Clydesdale and Yorkshire Banks have a commitment to supporting the Scotch Whisky industry that is as solid as the oak casks that house and mature the nation’s favourite spirit.
It is hard to think of a better time to be involved in the Scotch trade, with data over the last 2 years in particular pointing to a huge resurgence in the spirit’s popularity, especially within Asia’s booming middle-class demographic, who place great value on premium whisky originating from its spiritual home of Scotland.
Scotch whisky exports from the UK were valued at roughly £4.4 billion in 2017, according to the latest Scotland Food and Drink report, created in partnership with Clydesdale and Yorkshire Banks.
That represents a 9% rise since 2016 and a 54% rise from 2007. This was equivalent to 1.23 billion bottles making their way across the world, accounting for over 20% of all UK food and drink exports. The impact is so poignant that the UK trade deficit, one of the largest in Western Europe, would have been nearly 3% worse without Scotch whisky!
There is an unprecedented level of investment in the Scotch Whisky industry, with over 40 new distilleries at various stages of development.
With a proven track record in providing financing and specialist expertise to some of Glasgow’s finest premium whisky producers, we are playing a role in helping to spearhead the huge resurgence of the spirit’s popularity.
Glasgow was once a city with a vibrant and thriving distilling trade, but by the 21st century all but one distillery (Strathclyde, which produces grain whisky) remained. This is now changing rapidly as a burgeoning customer base pining for premium Scotch grows domestically and internationally.
Clydesdale Bank is backing leading Glasgow-based producers, delivering relationship-based banking centred on a deep understanding of their unique funding needs. These companies include Hillington-based Glasgow Distillery (which recently released its first ever ‘1770’ single malt, selling out in a matter of weeks). The company received a significant funding package from the Bank to help its expansion and growth, and the Directors now wish to expand operations and leverage off the strong reputation they are building. They want to increase production, which will improve efficiency and enable them to create extra value in future years by laying down more Malt stock. The expansion is underway with revolving credit facility funding from Clydesdale Bank.
We also provided financial backing to Glasgow Whisky Limited, a leading provider of high quality malt whisky in Asia. The Bank also has a long-standing relationship with Hunter Laing, one of Scotland’s leading independent producers.
Iain Watt, Commercial Relationship Manager at Clydesdale Bank, has worked closely with all three brands, supporting them alongside a team of experts with a thorough understanding of the specialist needs of Scotch producers.
"Scotch Whisky exports have been picking up for a number of years." Watt Said: "The demand is staggering across global markets, but especially in Asia. It's one of the reasons why many premium scotch producers have been looking to our Bank for lending, because they've needed to scale up and service that worldwide demand."
We don’t just support these businesses within the confines of Glasgow however…
In a remote corner of the Scottish Isles, far away from the bustling streets of Glasgow, Scotland's Isle of Islay (pictured below), colloquially known as 'Whisky Island', has recently welcomed a brand-new distillery, Ardnahoe, with the backing of Clydesdale Bank.
Hunter Laing, a Bank customer and blender of premium Scotch Whisky for three generations, is close to total completion of the Ardnahoe facility, from which the business has just produced its first batch of the spirit. From the base on Islay, the firm is aiming to produce a minimum of 500,000 litres of alcohol per year, employing local islanders and working alongside local suppliers. It will be a key provider to the world's markets. The new distillery will draw whisky aficionados from across the world as Hunter Laing will open the site in the picturesque location for interactive tours, events, conferences and even wedding packages.
The site is located in an excellent position, overlooking the Sound of Islay across to Jura and situated between two existing distilleries, which will complement the Islay Whisky Tour and Annual Festival. The Bank is hugely proud to be supporting such an ambitious project.
Deyrick Smith, West of Scotland Commercial Area Manager at CYBG said: “Whisky is one of only a few stocks that appreciates in value over time, regardless of global demand. For example, a 20-year old spirit will be worth significantly more than the same whisky that was distilled five years ago. Whisky needs to mature for at least three years before it can be sold as Scotch – a rather large period of time in which no revenue can be made.”
Smith added: “Being acutely aware of the difficulties this can present to Whisky businesses, Clydesdale and Yorkshire Banks have frequently funded whisky stock on balance sheets while the spirit matures into a marketable product, as well as supporting distillery and bottling projects across the country.”
Iain Watt said: “Scotch Whisky continues to represent an attractive spirits category. Excellent growth has been experienced in the last decade with cased and bulk sales greatly benefiting from the opening up of emerging markets. Additionally, sales in the USA continue to be strong. The underlying positive long-term prognosis remains firmly in place, and Industry players are professing continued confidence in the future for Scotch Whisky.
“The Industry’s two key players, Diageo and Pernod Ricard, remain publicly very positive regarding future prospects, with Diageo recently announcing a re-opening of Brora and Port Ellen distilleries.”
Clydesdale and Yorkshire Banks look forward to playing an active role in the sector for many years to come.
POSTED IN: Growth