The History

 

The year is 1885 and you are walking down a muddy pathway that leads to a pig farm and ten acres of stubble on the western outskirts of Edinburgh. Adjacent to this rural scene is the new and developing suburb of Gorgie and Dalry and in the opposite direction across pasture land the country houses of Balgreen and Damhead are clearly visible. This unpromising location is however set to become an exciting new addition to the commercial and industrial heartbeat of Edinburgh. It is here that Andrew Usher, William Sanderson and John M. Crabbie decide to establish The North British Distillery Company Limited      

The site is chosen in preference to a number of others due to its ready access to an abundant supply of water from the Pentland Hills via The Union Canal. In addition the site is in close proximity to the railway network - an essential support to industry in the Victorian era. It is a bonus to find that the main city sewer runs less than 100 yards from the field thereby providing a ready solution to the disposal of effluent. Finally of course the neighbouring dairy farmers provide a ready market for the disposal of the draff and dreg residue from the distilling process

  

In short the site provided the ideal backdrop for this group of independent blenders and purveyors of their own brands of Scotch whisky to build and operate a distillery which would provide access to their own grain spirit. The spirit would be of consistently high quality and at a price which they could control. In essence the distillery was to be financed by the trade for the trade - a sort of "cooperative" arrangement that would remain the ownership structure for the next one hundred and eight years.

  

Having identified the site and established the vision for the new company construction work began in earnest during 1886. The distillery came on stream in September 1887, producing just under 1 million l.alc. in the remainder of that calendar year. In the first full year of production in 1888 distillery output amounted to 3.6 million l.alc. It is perhaps interesting to note that filling prices were established at one shilling and three pence per proof gallon - in today's terms 2.5p/l.alc.! Such was the early success of the NB that fillings demand increased year on year and by 1897 the Chairman, Andrew Usher, commented "there is no whisky more popular in Scotland than North British".  

 By the outbreak of the First World War in 1914 annual output had increased to approximately 9 million l.alc. supporting the rapidly expanding export sales of blended Scotch whisky. As the war dragged on the availability of cereals began to dwindle and eventually ceased altogether. Distillation was suspended in early 1917 and plans were initiated to convert the distillery into an acetone factory to help support the munitions programme. However the conversion work was never completed with peace being declared in late 1918. Distilling operations resumed in January 1920 by which time filling prices had escalated to an exorbitant  9.5p/l.alc.!  The post war era was one of great uncertainty with cereals and coal prices fluctuating wildly. Through it all the NB continued its steady recovery and by 1925 filling volumes had recovered to pre-war levels. Little did our predecessors realise the trouble that awaited them just around the corner!

 In 1925 the arrival of the Prohibition Era in the United States resulted in the loss of a significant export market for Scotch whisky. The following year the UK plunged into the General Strike heralding a period of worldwide economic recession. The misery continued for a number of years throughout the western world culminating in the Wall Street Crash in 1931. By the following year NB's annual production had fallen to 1.2 million l.alc.

 

In 1933, however, the United States repealed their prohibition laws and with slowly improving economic conditions, Scotch whisky's largest export market began once again to offer growth opportunities and a revival in the demand for new fillings. By 1937 production output had eventually recovered to 8.8 million l.alc. During this period a new office block was erected at Wheatfield Road and the first warehouse was established on the Westfield site.


This period of relative prosperity was brought to a rapid halt with the outbreak of The Second World War. Lack of available cereals caused closure of distilling activities during 1939. Although there was a brief resumption of production during 1940, distillation was suspended until the end of the war with NB's facilities, in the interim, being used as a government cereals store with some production of malted barley continuing in support of the brewers. With no production of new make spirit, warehouses were quickly emptied as stocks were consumed to support the continuing demand for Scotch. As casks were cleared the warehouses were refilled with such diverse items as wheat, oats, tobacco and clothing.

The end of the war came in 1945 and customers were informed in their fillings circular letter that "they may order up to one third of their 1939 fillings". The immediate post-war era witnessed continuing shortages of cereals for production and it would be as late as 1955 that production levels returned to those achieved in 1914.  

By this date demands for maturation warehousing began to exceed capacity. The decision was taken to build Westfield "B" followed quickly by Westfield "C" which was designed to accommodate racking for the first time. The continued growth of industry sales to more than one hundred countries meant that by 1961 distillation activities had expanded to 13 million l.alc. requiring yet further investment in warehouses. That year the company acquired the Corporation tramcar depot at Westfield and the former premises of Scottish Brewers at Slateford. Both premises were quickly converted providing additional new warehouses and a maltings.

The late 60's and 70's were vintage years for the industry and the distillery. In 1967 the office block at Wheatfield Road was extended utilising the same sandstone materials as the original. Indeed the Darney Quarry in Northumberland was reopened especially to provide the necessary stone! In addition in 1969 a new top floor was added providing increased office accommodation.

  

With both home sales and export sales booming, distillery output had virtually doubled by 1968. By this time the decision had been taken to purchase 30 acres of land at Addiewell, West Lothian and in 1970 the site contained no fewer than six new racked warehouses and a filling store. A further three warehouses were added by 1975 when an additional 30 acres was purchased at an adjacent site. By 1979 production was running virtually at capacity levels with output that year totalling 36.4 million l.alc. This expansion of output had been enabled by substantial investment in production facilities. New stills, mash tuns, washbacks and an upgraded laboratory were all part of the expansion programme. In addition the company led the industry in its control of effluent and heat recovery systems with the establishment of a dark grains plant, replacing the infamous "Dreggie". The pelletised product made from the cereals and yeast residue of the distillation process was sold as cattle feed generating a substantial improvement in revenue compared to the previous "draff and dreg" sales.

The growth and development of the company in these glorious years was impressive. However this performance was spectacularly reversed in the following four years. World economies were once again plunged into uncertainty with the Middle East "oil crisis" being a major catalyst. Although worldwide demand for Scotch whisky only marginally reduced, companies who had been forecasting ongoing annual growth of up to 10% suddenly found themselves with substantial surpluses of maturing stock. Corrective action was required and it came in the form of a sustained closure programme of distilleries and large cutbacks in filling orders. NB was not immune to this corrective action. Indeed between 1980 and 1983 production fell by two-thirds so that by 1983 output was only 11.3 million l.alc. With the significant downturn in activities the company shed a quarter of its workforce - although there were no compulsory redundancies. The opportunity was taken to plan for the future. A series of efficiency improvement projects were initiated. Out of adversity came a leaner, fitter organisation that was ready to exploit the recovery in demand for new fillings.  

The company celebrated its centenary year in 1985. One hundred years of operation had seen the company change significantly but the founding principle of a "cooperative" structure remained resolutely in place.  The company's main purpose was still to supply its customers with the highest quality spirit at competitive prices. In that respect then, little had changed.

As activity levels continued to recover the company embarked, in 1988, on a new ambitious scheme to recover and liquefy fermentation carbon dioxide. Approval was given to spend £1.8 million installing the new equipment. After some initial teething problems the plant provided a regular new stream of income.

 

Industry consolidation continued unabated as companies sought to become more efficient and reduce costs. The closure of Edinburgh's other grain distillery, The Caledonian, was announced in 1988 leaving NB as the last remaining producer in the capital.

The revival in fillings activity continued and by 1990 the distillery was producing a new record output of 41.7 million l.alc. This success was again short-lived as the industry entered another period of reduced optimism resulting in production cutbacks. As if mirroring the difficult times a serious incident in 1992 resulted in an explosion in No. 4  Still, which was damaged beyond repair. Fortunately no-one was injured in this alarming incident. Indeed plans were already well progressed to replace a still when the incident occurred. A quick change in implementation strategy saw the damaged still replaced and the order book for the year fully satisfied.

In 1993, after 108 years of remarkable achievements, the first significant change to the ownership structure of the company was witnessed. Robertson & Baxter combined forces with International Distillers & Vintners to form a joint venture called Lothian Distillers which bought out all other shareholders. After much negotiation a purchase price of £84 million was agreed and recommended by the Board to the shareholders. Worries regarding the future of the company were quickly dispelled with the North British trading name retained and an ambitious expansion plan to increase distillation capacity by 50% to 63 million l.alc. This expansion included the establishment of a capability to produce grain neutral spirit to support the requirements of IDV who had recently acquired the Smirnoff vodka brand.

   Over the next five years the re-investment programme amounted to approximately £30 million providing new stills, washbacks, a state of the art boilerhouse fired by natural gas and upgrading to the warehouse infrastructure. The order book continued to grow and by 1998 a new all time record for annual production was established at 61.6 million l.alc. During February of that year the company passed a notable milestone by producing the 1,500,000,000 l.alc of whisky since its inception in 1885. A commemorative new bourbon barrel was filled to mark the occasion and takes pride of place in No. 1 warehouse at Wheatfield Road.

Industry restructuring continues unabated. The merger of Guinness and Grand Metropolitan to create the mighty Diageo has now resulted in IDV's 50% holding in the company being transferred to UDV. These changes have, however, continued to strengthen the position of NB in the industry. Our long acknowledged quality of spirit is backed up by an efficiency of production and level of customer service that is unequalled elsewhere in the industry.  

The company undertook a major strategic rationalisation of its business when it sold its Maltings and Warehousing site at Slateford Road, Edinburgh in 2002, followed by the sale of its Warehousing site at Westfield Road, Edinburgh in 2003. The company now operates on only two sites with the vast majority of its  maturation warehousing concentrated at Muirhall.   Following the exit from the Westfield and Slateford sites, the site acquired by the company in 1975 on the south side of the A71 at Muirhall was developed for the first time with, initially, two modern maturation warehouses being built.   Today a total of four maturation warehouses have been developed on the site. 

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Warehousing in Edinburgh is now restricted to the original No. 1 Warehouse at Wheatfield Road which offers traditional style storage for casks laid down for longer periods of maturation.  Otherwise, the Edinburgh site remains the company’s centre of excellence for its distilling and related processes

The improved outlook for sales of Scotch Whisky overseas, in particularly in India, China and South America, saw increased demand for the company’s product over 2006/07, culminating in a new record level of production in 2007 of 65mla.  This surpassed the previous theoretical capacity of the Distillery of 63mla.  Whereas it had taken just over 100 years for the company to produce 1.5 billion l.alc by 1998, the 2 billion l.alc milestone will be reached just ten years later in early 2008.   

Those visionary  founders of the company would  be delighted if they were able to see NB in such great spirits today.