Start-ups are shaking up an old and staid industry.
BEHIND a homely blue garage door in a genteel corner of Hammersmith sits Prudence, a complicated and expensive young lady, and the focal point of an ancient British industry that is undergoing a remarkable and timely revival. Prudence is a £200,000 copper still—the first of its kind to be launched in the capital for nearly 200 years—turning out small batches of exquisitely palatable London dry gin. Named after a certain former chancellor of the exchequer who gained an ultimately unwarranted reputation for fiscal austerity, Prudence is the brainchild of Sam Galsworthy and Fairfax Hall. They are the entrepreneurs behind one of Britain’s fastest-growing young micro-distilleries, Sipsmith.
In the year since its launch, Sipsmith has sold 5,000 half-cases of its signature dry gin, a bottle of which retails at something between £22 and £26, mostly through national chains such as Waitrose and Majestic Wine. Financing came from within—both founders sold their houses to finance the venture—and Mr Galsworthy expects the firm to break even by 2012. But Sipsmith is just one of an array of start-ups injecting spirit and panache into Britain’s often bland distilling industry, with its ubiquitous brands and obsession with bulk sales.
Once upon a time, micro-distilling was as common in Britain as fog or mud. In the 1700s one in four London houses boasted a still, most of them producing some sort of hygienically challenged moonshine. A sizeable annual tax raised standards but eradicated competition, and by the late 20th century just one London dry gin—Beefeater—was distilled in the capital. Yet in recent years, driven partly by an international movement that favours high-quality, “artisanal” comestibles, micro-distillers have made a comeback.
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For Sipsmith’s founders, the urge to do something different was born in America. Mr Galsworthy spent most of the last decade there working as chief sales representative for Fuller’s, a big, London-based brewer. He saw that micro-distilling was gaining momentum, as state after state cut taxes and eased permits. That in turn allowed start-ups such as Anchor Distilling (whisky and gin) and Hangar One (vodka), both based in San Francisco, to take on the big boys. On his return to Britain Mr Galsworthy teamed up with Mr Hall, a childhood friend then employed in London by Diageo, the world ‘s largest spirits producer, and set out to create a new spirit.
For Ian Hart, the co-founder of Sacred Spirits Company, which operates out of a north London house in the well-heeled suburb of Highgate, gin-making came about almost by accident. When his job as a corporate headhunter evaporated in late 2008, he turned to the bottle. Sacred gin was launched last year, with Mr Hart distilling the stuff through a vacuum plant in a wendy-house in his back garden. So far business is booming. Sacred is stocked by Fortnum & Mason in London as well as by several fancy bars including Duke’s in St. James’s, where the creator of James Bond, Ian Fleming, first came up with the line “Shaken, not stirred”.
Exports to mainland Europe, notably Spain, are on the rise: revenues have topped £10,000 a month, and Mr Hart says that annual sales of £3m within five years are “ambitious but achievable”. And others are joining the party. English Whisky, founded in Norfolk in 2005 and one of only two British whiskies made south of the Scottish border, earns £650,000 a year. Around a tenth of its revenues comes from overseas, mostly from sales to France and Canada. And Chase Distillery in the Welsh borders made headlines not long ago when its potato-based vodka, sold at swanky bars around the world, stole the honours at this year’s World Spirits Competition in San Francisco.
Much could be done to support this newly thriving cottage industry. Taxes are levied at a flat rate on all distillers, irrespective of their size. Many believe that this should change. In 1992 taxes on British micro-brewers were slashed by 50% and it sparked an industry revival that continues to this day: 71 breweries opened in Britain in 2009 alone, taking the total to 711, according to the Campaign for Real Ale, a pressure group.
A tangle of red tape also baffles the budding distiller. It took Sipsmith two years to get a handwritten distilling licence from Scottish Revenue and Customs, and then the year was wrong. Another distiller found Britain’s Customs and Excise “incredibly helpful” but added that cutbacks had made so many staff redundant, there was “no one left to be bureaucratic”.
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