‘Magical spot’ for $25m whisky distillery

It is a question Scapegrace Distilling co-founders Daniel Mclaughlin and Mark Neal are often asked — why on earth would they build a $25million distillery "in the middle of nowhere?"

But as soon as Mr Mclaughlin set foot on the hillside above Lake Dunstan, between Cromwell and Tarras, he knew their search for a suitable location was over.

The 36ha site ticked all their boxes; it was on the 45th degree parallel which meant extremes of high and low temperatures which were ideal for ageing whisky, there was access to high quality water, the expansive site enabled the business to grow and it was also "a magical spot", he recalled yesterday.

Mr Mclaughlin was addressing a gathering at the Scapegrace site, where Regional Development Minister Kiri Allan announced a $2.9million convertible loan for its expansion, to meet growing national and international demand and consolidate its three New Zealand production sites into one.

Once completed, the facility would be the largest distillery in New Zealand’s history and Ms Allan was effusive in her praise for Scapegrace’s vision, saying she genuinely loved what the company was doing.

Scapegrace Distilling co-founder Daniel Mclaughlin pours a sample of the company’s single malt...
Scapegrace Distilling co-founder Daniel Mclaughlin pours a sample of the company’s single malt whisky to show Regional Development Minister Kiri Allan in Central Otago yesterday. PHOTO: STEPHEN JAQUIERY
From bare dirt, it was creating something both the region and country could be proud of and a legacy for generations to come.

The Scapegrace team had courage to turn aspirations and dreams "into cold, hard steel and barrels full of goodies" and that was something that inspired her.

The ability to increase production capacity from 30,000 litres to 567,000 litres was a "game-changer".

"It takes it to a completely different level. It’s an absolute privilege to stand alongside you as you embark on your new venture," she said.

The newly-announced investment supported the Government’s goal of supporting local businesses to do great things for local economies.

"The further development of the food and beverage industry in Central Otago will add to the region’s international brand reputation," she said.

The first of the four phases of development had already been completed which included the company’s head office, bottling line, warehousing and the first of four whisky barrel rooms which would each hold 1850 casks.

Phase two — "the engine room" of the project — was under way which included the "world-class" distillery which would open in about 10 months, Mr Mclaughlin said.

The third phase included a pop-up food and beverage brand experience, which was expected to open around March 2025, while the "crown jewel" was a 1000sq m hospitality precinct — including a bar, restaurant and event spaces — scheduled to open about October 2026.

Scapegrace was co-founded by Mr Mclaughlin and Mr Neal, brothers-in-law who were both previously involved in the liquor industry, and Richard Bourke.

They noticed how New Zealand was under-represented on the world stage for spirits, despite boasting a massive wine industry, and they saw a significant opportunity.

Their vision, from the outset, was always to create a global brand that could be taken to the world. It took about two years to go to market about nine years ago, initially with gin. Scapegrace then moved into vodka and, most recently, malt whisky.

It was now the largest independent spirit brand in New Zealand, exporting to about 35 markets. Export made up about 65% of its business and there was an ability to grow that figure, Mr Mclaughlin said.

When they first started the Central Otago project, they probably did not fully appreciate that they would be starting with no infrastructure and bringing everything on to the site. But it had been a good challenge and they were supported by a great team and board, along with about 140 shareholders, of which about 70% were from Otago, Mr Mclaughlin said.

Having all their functions on one site was going to provide far greater efficiencies while a value could not be placed on "having a spiritual home and bricks and mortar behind the brand", he said.

Scapegrace had "tremendous" support from the Central Otago District Council, local businesses and the general public. Sustainability was something that was at the forefront of its planning and the distillery structure would be made from timber, instead of steel.

Rather than industry-norm diesel boilers, electric boilers were being used, while the planting of thousands of native trees on-site was under way.

Both men had relocated to Wanaka with their families and were also loving the lifestyle that Central Otago afforded.

sally.rae@odt.co.nz