Publications that covered this story include:The Financial Times, The Times, The Guardian, The I, The Daily Express, The BBC, The Daily Mirror, The Belfast Telegraph, The Scotsman and The Irish Times, all 17 April 2017.
- Boutique distillers pushing big brands off the shelf
- Global distillery M&A deals trigger boom in growth rate of sector
53 new distilleries were opened in the UK in 2016* as artisan drinks brands continue to take market share from the global giants, according to our research.
Start-up activity is also being spurred by the number of M&A deals taking place in the “artisan” alcohol sector.
Examples of acquisitions in the last year include:
- Sipsmith, one of the leaders in the new wave of boutique gins in the UK was acquired by Japan’s Beam Suntory in December 2016;
- Scottish-based Edinburgh Gin was acquired by Ian McLeod Distillers (10th largest Scotch Whisky producer) in September 2016; and
- French conglomerate Pernod Ricard acquired Monkey 47, a German gin produced in the Black Forest, in January 2016.
The £1billion valuation put on craft beer brand Brewdog by an investment from US private equity firm, TSG Consumer Partners, is likely to spur more activity both in the craft distillery and craft beer segments.
England saw a 25% increase in new distilleries over the last year, jumping from 28 to 35. The ‘Gin-naissance’ has seen many new gin distillers pop up as consumers become more discerning when it comes to spirits.
Recent research shows that in 2016, UK sales of gin broke the £1 billion sales mark for the first time**.
In Scotland the number of distilleries has grown by 50% in the last year, with 12 opening in 2015, and 18 in 2016. Scotch Whisky is currently one of Scotland’s top exports.
James Simmonds, partner and chair of our national drinks sector working group, says: “Both the craft spirits and the craft brewery sectors are going through a period of explosive creativity.”
“You can see that in everything from the logos, branding and advertising of these products.”
“What is more is that the quality of the product is streets ahead of their big brand competitors.”
“It is no wonder that the global drinks giants are worried. And the best way they have found to deal with that new competition is get out cheque books and buy them.”
“But for every winner that will be many more losers – and some of the business plans we have seen for start-ups in this sector suggest a nasty hangover for some.”
New gins and whisky distilleries which opened in 2016 include:
- The Distillery: located on Portobello Road in West London, home of Portobello Gin and the world-famous ‘Ginstitute’;
- Manchester City Distillery: located on Red Bank, Manchester, home of the brand new Three Rivers Gin; and
- Toulvaddie Distillery: located in Ross-shire in the Scottish Highlands which claims to be the first distillery to be opened by a woman in 200 years, producing single-malt whisky.
Jump in distilleries opened in the last five years in the UK
*Year end 31 Dec 31
**Wine and Spirit Trade Association