Distillery applications treble in a year as boutique spirits boom continues

Publications that covered this story include: The Financial Times, 24 August 2015, The Time, 24 August 2015 , City AM, 24 August 2015 and The Economist, 28 August 2015.
  • 65 applications for new distilleries in 2014-15

The number of applications for distiller’s licences has more than trebled from 20 to 65 in just a year*, part of a boom in boutique spirits that has seen applications rise from just five in 2009-10, according to our research.

We explain that British boutique spirits are now considered a luxury item that customers are prepared to pay a premium for. Many younger consumers now favour independent and boutique gin and vodka over mass market products.

This growth in applications to HMRC for distiller’s licences echoes the rise in applications to launch breweries over the last few years. 30 new breweries for craft beer were set up in London alone in 2014.

Recently-established distilleries hoping to follow in the footsteps of well-established boutique distillers like Sipsmith and Hendricks include:

  • Rock Rose Gin: located in Caithness, the most northerly county of Scotland was opened in 2014 and uses the local berries in making their gin
  • East London Liquor Company: both bar and distillery in one, the distillery located near Bethnal Green opened its doors in 2014 bringing spirit production back to London’s East End
  • Butler’s Gin: creates its gin with a unique blend inspired by a Victorian recipe, and hosts a unique tasting experience on board a speedboat through the canals of North London

We suggest that these new and creative ways of distilling and selling gin and other spirits have broadened the market for consumers. This, alongside the growth of bars which offer extensive and unusual cocktail lists, particularly in London’s fashionable areas of Shoreditch and Hackney, have increased the popularity of boutique spirits and have encouraged more start-ups than ever before.

James Simmonds, partner says “Fashionable young consumers are searching for authenticity in their drinks, and they are not afraid to pay higher prices for it. The sharp increase in distiller applications reflects this rising consumer demand.”

“A trend that started in the bars of Shoreditch is now becoming a real thriving growth sector across the UK, with formerly boutique brands widely available on supermarket shelves.”

“Some start-up distilleries are beginning to look to export globally and they have the potential to do very well internationally. Scotch Whisky is one of the top exports for Scotland; the UK’s boutique spirit industry could follow its example.”

We state that the small boutique distilleries are often eligible for R&D relief. R&D tax credits can provide a company with tax relief or cash payments if costs incur when creating a new product.

James  explains: “This relief can give invaluable aid to small businesses, and could help many more aspiring artisan manufacturers in the food and drink sector.”

Applications for Distiller’s Licences leap in 2014/15

distiller

*2014-15 year end 31 March