In the second part of his look at how the spirits business is coping with the Covid pandemic, Ian Buxton looks at the craft distilling sector both here and in the US. Surprisingly, there’s quite a lot of good news. Hurrah!
Frankly, the last thing I expected in writing this piece was to be the bearer of glad tidings. I was pretty sure that coronavirus would have had a devastating effect on our smaller distillers: under-financed and over-dependent on the non-existent on trade, I anticipated tales of woe and to be reporting closures and widespread gloom.
So, expecting the worst, I took a random cross-section of this previously-buoyant industry from my contact book and asked how coronavirus had affected their business and how they saw the future. I should begin by noting that a number never responded. That might be an ominous sign, but then again there may be perfectly good reasons why my emails went unheeded and phone calls unanswered. Because of that I won’t identify these businesses, which made up around a quarter of my sample. Let’s hope they’re OK.
But what that means is that some 75% did get back to me and from them I received encouraging news of a determined and positive fightback. Yes, the arrival of this nasty disease has been disruptive, sometimes expensive and certainly not what anyone would wish for but it has brought out a refreshing blend of initiative, entrepreneurship and creativity in battling the bug.
The various government schemes for financial support have helped, of course, but one factor that came across time and again was the production of hand sanitiser. Indeed, from the USA, Bill Owens, president of the American Distilling Institute (‘the largest small-batch, independently owned craft distillery association in the world’) told me succinctly that “what saved the craft [distiller] is hand sanitiser”. Though tasting rooms are closed (these tend to be disproportionately important to smaller US distillers) Owens reports “a distillery near Chicago going 20,000 bottles a week” and another in Kentucky achieving some $40,000 in sales. He drew a sharp contrast though with smaller brewers and winemakers, estimating that around one-third will close their doors.
A similar story emerged here in the UK. From Orkney, Stephen Kemp said that while “we watched our various revenue streams dry up overnight …. we very quickly had to diversify, and so like many others we began creating hand sanitiser,” adding that ”we also had to ‘amp-up’ our online presence substantially, and invest very heavily in online marketing.” In addition, taking advantage of the fact that many in the bar trade have had some time on their hands, Orkney Distilling say they have been “working hard to keep in touch with those in the trade who will inevitably re-open – we want to be there with them and for them!”
At the opposite end of the country, the small team at the Capreolus Distillery in the Cotswolds also saw an opportunity to build trade relationships. While the up-market restaurants and bars that make up such an important part of their business have been closed, Barney Wilczak relates that “after an initial couple of weeks of panic we focused heavily on investing in both existing sommelier friends and new restaurants. This translated as sending out samples, tasting online, providing training and using the time to communicate the values that our approach embodies.” As he also noted, “this had the advantage of being able to reach people whose schedules are normally extremely hectic and allowed them to spend time getting to intimately understand the intricacies of our spirits.” Like Orkney, and despite being an extremely small business themselves, Capreolus took pains to offer the trade “professional development, education and an engagement that shows we will be there for them in both bad and good times.” Doubtless, this investment will be repaid many times over in future sales.
At the Port of Leith distillery, founder Ian Sterling offered this perspective: “We’ve had to work much, much harder and I would really like a holiday.” But he went on to state that “overall the impact has not been severe and indeed sales have grown over the last three months”. Like many others, Port of Leith reported a mini boom in on-line sales both domestically and for export and, encouragingly, “many of those new online customers are continuing to purchase that way”. Work continues on its new distillery which should open in 2021.
There will, of course, be casualties. As Nicholas Cook from The Gin Guild points out “the underfunded, those with weak business plans, mediocre or average products without individual stand out appeal or branding, and those who were simply jumping on the ‘gin bandwagon’ and those simply caught out at the wrong point in their business development, or who were exposed as over expanded at this critical time, will find it difficult to survive”.
But from my brief snapshots – and there were others – not all is doom and gloom. The industry has been tested, but not to destruction. Craft spirits shall not wither and die!
Though he has neither a beard nor any visible tattoos or piercings, Ian Buxton is well-placed to write about drinks. A former marketing director of one of Scotland’s favourite single malts, his is a bitter-sweet love affair with Scotland’s national drink – not to mention gin and rum, or whatever the nearest PR is pouring. Once, apparently without noticing, he bought a derelict distillery. Follow his passionate, authentic hand-crafted artisanal journey on the Master of Malt blog. Or just buy his books. It’s what he really wants.