The History of the Independent Bottlers
Single malt whisky is old. Not only on the label but historically speaking. In 1995 its 500th birthday was celebrated. Before that time, only a few monasteries knew about the production of malt whisky. Outside these ‘strongholds of knowledge’, its production was a secret. Beer was brewed from barley, but how to make whisky from beer remained a mystery.
A hundred years later there was no more secret. The first distilleries outside of the monasteries were established. As of 1700, almost every farm in Scotland, Ireland and on the US east coast distilled whisky as a sideline. There were no alcohol taxes, and each farmer tried to turn at least some of their barley into cash.
The whisky didn’t last long. Right after production it was quaffed by thirsty pub-goers straight from the cask. Each cask tasted differently, which made people pay attention to who had filled it. In the US, a law was passed stating that each whisky cask had to be labelled with the county of its origin. That’s how the name bourbon (from Bourbon County) came into being.
Over the course of the centuries, bourbon and Scotch secured their place in history. At the end of the 19th/beginning of the 20th century, the cheap and mellow blends in glass bottles replaced the malt whisky casks from the pubs. The governments needed money, and distilling licences became unaffordable for farmers. The market was concentrated, and from thousands of Scottish farms only a few hundred malt whisky distilleries emerged. They mostly worked for the blend industry. The time of the beloved malt whisky from small casks was over.
Completely over? Not quite. A small community still requested malt whisky, which was now also available in bottles. Around 1900 there was a market niche for whisky. For example, Glenmorangie exported malt whisky to San Francisco. But there were only few malt whisky bottlers; brand management and distribution were too costly.
Before the year 1825, Gordon & MacPhail, a well-known grocery company from Elgin, Scotland, decided to buy malt whisky in casks and to market it on their own account. Important Speyside malt whisky distilleries like Macallan and Mortlach recognised the positive effect and had their malt whisky bottled in Elgin, too.
Not only Gordon & MacPhail knew about the market niche. Many other retailers followed suit in the following years. In a century with two wars and many upheavals, most of them perished again.
No other important independent bottler beside Gordon & MacPhail survived the time of the two World Wars. Instead, the distilleries, above all Macallan, Bowmore, Glenlivet and Glenmorangie, started to market their malt whisky by themselves.
Gordon & MacPhail were still primarily grocers, but they assembled a large stock of malt whisky casks that are worth a fortune today. No other distillery or independent bottler has got such a large stock of old malts.
It wasn’t until the 1980s that a new, important independent bottler, Signatory Vintage Ltd., entered the market. In contrast to the established Gordon & MacPhail, the young owner concentrated on Scotch single malts only.
No groceries, no blends and no distillery that could have distracted from selling whisky, just single malt and nothing else. Within 20 years, the two brothers Symington managed to rearrange the whole market with steady work. They were no white-collar managers afraid to get their hands dirty. They really worked hard and within a few years they achieved what other families couldn’t achieve in a hundred years’ time.
Today Signatory is a flexible and innovative independent bottler that continually releases newly-crafted malts. They have good relations to distilleries. For example, only Signatory managed to bottle the Ben Wyvis single malt again, which was thought to be lost forever.
But let’s stay realistic. Gordon & MacPhail and Signatory are small family businesses that bottle a few hundred casks per year under their own moniker. Compared to the big players, they’re a drop in the ocean – albeit a drop of finest single malt whisky.
Where there’s light, there’s shadow. Until September 2001 new young independent bottlers entered the market almost on a monthly basis. Most of them didn’t make it from the twilight to the spotlight. Their whisky sources are too dubious, and the quality is far from consistent. Some bottlers have never seen the casks they bottle. They are sometimes called ‘arm chair bottlers’ because they sit at home and have malt whisky bottled somewhere else. They don’t know how their whisky tastes and they don’t care. Malt whisky is ‘in’, and the consumer is thought to fall for any nice story and an exotic Gaelic name.
But consumers aren’t that ignorant. They notice when they’re taken in. Maybe they can be fooled once or twice but not a third time.
The big corporations have also recognised the risk of these dubious bottlings that are sold bearing their name. They have often taken legal steps against these bottlings. Some distilleries, among them important ones like Glenmorangie, Glenfiddich, Glenfarclas and Balvenie, strictly forbid their names to be used. As of summer 2002, the big alcoholic beverages company Diageo has decided not to sell casks from their important malt whisky distilleries to independent bottlers anymore. Existing contracts will be honoured, but the market is dried out in the long run.
Instead they have decided to enter the business of high-value bottlings themselves. The corporations now offer an impressive range of special bottlings. Glenmorangie’s Private Collection and Diageo’s Special Releases have become highly popular with collectors.
The independent bottlers are aware of this looming danger. It won’t take long until they’re literally dried out. They won’t make profit with 2nd and 3rd class distilleries. The big and well-known brands have a huge advantage. If the big players still give away casks, they want to be paid well for this kind of brand management.
An opposing trend is conceivable. Gordon & MacPhail bought the Benromach distillery. Ian MacLeod bought Glengoyne, and Murray McDavid, an aspiring new independent bottler, bought Bruichladdich. Only Signatory lacked behind until the summer of 2002. Originally they wanted to buy Ardbeg but were outbid by Glenmorangie Plc. In 2002 they acquired the small Edradour distillery.
What does the future have in stock for the independent bottlers? In the medium term, the market will be consolidated. Too many small businesses that only bottle a few casks each year can’t survive. They must come up with new long-term strategies.
For example, they can establish a new distillery, like Isle of Arran, Drumguish (Speyside) and Kilchoman did. The easiest and most widely used way is to take over a mothballed distillery. However, the devil is in the details. Which outstanding distillery is mothballed and affordable?
Lesser known distilleries are cheapest, but they also have the least potential. The distillery mustn’t have been closed for too long, otherwise the stocks aren’t large enough to keep a customer base for long. It’s a dilemma. Which distillery will be next?
The big players flex their muscles and divide the market up among themselves, but only the market that is attractive to them. Who wants to try an independent Tomintoul, Tamnavulin or Glencadam except for some experts? They may still be bottled by whoever wants to. The well-known brands, however, won’t give anything away. One thing is certain: Good single malt whisky has its price, and people are willing to pay that price. The Scots have understood that. Whether we buy a single malt from a big or a small distillery – chill filtered or not – our taste can’t be fooled.
Let’s get away from this David and Goliath story. Big and small companies have the same opportunities. The Connoisseur drinks the single malt whisky he likes, not the whisky that is advertised for with the wildest stories. Small distilleries will continue to produce excellent single malts in small batches. The ‘global village’ is a reality. Everyone can offer their goods on the global marketplace. The consumer will decide which distilleries and bottlers will survive.