Scotch whisky exports exceeded £1bn for the first time in eight years in the first half of 2005.
Whisky distillers used traditional skills to produce gin and vodka
Emerging markets like India and China continued to grow while an increase in American sales consolidated the US as Scotch's most valuable export market.
But, increasingly, Scotland's traditional distilling skills are being used to produce other spirits.
These include some more usually linked with England, with 80% of the UK's gin and vodka being produced in Scotland.
Pimms, a classic English summer drink, is actually distilled in Fife.
Rum also comes off Scottish production lines and Malibu is made near Kirkcaldy rather than the Caribbean.
Distillers cited tradition as the main reason for the expansion, with age-old crafts forging the link between the past and what is now a multi-billion pound industry.
Cameron Brig distillery in Fife is one company to have made the transition.
It started life as a small malt distillery before starting to distil grain spirit.
It is now the largest white spirits distillery in Scotland.
Manager Billy Mitchell said the same old skills are used to make drink on an industrial scale.
"Our success is based on 'good for Scotch, good for Scotland' in terms of our whisky, but that gives us the ability to bring other products onto the plant," he said.
"Whisky volumes in the UK have remained fairly static. What's interesting is the battle in the marketplace for these other products."
Niche products have been seen as another way of developing an increasingly competitive market.
For instance, Hendrick's Gin has distilled botanicals such as juniper berries and angelica root alongside cucumbers and rose petals to make a new premium gin.
Head distiller John Ross said traditional skills were vital in this process.
"We have a phenomenal whisky distillation heritage and that is our core business," he said.
The Scotch trade body said 114m bottles were sold in the UK last year
"It has been relatively easy for us to take our knowledge of malt and grain whisky distillation and apply it to gin.
"We wanted to do something entirely different and unique and take it to that premium category."
More vodka is drunk in Scotland than whisky, but David Williamson of the Scotch Whisky Association said Scotch was far from in decline.
He said that Scotch whisky is still the number one selling spirit in the UK, with over 114m bottles sold in Britain last year.
He added: "We are an international business and nine out of every 10 bottles of Scotch are sold abroad - that's why growth in export markets is so important to us.
"Last year, we saw growth in mature markets like the United States where Scotch has traditionally done well.
"But we're also seeing growth in these new emerging markets, like China and India."