Northern Lights

After over two decades, the dream of making whisky on Shetland is edging closer to reality,  while Orkney, home to Scapa and Highland Park, is set to have three new distilleries reports Ian Fraser …

When Canadian businesswoman Caroline Whitfield announced plans to build the first ever whisky distillery on Shetland back in 2002, the media coverage bordered on the ecstatic. Having recruited the 'Einstein of whisky' - Dr Jim Swan, Whitfield talked a good game and made impressive headway with the launch of a range of gins and vodkas distilled in the Central Lowlands under the Blackwood Distillers name. But her plans for a distillery on Shetland – an archipelago replete with Norse myths and legends – came to nought when Blackwood went into administration in 2008.

Sixteen years later, a group of local businesspeople are reviving the dream. Shetlanders Martin Watt and Calum Miller first started considering opening a distillery on Shetland more than ten years ago. They have obtained a site on Lerwick's Market Street and were joined in 2022 by sales and marketing expert Caroline MacIntyre and by master distiller Ian Millar – former global brand ambassador for William Grant's Glenfiddich, and former distillery manager at Bladnoch, Dalwhinnie, Blair Athol and others for Diageo. 

Watt, an accountant, initially feared the Blackwood saga might have tainted local opinion. However, he was pleasantly surprised when the Shetland community wholeheartedly embraced the Lerwick Distillery Company's plan. "Interest has been phenomenal and very rapid as well. Of the £1.8 million we've raised, one-third has come from Shetland investors." The distillery has raised £2.6m from investors and advance cask sales (subscribers to its Haad Still Fellowship receive a 500ml sample bottle of Shetland whisky every six months for eight years), as well as securing £300,000 in grants from Highlands & Islands Enterprise and Shetland Islands Council. 

With two 4,000 litre stills but limited fermentation capacity, Lerwick expects to be able to produce 300,000 litres of pure alcohol (lpa) a year. Near term challenges include getting the distillery connected to the national grid. Delays in achieving this, coupled with inflation and higher costs, have pushed construction costs above £4m, necessitating further fundraising. However, Watt is confident the company will open its retail premises on Market Street this September – just in time for late-season cruise ships visiting Lerwick – and to commence distilling by 2025, or 2026 at latest. 

Lerwick Distillery has therefore shown a clean set of heels to a pair of rivals also gunning to commence whisky production on the island in the near future. Shetland Distillery Company Ltd – founded by Debbie and Frank Strang, owners of Saxa Vord resort and Stuart and Wilma Nickerson, owners of independent bottler the Malt Whisky Company – opened the Saxa Vord Distillery on Unst 2014 but have to date prioritised production of Shetland Reel Gin.

Meanwhile, Aberdeen-based oil executive George Irvine set up Spirit of Shetland Ltd in 2021, with the aim of distilling whisky on the west side of the main island. Watt says: "I hope they're able to get it up and running. I have no issues with a second distillery opening. Having two distilleries here would be better than one."  

Orkney, by contrast has a long tradition of whisky-making that goes back to 1798 in the case of Edrington-owned Highland Park distillery on the southern fringes of Kirkwall. In 1885 it was joined by Scapa two miles south of Kirkwall, and now owned by Chivas Bros. Between them, the pair produce some 3.5m lpa per year. 

Highland Park, which was given a 'Viking Soul' rebrand in 2017, is facing challenges as owners Edrington seek to further premiumise the brand. Speaking to The Herald in July, the company's CEO Scott McCroskie said the brand had been affected by "the drop in consumer demand last year, particularly as this has coincided with… our strategic decision to discontinue lower-value expressions."

Scapa meanwhile was shut down by ex-owners Allied Domecq in 1994, but revived by them in 2004, before joining Pernod Ricard's Chivas Brothers the following year. Catering to the boom in whisky tourism, Scapa recently opened its 'Scapa Noust' tasting room overlooking Scapa Flow and produced a short film featuring the 'Game of Thrones' actress Gwendoline Christie wandering around the storm-tossed Orcadian landscape wearing a long flowing cloak.

Three companies – Kirkwall-based Orkney distillery, Deerness distillery, and Sanday-based Kimbland distillery – were vying to become Orkney's third whisky-making venture. Deerness, established by husband and wife team Stuart and Adelle Brown on a peninsula in eastern Orkney in 2016, last year claimed to have emerged triumphant, issuing a press release claiming it was to become "Orkney's first whisky distillery in 138 years".

It seems this was misleading. Soon after the release was issued and picked up by various media, the founder of Kimbland distillery on the island of Sanday, Sebastian Hadfield-Hyde, rubbished the claim. He pointed out that Kimbland Distillery had been inaugurated in 2020 and was just weeks away from having its first whisky maturing in casks. Hadfield-Hyde, who more recently installed two 9,700 litre stills and a 21,000 litre fermenter at Kimbland, said it was "totally wrong" for Deerness to make such a claim. In reality Deerness doesn't expect to commence whisky distilling until October, having mainly focused on gin, vodka and a coffee liqueur so far.

The other Orcadian player that sees getting into the Scotch business as a priority is The Orkney distillery. This has focused on gin under its Kirkjuvagr brand since it was founded in 2016. In March however, the business, led by managing director Stephen Kemp and located on Kirkwall's harbour front, commenced distilling Scotch – meaning it has also nosed ahead of Deerness in the island's so-called "whisky wars". Kemp said: "Whisky production has been our dream since we began work on the distillery … We're determined to create a single malt of exceptional quality and provenance." Before its planned release in March 2027, the distillery intends to offer two blended Scotches, Hoy and Fara, which will be bottled and further matured on Orkney.

While Shetland remains a tabula rasa where whisky production is concerned which is likely to give added impetus to its first distillery once it opens as a result of the novelty factor, Orkney is far from saturated. Yes, it may soon jump to having five active whisky distilleries but that is fewer than were based on the archipelago in the 1820s when, according to Gavin D Smith in Scotch Whisky, it had nine, including seven in Kirkwall and two in Stromness.