The rise of English distilleries

Keeping up with new distilleries opening in England used to be easy, because it didn’t happen that often. Now it happens all the time, and staying up to date with such a rapidly growing population requires a data base with plenty of memory.

This dynamic new era has gathered momentum over the past decade, with The English Whisky Co, for example, opening a distillery in Norfolk in 2006, followed by Chase Distillery in Herefordshire in 2008. That was also a key year in the capital, when Sipsmith epitomised a new generation of Londoners.

So, what's been going on? Greater interest in spirits, driven by cocktail culture, and the 'craft movement' are of course key factors. But there's also a more specific driver.

"The growth of distilleries in England is overwhelmingly about gin, with 49
new gin distilleries opening in 2015, and I think it will be roughly the same in 2016. There's been a huge growth of interest in gin, and the equipment to make gin is relatively inexpensive compared to the equipment required for other spirits," says Jamie Baxter, master distiller and consultant.

Opening a distillery requires a certain vision, but making this a reality entails plenty of cash (of course) not to mention an extensive 'to do' list. This includes obtaining official approval of the premises and the production process to be used, together with the necessary licenses from HMRC. If maturation is also part of the plan then a separate license is required for a warehouse keeper, together with approval to operate an ageing warehouse.

Meanwhile, ensuring that all the numbers stack up is down to the business plan, particularly for distilleries producing whisky (the ageing period inevitably making this a longer-term proposition).

"Our business model for the Lakes Distillery has several revenue streams in addition to our brands, including conference and events, a partner hotel, a tasting room, and a bistro. Providing this range of options also promotes the distillery as a destination in its own right," says Maria Duddin, events, business development and pr manager, Lakes Distillery, which opened in December, 2014, and produces vodka, gin and single malt whisky.

Once all the legalities, formalities and commercial aspects have been sorted out, there are plenty of creative decisions to make.

"I produce five different gins and the hardest thing was finalising the recipes. The Christopher Wren gin, for example, has five botanicals and it's the balance between the botanicals that's the hardest to achieve, it takes a lot of experimentation, and it's much harder than getting the licenses," says Jonathan Clark, founder and owner of City Of London Distillery, which opened in 2012.

Gin has long been a British tradition, but there's now a growing category of English spirits, with English whisky for example pioneered by The English Whisky Co.

"Trailblazing was a good thing, putting us at the forefront, and we had a very good response right from the start. But you also need some competition. More distilleries are soon to produce English whisky, and others are planned. Once there are more English whiskies on the market the category will become self-perpetuating, I hope. It would be great if this resulted in retail shelves which are dedicated to English whisky, rather than English whisky being put on the 'rest of the world' shelves, as is currently the case. And if English whisky was a category in its own right on websites, rather than being a part of 'other whiskies,' that would also be terribly valuable," says Andrew Nelstrop, managing director, The English Whisky Co.

In addition to having an English identity, brands can have another, more specific identity, which is being 'local.'

"Local appeal is vital, and people in Cumbria are very proud of our brands. For many consumers, particularly millennials, buying local brands is very important. But this concept also works nationally, as a specific origin appeals to many consumers, even if it isn't local to them, and there is such affection for the Lake District throughout the UK," says Maria Duddin.

Alex Wolpert, founder, East London Liquor Company, adds, "The appeal of being local will never lose currency, and it's important for customers to see where something is actually made. Our building is divided into two areas, which means you can sit at our bar while watching us distil through a special glass window and then head over to our bottle shop and restaurant for a bite to eat and a bottle to take home. Becoming more and more of a destination place means that people from around the world are coming in to drink next to locals in our space."

Providing distillery tours and tastings is also standard practise, particularly as a growing number of consumers consider it cool to be knowledgeable.

"Some people who tour the distillery want to know everything about production and provenance. But that level of interest is not for everyone, and some consumers just want a great flavour delivery and attractive packaging. When you can provide that, while also having the provenance story, then people can choose to learn more, as and when they're ready," says Alex Wolpert, with East London Liquor Company, which opened in 2014, producing vodka, gin, rum and whisky.

Having engaging stories to tell raises the question of how best to communicate them. This needn't require a significant budget. But it definitely requires planning, commitment, and the ability to make the most of various opportunities.

"We shout about what we're doing while we're doing it, and social media is very important for us, including Twitter and Facebook, though Instagram is our biggest audience, blending image with comment. We constantly monitor stats to check the impact of what we do; it's about having an engaging and specific tone that people recognise. You can do very well on social media with a low budget, but if we had a bigger budget, we'd have a bigger reach. People underestimate the time it takes to maintain a dynamic social media presence," says Alex Wolpert.

Another key aspect of communicating with the target audience is utilising pr, though a pr agency can offer a far broader range of advice and support.

"Intelligent PR should be able to deliver at least five opportunities to engage key audiences, turning them into valuable brand advocates - including publicity, digital, social, content and experiential. Experiential for smaller distilleries is very interesting as, unlike bigger brands that have to invest more heavily to make brand homes deliver value, smaller distilleries already have a rich, local, personal and authentic brand experience at their fingertips, which they can use to tell their story and engage, educate and inspire their trade and consumer audiences. In turn strong PR will make sure those memorable experiences are shared by word of mouth, offline and online, with their communities. That then builds an emotional connection and valuable third party endorsement, which is the holy grail of great PR and communications. But to make any PR activity deliver value, the first step for any distillery or business owner irrespective of size is to decide what their priority commercial goal is, to build their brand, and increase brand equity, or to drive sales? In my mind, if a business is in for the long-term it should always be both, 50:50. Once they are clear and fully committed to this, they can then set their commercial targets and metrics to measure PR success. That's when experienced PR and Communications specialists can build a strategic PR plan. Ultimately, a clear commercial goal, combined with intelligent PR that marries creativity with strategy, will guarantee the best return on any investment," says Louis de Rohan, Founder and Creative Director at LDR CREATIVE, an award winning Soho agency that specialises in drinks brands.

So, there are significant opportunities for brands. And it keeps getting better for consumers. The growing range of brands means more to discover and choose from; more to compare and contrast, in terms of flavour delivery and brand proposition, and consequently more to talk about (always a good thing). And it's easier than ever for consumers to learn about a brand's credentials, with information readily accessed from their preferred device.

Similarly, brand owners have various communication channels at their disposal, to cater for consumer interest in provenance and production. But the growing number of brands also means the market is ever more competitive, and with a finite amount of shelf space in bars and retail, getting listings is increasingly challenging.

This typically raises the question of whether brands that are variously described as craft, artisan, niche, boutique, speciality, etc, can compete successfully against more established, 'mainstream' brands supported by larger marketing budgets.

Whether any brand can compete successfully depends on the definition of success that each brand owner has, and that of course can vary significantly. It all depends on the level of sales required to develop the business, or to fulfill a brand owner's ambition, which may be smaller or larger (everything is relative !)

"Success is paying the wages, and hitting the financial targets each year, though in practice sales volume is irrelevant. We have to sell enough to ensure the company is performing, and that we can put some whisky into long term maturation store. Distilling whisky is a long-term business, and the success we achieve will really be for the benefit of the next generation, or the next two generations," says Andrew Nelstrop.

Meanwhile, a key aspect of any sale is how much profit it generates.

"It all depends on the value of the bottle, and whether you're selling at a
wholesale price, or a retail price direct to the consumer. If your distillery is in a tourist area, or if you're selling at farmer's markets, direct to the consumer, you can make a very good margin. And engaging directly with customers also generates a huge amount of goodwill," says Jamie Baxter.

Local and national sales are of course a vital foundation, but for brand owners with broader ambitions, what are the export prospects for English brands?

"I've started exporting, and it helps that the gin is English and from London, because that's where London dry gin originated, even though now it's only a recipe. Of course packaging, pr and social media also help, but ultimately it's the taste that's the most important thing," says Jonathan Clark.