Warehouse Life and Maturation

A few years ago, when we were having this website created, Jane and I were full of ideas about the things we would do to make it as interesting as possible for casual readers and whisky enthusiasts alike. My theory was that, although a distillery is in our plans for the future, what we do on a daily basis is probably quite interesting to people who have already visited a few distilleries, but have rarely seen what goes on in other parts of the industry. We should be able to offer you the unpolished, uncut version, which might offer some fresh insight.

A couple of years have passed, and although I sporadically remember to upload photographs onto our Facebook page, I rarely give any information about what we actually do.

In order to understand what we do, you probably need to understand what we want to do. The goal has always been to have our own distillery. Not a small scale corner of a small barn setup (not that there is anything wrong with these), but a distillery that is capable, at least in theory, or producing at a cost per litre that is at least halfway competitive with the larger names. It is fairly logical that if you have small stills then you produce small batches, and therefore need more batches to produce the same quantity.

In order to get ourselves a distillery, we decided to get into warehousing. Sure, we could bottle casks, have fancy labels, set up a brand and sell the bottles at high prices. Large profit margins would obviously help us on our way to our own distillery, but I’m still of the opinion that I would not want to buy a bottle of whisky for more than £100 unless it was really special (and in reality, probably only as a gift, as I’d be unlikely to want to drink it). In the current whisky business, this is very much fighting a losing battle. If you say that you won’t sell something for over £X, then inevitably you end up being priced out of purchasing those casks. There is nearly always somebody else who will dive in and make a quick sale, because there is nearly always somebody else who is willing to pay the higher price.

Over the past couple of years, we’ve been very busy filling up our warehouses, trying to use the income from warehouse rent as an alternative to raising cash for a distillery through bottle prices. This has been an interesting experience, varying from day to day from engineering steel calculations, explosion proof electrical wiring, forklift attachments and barcoding systems.

The sheer volume of casks has led to a huge increase in the number of changes of ownership, so systems have been put in place to try to remove duplicates and also to keep track of other peoples’ dealings. Sometimes, sales in a warehouse can take so quickly that a cask might not be officially in one person’s name but they’ve already agreed the sale to another person. Very often, the delivery order will be back-dated so that the person in the middle can avoid paying warehouse rent.

With more casks, has also come more bottling work. It isn’t a requirement for customers to use us of their bottling, but we do try to make it easier by offering bottling services. Bottling is a partly seasonal task, with most people wanting their whisky around Christmas time and this leading to a backlog usually from October. Despite investing in expensive bottling equipment, every time I think that we are going to catch up, something happens and we end up with more bottlings. Different customers have different requirements, so the issue of scheduling it something that we still struggle with to this day. “How long will it take?” is the most common question received in our office, and it is a difficult one to answer. We have period of bottling 10 casks a day where we feel like we are the most efficient team on the planet, but then a couple of weeks later thousands and thousand of labels will come through the door from the various customers. These labels are often not on a roll and need to be hand applied, or the bottles are tapered so the labels can’t be applied by a machine. Suddenly a week has passed when you are mostly labelling and only bottling 2-3 casks per day. The variability in labelling is the single biggest problem that we have. Bottling a cask can be done in 25 minutes with a three person team, but labelling can take an hour and a half.

Another problem with more casks, is proportionally more leaky casks. Lots of our customers have grown alongside us, so they have a larger stock and also therefore experience a larger number of leaks. We have a good system of storage where we can access nearly every cask for sampling, but it doesn’t really make it any easier to spot slow leaks. Imagine a 1ml drip every minute from a cask end – thats 525 litres in a year, in otherwords your cask could be empty for the sake of 1ml every minute. To further complicate matters, casks are an ever changing thing, expanding and contracting as the temperature fluctuates. We estimate that the temperature of the whisky in our casks fluctuates from 2 degrees C to 14 degrees C throughout the year, with higher fluctuations in those casks that are out of the warehouse for work to be done. This fluctuation in temperature can mean that a cask which is perfect in every way today, can be leaking next week. You bring it out and fix it, only for one next to it to spring a leak next week. All of this assumes that you actually notice the leak. We have concrete floors, so usually can see pools of liquid if they form in a walkway, but we can’t if they form at the back of the casks (they sit back to back with an aisle on the outsides). The casks are stored 8 high, so a 1ml drip per minute might not even make it to the ground, but can soak into the wood of various casks below.

Then you have the worst types of leaks – the instantaneous, unpredictable, “explosive” type of leak. Some types of wood and in my experience most commonly Spanish oak sherry casks, can rupture completely unexpectedly, emptying the cask in a matter of minutes. If this happens at night or at the weekend, or simply when you’re not nearby, what chance is there to save the liquid? I think that this happens due to over tightening of the hoops on the curved sherry wood, putting a lot of strain on the curved cask staves. As they dry out in the warehouse they pop. If you’re lucky, it will be the top of the cask -if not, it won’t.

Ten years ago when we were selling casks of 10 year old Caol Ila for £2200, leakages weren’t such a major issue (20 litres lost at 50% might cost you £220). Now just a few litres of losses can take you into the high hundreds of pounds or even thousands of pounds of losses.

Since 2010 when I started with just myself, the company has now grown to 24 of us. With the help of a keen and happy staff, I want to try to continue to grow, providing customers with good value whisky and a friendly approachable service.