If you’ve ever dreamed of starting a whisky distillery, it may be time for a reality check. Here are the four biggest obstacles you’ll face if you are planning to open up a whisky distillery someday.
1. Money, Money, Money
To get into the scotch whisky business the first thing you’ll need is a lot of start-up capital. You’ll need to pay for the permits, the distillery site, the equipment, construction of the distillery, and employee wages. It is unlikely that you, as an individual, will have a mountain of money lying around to pay for all of these things. In that case, having a solid business plan, industry contacts, and a gift for the gab will come in handy when you’re looking for investors.
2. Obtaining Permits is a Drag
You’ve got the money you need to start your distillery, now the next thing you’ll need is the proper approvals. While getting manufacturing licenses and permits for starting a whisky distillery is no different than getting them for a gin or vodka distillery, it is still a very time consuming process. I spoke to my former boss at The Borders Distillery, John Fordyce, who told me that it took them two years to get all their approvals and permits sorted.
3. Patience is Key
Gin and vodka distilleries are able to sell their products almost immediately after they are distilled. However, for scotch, the spirit must legally be matured for a minimum of three years and a day.
Even though it only takes three years and a day in the cask for the spirit to legally become scotch whisky, that doesn’t mean you’ll be able to sell your product in three years time. Maturation is not a linear process. It doesn’t go 1, 2, 3, 4, 5 years then bang the scotch is ready for sale. No, as a scotch distillery, you will wait for your scotch to mature into the best tasting version of itself. This could end up being ten years or more.
You’ve got to remember that the influences on the maturing cask are many and varied. Variables in the maturation process include: the quality of the cask, the quality of the spirit, the atmospheric pressure, the relative humidity, and whether it rained a lot or very little during the year.
Maturation is a bumpy road and it’s difficult to say for certain when the first spirit will be ready. You’ll have no idea. One thing you definitely won’t want to do is become impatient and rush your whisky to market before it’s ready. After all, you only get one chance to make a first impression, so you’d best make sure it’s a good one.
Unlike gin or vodka distilleries where they can sell their products soon after they are distilled, there is a gap of several years between when the spirit is distilled and when the product is ready for sale at a whisky distillery. Patience may be a virtue, but it’s a necessity if you’re dreaming of opening up your own scotch whisky distillery.
4. Keeping Your Distillery Afloat
If your new scotch distillery has to wait 6-10 years before it can sell its single malt scotch, you’ll need to find other ways of bringing money in to keep the distillery operational so that you can keep producing spirit and laying down more casks for the future.
While the Borders Distillery has positioned itself as a scotch whisky distillery, they are also currently producing vodka and gin. This is a very common thing for whisky distilleries to do in order to bring in money as they wait for their whisky to mature.
The distillery also has a cask scheme set up to sell entire casks of their maturing whisky to private individuals. Additionally, they sell blended whiskies under their brand name. They have two blended whiskies for sale, The Clan Fraser and The Lower Eastside. It’s important to note that these whiskies aren’t produced at the distillery. They are made of whiskies from other distilleries that have been blended to The Border’s Distillery’s specification and are sold under the distillery’s name.
Another common route into whisky distilling is for distilleries to position themselves as gin distilleries first. After establishing a reputation and a stable revenue stream, they can start thinking about branching into the whisky business. A reputable gin distillery can then make the necessary changes to reconfigure themselves to produce whisky. This method requires less start-up capital than if they were to start making whisky from the get go.
The most challenging part of starting a whisky distillery is time. You are making a product today that won’t be ready for sale until ten years from now, and you don’t even know what that final product will taste like. You’re basically running your business hoping that all the money you’ve spent upfront will pay off in ten years time. If everything goes right, then whisky isn’t such a bad business to be in. However, it will take a lot of guts and a lot of faith to start a whisky distillery.
Watch it on YouTube Below
Leave a Comment