Thursday 22 August 2013

The Great Northern Distillery

Yesterday's big news was the announcement of the Great Northern Distillery, to be owned by the newly formed Irish Whiskey Company (IWC). It's a fresh venture, but there are some old hands in the whiskey game involved, chief among them John Teeling, founder of Cooley Distillery.

Until US multinational Beam took over in 2012, Cooley was the go-to distillery for supermarkets, entrepreneurs and others wanting to sell their own brands of Irish whiskey without the fuss of making it themselves. Beam promptly exited that market to focus on making spirit for its own labels. According to John Teeling, Cooley had cultivated 80 to 90 private and retail label customers so the supply shut-off meant there was suddenly plenty of unmet demand for large quantities of Irish whiskey.

Diageo is moving lager production from its "Great Northern Brewery" in Dundalk to Dublin so they are happy to sell the facility to the Irish Whiskey Company. Dundalk is happy that a long tradition of brewing and distilling there will be maintained, once the Great Northern Brewery sign is touched up to read Great Northern Distillery instead.

The plans, which may yet change, are to produce grain spirit and unpeated, triple-distilled malt and pot still spirit. That provides a lot of flexibility for meeting the requirements of private and retail labels. The company also sees a market for its grain whiskey in the new craft distilleries popping up around Ireland. They typically install a pot or two but don't operate a continuous still and so can't make the lighter grain spirit. If they buy that component in from IWC, they can bottle less expensive, blended whiskeys.

What the business strategy doesn't include at this point are house brands, or low volume, single cask-scale bottlings.

The new distillery will be second only in size to Midleton on this island. Operating at full capacity, it could pump out 8m litres of grain alcohol and over 3m litres of pot still spirit. What does this mean for Irish whiskey?

Well, it's certainly true that by the time Cooley was acquired there was a plethora of forgettable 4-year old Irish whiskeys with generic Irish-sounding names, particularly in the US. We'll no doubt see those again.

On the other hand, Cooley's willingness to supply whiskey gave rise to many interesting experiments. There was a kosher whiskey, a Petite Sirah-finished blend from a Californian winery and a supermarket single malt that Jim Murray declared Irish Whiskey of the Year in 2011. It also gave a kickstart to some of our new independent distilleries, like Slane Castle and Echlinville, who got their feet wet by building a brand not a production facility.

IWC will take possession of the site in early 2014. It will be able to adapt some of the existing brewing equipment and should have new distilling kit installed and running during the third quarter of 2014.