Drought hampers single malt growth

Whisky distillers in Speyside saw the worst water shortage in 170 years this spring, forcing temporary cut backs in production.

“February and March were so dry we ran out of water and were running at 40% capacity,” revealed George Grant, sales director for family-owned single malt producer Glenfarclas. “In 170 years that’s never happened,” he observed.

Having failed to receive the usual quantity of winter snow, the region was then afflicted by the same dry spell experienced by much of the UK. “That Scottish drizzle is so important because it saturates the ground,” remarked Grant.

As global demand for Scotch whisky continues to increase, this issue of water supply adds a further restriction on the production capacity of single malt producers in particular.

“In the last three years our production has doubled,” confirmed Grant, but he suggested that further increases would prove challenging.

With Glenfarclas relying for its entire production on just six copper stills, although in theory there is room to add a further two, Grant pointed out: “There’s already a water issue so we wouldn’t add more.”

Glenfarclas is not the only distillery kept in check by such limiting factors. “Many of these distilleries just weren’t designed to produce as much whisky as they are today,” remarked Grant

With its current capacity, his own brand can potentially produce a maximum of 3.5 million litres of alcohol per year but even then, Grant observed, “It’s impossible to hit that.”

To explain this, he flagged up the further restrictive factor posed by Broxburn Bottlers, the bottling line owned by Glenfarclas’ parent company J&G Grant, which also bottles for firms including Diageo, Whyte & Mackay and Bacardi.

“If we increase production, we need to reduce what we do for others,” he explained, highlighting the cash flow benefits of the current set up.

While blended whiskies can take advantage of the larger volumes offered by use of several distilleries, even here Grant observed: “The problem they have is getting enough casks – there’s always a limiting factor.”

In response, cooperages are busy moving to serve this current boom in worldwide whiskey production. Demptos, the French-based owner of cooperages as far afield as Napa Valley, Hungary and The Speyside Cooperage is now due to open a second Scottish operation close to Diageo’s Cambus Cooperage, as well as a new Kentucky business.

“A huge number of distillers have upped production,” confirmed Ronnie Grant, a former cooper who now helps run The Speyside Cooperage’s thriving visitor centre. “Lots of them are now running seven days a week.”

With Scotland currently holding eight cooperages, Ronnie estimated: “There are probably 20-25m casks floating around Scotland. We have up to 200,000 casks out in the yard at any one time.” In a nine hour shift, each of The Speyside Cooperage’s 15 coopers can expect to repair between 20 and 30 hogshead casks. Last year Ronnie reckoned the cooperage repaired “close to 100,000 casks.”

For analysis of Scotland’s ability to compete with other whiskey producing nations, look out for the May issue of the drinks business.