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Number of UK distillery businesses jumps 29% as 79 more open during Covid-19

Publications featured in include: The Times, The i, The Sun and The Morning Account. 

The number of distillery businesses in the UK jumped 29%* during the Covid-19 pandemic, up from 272 in 2019 to 351 in 2020 our research shows. 

The growth in the number of distillery businesses is likely to have been fuelled by people using lockdown as a ‘springboard’ to start craft spirits businesses, following the success of the many entrepreneurs who have entered the growing market in recent years.

The number of distillery businesses in the UK has more than trebled since December 2015 where there were only 110 in operation. There has been a surge in new start-ups as entrepreneurs have reacted to the growing demand for craft spirits in the UK since 2016.

Pubs and bars being forced to close for much of 2020 has encouraged more people to expand the range of drinks they enjoy at home and increased demand for craft spirits. The spirits sector has been buoyant during Covid, with spirit sales across the UK from April to October 2020 rising by 10.7% compared to the same period in 2019**.

James Simmonds, partner at our Nottingham office explains that spirits sales have performed much better than beer sales during the lockdown which some evidence to suggest many drinkers have swapped beer for cocktails.

Diageo, the spirits giant that produces Smirnoff Vodka, Tanqueray Gin and Captain Morgan Rum reported its 2020 spirits sales were up 15% year on year due to people wanting to recreate their usual ‘big night out’ with cocktails being made at home. 

The UK’s largest gin subscription service has doubled its membership to over 100,000 people during the pandemic. Growing interest in the smaller, local distilleries which the club promotes is likely to have contributed significantly to the increase during lockdown.

Several craft breweries such as, Brewdog and Wimbledon Brewery have also now established their own distilleries in recent years.

James Simmonds says: “The demand for craft spirits is continuing to grow and is showing no signs of abating just yet. The next test will come when lockdown finally ends.

It does seem that lockdown and furlough has been a catalyst for people to turn their long-held plans of owning a craft distillery into reality.

For those who have built up wealth through their careers, the idea of becoming a craft spirits maker can be a very appealing one. Moving to the country to make gin might be just the lifestyle change that some successful City professionals are looking for during the pandemic.

Lockdown has also increased the demand for craft spirits with consumers stocking home bars with new brands of gin and rum. This has encouraged more entrepreneurs to enter the sector and create their own brands.”

Starting a craft distillery or brewery has become particularly attractive to high-earning professionals with financial and professional services backgrounds who are looking to change career paths. For example, Mc’Nean, which makes whisky on the west coast of Scotland, was founded by a former Bain strategy consultant. Cotswolds Distillery, which makes gin and whisky, is run by a former managing director of a hedge fund. 

* Source: HMRC. Year-end 31 December 2020
** Source: HMRC
 

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