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Move over craft beer, single-estate spirits aim to be the next drinks trend

Stretching 2,000-acres to the beautiful Lunan Bay, Arbikie Highland Estate is an arable farm producing crops including potatoes, wheat, barley and rapeseed.

For four generations, the Stirling family has been farming this land, which is currently under the stewardship of brothers David, Iain and John. Having carved out careers in the alcohol, restaurant and financial sectors, the three returned to Arbikie last year to open what has been touted as Scotland’s first single-estate distillery.

While not officially defined by the industry, single-estate spirits – also known as “farm to bottle” spirits – are generally understood to be products created using most, if not all, ingredients sourced from a single area of land. The brands producing such spirits are unique in their decision not to use neutral grain spirit (NGS) to bump up volume – a regular occurrence at both large and small distilleries.

NGS is made using grains such as wheat, corn, rye and sugarcane that producers buy in bulk to then redistill, as opposed to distilling all of their base ingredients from scratch, a much more expensive proposition. NGS is used by big distilleries to maintain volume, and by small distilleries to keep costs down and enable them to scale-up production quickly should demand take off.

Single estate distilleries, on the other hand, conduct almost all stages of production on site, including growing, fermenting, malting, distilling, maturing, bottling and labelling.

“We could buy neutral grain spirit in for about 50p, but instead we distill from scratch for about £4 a litre,” says James Chase, marketing director and founding family member of Herefordshire-based Chase Distillery, which claims to be the UK’s first single-estate distillery, having opened in 2008.

The craft craze spreads

These distilleries represent an emerging category that focuses on provenance, a concept traditionally associated with wine.

“We treat our potatoes in the same way winemakers treat their grapes, noting the aspects of each variety and the vintage,” says David Stirling, brand director at Arbikie Highland Estate.

“Historically, consumers didn’t really care about where their spirits came from, but the good food craze has prompted people to question the origins of these products,” believes Chase.

Producers such as Arbikie and Chase largely credit their success to the ubiquitous craft movement, which has taken the drinks scene by storm in recent years. Soaring consumer interest in locally sourced products from small, independent companies has filtered down from food and beer into spirits. Indeed, the number of applications for distillery licenses in the UK has trebled over the last year alone as entrepreneurs seek to capitalise on demand for boutique bottlings.

Sustainable spirits

As shoppers become more curious about the origins of their drinks, and as corporate and social responsibility policies increasingly dominate business discussions, distillers large and small are exploring how to make their supply chains more sustainable.

In 2008, UK drinks giant Diageo outlined a number of targets to improve its environmental impacts – addressing water use, waste and carbon emissions – and is currently building a £65m bioenergy plant at its Cameronbridge Distillery. Bacardi, one of the most vocal innovators in sustainable spirits production, recently opened a 100-acre blending and packaging facility for its John Dewar & Sons Scotch whisky arm. It features a drainage system that recirculates rainwater to a retention pond and provides wetlands for wildlife. Meanwhile, Absolut Vodka has created a hub made out of recycled transport containers in which designers and engineers are invited to develop sustainable packaging solutions.

However, shortfalls in meeting bold sustainability targets can be steep. Diageo failed to meet all but one of its sustainability commitments, only cutting wastewater pollution by 3.1%, against a 60% target. The distiller and its rival Pernod Ricard have also both been criticised by the Scottish Environment Protection Agency for over-abstracting water in 2013.

While large distillers are able to invest millions of pounds in making their businesses more sustainable, farm to bottle distilleries demonstrate this in the control they have over each stage of production. They claim that their decision not to use NGS, which is imported from all over the world, gives them greater accountability with regards to how their operations impact the environment.

“If these initial processes are left up to other people, how can you guarantee they are sustainable?” asks James Chase.

The potential for farm to bottle spirits to enhance the value and premium position of a range has not gone unnoticed by multinationals. After announcing a write-down of its Absolut vodka brand earlier this year, Pernod Ricard is focused on promoting super-premium brand extension Absolut Elyx – said to be made from single-estate wheat. Meanwhile, as sales of its core rum brand plummet, Bacardi launched the Single Cane Estate Rums range earlier this year. There is currently no widely used certification system for “single estate”, leading to a diverse array of products and distilleries that market themselves in this way.

Debate has been raging in the spirits industry for some time over what has been seen by many as an appropriation of the “craft” label by heavyweight companies that want to monopolise the market. Arguably the same could now be said to be happening to small single-estate producers.

“I certainly feel that the larger companies will either buy small, genuine craft brands or look to create fictions and back stories for their own labels,” says Will Borrell, founder of Vestal Vodka, described as a “single-village” Polish potato vodka due to the close proximity of its production stages. “This has the potential to damage the craft movement and I think they will see single estate as another badge. I say these people should be happy driving their Ferraris and leave us craft producers with our tractors.”

Source: The Guardian