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Master of Malt Blog

Author: Ian Buxton

How your taxes help small distillers

Ever fancied investing in a small distillery? Well, you might not realise it but you already have. Through various regional development funds, taxpayers’ money has been pouring into the drinks…

Ever fancied investing in a small distillery? Well, you might not realise it but you already have. Through various regional development funds, taxpayers’ money has been pouring into the drinks sector. Ian Buxton takes a closer look at what we are getting for our hard-earned cash.

Do you, in economic terms, favour more of a New Keynesian approach to government expenditure or do you lean towards Ayn Rand’s Objectivist view? Or, to put this in terms more immediately relevant to a drinks blog, do you believe that new distillery start-ups should be funded with taxpayers’ (i.e. yours and mine) money? Perhaps you’ve never thought about it, or perhaps you didn’t know but across the UK many of the new boutique distilleries that have been springing up in recent years have benefited from the largesse of our public sector. 

There are, of course, any number of ways of financing a distillery project. The promoters may be in the fortunate position of having all the necessary capital themselves in which case there’s no need for outside finance. Or they could seek angel investors, or borrow from a bank or other lender, or turn to crowdfunding. That’s been an increasingly popular route: from Burleigh’s Gin to Salcombe Distilling; Cotswolds to Glen Wyvis and Nc’nean to Sliabh Liag examples abound of enterprising entrepreneurs tapping a worldwide and growing community of drinks enthusiasts willing to back new distilling projects. And not just for small beer – some of these projects have raised over £1m from their backers, most of them hoping for a Sipsmith-style payday sometime in the future when the nascent brand attracts the greedy attention of an industry giant seeking some craft credibility.

Nc’nean distillery – you helped pay for this

But there’s another route open to the ambitious promoters of a new business, particularly in Scotland or some of England and Wales’ less prosperous areas. Here the secret is to find the relevant local economic development agency and plead your case for support. Their backing could come in the form of equity (i.e. a share of the business) or more probably a soft loan, outright grant or support for specialist consultants to help develop your business. There’s quite a lot of free money out there if you know where to look and if you don’t, an army of consultants are all too willing to help.

Unlike a venture capitalist, such an agency is not risking its own money. On the contrary, the business enterprise network is funded by the public purse; that’s to say from the taxes, on both income and consumption, which you (hopefully) have been paying, more or less willingly. Most, of course, pays for the schools, hospitals, roads, welfare system, defence and so on that we all rely on but a modest percentage finds its way to the enterprise agency network and a smaller part of that builds distilleries.

So what is the case that they can make for the cash? It’s hardly a capacity argument. The UK has more than adequate production volumes to make all the gin and whisky we need and it would be hard to argue a strategic requirement for making spirits – they’re hardly a coronavirus vaccine, tempting though the thought might be.

No, the magic words that unlock the loot appear to be job creation, tourism or exports – or, better still, a combination of all three. As their name suggests, development agencies are seeking to promote economic regeneration in their local area. Thus the boom in craft spirits and distillery tourism is seen as a lever to create sustainable businesses that attract visitors, creating employment for local people who spend their new wages locally, thus creating more employment in the immediate area. It’s a classic Keynsian multiplier effect and considerable numbers of new distilleries have benefited.

Holyrood Distillery manager Jack Mayo peers into a still

To take a few examples at random, Scottish Enterprise has put funding of various types into Isle of Harris Distillers, Nc’nean, The Clydeside Distillery, Holyrood Distillery and a number of others. The recently opened Annandale Distillery was helped to get off the ground with financial assistance from Historic Scotland and the Scottish Government through a Regional Selective Assistance grant and later enjoyed additional support from Interface, another agency funded by the public sector. As a leading Scottish accountancy practice Johnston Carmichael puts it, the “Scottish Government [is] very supportive, [via] Scotland Food & Drink [and] Scottish Enterprise Investor Ready assistance with business planning costs and other costs”. Their professional recommendation: “Max out on free money!” [That’s an actual quote from Johnston Carmichael.]

But the support doesn’t stop at Hadrian’s Wall. Situated in the Peak District National Park the tiny Forest Distillery were backed by Cheshire East Council’s Economic Development Service and went on to collect two separate double-gold medals at the San Francisco Spirit Awards. And from England’s south coast another example: a beneficiary of the Isle of Wight Rural Fund, HMS Victory Navy Strength Gin recently collected the ‘Best in Category International Navy Strength Gin’ accolade in the American Distilling Institute’s Spirit Competition.

However, it can be tough surviving in the global drinks industry and prospering is even more demanding. So, as it’s our money they’re handing out, let’s hope our civil servants are backing winners. Regardless of where you might place yourself on the political spectrum we can all drink to that!

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Jim Swan: a legacy of style

With the arrival (and swift departure) of the much-anticipated first single malt from Nc’nean, we thought it a good idea to look at the legacy of the man who consulted…

With the arrival (and swift departure) of the much-anticipated first single malt from Nc’nean, we thought it a good idea to look at the legacy of the man who consulted for the distillery before his death in 2017, Jim Swan. Ian Buxton looks back at one of the most influential people in modern whisky and ask whether there is such a thing as a Jim Swan style.

As many readers will know Dr Jim Swan, hailed as ‘the Einstein of whisky’ and arguably one of the most important figures in distilling engineering and design since J.A. Nettleton (author of The Manufacture of Whisky and Plain Spirit, published in 1913 and probably the single most influential technical book on whisky ever published, in case you didn’t know), died in February 2017. He’s far from forgotten, though, and with a number of the whiskies he was involved in creating now coming to the market, I thought it timely to look at his legacy and ask if there is such a thing as a Jim Swan style. First, though, a brief reminder of his exceptional career.

Starting in 1974 with the forerunners of today’s Scotch Whisky Research Institute he collaborated closely with more than twenty Scotch whisky distilleries. It was a unique ‘apprenticeship’ and introduction to the industry which is probably unrivalled and, during this period, working with Sheila Burtles, Paul Rickards and George Shortreed (the latter two both highly-regarded blenders), he developed the original flavour wheel. If he had done nothing else, he would be remembered for this alone.

In 1993, he became an owner-partner in R.R. Tatlock and Thomson, the well-known technical consultancy and, in 2002, branched out on his own to offer his services to spirit producers worldwide. And he was in high demand.  From Scotland to Taiwan, Israel to Latin America, he criss-crossed the globe trouble-shooting, advising new distilleries and cooperages (he was, above all, an expert on every aspect of wood) and serving on leading competition judging panels.  His clients – those that can be mentioned, because the work was often commercially sensitive – are a roll-call of the most distinguished companies across the spirits industry.

Dr Jim Swan (right) with Ian Cheung from Kavalan in Taiwan

But where Jim Swan will be particularly remembered is in his work over the past twenty years for new world and craft distilleries, notably Kavalan. Shortly before he moved on from that company I asked their then master distiller Ian Chang to assess Jim’s influence. “We will all be forever grateful and in awe of him” he said, adding that: “He drove the creation of a second wave, a New World in the world of whisky. He pushed the frontiers of whisky production right across the world. He opened up an industry that many people thought was untouchable and he innovated and adapted and created new philosophies. He used his decades of research and his sharp mind and flexible thinking in each project and in this way, he has deepened and enriched the entire world’s knowledge, understanding and appreciation of whisky.”

Others happily agreed. According to Cotswolds‘ head of production Nick Franchino “Jim will be viewed as someone who helped change the public perception of whisky and how to make it. His pioneering production methodology enables distilleries to greatly reduce the number of years it takes to create a wonderful whisky, allowing new and exciting distilleries to enter the industry and create a wider choice of high quality whiskies.” As to a style, Franchino had this to say: “His methodology was to create a fruit forward, clean spirit and so there will be that similarity between distilleries that he worked with. However, we all have different stills and local conditions for production and maturation, so there will be welcome variations between us all too.”

From Canada’s Victoria Caledonian Distillery, founder and whisky maker Graeme Macaloney paid generous tribute to Swan, crediting him with “creating a cadre of non-Scotch single malt producers who are making single malts in the traditional Scotch style which are as good as or even better than most single malt Scotches. In the long term, I hope this will lead those Scotch distilleries who make an acceptable but not stellar single malt to realise they will need to ‘up their game’ if they wish to contribute to Scotch’s domination of the global single malt market.”

Milk & Honey

Casks maturing at another Jim Swan-influenced distillery, Milk & Honey in Israel

While Anthony Wills at Kilchoman agrees that a Swan style can be discerned, he made a further important point: “Jim liked up-front fruit character with the new make and as far as I’m aware all the new distilleries he worked with had this character. This allowed for the whisky to mature relatively quickly if put into good quality wood.”

Now, Jim Swan was an acknowledged authority on cask selection. We were both involved in the early evaluation of the mature stock at Glenglassaugh when this changed hands and I vividly recall him assessing this as “undoubtedly gold medal winning”. Entered for the 2009 IWSC awards the whiskies we tasted that day collected the top trophies for both 30 and 40 Year Old single malt and the special IWSC 40th anniversary trophy – remarkable achievements for a then largely-forgotten distillery and a small testimony to Jim’s unerring nose for quality.

His early work on wood chemistry helped unravel how different parts of the oak tree contribute to flavour. In particular, he was a pioneer and advocate of STR (shaved, toasted and recharred) red wine casks seen at many of his consulting clients, such as Kilchoman, Annandale, Kingsbarns, Nc’nean, Cotswolds, Penderyn, Kavalan and Israel’s Milk & Honey

Lindores Abbey Distillery

Swan’s final job, Lindores Abbey distillery

Graeme Macaloney describes it as having “a style of its own whereby the heat-treated red-wine-saturated cask sweetens the wine through a natural caramelisation process yielding variously caramel, toffee, butter-scotch or other similarly related notes”. The innovative use of a previously under-exploited cask type was a trademark Swan innovation and undoubtedly something that he will be associated with long into the future.

Jim Swan’s final project was with Lindores where, fittingly, the records of Scotch whisky distilling begin. Co-founder Andrew McKenzie Smith remembers him thus: “his in-depth knowledge of maturation, his massive success with Kavalan (and others) will be long remembered as will his modesty in an industry not overly populated by modest, shy and retiring people.” He went one to say: “He was a genuinely nice man, a gentleman indeed,” and Graeme Macaloney remembers “an inspiration and amazing coach when it comes to making great whiskies, and a true gentleman and scholar, yet very humble.” What finer legacy might anyone wish for?

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Visitor centres without visitors

Many small distilleries have based their business models on direct to customer sales from their visitor centres. With tourism all but dead, Ian Buxton investigates what people are doing to…

Many small distilleries have based their business models on direct to customer sales from their visitor centres. With tourism all but dead, Ian Buxton investigates what people are doing to diversify and bring in the all important pounds, dollar, euros and yen, and what the government could do to help. 

“Overall the last 6 months have been challenging and unpredictable but we have strived to be flexible, nimble and think differently, something smaller distilleries can do well, to make the best of the situation and seize opportunities” says Deborah Carter of the Cotswolds DistilleryAnd, yes, from a cross-section of the smaller distilling community that’s a ‘can do’ attitude that is repeated time and again. Frankly, I was expecting some horror stories: after all, while larger, more established distilleries have deep-pocketed owners to fall back on, the same cannot be said for the burgeoning craft distilling community.

There’s one respect in particular in which I expected the coronavirus lockdown blow to fall especially hard on smaller businesses and that is in the effect on their visitor facilities and highly profitable direct to consumer (DTC) sales. For many, the income from distillery tours, hands-on experiences and bottle sales are a critical part of their business plan; vital cash flow to sustain employment while at the same time creating consumer ambassadors who will promote the brand to friends and family, having paid handsomely for the pleasure.

Worth a visit, the beautiful Cotswolds distillery

As Stephen Kemp of Orkney Distilling explains: “Here in Kirkwall, we expected to welcome thousands of tourists across our door during the summer of 2020,” noting that “with Kirkwall up until the pandemic being the busiest cruise port in Northern Europe, we had over 150 ships due to visit.” He went on to say: “The cruise tourists are generally really positive spenders during their limited time with us [and] retail sales during busy cruise weeks can be in the thousands of pounds per day, so the loss of the cruise tourist market alone has been a very substantial hit for us”.

In the USA, Philadelphia Distilling (makers of the lovely Bluecoat Gin) had a different problem. They’re located in a ‘control state’, where the State government controls all retail and trade sales of spirits yes, that’s correct, there’s nowhere in the whole of Pennsylvania to buy any spirits other than the 600 State Liquor Control Board outlets. And at the start of the pandemic the governor shut them all down! But there’s a tiny loophole: small craft distillers are permitted DTC sales.

Talk about an opportunity. “Within two days of the shutdown we had our online e-commerce site up and running alongside a ‘no touch’ drive thru in front of the distillery,” explains Founder and CEO Andrew Auwerda.  “Prior to the Covid-19 shutdown, we would get one or two orders, but within days of the State’s stores closing, we were processing two to three hundred orders per day!” While the Control Board outlets have now re-opened, as Auwerda notes “we are left with a very nice completely new revenue stream of consumers who are still ordering from us directly and we are planning a big online holiday push!”

Bluecoat gin, selling like hotcakes throughout the pandemic

Sadly, it’s not all good news. Nick Weatherall of the Piston Gin Distillery in Worcester told me that “Gin school and direct bottle sales formed a critical part of our growing business and accounted for around 40% of our revenue, so it was a massive impact to have to close the school and the shop.” He added: “While we’ve been able to re-open the school, social distancing has meant we can now only hold 50% capacity.” “Looking at monthly sales and attendance, it’s clear that Covid lockdown has set us back around 10 months and who knows what lies ahead.” Like so many others there was a silver lining though. “Fortunately we were able to quickly start making hand sanitiser and that undoubtedly saved the business,” says Weatherall who has been featured on the BBC’s local TV news  for his entrepreneurial approach

At Edinburgh’s Leith Distillery, due to start producing single malt whisky in 2021, Ian Stirling observes that “We normally host tours at our Tower Street Stillhouse, where we produce Lind & Lime Gin, but the loss of this business has paled in comparison to the remarkable growth in gin sales that we’ve experienced since May.”  However, he says: “We are certainly grateful that the Port of Leith Distillery is due to open at the end of 2021. 2020 would have been challenging to say the least,” adding “we have modeled lower projections for visitors to our whisky distillery in 2022.”

The Orkney Distillery visitor centre in busier times. What great taste in books they have, BTW

And the pandemic brought one unusual visitor to Orkney.  As Stephen Kemp recalls, in July “Prime Minister Boris Johnson visited Orkney to announce the Islands Deal. I was involved in the local meeting with him, and during a quiet moment it was enormously pleasing for me to be able to hand the PM a bottle of our ‘Angell’ hand sanitiser and thank him sincerely for the work that the Government put in to enabling craft distillers like us across the country to quickly diversify.  This not only enabled us to help protect our local communities, it also helped us to keep our staff employed and was a lifeline that kept many small businesses afloat.”

So what, I asked Stephen, would he ask the Government to do now?  “I would like to see a freeze or reduction in alcohol duty for spirits, as the cost of production is rising, but with constrained household incomes and consumer confidence very low we need to be able to avoid product price increases.  Continued support through trade deals with export markets is of incredible importance, and of course we need to understand what our relationship with Europe is going to look like so that we may begin to plan for future export to these markets.”

Sounds like a plan. Let’s hope the Prime Minister was listening.

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How to buy (a bit of) your own drinks brand

This week Ian Buxton explores how you can own a little bit of your own booze business through the magic of crowdfunding. You might even get in on the ground…

This week Ian Buxton explores how you can own a little bit of your own booze business through the magic of crowdfunding. You might even get in on the ground floor of the new Brewdog and get rich! But you probably won’t.

Did you get any Brewdog? Not pints of the eponymous beer but a bit of the company. The self-styled bad boys of brewing raised capital through crowdfunding. If you picked Brewdog as an investment in 2010 then well done – early backers saw huge returns. As James Watt, BrewDog’s co-founder, explained in 2017 when a US private equity company took a 22% share: “Shares purchased in Equity for Punks I are now worth 2,765 percent of their original value. Even craft beer fans that invested in Equity for Punks IV, which closed in April 2016, have seen the value of their shares increase by 177 percent in just one year.”

If you’d invested in Brewdog in 2010, you’d be rich. RICH!

Unlike schemes such as Kickstarter where your cash is effectively a pre-order for a product and you don’t own a share in the company, crowdfunding means you are buying equity and become a shareholder – a co-owner of the business.

Now, you can buy shares in the large publicly-quoted drinks businesses, such as Diageo. In fact, if you have any kind of formal pension fund you quite probably already do. But crowdfunding is different: it allows you to get in at an early stage of the development of a new company. It’s interesting, fun, and potentially more profitable than investing in a well-established company but – pay particular attention to this bit – carries considerable risk that you can lose all your money.

So why do it? Well, several reasons. You may know the founders or principals of the fledgling concern and be prepared to back their judgement; you might agree that they’ve spotted a genuine gap in the market; in the case of a community-based enterprise you might take an essentially philanthropic view or you might just fancy a flutter.

You’ve missed out on Brewdog but, on the basis that you’re reading this on a drinks site I’ll assume you’re interested in booze, so what opportunities are out there right now? I’ve taken a look at Seedrs.com, a UK crowdfunding site, and WeFunder.com based in the USA. Note that these sites operate by providing you with information on the company, funds to be raised, intended use of the cash and details on what percentage of the business is being offered. There will be a fundraising target and a date when the offer will close. Read all this information VERY carefully before you commit.

Burleighs gin raised over £100,000 through crowdfunding this year

No one can have missed the gin craze of the last few years. If you think it can carry on for a while yet, then £10 will buy you a piece of Burleighs Gin – they’ve already raised over £100,000 on Seedrs.com.   

On the other hand, you might consider that gin is already a little passé and have heard of the hard seltzer boom in the USA. In that case, premium non-alcoholic and alcoholic seltzer brand Something & Nothing could be a good fit for your portfolio. Investment, also on Seedrs.com starts at £20, but one bold backer has already pledged £96,000 so evidently someone believes in the proposition.

Perhaps something on the huge US drinks scene will appeal. Turning to WeFunder.com there are a number of opportunities, ranging from flavoured malt beverage HoopTea (a $1,000 minimum commitment though) to Kokoro Spirits ($100 and up). Starting with Tequila it aims to build a “collection of premium spirits and a brand that celebrates communities and cultures from around the world”.

It’s always a good idea to spread your risk by diversifying investments. With that in mind, Drifter Spirits is creating a portfolio of craft spirits for the US market, starting with cachaça and aquavit brands. The company has been trading for some seven years with an experienced management team  $500 gets you a place on its share register.

There are many more opportunities arising on a regular basis and there are other crowdfunding sites. These are simply examples of an interesting new trend.  Any of these companies could be the next Brewdog or all might crash and burn, taking your hard-earned with them. Caveat emptor!

IMPORTANT: Nothing in the foregoing constitutes investment advice or a recommendation. As with any investment consider the risk factors, do not invest more than you can afford to lose and seek appropriate professional advice. Disclosure: Ian Buxton may be an active investor in one or more of the businesses mentioned here.

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The growing pains of Irish whiskey

It’s an Irish whiskey double-bill today. This morning we had exciting news of developments at Sliabh Liag, and now this afternoon Ian Buxton looks at problems and disagreements behind the…

It’s an Irish whiskey double-bill today. This morning we had exciting news of developments at Sliabh Liag, and now this afternoon Ian Buxton looks at problems and disagreements behind the much-heralded Irish whiskey renaissance.

According to James Joyce “the light music of whiskey falling into glasses made an agreeable interlude”. Ironically, though, that was written in 1914 when Irish whiskey was in near-terminal decline; a hiatus rather than an acquiescent break. Two years earlier, in 1912, a group of Scotch whisky distillers had founded the Wine & Spirit Brand Association, the body which thirty years later evolved into the Scotch Whisky Association. Their goal was to create a united industry voice, just one step in Scotch’s march to global domination. In fact, things were to get a great deal worse for the beleaguered Irish industry. By 1930, William Ross of the DCL was able to observe that “Ireland is an irrelevance.” Cruel, perhaps, but at the time entirely accurate.

It took a long time but, eventually, things did get better. Much better, as it happens as up until coronavirus’s rude interruption, Irish whiskey was enjoying its biggest boom since the mid-1800s with new distilleries being opened at a furious rate, existing distilleries expanded and a bewildering range of new brands being launched.

Why Irish whiskey needs a moment of self-reflection

Irish whiskey has welcomed a hoard of new brands, distilleries and whiskies in the last few years

Not that everything went smoothly. In particular, many of these new brands seemed to be little more than marketing labels – whiskey from one of Ireland’s major producers repackaged by third-party bottlers. Some went further leading to the misleading impression, according to their critics, that such bottles were produced by one of the new wave of boutique distilleries. As the ever-outspoken Mark Reynier, now distilling in Waterford summed it up earlier this year in a fascinating interview for The Irish Times. “Most of the whiskey business in Ireland is independent bottling. Almost all Irish whiskey comes from three distilleries, so while there may be over 100 labels on display at Dublin airport, most of it comes from the same few sources. It is a charade and it risks doing untold damage to Irish whiskey.”

So you would think that an Irish equivalent to the Scotch Whisky Association is just what the industry needs. And indeed there is such a body. Founded in 2014 as the Irish Whiskey Association (now Drinks Ireland and covering all Irish alcohol) it boldly identifies the number one objective of its ‘work plan’ as: “To protect the integrity and high standards of the Irish Whiskey category by securing and enforcing the strongest possible legal protection for the Irish Whiskey category name and Geographic Indication.”

Why Irish whiskey needs a moment of self-reflection

Reynier says the proliferation of whiskey repackaged by third-party bottlers could do lasting damage  

That would seem to be a wholly laudable objective and Drinks Ireland played a key role in defining Irish whiskey in a Technical File for the EU which became law in 2014. Indeed, according to DI’s William Lavelle, “Since the Technical File was adopted in 2014, Irish whiskey has benefited from increased exports, increased whiskey tourism to Ireland and a rise in the number of new brands in Irish whiskey.”

Quite possibly, but a lot has happened in the last six years, and not everyone seems to agree that the growth noted by Drinks Ireland is a consequence of their work rather than a coincidence. Mark Reynier for one regards them with some concern as under-resourced and “trying their best but pretty disjointed”. His main concern is that, as Irish whiskey grows in world markets, cynical competitors will take the opportunity to point to the proliferation of labels and suggest, through their crocodile tears, that ‘sadly, you can’t trust Irish whiskey’.  

Others, such as the relatively new Blackwater Distillery in Waterford point to what they see as an inherent bias in the regulations that favour the larger producers who were well established when the rules were written.  In a provocative entry on their hard-hitting blog, they are particularly critical of Irish Distillers, the Pernod Ricard subsidiary. 

Why Irish whiskey needs a moment of self-reflection

The promise of Irish whiskey is great, but so are the challenges facing the industry

Is this I wonder, any more than the inevitable growing pains that come with such a rapid expansion in the industry and the arrival of so many new producers, all with their own ideas, enthusiasm and desire to innovate? After all, as the Scotch whisky industry knows, new ideas and methods of production can be adopted into the regulations if the demand is there and the industry can show a need.  

Change can come, albeit over time. Irish whiskey has been around for centuries and survived any number of crises, some self-inflicted. As the world emerges from the current disagreeable interlude, as eventually, it will, perhaps this is the moment for all the players, large and small, to seize this opportunity for self-reflection and build the credibility and integrity that their trade association seeks to promote.

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Rock of ages: can maturation be fast forwarded?

This week Ian Buxton applies his boozy magnifying glass on maturation and asks if it can ever be manipulated or accelerated to produce a quality spirit. I found myself recently…

This week Ian Buxton applies his boozy magnifying glass on maturation and asks if it can ever be manipulated or accelerated to produce a quality spirit.

I found myself recently considering the question of ageing.  Probably because it was my birthday (yes, fine, thanks for asking) but it did bring a few things into focus. For example, will the challenge of accelerated maturation in spirits ever be fully cracked – and, if so, will the consumer accept it? Speeding up the ageing process in spirits (unlike in writers, where it seems to accelerate naturally) has long been something of the Holy Grail for some drinks companies. 

After all, if you could manufacture the same taste profile from a six-month-old spirit as one that has spent ten years waiting in cask there would be undoubted benefits. Just think of the saving in casks and warehouses. Imagine the additional profits. Why you might even be able to offer lower retail prices (now things are getting fanciful).

But people have been trying for over a hundred years or more. Shortly before the Tullymet distillery in Perthshire was closed in 1911, the owners John Dewar & Sons, then independent and family-owned, engaged “an eminent analytical chemist” to experiment with artificial maturation. It was reported that “he brought elaborate appliances from London and with our permission and the sanction of the Excise he toiled week after week with his alembics and retorts”. 

can maturation be fast forwarded

We employ various techniques already to enhance barrel maturation, but can we accelerate the process?

However, the trials ended in failure: though the boffin “brought his sample in triumph” to Dewar’s Perth HQ the company found it “nothing but an anaemic and emasculated fluid, with a taste resembling Chinese samshoo”. Perhaps they should have stuck at it, as today baijiu distiller Kweichow Moutai is the world’s most valuable drinks company, far exceeding the stock market worth of Diageo. 

More recently, there have been other efforts.  In the USA, hip bourbon distillers Hudson trailed blasting rap music at selected casks to promote ‘sonic ageing’, the theory being that vibration increases the wood/spirit interaction. In July 2008 it was reported that Diageo was wrapping casks in plastic film. A spokesman responded drily that “At this stage, the technologies under trial are not proven and we are continuing our research.”  Since then, whatever they were up to (and reports vary) it evidently didn’t work or demonstrated what it was they wanted to show. Either way, the trials have been quietly dropped.

Elsewhere, distillers have experimented with the freeze distillation of spirit, though this appears to have been more about getting very old casks that had fallen below 40% ABV, and thus couldn’t be sold as Scotch whisky, back up to a legal strength. The value that might have been recovered is extraordinary given today’s price of really old whisky but whether or not this perfectly scientifically-sound technique would have met the SWA’s ‘traditional production methods’ standard might have been an interesting debate. 

can maturation be fast forwarded

Bourbon distillers Hudson previously experimented with ‘sonic ageing’

Over in California, the folks at the Lost Spirits ‘skunkworks’ in Los Angeles has employed its THEA One Reactor (Targeted Hyper-Esterification Ageing) to create remarkable peated whiskies and navy-style rums. I’ve tasted these and in my book 101 Rums to Try Before You Die concluded that “though logic tells you that six days in a Star Trek-style ‘reactor’ cannot possibly deliver the flavours of traditional ageing, your nose and palate tell you otherwise”.  So, good then.

 

‘which they suggest may be compared to a leading’

Now yet another group are addressing this timeless challenge with what they are terming ‘accelerated beverage maturation technology’. The little-known and curiously anonymous NobleAB has produced samples of a ‘peated Speyside’, which the company perhaps optimistically suggests can be compared to a leading 10 years old Islay single malt, and a Lowland and an Indian Spirit, all oak matured with its ‘unique’ process. This its describes as “a substantial amount of wood science with specially prepared oaks for targeted maturation”. 

I know little more. Though there is a domain name for NobleAB dating from August 2017 there is no active web site and the CEO’s business card does not carry a physical address.  He’s one Stefan Laux. According to his LinkedIn profile, he spent some seven years with Rémy Cointreau leaving in 2004 (long before they acquired the Bruichladdich and Westland distilleries, and many years after they had sold Glenturret). Subsequently, Laux has moved quickly through a bewildering number of posts: we find him variously in Italy, Poland (in several roles), Tunisia, the USA, Switzerland and Hungary.

can maturation be fast forwarded

We want to know what you think – can maturation be sped up?

It’s all very mystifying. Will this prove a crock of gold, or a crock of something less pleasant?  Some samples have reached me by a strange and circuitous route and I may return to this topic if I have news. But I’m interested in your views – feel free to comment below with your thoughts on fast-forwarded whisky.

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How craft distilling is coping with Covid

In the second part of his look at how the spirits business is coping with the Covid pandemic, Ian Buxton looks at the craft distilling sector both here and in…

In the second part of his look at how the spirits business is coping with the Covid pandemic, Ian Buxton looks at the craft distilling sector both here and in the US. Surprisingly, there’s quite a lot of good news. Hurrah!

Frankly, the last thing I expected in writing this piece was to be the bearer of glad tidings. I was pretty sure that coronavirus would have had a devastating effect on our smaller distillers: under-financed and over-dependent on the non-existent on trade, I anticipated tales of woe and to be reporting closures and widespread gloom.

So, expecting the worst, I took a random cross-section of this previously-buoyant industry from my contact book and asked how coronavirus had affected their business and how they saw the future. I should begin by noting that a number never responded. That might be an ominous sign, but then again there may be perfectly good reasons why my emails went unheeded and phone calls unanswered. Because of that I won’t identify these businesses, which made up around a quarter of my sample. Let’s hope they’re OK.

The Nightcap

The Port of Leith Distillery

But what that means is that some 75% did get back to me and from them I received encouraging news of a determined and positive fightback. Yes, the arrival of this nasty disease has been disruptive, sometimes expensive and certainly not what anyone would wish for but it has brought out a refreshing blend of initiative, entrepreneurship and creativity in battling the bug. 

The various government schemes for financial support have helped, of course, but one factor that came across time and again was the production of hand sanitiser. Indeed, from the USA, Bill Owens, president of the American Distilling Institute (‘the largest small-batch, independently owned craft distillery association in the world’) told me succinctly that “what saved the craft [distiller] is hand sanitiser”. Though tasting rooms are closed (these tend to be disproportionately important to smaller US distillers) Owens reports “a distillery near Chicago going 20,000 bottles a week” and another in Kentucky achieving some $40,000 in sales. He drew a sharp contrast though with smaller brewers and winemakers, estimating that around one-third will close their doors.

A similar story emerged here in the UK. From Orkney, Stephen Kemp said that while “we watched our various revenue streams dry up overnight …. we very quickly had to diversify, and so like many others we began creating hand sanitiser,” adding that ”we also had to ‘amp-up’ our online presence substantially, and invest very heavily in online marketing.” In addition, taking advantage of the fact that many in the bar trade have had some time on their hands, Orkney Distilling say they have been “working hard to keep in touch with those in the trade who will inevitably re-open – we want to be there with them and for them!”

Barney Wilczak in action

At the opposite end of the country, the small team at the Capreolus Distillery in the Cotswolds also saw an opportunity to build trade relationships. While the up-market restaurants and bars that make up such an important part of their business have been closed, Barney Wilczak relates that “after an initial couple of weeks of panic we focused heavily on investing in both existing sommelier friends and new restaurants. This translated as sending out samples, tasting online, providing training and using the time to communicate the values that our approach embodies.”  As he also noted, “this had the advantage of being able to reach people whose schedules are normally extremely hectic and allowed them to spend time getting to intimately understand the intricacies of our spirits.” Like Orkney, and despite being an extremely small business themselves, Capreolus took pains to offer the trade “professional development, education and an engagement that shows we will be there for them in both bad and good times.” Doubtless, this investment will be repaid many times over in future sales.

At the Port of Leith distillery, founder Ian Sterling offered this perspective: “We’ve had to work much, much harder and I would really like a holiday.” But he went on to state that “overall the impact has not been severe and indeed sales have grown over the last three months”. Like many others, Port of Leith reported a mini boom in on-line sales both domestically and for export and, encouragingly, “many of those new online customers are continuing to purchase that way”. Work continues on its new distillery which should open in 2021.

There will, of course, be casualties. As Nicholas Cook from The Gin Guild points out “the underfunded, those with weak business plans, mediocre or average products without individual stand out appeal or branding, and those who were simply jumping on the ‘gin bandwagon’ and those simply caught out at the wrong point in their business development, or who were exposed as over expanded at this critical time, will find it difficult to survive”.

But from my brief snapshots – and there were others – not all is doom and gloom. The industry has been tested, but not to destruction. Craft spirits shall not wither and die!

Though he has neither a beard nor any visible tattoos or piercings, Ian Buxton is well-placed to write about drinks. A former marketing director of one of Scotland’s favourite single malts, his is a bitter-sweet love affair with Scotland’s national drink – not to mention gin and rum, or whatever the nearest PR is pouring. Once, apparently without noticing, he bought a derelict distillery. Follow his passionate, authentic hand-crafted artisanal journey on the Master of Malt blog.  Or just buy his books.  It’s what he really wants.

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And that’s a wrap

There have been some amazing whisky publicity stunts over the years but none quite as audacious as the one Ian Buxton tried to pull off with the artist Christo. Here’s…

There have been some amazing whisky publicity stunts over the years but none quite as audacious as the one Ian Buxton tried to pull off with the artist Christo. Here’s the full story. . .

You may have noticed that the artist Christo died recently. He was 84. His wife and artistic collaborator Jeanne-Claude died in 2009 and thus Christo’s passing marks the end of a remarkable creative duo. They worked together but always under the name of Christo.

You will remember them of course as the guys who wrapped things. Starting in the 1950s with mundane household objects such as chairs and bicycles they graduated to wrapping trees, fences, bridges, monuments, buildings and, on occasion, islands. They wrapped the Pont Neuf in Paris and even the Reichstag (below). 

Imagine getting one of these for Christmas!

They were colourful and sometimes controversial characters. Not everyone cared for their work; there were frequent objections to their planned installations and one lady even died when one of their Umbrellas (1991) was toppled in high winds and struck and killed her.

We didn’t seem to ‘get’ them here in the UK, though after Jeanne-Claude’s death, Christo was able to install his London Mastaba in Hyde Park in 2018. So what’s this got to do with whisky you may be wondering.  Well, if I had been a more persuasive advocate, they might have completed their first UK work in Scotland, nearly twenty years earlier. It’s an unusual story, strange but true.

Prior to this writing lark I worked almost exclusively in consultancy, building on my previous career in marketing. Together with my wife (note the parallel), we established a consultancy business in Edinburgh where we had a number of whisky clients. However, in early 1999 one major client appointed a new president of global brands. This is generally not good news for the incumbent agencies as, determined to make their mark, the newcomer looks to shake things up. Based in the USA, the lady concerned did not appear impressed with anything other than the most fashionable of trendy New York agencies. It was imperative that we come up with a suitably grandiose idea. And fast.

So I proposed that we ask Christo to wrap the client’s main distillery. To bait the hook, I suggested we pay them £1 million, cover all the costs, give them complete creative control and see what they came up with. But I had a cunning plan: to get the client their money back I also proposed a special Hommage à Christo limited edition of wrapped bottles of single malt. 1,000 bottles at £1,500 should do nicely, I reckoned.

How long would it take to wrap a distillery?

Well, the client loved it and I was instructed to go and see Christo immediately and make it happen. Through friends of friends we were put in touch and, in the summer of 1999, I found myself in New York visiting Christo and Jeanne-Claude at their combined store, workshop, gallery, studio and home in an old warehouse in the Meatpacking District (not in those days the most salubrious part of town).   

I was received with great courtesy and we toured the studio, looking at the concept studies for their current project, Over the River. Later abandoned due to local opposition, this envisaged suspending 5.9 miles of fabric panels along a 42-mile stretch of the Arkansas River between Cañon City and Salida in south-central Colorado. They told me that they needed $5m to fund the project. My hopes rose – compared to a river, wrapping a distillery would be a breeze and surely a million quid would come in handy.

Some whisky was shared, and then some wine, and they agreed to look at the drawings I had brought. Scotland seemed to appeal; the drawings received close and apparently sympathetic attention and some practical issues were discussed. All seemed to be going well.

But then we hit a snag. Quite a big one, as it happens. Rather gravely and, I thought, a little sadly they explained that, on principle, they never ever accepted commissions. There were no exceptions; they were both completely clear that a commission would not be their artistic vision and thus fatally compromised. A little recklessly – both bottles had been well sampled by this stage – I assured them (quite without any authority) that my client would surely want to increase the fee. I mentioned figures, increasingly extravagant figures, but they were unmoved. So I returned, older, wiser and empty handed to my client to report my failure.

And, you’d assume, we lost their business.  Well, no.  Along with my Christo project I’d also proposed building a visitor centre and they loved that idea as well. So Aberfeldy distillery got Dewar’s World of Whisky – but, sadly, neither of us will ever feature in the history of art!

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Coping with Covid: Scotch whisky’s post-pandemic plans

Today industry veteran Ian Buxton takes a look at how Scotland’s whisky business has coped with the global pandemic and what the mood is as the world begins to return…

Today industry veteran Ian Buxton takes a look at how Scotland’s whisky business has coped with the global pandemic and what the mood is as the world begins to return to some semblance of normality. 

You don’t need me to tell you there’s a nasty bug going round. Not so very long ago I was worrying about the new US import tariffs on single malt Scotch and the tit-for-tat taxes on American whiskey exports to the UK and European Union, noting that producers on both sides of the Atlantic, especially smaller distillers in the so-called craft sector were starting to feel real pain. The USA is Scotch’s most valuable single market – worth more than double the next nearest (France in case you wanted to know, where they love ‘value’ blends) – so it’s important.

Well, I didn’t know the half of it. ‘May you live in interesting times’ goes the old Chinese curse and regardless of where this particular C-virus curse originated we’re certainly in interesting times now.

Like most of the rest of the world and certainly the UK, Scotland’s distilling industry was brought to a dead stop with the arrival of Coronavirus. By mid-May the Scotch Whisky Association was reporting that “87% of production sites are either operating at reduced capacity or have closed entirely”. Many began producing hand sanitiser and high strength ethanol for key workers but, however laudable their efforts, they weren’t filling casks of new make or bottles of whisky.

However, at last, there are reasons to be hopeful, and while visitor centres remain shuttered, bottling and distilling has restarted at many locations. I’ve been asking what the industry plans to do to rebuild sales in the land of the free.

There must be worse places to isolate than the Hebridean island of Islay, from where Bruichladdich’s Christy MacFarlane told me that a phased restart got underway on 3 June though many employees remain home working. “Within the USA, sales and marketing have continued on a conservative basis, with an uplift in e-commerce channels,” she says. Also on Islay, Ardbeg and its mainland sister distillery Glenmorangie have reopened – just in time to support the launch of two new products into the USA. The Cadboll Estate is Glenmorangie’s first single estate whisky.  Aged in American oak bourbon casks for 15 years, this limited edition single malt Scotch whisky is exclusive to the US, Canada and Mexico. Wee Beastie is Ardbeg’s first 5 year old expression, matured in ex-bourbon and oloroso sherry casks.

Islay’s smallest distillery (for the moment) is Kilchoman. Just prior to lockdown, the family had completed a significant expansion and now they’re back at work, albeit with a smaller team all keeping an appropriate social distance.

Back on the mainland, Gordon Buist, production director at Chivas Brothers explained that “at present, seven of our 14 distilleries are operational [with] the health and safety of our team our number one priority. Any decisions on increasing capacity and/or reopening sites will be led by government guidelines that keep them – as well as our visitors, partners and the wider community – safe.”

However, while anticipating that “social distancing will continue to be the norm across all of our sites until a vaccine is found,” he concluded that Chivas “remain confident in the resilience of Scotch – which has seen just one dip since 2000 – and its ability to bounce back after this outbreak, as it has done following many other macro events that have impacted the world in the past 20 years.”

whisky crash

Ian Buxton next to a cask of whisky

Representing Balblair and Old Pulteney single malts, Malcolm Leask, global vice president of sales, was similarly upbeat, remarking on its new US distributor partnership with the super-premium artisanal spirits importer and distiller Hotaling & Co, from April and promising “exciting plans for these brands in the US market over the next year, to tell the stories of our whiskies and re-engage US malt whisky drinkers.”

But tourism and whisky festivals have been hit hard. It feels as if 2020’s visitor operations will be a total write-off, though some distilleries have been offering their limited edition festival bottlings online. Expect them soon on an auction site as the virtual roundabout continues.

Back in the USA where blends are still hugely important, from major player Dewar’s comes word that blending and bottling operations have continued without interruption of supply. Brian Cox, VP Dewar’s North America says “COVID-19 has raised challenges, as it has for everyone, but we remain resolutely focused in trying to anticipate and shape the future, for both Dewar’s and the category. We plan to carry on pushing the boundaries of what is expected from the whisky category and continue our long-standing commitment to innovation. Watch this space for more exciting news from the brand soon.”

That’s the spirit for these times!

Though he has neither a beard nor any visible tattoos or piercings, Ian Buxton is well-placed to write about drinks. A former marketing director of one of Scotland’s favourite single malts, his is a bitter-sweet love affair with Scotland’s national drink – not to mention gin and rum, or whatever the nearest PR is pouring. Once, apparently without noticing, he bought a derelict distillery. Follow his passionate, authentic hand-crafted artisanal journey on the Master of Malt blog.  Or just buy his books.  It’s what he really wants.

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Whisky business

On the blog today, Ian Buxton looks at two scions of whisky families, Edwin York Bowen and Richard Seaman, who turned their backs on the booze business to become a…

On the blog today, Ian Buxton looks at two scions of whisky families, Edwin York Bowen and Richard Seaman, who turned their backs on the booze business to become a composer and a racing driver respectively.

If we turn the clock back to the late Victorian period there were substantial fortunes to be made in whisky and, in a period before industry consolidation, much of this accrued to a privileged class of owners who lived in considerable style. But their offspring didn’t always care to follow their parents into ‘trade’, preferring very different lifestyles. In one case, this brought respectability in the arts whilst another was to excel briefly in the raffish world of pre-War Grand Prix motor racing – with a tainted and notorious association with the Nazi party.

The composer Edwin York Bowen (1884-1961) achieved early fame and was hailed as the ‘English Rachmaninov’. Indeed, Camille Saint-Saëns saluted him as ‘the finest of English composers’ after attending the premiere of Bowen’s Piano Concerto No. 1. The whisky connection came through his father who was a partner in the blenders Bowen & McKechnie. Bottles of its Lords & Barons and Gold Braid blends appear from time to time at auction and an attractive water jug decorated with the message ‘Ask for Melrose whisky’ forms a poignant coda to his story. 

York Bowen: Photograph by Herbert Hughes, 1935. McCann Collection, ©Royal Academy of Music.

Bowen’s fame as a composer was short lived, though he continued to compose, perform and teach for the rest of his life, by the late 1920s his romantic style was considered outdated and his reputation faded. But in recent years, his reputation has risen. Bowen was a great pianist and some of his early recordings are now available on CD from Presto Classical. His own compositions may be obtained on notable classical labels such as Chandos and Hyperion, and are occasionally heard in the present day repertoire of a number of performers resulting in something of a recovery of interest in his work.

Likewise, Richard ‘Dick’ Seaman’s reputation has recently been boosted by the publication of Richard William’s book A Race with Love and Death: The Story of Richard Seaman.  Seaman (1913-1939) was the son of William Seaman. Originally destined for the diplomatic service, a decline in the family fortunes meant William was sent to work for his uncle William Lowrie, then said to be the world’s largest whisky stockholder. Lowrie took a shine to his nephew, paying him handsomely and appointing him a director. By 1910, recently widowed, he was a significant shareholder in not only W P Lowrie & Co., but also Haig & Haig, Mackie & Co. and Dewar’s, where he was also a director. 

In fact it was the great Sir Tommy Dewar who introduced him to his second wife, Lillian Pearce at a dinner at the Savoy Hotel. Love followed at first sight, Dewar later quipping at the wedding reception that this was the last time he was going to introduce any of his widows to any of his friends, as it always led to trouble.

John Richard Beattie Seaman. Photo courtesy of Daimler-Benz

Trouble – and great sorrow – certainly followed their son Richard. Educated at Rugby and Trinity College, Cambridge, he began motor racing in 1934 and was very soon successful in European competition driving first, as a privateer, an MG with later an ERA and Delage. His victories were spotted by Mercedes-Benz, whose Silver Arrow cars were a dominant force on the European Grand Prix circuit, and he signed for them in 1937. This resulted in a breach with his mother, who was opposed to him driving for a “Nazi team”, and the family tensions worsened when he married the daughter of a BMW director.

However, success on the track continued and in 1938 he won the German Grand Prix, came second in the Swiss event and was third at Donington. Now seen as one of the leading drivers on the European circuit he was leading the 1939 Belgian Grand Prix at Spa when he crashed and was severely injured, dying just a few hours later of the burns he received in the crash.

Richard Seaman’s wrecked car, Belgian Grand Prix, 25 June 1939. Photo courtesy of Daimler-Benz

Driving for a German team in the days just prior to the Second World War was bad enough, but Seaman gave further offence when he was seen to give, rather half-heartedly it must be said, a Hitler salute on winning the German Grand Prix. Worse was to come – at his funeral at Putney Vale Cemetery (where, curiously, F1 driver James Hunt is also buried) an enormous wreath of white lilies was placed among the piles of flowers, adorned with the name Adolf Hitler. It is said that Mercedes continues to tend his grave to the present day.

The very varied lives of Dick Seaman and York Bowen are linked by whisky and hark back to a world of great wealth derived from the Scotch whisky industry.  Yet in very different ways they set their faces against the source of their privileged existences – and perhaps are remembered all the more for that.

Though he has neither a beard nor any visible tattoos or piercings, Ian Buxton is well-placed to write about drinks. A former marketing director of one of Scotland’s favourite single malts, his is a bitter-sweet love affair with Scotland’s national drink – not to mention gin and rum, or whatever the nearest PR is pouring. Once, apparently without noticing, he bought a derelict distillery. Follow his passionate, authentic hand-crafted artisanal journey on the Master of Malt blog.  Or just buy his books.  It’s what he really wants.

No Comments on Whisky business

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