10 August 2017

The company that paved the way for the gin boom

Gin wouldn't be such a hot commodity if it hadn't been for Sipsmith leading the way.

Ask anyone in spirits circles about the origins of the UKs gin boom in the past decade and they will inevitably mention Sipsmith, the distillery that first began producing spirits in a garage in Londons Hammersmith in 2009. Its come a long way since then and has been instrumental in breaking open the doors to the spirits industry that others have since followed through.

Beefeater was the only major gin distiller left in London at the time and, as difficult as it is to imagine today, consumers just werent that into gin. With no other local startup distillers to draw inspiration or guidance from, Sipsmiths founders – Sam Galsworthy, Fairfax Hall and Jared Brown – had to look to the past.

We were inheriting 200 years of gin distilling from Beefeater,’ says Galsworthy of those early days. That gave us our true north.

Seeking a licence

The journey began in 2007; the first major hurdle was to secure a licence for the distillery. We were so naive. We went to the government, and they were amazingly unhelpful, saying that what we were trying to do wasnt allowed in the UK.

The team persisted and quit their day jobs. They were eventually granted a licence in December 2008 – making Sipsmith the first new copper distillery to set up in London since 1820. Securing that licence not only set the wheels in motion for Sipsmith but set a precedent for other startup distilleries applying for a licence.

As Galsworthy recalls: This was the beginning of the financial crisis and Gordon Brown was talking about economic prudence. No one was lending money but we were already committed. Its what some people call hurt value, which is the value of pain youre likely to be subjected to upon failure.

The trio nevertheless found enough investment to begin setting up their distillery. The location was a garage on a quiet street in Hammersmith, which was formerly the residence of revered whisky expert Michael Jackson.

Overseas inspiration

When the time came to find a still, Galsworthy drew on his time working for beer-maker Fullerin the US, and his visits to the pioneering craft spirits producers across the Atlantic. With the prime ministers words in mind, they named their first still Prudence.

The traffic lights were turning green,’ remembers Galsworthy. Wed found money, and achieved the licence. Everything had started to move… and we hadnt sold a case.

He recalls that no wholesaler would take their products and that initially, he would deliver cases of their vodka and gin on the back of his Yamaha scooter. But first, hed had to convince bars to take his spirits at all – a tough sell when Sipsmith didnt have any listings elsewhere.

Big wins

I had a list of 10 accounts, the likes of Artesian, Mandarin Oriental, Dorchester and Dukes Hotel,’ he says of the turning point for Sipsmith in the on-trade (hotels, bars and restaurants). I refused to talk to anyone else until we were in those. I knew the rest would come if we could get those Everest accounts. Sure enough, loads of other bars started picking it up after that.

Galsworthy had a few tricks up his sleeve: getting friends to ask for the brand in bars, even when Sipsmith wasnt stocked there. When the brand was picked up by a few Majestic Wine and Waitrose stores, hed go into each store and buy a few bottles to improve their sales. And all the while, the momentum was growing.

It was one pallet a month, then two, then three, and it was manageable, but we were still losing money hand over fist. Thats when I said to Fairfax: You run the accounts, and Im just going to go out there and sell and make this boat float.”’

And thats just what he did. The business grew to the extent that it had to set up a new distillery with more capacity in nearby Chiswick by 2014.

Going global

Cut to the end of 2016, and the brand announced that it had been acquired by the third-largest premium spirits business in the world, Beam Suntory. The deal, they said, would leave its founders at the helm, firmly in control.

It was vital. We have two principal ambitions. To be around in 200 years’ time, and to be in all four corners of the world,’ explains Galsworthy. Beam Suntory has an outstanding reputation globally, and it has the muscle in markets where we couldnt have dreamt of getting a conversation with key retailers, let alone consumers. In short, it ensured our two ambitions.

The revival of the overall gin category remains a priority for Galsworthy. Of all the great moments Sipsmith has had, from the awards to the growth rates, we still hang our hat on the fact that the gin landscape looks very different today compared to when we started. Were incredibly proud of that.

First appeared in issue 18 Aug/Sept