn’t do to be parochial. As Aeneas MacDonald observed in 1930, only half in lament, “whisky now belongs not to the Scots but to the world at large.”But if your Scotch whisky business is run from Amsterdam, your heart lives in exile from Cuba or your soul is French, then I can be forgiven for an occasionally sentimental and romantic backward glance to a supposed golden age.However, the xenophobes amongst us can take heart: the independents are on the move and they march (mostly) to the skirl of the pipes.In the last few years, rationalisation amongst the global giants has led to the disposal of some properties they regarded as marginal and the resurgence of the independent distiller has begun.Among the recent changes have been Pernod’s disposal of Edradour to Signatory; Edrington’s sale of Glengoyne and Bunnahabhain (to the Peter J Russell Group and Burn Stewart respectively) and Allied’s transfer of Glencadam to Angus Dundee. In addition, Pernod has recently sold Benriach and other disposals are rumoured to be in the wind.However, as my first four have had a couple of years to settle down I have been talking to their new owners to find out how they see the future. Not surprisingly, they are delighted with their new purchases and, in their different ways, are all moving smartly on.First, Glencadam. This small and frankly obscure distillery is located right in the heart of Brechin and is now the last remaining operation in the county of Angus. Founded in 1825 it was operated for many years by Allied and its output was used exclusively for blending in brands such as Stewart’s Cream of the Barley.Allied mothballed the site in June 2000, laying off all but one of the staff. Enter Angus Dundee plc, a privately-owned family firm who produces mainly for the own label and customers-own-brand market. Also owning Tomintoul it already had a distilling heritage and an established, if low-profile, business.Angus Dundee purchased Glencadam in May 2003. As its distilleries director Robert Fleming was proud to tell me, by September it had recruited and trained new staff, refurbished the distillery and commenced production.Now Glencadam is running at full output, its single pair of stills providing around 1.4 million litres of new make a year. With seven day operation, the distillery has had to take on more staff and invest in new washbacks and an increased filling store.There’s a purposeful air in the place now and Angus Dundee is very excited to be launching Glencadam as a 15 year old single malt.“We’re particularly proud that this is the first bottling of Glencadam ever,” says Robert Fleming, “and we have very high hopes of developing this as a brand in its own right.”Plans for a visitor centre have been shelved but visitors can be accommodated, provided a prior arrangement has been made. Phone in advance for a rare chance to see an unusual and interesting small distillery, working at full steam. Glengoyne is perhaps better known.Former owners Edrington lavished investment on the distillery, which lies in its own stunningly attractive glen just outside Glasgow. Like Angus Dundee, proud new owner Leonard Russell of Ian Macleod Distillers comes with a family heritage, strong whisky credentials and an existing blending business.Glengoyne was, of course, already in production but, as Leonard Russell recalls, “when we bought it we didn’t get an instruction book so we asked everyone to stay on and just continue to do what they already did so well.”But Glengoyne isn’t standing still. The new manager Robbie Hughes has ensured that the latest environmental practices on effluent treatment have been adopted, whilst maintaining time-honoured practice elsewhere in the distillery.The pace of work has picked up, though, with production doubling since the April 2003 takeover. Glengoyne is used in Langs Supreme and now in Ian Macleod’s wellknown Isle of Skye blend. However, the single malt will get even more attention in the future, with Leonard Russell’s stated ambition to position Glengoyne as an alternative to peaty malts.“Ultimately, we see Glengoyne as one of the top 10 malts globally,” he claims. “There is no Krug amongst single malts, and that’s where we shall be in 10 years time.”The first step to that ambitious goal has been the concentration of the range to three age variants – 10, 17 and 21 years old – and the launch of a 12 years old cask strength version. Other plans are under wraps – more in the next issue of this magazine. Glengoyne also had a well-established visitor operation and that continues under the new owners.As Leonard Russell told me, “once you visit, you love the place, the atmosphere and the enthusiasm of the people.”If enthusiasm is any measure, he was certainly bubbling over when we met. The mood was also upbeat on Islay when I spoke to Bunnahabhain distillery manager John MacLellan. This was another disposal by Edrington, this time to smaller Scottish distillers Burn Stewart (though ultimately, ownership rests in the West Indies). With Islay whiskies very much in vogue I wasn’t too surprised to learn that the distillery had continued their policy of limited release bottlings of specially selected casks.A tiny run of peated Bunnahabhain – albeit only seven years old – sold out during last year’s Islay Festival at £50. Already collectors are clamouring for more, though hopefully some will be drunk.The new owners are keeping the distillery busy and, having watched the results of the peated bottlings, are now producing a healthier quantity of peated new spirit each year. Though several years away from release, it’s interesting to speculate on the likely future destination of this make, which moves towards the style more usually associated with Islay, rather than Bunnahabhain’s lighter, more delicate signature single malt.At 38 ppm of phenols, the peated Bunnahabhain is up there with Laphroaig or Bruichladdich’s Port Charlotte style, so the first release will be eagerly sought after. What is available right now is a limited edition of 1,620 bottles of Bunnahabhain at 34 years old which, even at £150 ($275US), must be a sound collecting proposition (I hate myself even as I write this – just drink the stuff, for goodness’ sake!)As regards the standard mainstream expression, new packaging is in the pipeline, suggesting that Burn Stewart has a keen appreciation of the potential of this previously undersung Islay dram. I reviewed Bunnahabhain in Whisky Magazine (issue 27), describing it as “the foil to Islay’s Claymore.”Under the new owners the sword, while still sheathed, may now be creeping out of its scabbard – and not before time. Our final distillery, though the smallest, is probably the best known.Edradour was developed into a major tourist operation by the previous owners Pernod Ricard and that has continued under the new management. You can easily go and check out any changes yourself as Edradour is close to the tourist honey spot of Pitlochry, itself one of the prettiest little towns in Scotland.Andrew Symington’s Signatory operation has moved up a gear with the purchase of Edradour, as Andrew himself recognised when he said “I’ve much more credibility now I’ve joined the circle.Although I’m the smallest player, it’s great fun. Edradour is the perfect size for Signatory, the two can fit hand in hand.” Interestingly, as he relates, Glencadam was also on his target acquisition list. “We nearly bought Glencadam, a great but little known distillery, very well kept, interesting stills that keep going up and up and nice gardens.“The spirit is not bad but it would have been quite difficult to sell enough as a single as it’s an unknown name. With a lot of money we probably could have worked magic with it. The only real problem is that it’s in Brechin! No one goes there any more – not now it has a by-pass.”I can’t help feeling that the two distilleries have ended up in the right hands. Edradour is the perfect foil for Signatory and Angus Dundee’s substantial blending business keeps the stills well and truly busy in Brechin.It’s a happy outcome that demonstrates quite clearly why these operations are better off in independent ownership. For all the investment, global reach and professionalism of the industry giants there’s still a place for passion, personal commitment beyond the reach of any career plan and the idiosyncratic approach of a private owner that lends so much colour and variety to our industry.Long may they flourish!Contacts
Glencadam Tel: +44 (0)1356 622 217
(visits strictly by appointment)
Glengoyne Tel: +44 (0)1360 550 254
Bunnahabhain Tel: +44 (0)1496 840 646
Edradour Tel: +44 (0)1786 473 524