First, a death. Aleck Crichton, above, passed away recently at the age of 98, an impressive age for anyone, but especially for someone who led a tank battalion through Normandy in the aftermath of the D-Day landings. Somewhat ominously named after an uncle who died in the Great War, Crichton was badly injured in 1944. Returning home to Ireland, he took up a role in the family business – Jameson. He was part of the team who engineered the merger between the last big distilleries in Ireland, an act which most likely saved our industry from extinction. Part of that difficult transition meant that, in 1984, the decision was made to concentrate on Jameson – a decision that has paid off some three decades later. Richard Burrows, speaking to Ivor Kenny in 2001, noted how this singular focus was difficult because the family members of the original distillers were still on the board: “They paid lip service to marketing – they may sound harsh, but I believe it’s true. Their interest was whether their Jameson, or their Powers, or their Paddy was getting the promotional money.”
Crichton was also chair of the Yeats Society, fitting given that his parents were friends of Yeats’s, a regular visitor to their home on Fitzwilliam Square. Crichton’s memories of Ireland’s Most Emo Nerd were thus: “I would play tag with his children on the square and we were always getting into trouble,” he recalled.
“I don’t remember him ever actually talking to us but he didn’t ignore us either.”
“He always dressed impeccably, always wore a bow tie and silver buckles on his shoes. My father and mother were huge friends and he was often in our home for tea.”
Good old poets – loads of money for shoe buckles, none for buying their own tea.
The foundations laid by Crichton and the rest of the board of IDL are being reaped in the Irish whiskey boom of today – just look at Mark Reynier’s Waterford Distillery, who recently got a rather large chunk of investment cash. Sez the press release:
Phase 1 of our project was the purchase of the Guinness Brewery from Diageo in December 2014 for €7.5m. We then spent €2m during 2015 converting it to a modern distillery; developed a unique barley supply chain; distilled 1m litres of new spirit traceable to 46 farm terroirs by January 2017; and established a bespoke warehouse complex at Ballygarran.
Phase 1 is now complete, on budget and on schedule. The quality of the spirit is first rate supported by both taste and analysis.
We now move to phase II, as outlined in our plan, the total focus of building up stock volumes to 5m litres.
Distilling is an expensive business. And with no revenue stream (deliberately) at this early stage, all the more so.
It is a testament to the strength of the company – the Facilitator, people, shareholders and spirit – that it has secured €20m new funding for Phase II with the investment of €5.8m from BGF (Business Growth Fund) and a €14.4m debt facility with Ulster Bank.
At the same time as the Ulster facility, BGF was invited to make their first investment in an Irish business. We’re delighted to have them aboard.
This €20m funding of whisky stock leads, inevitably, to Phase III, the exciting bit, bringing the whisky to market. Roll out those barrels.
Another snippet of news also came from Waterford Distillery around the same time – the departure of one of the key members of the team. Lisa Ryan had worked on site when it was Diageo’s Guinness brewery, and was head brewer after Reynier took over (her father also supplied some of the barley for their whiskey). So this came as something of a surprise:
Congratulations to Head Brewer Lisa who is joining Walsh Whiskey as distillery manager. We wish her all the best in her exciting new role
Ten years ago you either worked for Cooley, Bushmills or IDL or you didn’t work in distilling. Now we have a growing industry, and a desperate search for staff with experience. Staff being able to move from distillery will be good for the industry and for the category. People will do good things with a brand and get headhunted, and a knowledge economy will be created. So the future is bright – even Diageo are back in the game. They jettisoned Bushmills not long ago and now are building a distillery in their Dublin campus. You can peruse their plans for the St James’s Gate Power House on the DCC site, but here are a few snippets:
There is a really insightful analysis of the move by Louise McGuane here, which explains the smart business of getting rid of one distillery only to build another. Diageo have resurrected the George Roe brand for a sourced blend, presumably from Bushmills, although who knows – with Irish whiskey it’s never exactly crystal clear. The issue of transparency is one that rapidly becoming an unhealthy obsession for me. It’s like Tesco’s fake farms that they use in branding their meat – they say consumers don’t care, and perhaps they are right. But I think that if you stood at the checkout and explained to people that they have no idea where their food came from, and that the shop selling it to them had to invent a place to make that fact seem less unsettling, then they might be less inclined to buy that giant chicken for three euro.
The same goes for whiskey brands – here’s an example of food marketing: This is the pre-release image of The Whistler, a sourced whiskey from Boann Distillery –
And this is what the label actually says:
We can argue semantics all day, but changing from bottled to crafted suggests the hand of marketing. It’s disappointing, not least because I had a few of the Boann whiskeys at Whiskey Live Dublin and thought they had a very strong product. Boann are legitimate distillers who are building a brand while stocks mature – so why bother with the use of the term crafted? It is a weasel word, and the category would be better off without it.
However, it isn’t entirely fair to single Boann out – after all there are other independent bottlers who are using far more misleading tactics – but the entire category is going to have a credibility issue until this sort of behaviour is abandoned. Yes, we only had three distilleries for the last few decades, and yes we have hundreds of brands from those same three sources, all trying to create their own identity – but our image abroad will not improve unless we call a halt to the theatrical flourishes of food marketing firms. There are few sights more depressing than Americans tweeting at independent bottlers to ask them about opening times of their non-existent distilleries – and it is happening. Consumers will end up disillusioned when they discover that the brand they love has endeavored to convince them that their whiskey comes from a distillery that does not exist, and our grand plans for whiskey tourism will be for naught.
And it isn’t just small bottlers sending out confusing signals, the biggest of them all is guilty too, as every bottle of Jameson carries the address of ‘Bow Street, Dublin’ proudly on the label, as though the liquid contained within is actually made there. The liquid is made in Cork, the IDL HQ is in Ballsbridge, and while Bow Street is the tourism HQ, when it comes to the whiskey itself, that address is a phantom limb.
As the interest in Irish whiskey grows worldwide, I am seeing more and more chatter online about the issue of transparency – I don’t want us to be seen as some sort of snake oil tricksters, slinging whiskey distilled in Fidder’s Green by the magical folk, when it all comes from one branch of the holy trinity of Cooley/Midleton/Bushmills. Supply deals may include a privacy clause, but brands can still be more honest – do it in small print on the back label, the geeks will appreciate it and everyone else won’t care enough to read it. The IWA aren’t going to enforce this – one member told me as much when I asked them about false provenance. They told me copyright was basically all they were concerned with right now. It is understandable: The IWA is just an industry body – the consumers’ best interests are not their top priority.
However, I was pleased to see the Irish Whiskey Society are holding a night on this topic soon. Here are the details:
On May 25th, the Irish Whiskey Society will be inviting 8 of the industry’s most vocal movers and shakers for a panel discussion on the liquid identity of our national drink: its making, its labelling, its sales, and its spirit. From startup indies to growing global brands, the panel will include brand builders, critics, distillers, and publicans – for a look at the liquid as its trickling off today.
If there is change, it will be the geeks and the indies who lead it – they understand that if you make transparency and honesty the core of your sales pitch, you can’t go wrong.
There was more good news recently for the orphan of Irish whiskey – Bushmills. I find it frustrating to see this brand languishing as it has, and while I was optimistic that the new owners would bring some fresh thinking, I haven’t seen much evidence yet, from the poorly-received Steamship series to the woefully titled Red Bush. They must have some incredible stock there just waiting for the right treatment – gives us some single barrel, some quality age statements – after all, the place is actually doing quite well:
Northern Ireland’s best-known whiskey maker enjoyed a bumper year in 2015, according to its most-recently filed accounts.
Part of the 18 months in the accounting period covers a period under the ownership of Mexican drinks giant Jose Cuervos, after the sale of Bushmills by Diageo.
The brand’s new owners filed a planning application for a major expansion of the Bushmills facility in a bid to double production capacity. It plans to build a £30m expansion to its current distillery and has now been given permission for the facility which, it says, will “effectively double production capacity”.
It’s also planning to build almost 30 huge warehouses to mature its world-famous Irish whiskey. A strategic report filed with the accounts says its new owners are planning to develop the company through expanding into new markets and increasing sales.
Increase the sales by all means but please increase the quality of the releases while you’re at it. That place deserves to shine.
As titans like Bushmills meander, there are of course numerous challengers approaching. There’s Cape Clear Distillery and the man behind it, Adrian Fitzgibbbon, a financier who was one of the leading lights in the Irish wing of Sachsen LLB. Mr Fitzgibbon initially aimed to set up a distillery and visitors centre on his own property, Horse Island, a small chunk of land about 800 metres off the coast of Skibbereen. Designer Terry Greene, who is behind the neo-celt aesthetic of Barr An Uisce, did some sterling work on the brand:
When that was refused, Mr Fitzgibbon moved his attention to the nearby island of Cape Clear, where the plan has been accepted and is now the funding stage. Here are the plans:
Cape Clear is beautiful, and one would hope that with Fitzgibbon’s background in finance, they will have no trouble whipping up the cash to make it the dream a reality.
Another Cork resident with a background in finance is Michael Scully, a farmer turned property developer, the latter part of which you can read more about here. He is behind the Clonakilty Atlantic Distillery, which is dues to be built within a unit set up for Ulster Bank before the economy tanked. It later became a gaelscoil. Here are some visuals:
There’s also Gortinore, who have plans for the old mill in Kilmacthomas, Tipperary Boutique, who are forging ahead with plans for a grain-to-glass operation near Cahir, Sliabh Liag up in Donegal – there are many planned distilleries and it is going to be interesting to see who makes it to market in five to ten years and who falls by the wayside. It is going to be an interesting decade for Irish whiskey, but my own two cents are thus – all the mentoring in the world isn’t going to ensure integrity. The financial collapse in 2008 showed that there is no ‘invisible hand of the market’ which guides best practise, and that humans will generally do whatever suits them best – even if it means lying to the public. The whiskey business has had a tolerance of subterfuge that needs to be ditched so that we – consumers and producers – hold our heads high and make Irish whiskey great again.
The Irish have always been good at booze. Whether making it, selling it, or simply consuming it, we have a national identity that is forever linked to – and somewhat soaked in – alcohol. We may wring our hands over the complexities of our relationship with the demon drink, but we sometimes forget the power of being a nation where craic addiction is seen as a good thing. Brand Ireland is as much about a nice drink, a singsong and good company as it is about poetry, prose, saints and scholars – and our skills with alcohol travel with us. Take Jack ‘Legs’ Diamond.
Born in Philadelphia to Irish immigrant parents from Kilrush in County Clare, he served in the army before deciding military life was not for him. He moved to New York and built an empire by bootlegging liquor during Prohibition. Known as ‘the clay pigeon of the underworld’, he survived many assassination attempts and became a socialite and media darling, a loveable Irish American rogue.
Speaking to Louise McGuane, it’s hard not to hear the ghost of Legs Diamond in her voice. Her accent is a bizarre mix of her native Clare and the flat New York Irish of Brooklyn. Like Diamond, she briefly considered a career in the military, even serving a couple of years in the FCA: “My brother was in the Army, he was a cadet and then a captain in the artillery division, so he would have gone off to the Curragh. I loved the whole idea of the Army, the camaraderie and sense of adventure,” she says.
But instead of heading east to fire shots across the Curragh in the rigid world of the armed forces, she opted to head west to America and fire shots across bars in the slightly more fluid world of high-end alcohol sales.
“Well it was the Eighties and Nineties in rural ireland, this was pre-Celtic Tiger – everybody left, it was a cultural thing. I had two aunts that had gone – there was a lot of emigration to the US in my family, I had cousins over there, so when I emigrated there was a cousin waiting to pick me up when I got off the boat, so to speak, and there was a culture of emigration out west anyway. It was just what you did.
“I just sort of fell into the drinks industry. I did philosophy and literature in college – I’m a big believer that whatever your degree is, unless it is something really technical, it is fairly irrelevant to whatever you go on to. And in America they simply don’t care what your degree is in – they just want to know that you can do the job, you’re not really judged on getting a 2.2 or 2.1 or any of that, or at least back then they weren’t. Kids have it tougher now in relation to that in terms of the competition for jobs.”
America, the land of opportunities for thousands of Irish emigrants in the Eighties, was a very different bureaucratic beast to the old country. When she started to work in the drinks industry in the States, McGuane soon realised that the world in which Legs Diamond and others operated – the dry America of the Volstead Act – still cast its long shadow.
“I was with Moet Hennessy first, doing on the ground sales and marketing work, which is really valuable because the US market is a really tough one to get your head around. Ever since Prohibition all of the individual states set their own liquor laws – so it’s almost like 50 different countries that you have to know individually, and then at county level those laws can change again, as you can have dry counties. You also have state boards that run the liquor so your point of contact for that state in terms of sales would be two guys who work for the state office.”
While the American market is the one she came to know best, she also spent time in Asia, working in the drinks business in Singapore. After spending two decades learning the complexities of the liquor business with luxury brands such as Hennessy and (Tony Soprano’s favourite) Stoli, McGuane had a tough choice to make: Love or career.
“When I was with multinationals I was on the global trek, and you have to move every two or three years, which was great until I got married and then it just wasn’t possible as I didn’t have a trailing spouse, he has a luxury PR business in London so he has to stay there.”
So she quit. But she didn’t stand still for long – and it was a relic from Legs Diamond’s ancestral home that started her on her next adventure.
“It was this one guy, this JJ Corry guy, a Cooraclare native who became a whiskey bonder in Kilrush. I found his label on eBay and I called up the guy with the label and said what do you know about this. I found out all I could about Corry, then I met his great-grand-nephew, and made all these enquiries around his neighbours and the local historical society, and just decided ‘ok, I am going to do this’.
“The initial idea was ‘we’re going to set up a craft distillery, we’re going to set it up on the family farm, it’s going to be great, let’s buy stills’. That was the first idea – but then I thought ‘no we are not doing that’.”
So a distillery was not going to happen – but then McGuane had the crazy notion of resurrecting a long-dead trade. A century ago, the Irish whiskey bonder was a common sight. Grocers and publicans would buy their spirit straight from distillers (who at the time were mere wholesalers themselves) and then age it in their own premises to sell on as they saw fit. Over the decades as the industry contracted and consolidated, distilleries started selling direct to the public, and one by one the bonders disappeared. There are still relics of that time, famously the Yellow Spot and Green Spot whiskeys, but they are as close to bonded whiskeys as birds are to dinosaurs.
So McGuane set to work. After using her extensive knowledge to put together a copper-fastened business plan, she turned to crowd-funding fountainhead Kickstarter to raise equity. She offered a variety of buy-ins, from small gifts aimed squarely at the Irish American market – a packet of shamrock from the Emerald Isle – to week-long stays in her County Clare home (a half-mile from the house Legs Diamond’s ancestors hailed from) which has a backstory all of its own.
“So my grandmother was born in that property. My great aunt died in estate, so my dad had to borrow money from my aunt in Alabama to buy it back – and he did, back in the Eighties. So it’s all part of the family farm, which is dairy and peat. My uncle used to grow barley, so it is barley country – and growing it in the future is something I’m not ruling out, that whole grain-to-glass.”
But the property was completely transformed under McGuane’s guidance, from a traditional farm cottage to an architecturally designed beauty, all glass walls, brushed concrete and stylish Scandinavian aesthetics. It has become part of the brand for Chapel Gate, as her business is now known, being the HQ for investor meetings and venue for business events.
“With the Kickstarter I sold eighteen stays in my house – I raised 18,000 that way! It’s a beautiful house and it ended up being a really good asset for the business. It’s right next to the rackhouse, on the same plot, and I’ve have a few potential customers come over, a few potential importers too, and it then becomes a really good spot to show people the modern face of the brand and show them how we operate from a design perspective.”
The only possibly downside is that, should it all go south, all her investors now knows where she lives – although McGuane is quick to point out that hers is a pretty solid investment.
“A distillery was the first idea – but then I thought, no, we are not doing that. Maybe in the future-future-future, but who knows. The bonding piece, that is awesome, that’s far more low risk from a business perspective. The assets that I’m acquiring are appreciable assets – so if everything goes horrifically wrong I sell off all of my assets, and everybody gets their money back. The whole buying-a-still, commissioning-a-still – I don’t have that headache, whatever headaches I’ve had are nothing next to the headaches the guys setting up all over the country have.”
But one of the minor headaches she did have was trying to ensure that her investors were the best kind – connected ones.
“The kind of investors you get in this business – you don’t get institutional investors because your break even is about seven years if you’re lucky, and then your payback is if you suddenly sell out to somebody, because there will be a time where nobody is buying Irish whiskey distilleries anymore and what’s gone is gone. And then you have lifestyle investors – maybe ten guys who like the idea of saying ‘I have a distillery in Ireland’ and they come over and they taste whiskey and they have good connections like hotel chains, so you have to figure out who you want to invest, get the right investors for your business and your model. Then when you become a going concern, then you’re into institutional investment, but in the early days you gotta pick your investors really carefully.
“All the investors care about is what’s the downside, if this goes under do I get my money back, and with the bonding model you get your money back, but with the distillery model you won’t because there is all this debt owed on the cap-ex basically. You have to prove to people that the downside is all but zero and then you’re alright.”
Chapel Gate is now officially more than ‘alright’, as McGuane, since mid-December, is Ireland’s first licensed whiskey bonder in half a century. But with resurrecting a lost trade comes the need to resurrect a lost section of State tax law, and with that comes hassle.
When I ask if she has any advice on setting up an Irish whiskey company, she has this tip: “Don’t set up an Irish whiskey company. Definitely don’t do it on your own. It is a terrible idea. Because we are in the resurgence of the industry, there is no living memory, no institutional memory in government bodies.
“So normally the guys at Pernod, they had their revenue officer, they had their HSE guy, they had whoever else they had been dealing with for the last 50 years down in Midleton, and nobody in any of those departments had to even consider these issues. And now suddenly I have my revenue guy in Limerick – who, by the way, is brilliant, shoutout, love him – his name is David Browne and honestly he is fantastic. As a public servant the man deserves a bonus – he is brilliant. The process was new for him, it was new for me, I approached revenue in complete fear, panicking as to what was going to happen, and we worked it all out together, and he was incredibly supportive.”
Supportive he may have been, but her struggle to get the business off the ground was not without it’s difficulties, as catalogued on her blog. McGuane’s knowledge of the industry means she has confidence in speaking out against bureaucracy and what she sees as unfair control of the market by big firms – including her former employers, Pernod, owners of Irish Distillers Limited, the custodians of Irish whiskey.
Her trials and tribulations with her own project were all laid out on her blog, moving from frustration, to anger, to joy – the full rollercoaster of emotions that come with bringing a project like this to life. But while it played out like a sweeping epic, her journey from genesis to licensed whiskey bonder has been rather a short one.
“One year from Kickstarter to bonding; it feels like it has been about a decade. But the blog and social media aren’t just about keeping people involved in the project – it’s also an outlet. I use it a lot to vent, because I am usually just sitting in an office on my own all day, it’s me and Ruby the dog, and that is very difficult, because it feels like forever, and there is no one there to bounce ideas off. So social media is a way to share the experience with people, so people have to hear the sort of nonsense you have to go through. I use it sometimes to make a point as I know the Revenue reads it and I know the local planners read it, so every once in a while I will use it to deliver a barbed question at them on whether or not they want to create jobs.”
In a business like hers, however, the number of jobs is fairly low – although she did advertise for a warehouse cat (one that, presumably, must love dogs).
Because she resurrected a dead trade, she also needed to hire someone versed in an almost dead craft; coopering. Currently there are only a handful of qualified coopers working in Ireland, so she set about finding one with a bit of time on his hands.
“Our cooper Eugene Quinlan is from Midleton, and he worked with IDL up until the 1990s when they got rid of them all. He does that trip now from Midleton to west Clare every couple of weeks, and it is a trek. He comes up every couple of weeks, so if we bring in any casks he can check them over, he comes up and repairs leakages, and also just to keep an eye on the wood, check the casks over, make sure everything is as it should be.
“There are four coopers in Ireland. There’s Ger (Buckley, in Midleton) who has an apprentice now, there’s somebody at Bushmills and an apprentice there too, there’s a guy at Nephin, John Neilly, who is actually Scottish originally.”
The lack of whiskey experience in the job market here – and the abundance of it in Scotland – is another stumbling block to setting up a whiskey business in Ireland.
“Finding staff is a real issue here as almost anyone working within the industry in Ireland right now is working for a massive multinational, so they probably have a pretty sweet package going on and a nice pension – you are not going to poach those older guys away, the really experienced guys, as there is no culture of moving around from distillery to distillery like there is in Scotland. So everybody is looking to America, they are looking to Scotland, they’re looking all over basically. But that is just one of the growing pains of an emerging industry and we are just going to have to go through that for a while.
“You have to go outside the country to look for someone – but I struggle with parts of this. If you’re going to bring in a Scotch whisky expert, their palate is going to be very much in that sphere, technically.
“But there are guns for hire, liquid consultants in Ireland, Scotland and America, and Sweden – mostly women actually – and I work with some of those. Their palates are very wide, so you give them a brief on Irish whiskey and they will get into that headspace. So you have to carefully pick who you work with. I am actually now using a Scottish liquid consultant and he is doing a great job.
The Irish Whiskey Association (IWA) is the body which oversees the category in Ireland – but like everything else here, it is a newborn entity that is going to a mix of very large, powerful firms (Pernod, Brown-Forman, Diageo) and almost micro operations like McGuane’s. So in order to balance this out, the smaller firms are banding together.
“I work very hard to make it happen – on Friday we are having a meeting in Limerick of about eight of us. It’s very informal, just a lunch… but the industry is so new, that all of us have just had our heads down just trying to get through licensing and all that…But I have high hopes that the smaller firms will start to come together. We all have common issues, for example the craft drinks bill affects all of us; the wholesale market affects all of us, the excise and duty – we need relief for that for smaller producers, we have to have that.”
The craft drinks bill is an issue for Irish alcohol producers as a whole so the IWA will be pushing have the law changed so that distillers and brewers and bonder (singular; currently McGuane is the only one) are able to sell direct to the public from their premises without having to fork out 80 grand to buy a pub licence.
“The craft drinks bill is really imperative – I’m just joining the IWA formally, and I went along when they were launching their tourism initiative, which is great. But my concern is this: With programmes like the mentorship, none of those firms are going to be paying 80 grand to get a license to sell direct to customers from their distillery, because the pay-off on an investment like that happens over years and years, depending on where you are and on how you are doing it. Maybe you would get the payback in a year, in areas where there is a lot of tourism, but in rural areas where tourism is seasonal? The crafts drinks bill is, in my opinion, tantamount to the success of those firms and the IWA tourism strategy itself. It wasn’t integrated into the IWA strategy because it came out of nowhere the week leading up to the launch, but Alan Kelly TD (proposer of the bill) was there and he spoke about the bill, and it is really important to the success of us smaller guys.
“And the smaller guys is often where the really interesting stuff happens. It’s nice to visit big massive distilleries, but you’ve been to a million of them, I’ve been to a million of them, it’s the same-old same-old. It’s going to the smaller craft guys that has real value – both for the tourism and for the industry, those rural regions that need it.
“Scotland has the market cornered in whisky destination tourism – but here in Ireland we have the Wild Atlantic Way and a whiskey trail that could piggyback on the success of that, but it will take a lot of close work with Bord Fáilte and with the IWA, to make it happen. It needs definitive timelines and it needs that craft drinks bill to make it happen for the smaller guys.”
Another issue she would like to see the IWA tackle is some of the shenanigans in the independent bottling scene, which is awash with non-existent distilleries, false provenance, and the products of three distilleries being sold by third parties under multiple identities.
“The SWA and the IWA are very different bodies, the SWA is very mature and well-established, while the IWA’s core focus for 2017 is clamping down on labelling, but at the moment they are just on category level – so you can’t call yourself Irish whiskey if you finished your whiskey in Scotland, like (the recently withdrawn) Craoi Na Mona.
“I think there needs to be more transparency – and this is one of the reasons I am so open on social media about what I am doing; there is no bullshit in what I’m doing, I’m really open about where I get my stuff from, what I’m doing with it, although I actually can’t put on my label that it’s from Cooley or GND. I can’t boast about where it’s from as I’m not allowed to, but I will be 100% transparent to anyone at any time if I can.
“I don’t think it’s right that everyone is getting stuff from Cooley and everyone is just banging a label on it and making stuff up and creating false provenance. I appreciate that we are in a weird time, that we are all trying to build brands, but I don’t think anyone is buying it anymore – or at least, anybody in the know isn’t buying it.”
She also practices what she preaches, being incredibly transparent on every aspect of her operation:
Barrels: “I’m not going to tell you exactly where I get my casks from; but I spent about a year looking to get casks as there is a global cask shortage because there is such demand at the moment particularly in the US. But there are key cooperages you go to for ex-bourbon casks, mostly in Louisville Kentucky, there’s a bunch of coopers in Minnesota as well, so the barrels are located in those kind of hubs. I was going to all the big guys and they were all telling me it was an 18-month wait, a two-year wait, just for ex bourbon, so I found a guy in Louisville in the end who only supplies to small craft guys, who gets casks directly off the lines basically, and he has cousins who work at the various distilleries, he is very small scale, has his own little cooperage and if I say ‘go to Jack Daniels and get me so many ex-single casks’ he can do that on a tiny scale. So he is my go to guy for ex bourbon and the scale is perfect for me.
“Then there’s a number of middle-men who sell on ex-port, and ex-Bordeaux, and ex-sherry casks as well. There’s a big company called Shen, based out of France, who bring in new American oak and things like that. So I get bits and pieces from those guys, but mostly I am starting to go direct to distilleries and direct to other wineries in particular. I do this as I am so small scale that I can, and it’s more economical as barrels are very expensive, particularly if you have a middle man, and the places I am going I can hand pick them, if I like the whiskey I can get one of their used casks.”
Spirit: “At the moment I am working with grain and malt, I’m working with John Teeling’s Great Northern Distillery, and they are moving to pot still now as well. The stills they have are fairly steampunk, they are converted kettles basically, so they were ironing out a few kinks, but they are really there now. Alan Anderson is the master distiller there and he is super flexible. Because it is early days for them they are very willing to work with you – if you want to mess about with mash bills and mess about with distillation times, they will do it. Or you can just push the button for you and spit out the usual stuff. But we are now starting to get into the phase where we are getting batches, so my first batch we fiddled about with the mashbill, and batch two was in January, and we started to make that more bespoke, tweaking it here and there.
“I went for grain and malt 50/50 because I think grain is starting to move up the ranks, the Teelings are doing really interesting things with grain, and finishing grain is something that is being played around with massively. But all of that is something that you just have to wait and see with, as you don’t really know what is going to happen in the cask, I can’t really plan until it is ready. But all those variables are one of the nice things about it – you don’t just turn on a pipe and get whiskey. There are many variables.”
Ageing: “We are racking, not palletising, so our capacity is about 550. A good start, and we have 110 in at the moment, with batch two going in May, and another batch by the end of the year so I reckon we will be at full capacity within two years. At the moment I am 100% focused on what I have just done, get a quality source of whiskey, get the right people around me, I have a great cooper and I have some liquid consultants and a really good source of casks from the US, rackhouse sorted, licensing done, boom boom boom, and the next piece is forward planning. So I’ve put together a wood programme where I am chopping down trees to send wood to Spain or Portugal for drying out so that in two years I can put whiskey in my own casks. So in 2017 I’ve had to start planning for three to five years ahead. The same thing goes with supply so I have X amount and while I have a contract for this year and next years I have to think about a decade from now – how much more whiskey do I need to cask for in ten years time? The same goes for rackhouses – I’ve built one now, so do I build another one, do I build a bigger one, where is the next one going, when is it going, I have to apply for planning and so on. So I need to make a firm plan for the next decade. We are playing the long game here.”
On bringing out a sourced blend: “What we are working on at the moment is this: I have my new-fill in cask, and I just have to wait obviously, and see what happens, and then in the interim I have a source of mature malt and a little bit of mature grain as well, so we are working on a very small launch portfolio. So we are going to come out with two …. I’m not even 100% sure yet, a single malt, but that might change, but we want to done very transparently, I mean we all know where the stock comes from….There is actually a smattering of different stocks that I have purchased, with a bit of Bushmills kinda thrown in randomly, and every cask has a really interesting backstory, some casks I’m really trying to dig into a try to figure out how they’re going to end up there. But we are coming out with a very small portfolio so we want to build a brand, get into the US, be very transparent about it. I don’t have enough stock to keep me going very long. I will barely make it to three years and I don’t know if we will be releasing anything in three years, probably not. Really you want to go to eight years, but will I get to eight years? Not now. Definitely not where I am right now.
“The wholesale market for a producer, for someone like me, supply is a massive issue. There is no supply. There’s not mature whiskey out there. Whatever you can get your hands on, you get your hands on it right away, before the price might do up. For me it just made sense to get my hands on what I could and then be transparent about that, and start to use that to start breaking my way into my core markets. I want to have a product that starts to express the style of whiskey that we want to make moving forward as best we can and then when we are ready with our own 100% bonded whiskey that we have aged ourselves and finished ourselves that we can lay more claim to I will have a market ready for that.”
On releasing a gin or vodka: “No, and here’s why. I was at Fortnum & Mason, so I went to the liquor department simply because I wanted to see what was going on. It’s one of those stores that you want to be in, you want your brand in there, no matter how much you might sell you just want to be on the shelf because it is just a great store to be in. And there was shelves and shelves of stock, Mortlach was there obviously behind bulletproof glass, and then there was a craft whiskey section, and there was a small shelf with irish whiskey on it with about eight brands, and then there was a gin section and it was the length of this hotel foyer, a 25 metre long, five foot high gin extravaganza. I love gin, I know gin, I know the category well, I worked with Tanqueray for a number of years, but I just don’t have the capacity to launch a super premium gin product into a very crowded super premium gin category and work it. It needs more PR and marketing, and more people to do those things. So my shtick is – make one thing and make it really well, so I am focussed on whiskey.”
So she is in for the long haul – but is the boom in the category? Can Irish whiskey sustain this incredible momentum?
“Eventually it will plateau but it will keep flying now for quite a while. Look at Asia. I spent a lot of time there, and if you go anywhere in Asia and ask for an Irish whiskey, you will be pointed to Ballantines or something as there is zero category knowledge or impact. Nobody has won there; Pernod has a tough time in Asia generally, but they haven’t launched the category there successfully, so that market is still completely closed, but it is going to open, they are going to start making inroads there. There is interest there now – there are Irish Whiskey Societies setting up in Hong Kong and Macau.”
A key trend she has identified is premiumisation – where a whisky is given a massive price tag due to a combination of age and a marketing department focussed on the super-premium category. It’s also humorously known as ‘Mortlachisation’ after Diageo ramped up the price of the previously accessibly Mortlach.
“I think there is a massive opportunity in ultra premium, which not everybody is going to want to hear, but it is there. The reason you’re going to see it coming out of Ireland is that we have genuine rarity. In terms of older, more mature whiskey in Ireland, you can’t get it. There is no open market, there won’t be an open market for 20-year-old whiskey until 20 years from now, so rarity in Ireland is even more exclusive than rarity in Scotland, where there are warehouses and warehouses of bulk whisky – there are three or four warehouses of that sort of aged stock in Ireland and most of it is accounted for. Ultra premium will definitely happen, based on rarity and based on design.”
Her predictions have already come true, with Irish Distillers recently taking the bold step of releasing a 31-year-old single grain for 1,500 a bottle. However, this doesn’t mean that the average consumer will have to pay more for their standard issue drams.
“It won’t hit consumers as it’s a category in itself. At that level it isn’t even seen as Irish whiskey – it is simply a luxury item. When it’s a 20,000 bottle of whiskey it supersedes the category of whiskey and becomes a luxury item – and that’s all it is at that juncture. But there is a market for that. Scotland, and all the big guys – Diageo in particular – have been playing that game very very well for a long time. You’re starting to see it trickle through here too in duty free, the Teelings have some really interesting releases recently, they started to be a bit more design led, we have something in the pipeline as well coming down the line. It’s an inevitability and I know people don’t like it, but it is more like a luxury product.
“There’s a halo effect – and Scotland does that very well, like Johnny Walker portfolio has whiskies that you can buy for 55,000 pounds, it’s not about how many you sell at that level, and I’m not predicting a 55k Irish whiskey any time soon, but it does become a PR event. But everyone does still want their blended Irish whiskey or their ten-year-old or their 15-year-old – so it doesn’t have to have a knock-on for the average consumer.”
So the boom is getting boomier. And thus it was for Legs Diamond back in the 1920s, and after making his fortune in liquor during Prohibition, he forged out on his own. However, once out of the protection of the syndicates, he was vulnerable, and ultimately someone caught up with the clay pigeon of the underworld, and he paid a supreme penalty. While it seems unlikely that a beret-clad French assassin is coming for McGuane (good luck to them finding Cooraclare), I ask her if it is worth it – forging out on your own, leaving the safety of a giant multinational, to pursue your own dreams, to put it all on the line just to be your own boss.
“By a factor of about 15,000, yeah. Those big multinationals are fantastic in that you learn, you work hard, you are exposed to a multitude of cultures, you get to know markets very intimately, and you get very specific market knowledge. So I could tell you the names of the top five bars in New York or Miami, or Seattle; I know my market down to that level because multinationals expect you to know that from the sales guys on the ground selling a case a week all the way up to category trends and market strategy – all that breadth of knowledge. Some of that information becomes useless when you come out on your own, but it is the confidence it gives you – I can walk into a room full of investors and know my category and my market better than anyone.
“I miss the perks though – the wildly extravagant expense accounts, the business class flying, and all the gold cards I used to have on all the airlines. Now it’s Ryanair, all the time, basically.”
With a growing stockpile of spirit, as well as plans ahead to release a sourced blend, and even a brand celebrating the legend of Legs Diamond, she may be due a seat upgrade to business class sooner than she thinks.
Footnote: There was a great profile of Louise in the Indo which you can read here, and it contains a lot of material I didn’t touch on. Louise’s blog is located here and is really worth a read for anyone interested in whiskey, start-ups or Kafkaesque labyrinths of bureaucracy.
There are two categories in Irish whiskey start-ups – the schemers and the dreamers. The schemers are the ones bottling anything they can get their hands on and pretending the are so much more than they are. The dreamers are the ones who actually went and created something more than just a label – people like Mark Reynier, Peter Mulryan and Louise McGuane. I was lucky enough to interview all three, and while they all have different routes to Irish whiskey, all are striving for the betterment of the category as a whole, and they deserve every support.