Team Brancaster Gin L-R Tracey and John Wareham and Laura and Tom Earl
Gin is one of the U.K.’s most popular spirits, especially at this time of year, and while sales growth has slowed in the prevailing economic climate, overall gin sales remain buoyant.
Revenue in the U.K. gin sector is forecast to hit $2.1 billion (£1.6 billion) in 2023, with the market expected to grow annually by 7.92% (CAGR 2023-2028). Last year the total value of U.K. gin exports rose by £189.4 million to £730.9 million, up by more than one third on the previous year, according to HMRC figures.
The premium brand sector in particular is continuing to see strong engagement, and with consumers willing to pay premium prices for craft gin, the number of new entrants to the market has soared in recent years.
However, starting a gin distillery business is not for the fainthearted. A high-quality still alone can cost anything from £50,000 to over £200,000. But many entrepreneurs have succeeded. Stratford-upon-Avon-based Shakespeare Distillery was launched in 2015 when the U.K’s craft gin sector was on the rise. Today it produces a range of craft gins and rums, provides daily tours and runs a visitor centre, shop and gin school.
The legal essentials
As director Peter Monks points out, the challenges outside of the normal startup costs for any business are compounded by the size and cost of much of the equipment and premises needed to distil spirits. In addition, the complex taxation system of spirit duty can be overwhelming for newcomers. “The paperwork needed to be submitted to obtain a distilling and rectifying license or tax warehousing permit is onerous and regular submissions need to be made online,” he says.
Selling products to mainstay retailers requires the business to have undergone either a SALSA or BRC audit to ensure its commitment to food and beverage best safety practices. “These are challenging for anyone new to a manufacturing process and require a great deal of paperwork, risk assessments and traceability testing. It is onerous and expensive,” adds Monks.
But as many newcomers have discovered, owning your own distillery is not essential to launching a new gin brand into the market. Jon Hulme, founder of Craft Gin Club, says: “Lots of distillers will more than happily allow a startup distiller to use their equipment to create their initial batches, for a fee. We’ve seen many brands successfully get to market this way with a spend of just a few thousand pounds. That said, eventually most successful craft brands invest in their own distillery, but costs of equipment alone can run into the hundreds of thousands, so it’s not something we recommend rushing into.”
Creating the brand
Partnering with an established distillery was the route favored by the founders of Brancaster Gin, which was launched in the north Norfolk coastal village of Brancaster in October. The idea emerged two years ago during a dinner party conversation between friends and gin aficionados John and Tracey Wareham and Tom and Laura Earl.
“The more we thought about it and talked to other people about it, the more that Brancaster Gin seemed a good idea because this is such an iconic coastline, people are drawn to it, and we believed we could create a gin that embodies it,” explains John Wareham.
They invested in a small copper still to develop the recipe, secured a distilling and rectifying license, and began foraging for local botanicals found on the local salt marshes and sand dunes; samphire, sea buckthorn, gorse and elder, to flavor the gin. Distilling it in volume themselves was considered but then ruled out, and they chose Hawkridge Distillers, a business with years of distilling experience using traditional craft-based processes to produce their gin.
Wareham says: “We had the legal authority to operate a large still, and the space to convert part of the garage into a gin-making factory, but our view was that if we were going to do it, we had to make it the best gin it could be, and that didn’t involve making it ourselves. The guys at Hawkridge are the experts.”
Tap into the local market
But they still faced the challenge of marketing and selling their product to the trade, in the face of fierce competition from large national and international alcohol brands with budgets to match. This has become more difficult since the pandemic which decimated the hospitality industry, explains Peter Monks.
“There was a shift towards consumers drinking at home and therefore trade outlets being less likely to take a chance on a new local brand. The key to overcoming this is to work in partnership with the customer, offering support and training for staff, knowledge of your products and your story and making sure your brand is well positioned on the bar.”
Nevertheless, in the six weeks since its launch, Brancaster Gin has had a positive response from craft fairs, local pubs, retailers, hotels and restaurants, and early sales have exceeded expectations. But as Wareham points out, the team are under no illusions about the fact that the further away from the local market they go, the more their product will need to stand entirely on its merit as a premium coastal gin brand. He says: “Through social media marketing, we are making sales from different parts of the country. I believe that we can build a strong regional brand with the potential for success elsewhere in the U.K. and beyond.”
The craft gin sector is a crowded marketplace. Audience demographics are changing, with Craft Gin Club observing ‘premiumization’ trends with younger and older drinkers being increasingly interested in craft, provenance and authenticity when it comes to spirits.
The advice from Jon Hulme to would-be gin entrepreneurs is to understand how you stand out from the crowd and what makes your gin different and better. He says: “Be authentic, but don’t underestimate the importance of brand; looks and your story or ethos are just as important as flavor when trying to create a brand that can punch through a very busy space.”
