Yes, it was a risky move. This was at a time when we were scrutinising every single financial decision and we didn’t yet know if Covid would return, but was it strategically critical? Yes.
The investment has enabled us to not only expand our existing lines (we’ve added three new flavours to our Manchester Spirit Grain Vodka line this month) but also extend into new products, as we prepare to move into whisky for the first time.
This level of diversification has not come suddenly to us, and it’s something we’ve built into our growth strategy from day one. I think we’re lucky in that aspect, and I honestly believe that despite the continuing economic pressures on our industry, the only way that many operators like us will thrive is through diversification.
There was much talk of businesses ‘pivoting’ during the pandemic – thinking outside the box, launching new ways of working, and moving into unexplored territory. While we’re not about to wildly shift into a different sector or format, the ability to keep customers coming back by continuing to offer them something new has been ingrained in us since the beginning.
Ultra competitive market
Our Manchester Gin line is one of the most awarded gins in the UK and we are extremely proud of it, but we’d be naïve to think the resurgence of the spirit will continue at the same pace as it has done going forward. While we’re definitely still seeing surges in South America and Northern Europe in particular (our exports of gin have increased 200% this year), tracking and forecasting market trends here in the UK has allowed us to get ahead of new spirit trends, and plan effectively.
We can all instantly name one or two brands that have stuck in their ways for so long they’ve eventually fallen foul of changing customer needs, but having the humility to understand that customers may eventually tire of your original offer is critical, especially in today's ultra competitive F&B market.
Our vermouth, absinthe, vodka, and rums have all been passion projects, but they’ve also shown our stakeholders and potential investors that we mean business.
We’ve purposefully released our new vodka flavours at a time when the value of vodka is booming. CGA’s latest research show sales of the spirit totalled £516m in the first quarter of 2022 —24% higher than in the same period in 2019, meaning it has taken 2.8 percentage points of share of the spirits category since the start of the pandemic, and now attracts 30 pence in every pound spent on spirits. It’s these kinds of stats that show that we know we’re talking about and that our Distillery isn’t just a one hit wonder.
Of course, diversification is only possible when you have backing, whether that be financially (in our case, our balanced business model and independent ownership derisks the investment in new lines), or emotionally via the team around you.
At the moment, among the turbulent environment, we can say with certainty that this diversification strategy is keeping us ahead of the game, and we are now starting talks with a number of investors as we look to build on this position over the months ahead.
As for the market overall, the UK has a long history of paving the way in the spirits sector, and I’m particularly proud to be in an industry known for its creativity, strength and determination to succeed despite everything that’s thrown at us.
While there’s always more that could be done to support those who want to expand and diversify, it’s also down to us ourselves to notice the opportunities and take those risks.
As any business owner will tell you, the biggest risk was starting up in the first place. Times are hard, yes, but standing still now isn’t the answer. The only way to pull this sector out of the economic lull we’ve all found ourselves in, is surely to get out and innovate.