Ian Stirling: ‘we wanted something new’
Interview: Ian Stirling, whisky entrepreneur
There will be nothing quite like it, and it will certainly turn a few heads – upwards, as it happens – when a 40-metre high vertical whisky distillery finally opens next year. It’s never been done in Britain before but the two young entrepreneurs behind the initiative say it is going to give the industry and Edinburgh something a little different.
“We never set out to build a vertical distillery,” admits Ian Stirling, co-founder of the project. “We wanted to build something new, and it was clear from the land we had that the only way was up.”
There is one other known vertical distillery – in Sweden – which proves the system works, but not with a bar and tasting room on top. Stirling, and business partner Paddy Fletcher, can’t wait for the first guests to ascend the towering structure on the tight waterside plot.
It has been quite a journey – literally – for the intrepid pair who toured the US and Hong Kong in their search for financial backers. It involved visits to 10 US states in all, but the effort paid off and about £1m of the near-£10m so far raised for the venture has come from America. They now have investors in eight countries.
Stirling says it was the sound of a Scottish voice that helped persuade many of them to listen to what they had to say. “There is a such a high demand for products from Scotland which is an incredible brand. You talk to importers and when you tell them you are from Scotland a broad smile spreads across their face,” he says.
He hopes the same enthusiasm will be found among smaller private investors who are now being tapped for a further £2.5 million through a crowdfunding exercise on the Seedrs platform. This will help with completing construction work and day-to-day working capital.
Progress has accelerated since lockdown forced construction to be suspended. The project is now on course to be completed by this time next year.
Not that it has been all plain sailing. Stirling says there were a number of setbacks, not least when they first began searching for investors.
“I was having lunch with a client from China and told him we were thinking of building a distillery. He immediately said he would back it and we began taking the idea seriously. But then he vanished.
“Disappointing though that was, we would not be where we are now, as he gave us the motivation to press on.”
However, there were other setbacks. “We found another trio of Chinese investors and signed a memorandum of understanding, but they backed out when we lost the site we had in mind.”
‘Once we had the lease signed we had our first investor the following week’
That original site – on the land between Ocean Terminal and the Scottish Government offices – is now being developed by Cala Homes. Already two and a half years into the project it was good fortune that a member of the shopping centre’s management team asked if they were interested in the corner site at its north east tip overlooking the port and within a short walk of the Royal Yacht Britannia, one of the country’s top tourist attractions.
“It was absolutely perfect and preferable to the original site,” says Stirling.
It was the moment that kickstarted the next attempt to secure investors, and with a site secured they found plenty of willing backers.
Fletcher, who had been working in a number of tech start ups, had also gathered valuable experience and knowledge about running a big business as European finance director for office sharing company WeWork. Together with Stlrling’s background in the international drinks industry they felt they were well equipped to progress their plans.
‘We were getting to know how to tap into the investor network. Once we had the lease signed we had our first investor the following week and we instructed the architect to start work.”
There are now about a dozen staff involved in the business which has developed a revenue stream through its Lind & Lime gin distillery in Leith.
“We had not intended to make gin, but because the whisky distillery would take time to build and move into production, we saw gin as a revenue stream and something to talk about.
“It has been more successful than we expected and we are relocating the gin distillery and warehouse to premises in Coburg Street, Leith, six or seven times larger, hopefully in December or January. The gin business is already generating gross profit of £1m.
“We have converted the lease on the site of the whisky distillery into a purchase and we hope to be in production this time next year.”
Straight up: How the distillery will look
With construction well under way, Stirling and Fletcher are turning their attention to marketing the new brand.
“We are already in 24 markets with our gin and export considerably more than we sell in the UK. We intend to sell our whisky into these same markets,” says Stirling. “Next year we will be exporting into the US for the first time and we have new markets in the pipeline.”
They have also launched a sherry and a port as a way of highlighting the Scotch whisky story.
“It struck me that sherry and port have played a big role in Scotch whisky,” he says. “They used to be shipped into Leith and the empty casks were used for whisky.
“We decided that launching a sherry and a port was a way of highlighting the Scotch whisky story. So, we import a sherry from a family producer in Spain and a port from Portugal. They will not make us rich but they give us a way to engage with customers.
“We want to create a trading entity with the Leith Export Company to launch a Champagne brand, and other products that we do not make but will distribute and trade under our name.
“This is what used to happen in Leith and we are reinvigorating that tradition of trading in wines and spirits.”
As founders he says they do not want to sell the business. However, they recognise that the hundred or so investors – all private individuals – need a return and an opportunity to exit. In the course of raising money the two co-founders had to sell a lot of equity to raise funds and now own 25% of the business.
“It means that the ownership is ultimately out of our hands,” says Stirling.
“The business will generate significant revenues further down the line and there is a prospect of dividends for shareholders,” he says. “We are watching with great interest the way Artisanal Spirits Company [owner of the Scotch Malt Whisky Society] floated on the Alternative Investment Market and we would like to think we can do something similar.”
Occupation: co-founder and co-CEO, Muckle Brig, parent company of Port of Leith Distillery and Lime & Lind Distillery
Education: Edinburgh Academy; King’s College, London (French with English)
Career highlights: After working in PR for a West End theatre in London I decided my future was in wines and spirits. I worked in retail and deliveries for Majestic Wine and then Roberson Wines where I established an off-trade department, selling to UK retailers and international importers. It involved travelling the world, securing major listings with multiple retailers.
What got you interested in building your own distillery?
Paddy and I are lifelong friends and we were passionate whisky fans and talked about building a distillery. We set up Muckle Brig (the parent company) in November 2014 and began looking for investors.
Highs and lows?
One of my favourite things ever was raising money in the US. The enthusiasm they showed for two young guys raising money was great for morale.
Losing investors was a big disappointment, of course. There have been a lot of challenges but we have weathered the storm. Construction was delayed as we had to close the site. Demand for our gin grew but there were problems getting cardboard boxes, while delivery of our unique glass bottles from Italy was extended from two weeks to two months.
Just in Time became a thing of the past and now we place bigger orders to make sure we have enough stock of materials.
What is the best advice you have received?
Raise more money than you need
What did you want to be when you were younger?
Possibly a film director. I worked as a wedding photographer for a while
Reading history books
What have you learned about yourself?
It has been fun, but quite a challenge and I have surprised myself by showing so much resilience.
Who would you name as three fantasy guests at a dinner party?
Will Smith (actor), Mo Gawdat (Egyptian entrepreneur and writer, former chief business officer for Google X), Lauren Bacall (actress)