SCOTLAND’S rapidly growing craft gin sector is ripe for consolidation, the co-founder of one of the industry’s leading independent players has declared.

Ian McDougall, co-founder of Makar Gin owner the Glasgow Distillery Company, said Beam Suntory’s recent acquisition of a controlling stake in London-based Sipsmith illustrates the appetite the industry’s biggest players have for entering the craft market.

The Sipsmith deal came shortly after Edinburgh Gin owner Spencerfield Spirit was acquired by Ian Macleod, the Broxburn-based distiller behind the Glengoyne and Tamdhu single malts.

And Mr McDougall believes it is the start of things to come.

“There is obviously a bit of transactional activity going on,” he said. “Is it surprising? Not at all. You are going to see more and more [acquisitions] as craft brands grow.

“Multinationals have to invest and protect their market share. I suspect we will see a bit more activity on that front in the next few years.”

A slew of Scottish gins have entered the market in recent year. Many of these, including the Isle of Harris gin, have been released by nascent whisky distillers to provide a source of income while they wait for spirit laid down to mature can legally be sold as Scotch.

Mr McDougall and co-owner Liam Hughes have followed a similar path at the Glasgow Distillery Company, and have recently branched out into the vodka market with the launch of the premium G52 brand as the gin sector begins to look crowded. However, he believes there is still lots of growth to come in craft gin sector in Scotland before saturation point is reached.

Mr McDougall, whose firm hopes to debut its single malt in 2018, said: “Gin will still kick on. It’s a growing market [and] there is talk of it overtaking the [UK] blended Scotch sector, although that is not the market that it was. There is still legs in it. There will be a saturation point but we have not reached it yet.”

The buoyancy of not just Scottish gin but craft spirits in general was underscored by Alex Bruce, managing director of independent bottler Adelphi.

The company whipped up a storm among whisky collectors with the release of the first spirit from its Ardnamurchan Distillery in the West Highlands a few weeks ago, receiving more than 9,000 requests for the 2,500 bottles it had produced for the market. It is now on course to launch its maiden single malt from the distillery in 2021.

While many of the new wave craft distillers still to bring their first single malts to market, Mr Bruce said it was still early in the life cycle of the latest generation of Scotch producers. But, as newly-opened distilleries such as Kingsbarns, Avondale, Isle of Harris, Arbikie, Strathearn and Wolfburn edge closer to bringing their debut malts to market, he said the response from the whisky-buying public has been encouraging.

He said: “The next phase are all these other ones which are being talked about – some of which have broken ground but haven’t started, others are still in planning.

“At my last count I think there was something like 25 to 30 distilleries, which is extraordinary.

“I think really the mood is still really buoyant. There is a definite demand for quality, for provenance, [and] for traceability.

“This new raft of small distilleries, just there to produce single malt of the best possible quality, it’s just the first time it has really happened.

“In the old days, distilleries were created predominantly to produce fillings for blends. This is the first time we are setting out to produce a single malt from scratch.”

Yet, for all the rush to build new distilleries in Scotland, there is no guarantee that they will all prove to be useful additions to the industry.

Mr Bruce said: “There are a number of distilleries which are starting who do not have a brand, who do not have distribution. There is nothing to say they can’t be creative, but they don’t have any proven track record. Whether or not they are just being opportunistic, or whether they think that now is the best time do it because of the success other people are having, that’s a difficult question to answer. I don’t think we will know for a few years yet.”

However, he added “it would be a great shame if we put people down who are starting for trying”.

“Just because we are in a great position with a brand and a distribution network doesn’t mean that other people can’t do that, given time,” he said.