The Scale of Modern Scotch Whisky
And its continued expansion
Glenfiddich Distillery, Dufftown
The increasing number of new distilleries tend to grab the headlines when anyone’s looking at the current Scotch whisky boom. Another area which gets somewhat less coverage is expansion.
These are existing distilleries whose owners have decided they need to increase production to fulfil the growing future demand for Scotch. But is it still growing? Are we starting to see signs that a slowing market may dawn on a new era of over supply?
In something of a follow up to Fletcher’s debut article Who Will Buy All This Scotch Whisky? I wanted to try to put numbers and scale to this question of capacity and expansion. As a curious enthusiast, I’ve utilised Ingvar Ronde’s superb Malt Whisky Yearbook and other reputable online resources such as press releases, official websites and news articles to try gather the numbers in this article.
The figures can vary depending on where we draw information from, and although I’ve tried to be thorough, it’s likely some of the numbers could be slightly off. However, the overall picture should remain reasonably accurate based on these ‘theoretical’ capacities. I am also focusing on the boom of the past ten years, where we’ve seen the largest number of new distilleries and expansions come online.
Let’s start with those new distilleries. In the past decade since 2014, we’ve seen 37 new malt distilleries begin distilling in Scotland, either distilling or due to begin distilling this year (such as in the case of Ardgowan, for example). More are in the pipeline beyond 2024 and to be honest it is hard to keep up. I’ve also included Brora, Rosebank and Port Ellen, despite them arguably being reopened rather than strictly speaking “new”.
The biggest new distillery in terms of theoretical capacity by some margin is Dalmunach with 10,000,000 pure alcohol, litres per annum (lpa). Interestingly, as recently as two decades ago this would have made it the largest malt distillery in Scotland.
Inchdairnie is next with 4,000,000, followed by The Borders and Falkirk with 1,600,000 and 1,200,000 respectively.
All the others are either 1,000,000 or under. A number of these are yet to release any whisky to the market, but importantly their combined theoretical lpa is almost 33 million.
the scale of Macallan’s new warehousing on the hill behind the distillery
However, as I’ve mentioned things get even more interesting when we come to the expansion of the established distilleries, who have made the decision to increase production in the past decade, presumably as a reaction to the recent boom period and future forecasts both at home and overseas.
The largest such capacity increases have been at the two industry powerhouses of Glenlivet and Glenfiddich both doubling their theoretical output by 10,500,000 to a whopping 21,000,000 lpa in 2018 and 2020 respectively. Both are running at full capacity too, which is not something we can say about many of the newer kids on the block, but we’ll work with the theoretical numbers to keep things simple. These are closely followed by a distillery whose scale of expansion surprised me when I first read it.
Pernod Ricard have set to work on upping their production at a number of their distilleries, including Aberlour and Miltonduff, with the latter in particular going from 5,800,000 litres, to 16,000,000 by the middle of 2025. Those three expansion programs alone account for almost all the new distilleries in the past ten years combined, but there’s more; fourteen more in fact.
huge expansion at Miltonduff. Credit: Chivas Bros
When we add the capacity increases of all seventeen distilleries that have, or are about to expand, we reach a phenomenal additional lpa figure of 72,855,000; more than double what the newcomers are capable of.
Even if I went back further and factored in the six other distilleries that have opened since 2005, including mammoth concerns Ailsa Bay and Roseisle, there would still be a difference of more than 10,000,000 litres just in expansion alone.
Other notable increases this past decade have come from Macallan, with an additional 6,000,000 litres when they opened their new distillery, Glen Ord with an extra 6,190,000 and Glen Moray with 5,500,000.
I had no idea some of these distilleries were in such high demand. The aforementioned Miltonduff is gaining in reputation with malt drinkers who appreciate what is available from independent bottlers, but that’s inconsequential in terms of the actual distillery output, and we see virtually no official releases. The increasing demand for blends, particularly Ballantine’s, is the reason cited by Chivas for it soon becoming the third largest distillery in Scotland with this almost tripling of capacity.
That’s a hell of a lot of Ballantine’s to sell, but I’m sure they have crunched the numbers and can see which markets are demanding it. The question will be if they continue to demand it. Chivas say both Miltonduff and Aberlour are expected to be operating at full production capacity by the middle of 2025. Capacity increases at Aultmore (Dewars/Bacardi), Glen Ord and Teaninich (Diageo) are also likely to be a reaction to the perceived demand for blends, yet figures show them on a downward trend generally, despite still dominating the market.
Adding the total LPA of every Scotch malt whisky distillery pre-2014, which comes to 346,160,000 litres, we can work out that the increased production of the new distilleries and the 17 expansions, 105,568,000 litres, accounts for a 30.49% increase in total Scotch malt production capacity between 2014 and 2025.
That is without mentioning a number of distilleries whose LPA hasn’t necessarily changed, but they have switched from five to seven day weeks in order to produce more alcohol and get closer to their theoretical capacity. Therefore, if we include Ardmore, Auchentoshan, Balblair, Balmenach, Dalwhinnie, Inchgower, Mortlach and Tomatin, realistically, we are looking at an even greater figure. Single malt whisky has seen increased demand over recent years, but that’s a lot of extra whisky to try and sell.
Diageo’s Blackgrange bond with over 6 million casks. Image: Google Maps
The warehouses are filling up fast, with the Scotch Whisky Association reporting there to be around 22 million casks currently in warehouses in Scotland, which they say equates to around 12 billion bottles of whisky. Just a couple of years ago that figure was 20 million.
Fletcher has crunched a lot of the numbers already and used his industry experience - which is far greater than mine - in his article.
The Scotch Whisky Association publishes figures each year showing how much whisky is exported annually across the globe. The results published in February this year showed a marked decline in 2023 compared to the record-breaking figures from 2022, where the equivalent of 1.67 billion bottles of whisky were exported, which is over a billion litres of Scotch whisky. Those numbers were down to 1.35 billion, or 945 million litres in 2023, which is broadly similar to the 1.3 billion ten years previous in 2013. There has been growth in the past ten years, but not a vast amount in terms of true growth, apart from that one standout year.
The total theoretical capacity of all Scotch malt whisky distilleries after the current planned expansions is 441,616,000 litres per annum. That is obviously a figure that won’t quite be reached, as many distilleries distil below their maximum capability, but most appear to be close to, or at capacity.
Adding in the grain distilleries, of which there are currently eight in operation, the total theoretical capacity of all of which equates to around 442,200,000 litres per year, which is extremely close to the total malt production across more than 100 malt distilleries. That gives us 883,816,000 litres of spirit potentially distilled per year in Scotland.
The problem with trying to work out if this is too much compared to what is being sold is that there are far too many variables. We are not talking about new make spirit being shipped in bulk, we’re talking about mature whisky finding demand in the future. Also, Scotch whisky is usually diluted from still-strength to filling strength (usually 63.5% ABV) before being filled into casks and then matured in Scottish warehouses, where losses will occur over time. After that, water is more often than not added in varying degrees at the point of bottling, depending on what ABV it is being exported or sold at. Therefore the litres of ‘whisky’ which makes it into bottles will be far greater than the new make spirit made, despite the angel’s share (evaporation) and devil’s cut (absorbed by the cask) losses during maturation due to the water added.
With the figures a difficult puzzle to crack with any real accuracy, the best evidence we have, as enthusiasts digging around it seems, is anecdotal. In the UK we have witnessed sales that appeared to drop off at the back end of 2023 and are continuing to do so into 2024, which coincides with a global downturn in 2023. Price increases in whisky and in essential commodities such as energy and food have caused people to reassess and focus their money elsewhere, and most enthusiasts are sitting on comfortable sipping stocks to keep them away from retail while prices seem high.
Couple that with there being more whisky being bottled than ever before and we have a situation where supply may already be outstripping demand. The SWA are claiming the drop in exports this year is a correction after an above average year in 2022, but we will have to wait for next year’s figures to see if the export market has indeed stabilised.
The general vibe is that this looks set to be a tough year for the industry, tougher than any we have seen for a while, and if the decline in export continues, what’s to say we couldn’t find ourselves in a situation where distilleries are having to close their doors again, or at least operate at reduced levels?
Discounted Diageo Special Releases, amongst many, at London’s Heathrow
As much as I love to take advantage of a sale or some keenly priced bargains after years of frankly upsetting price increases, I certainly don’t welcome any downturn which sees any of the 66,000 people in the UK supported by the industry losing their livelihood, not to mention any potential knock-on effects at home or overseas.
It’s my feeling that some will be more resilient than others. New distilleries with small capacities and enough of an invested following to keep the sales ticking over may weather the storm. Larger concerns, those that have been cynical with their pricing or those that have failed to gain or maintain a loyal following may find things a lot tougher.
RT
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