THE number of distilleries in Scotland grew by more than 50 per cent last year as the country’s food and drink boom continues.
Analysis published today shows production began at 18 different facilities last year, with 12 rolling out the barrel the year before.
The activity is part of broader success for the country’s food and drink industry, which saw exports to Asia alone top £1 billion last year.
It is also part of a UK-wide trend towards smaller, “artisan” operations that accountancy group UHY Hacker Young, which compiled the analysis, claims is making drinks sector giants nervous.
The group's James Simmonds says recent acquisitions and mergers of small firms by bigger rivals is the taste of things to come as major outfits respond to the commercial challenges and opportunities.
He also claimed these big-money deals are inspiring more start-ups, but cautioned that not all will be able to toast success.
Simmonds said: “Both the craft spirits and the craft brewery sectors are going through a period of explosive creativity.
"You can see that in everything from the logos, branding and advertising of these products.
“What's more is that the quality of the product is streets ahead of their big brand competitors.
“It's no wonder that the global drinks giants are worried. And the best way they have found to deal with that new competition is get out cheque books and buy them.
“But for every winner there will be many more losers – and some of the business plans we have seen for start-ups in this sector suggest a nasty hangover for some.”
Yet to deliver a drop to market, Toulvaddie Distillery in Ross-shire is amongst the country’s newest distilleries. Founder Heather Nelson, whose background is in film and TV, claims the firm is the first to be started by a woman in 200 years.
Production is expected to start before the year is out, and first-year casks are being offered at £2,000 a pop.
Other new ventures are under way in Hawick, Raasay, Morvern, Edinburgh, Glasgow and Skye, with the projects at varying stages of completion.
These will add to the 53 new distilleries that opened across the UK in 2013. Many of these trade in gin, which has seen its popularity surge in recent years and now commands sales of more than £1 billion in the UK alone.
Award-winning small batch producer Edinburgh Gin, founded by Alex and Jane Nicol, was acquired by Broxburn-based Ian McLeod Distillers – the tenth largest Scotch whisky maker – last September.
Meanwhile, Paul Miller of Fife-based Eden Mill predicts his firm’s gin will achieve £8 million in sales this year. The company began sending its produce overseas in August and has forecast £1.4m worth of gin exports to the US over the next three years.
Overall, food and drink exports from Scotland grew by £421m in 2016 to a record £5.5bn.
UHY Hacker Young says this kind of demand – together with the £1bn valuation recently put on Aberdeenshire craft beer brand Brewdog by an investment from US private equity firm TSG Consumer Partners – is “likely to spur more activity both in the craft distillery and craft beer segments”.
The Scottish Government aims to double the value of the food and drink industry to £30bn by 2030.
At a conference last month, First Minister Nicola Sturgeon revealed a £10m support package and hailed the sector’s “phenomenal success” and “unprecedented growth” over the past ten years.
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