distilling course


Setting up your own distillery


Do you love the taste of gin and feel that is an opportunity to develop your own craft distillery and gin brand.  Our distilling courses will be an ideal introduction to how you set up your craft distillery on a small commercial scale.  We share the knowledge with our expert distilling consultant Jamie Baxter who has establish over 20 craft distilleries over the last 5 years including leading Gin brands such as Burleigh’s Gin, Chase Vodka.



10 tips for setting up your own distillery:

These are 10 essential tips on setting up your own gin distilllery or craft spirit distillery from our expert distiller Jamie Baxter who has designed and installed over 20 artisan distilleries in his career to date.


1. Size of your distillery & scope

Distilling spirits is simply the extraction and concentration of alcohol from a fermented product. E.g. Beer, wine or cider and so on. Although the theory is the same, different types of spirit tend to be made in different ways and so it is important to understand the type and style of spirits that you want to create. It is theoretically possible to make many different types using the same equipment, but commercial considerations mean that this is not always viable in practice. The scale of operation is therefore critical too.

There are two types of distilleries defined under UK law: Distillers (who create a spirit from a fermented source to make for example whisky, Brandy etc) and Rectifiers (who redistill bought-in spirit, e.g. most gin distillers). Despite this legal distinction, they are both referred to as distilleries. If you want to make your own fermented product to distill, then you will also be building a brewery.


2. Licensing your distillery

Distilling is very tightly controlled. It is against UK law to put alcohol in a still without having proper approval. There are a multitude of different licences that you will need depending on what products you want to make, how you want to make them, how to age them, duty arrangements etc.
The Spirits Regulations 1991 define each and every Spirit made and drunk in EU. Some categories of products only differ in the way that they are distilled. Some can only be made in certain locations.

You will also need to consider Planning Law, Food Legislation, Health and Safety Laws, Environmental Protection laws, regulations pertaining to the sale of alcohol, rules on advertising etc.  Remember you will pay considerable duty on every bottle of gin your produce as well as VAT. Currently, UK exercise duty for spirits is £7.54 per 70cl.


3. Funding your craft distillery

There have been many craft distilling businesses that have been able to access funding to set up their own craft distilling brand.  It is all about creating a following on social media and getting people excited about your craft gins or bourbons or what ever you decide to distill.  If you are going down the craft distilling route to remember that it may not be as expensive as you first think to start producing gin or any other scraft spirit on a small scale.  There are a number of options of launching your distilling brand without having to make significant investment. Firstly, there is ‘cuckoo distilling’ where you utilise somebody else’s craft distillery equipment  You can also get an existing distillery to distill your spirit under licence and to your recipe. If you do want to distill your own product on a small scale then rectification of of spirits is not as expensive and as complex to carry out as full scale distilling of grain or other raw materials.  You can purchase your own craft sitill probably cheaper than you might think. Volumes may be relatively small but you will be able to distill on a commercial scale providing you have the the requisite licences.


4. Premises for your distillery

As is the case for any artisan food producing business even if you start small you need to plan for expansion and growth of your distillery.  Remember you will probably need more space than you first imagine. You need to factor in the storage of your empty bottles and also that for your finished gin or spirits.  Increasingly craft drinks businesses want to be able to put on events and pop up bars so that they can sell straight to consumers. If this is the case you need to factor this in at an early stage to your space requirements for your distillery.


5. Distillery set up planning

You need to allow plenty of time for slippage when it come to your start up plans for your distillery.  All it takes is for a planning permission to be more complex or convoluted than you initially expected or for the ordering and set up of your craft distilling plant to be delayed and then suddenly your plans for your distilling business go out the window.  Make sure you allow for some delays in your overall distillery business plan.


6. Long term plan for your distillery

Any great distilling brand will need a comprehensive long-term vision.  Will you be selling to farm shops & delis or is your plan to get your craft gins or spirits into a supermarket?  Are you looking at exporting your craft spirits?


7. Marketing Analysis of the spirit market & metrics

The market for craft distilled spirits has grown dramatically over the last few years however, you will need to conduct a careful analysis of the geographical and niche opportunities in the craft spirits market.  Latest research shows that gin sales rose 12% in the 12 months to June 2017 according to the Wine & Spirit Trade Association (WSTA)  The UK exports gin to 139 countries and since 2000 exports have risen by 166% invalue.

Running a distillery even a small craft distillery there are certain key financial concepts that are paramount.  Cashflow is king. You make be making a profit, but if you have no cash to pay your overheads you will very quickly be at the mercy of banks or creditors.  Make sure you get paid promptly for your craft spirits or gin and don’t let pubs, bars or off licences run up lines of credit.. Remember the old adage that turnover is vanity but profit is sanity.  You may think that you are selling lots of your craft gin but if you are not making any or enough profit on each bottle then it’s only a matter of time before your distillery goes bust. Our expert tutors will show you how to price your spirits to account for all the costs including beer duty and VAT.


8. Packaging of your spirits and gin

Spirits have to be sold in certain prescribed bottle sizes. Different types of spirits have different alcohol strength parameters. A gin designed for a Martini cocktail might be sold at a higher strength than one aimed at Gin and Tonics.

The lower outputs of a small batch Distillery mean that the product has to be sold at a higher margin than a high volume Distillery. The higher value of an individual bottle means that it is commercially viable to send small quantities to the customer via a courier, indeed for most start-ups this is the main route to market. Consideration must be given as to how the product will be protected. In time, the product will be instead sent out in pallet quantities to wholesalers and distributors.

Consideration should be given to increasing sales margins e.g. By selling direct to the consumer through a website, through Distillery tours and subsequent bottle sales, through selling at pop-up or permanent bars, at farmers markets etc.

 

9. How to create a world beating distilling brand

The market for craft spirits is not only expanding but it is getting more competitive with spirit brand competing for customer loyalty.  It goes without saying that you want to create a spirits brand that is engaging, memorable and not easily forgot. The interest in local food and traceability means that people are increasingly looking to understand more about where their food and drink come from and how they are made. Craft spirits are no different, so always look to explain where and what are your ingredients and why they are special.  Do you have a special water source. Most alcoholic spirits starts as water which is the most volumous and

History sells!  From brewing to distilling having a heritage drinks brand can be a massive selling point and a way of differentiating your drinks brand from the crowd.  Is your craft gin distilled in a country house, unique heritage building. Does your drinks band have a historical connection to a famous person or event.  The secret to creating a great drinks brand is to have an engaging back story.

It goes without saying that in order for your distilling or brewing brand you need to produce great product. This will of course depend on obtaining the best quality ingredients but then having the brewing or distilling expertise to create a fabulous beer, gin or spirit.

 

10. Do you have the skills to set up a distillery?

 

Essential for setting up a distillery like any new business is the right skill sets.  Do you have all the skills you need to distill spirits or gin and then sell it profitably.  A basic understanding of science and food production techniques would be a big advantage. Take an honest look and if you don’t you may want to consider going into business with someone with complimentary skill sets.  Remember in the early days any new business means that you as the business owner will probably have to do practically everything from driving the delivery van, to sales, marketing, social media and of course the actual distilling.  Get ready for 60 hour weeks and no holidays. If you are not prepared to put your life on hold for several years...probably best to stick to the day job.

Setting up a new distillery is a big undertaking, particularly if you have not distilled commercially before. If you have never worked in a craft distillery or had direct experience  in distilling then it’s worth getting some experience of the industry. Also get expert advice and do a distilling course with experts who can take you through all the things you need to consider before taking the plunge.  Brewing is a great industry to get involved in but make sure you go into it with your eyes wide open!

Hartingtons Ltd
Hartingtons Ltd
1st Floor Rutland Mill, Rutland Mews,Coombs Road
Bakewell , DE45 1AQ United Kingdom
01629 888 586