Whisky a go-go

Despite the recession, some products just keep booming. Scotch whisky is one such product and the global market is growing rapidly.

But making the most of emerging opportunities is easier said than done, particularly from an operational point of view. Increasing supply to keep pace with growing global demand has given whisky producers several operational challenges to contend with.

The principal issue is where to put all this whisky during the long maturation process?

A marketing manager at a major distiller told Link 51 as part of its survey that: “The industry has its own unique problems to solve if growth opportunities are to be maximised – it’s not simply a case of increasing output.

“More than anything else, it’s difficult to get around the problem that it needs to age for between 3 and 60 years. In that sense, growth in demand creates challenges not just in distillation, but in warehousing and logistics.”

The principal issue being faced is a lack of storage space. As producers increase output to meet demand forecasts, many are finding they simply have nowhere to put it. In part, this is due to the way the industry has developed over time; following a trajectory of organic growth over several decades, if not centuries, many distilleries independently and in a piecemeal fashion, and most are now finding that a serious rethink of storage solutions is required if global demand is to be met.

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Link 51 sees palletised storage solutions for the market as a short term option.

For whisky producers of all sizes, operational practicalities and external constraints have created conditions where palletisation is perceived to be the only viable solution for immediately increasing storage capacity as production expands in the short term.

Palletisation as a storage method certainly has its advantages: pallets are low cost, the movement of barrels can be mechanised, and the technique enables producers to maximise density within a given storage space. But while the solution is effective in the short term, a more forward thinking approach to storage is considered essential as the full potential of expanding global markets is to be realised. Not only does this method lead to excess wastage (much to the delight of the angels!), but it cannot offer continued ease of access to specific barrels – a necessity for distillers dealing with specialised lines of whisky or exchanging blends.

In the medium term, producers will move from palletisation to bespoke racking for high value products. Above all else, quality of product is the key consideration.

A planning manager for a mid-sized whisky producer told Link 51: “The global reputation of Scotch whisky is built on its quality, and producers realise this. To ensure high standards of whisky quality are maintained, many producers are looking at bespoke racking solutions. The key advantage of racking is ease of access, making it attractive for specialised lines of whisky.”

The benefits that bespoke racking lends to whisky quality are two-fold. Not only does the system improve accessibility for testing, enabling distillers to take better care of the casks in their charge, but there is an emerging view within the industry that racked storage is better for maturation and produces a higher quality output.

Beyond quality and accessibility, there are further practical advantages to bespoke racking. First, the system is customisable. Racking systems can accommodate multiple cask sizes simultaneously, and in-built flexibility in the racking architecture affords producers the luxury of being able to reconfigure their storage system, enabling them to adapt their storage system to evolving business needs and respond to changing market conditions.

A racking solution that can be customised is particularly important when considering another factor at play: regulation. Distillers are wary of tightening storage safety guidelines that necessitate an element of flexibility in future storage solutions, as additional requirements such as in-built sprinkler systems appear on the regulatory horizon.

With storage regulations widely expected to tighten, producers seek a solution that is adaptable not only to evolving market conditions but also to changing standards of compliance.