If you want to learn how to start a gin distillery, you’ve come to the right place. We asked the founders of Salcombe Distilling Co. how their gin distillery startup went from just an idea to an award-winning luxury gin brand in just a few years.
How the Idea for a Gin Distillery was Born
Salcombe Distilling Co. was born from Howard Davies’ and Angus Lugsdin’s shared connection with Salcombe, their love of the lifestyle on and around the water, and a passion for exceptional spirits. Having met teaching sailing in Salcombe in their youth, they kept in touch over the years. On a day in 2014, over a barbecue at Angus’ house, they started discussing the idea of creating a waterside distillery in Salcombe and producing world class spirits.
The First 2 Years as a Gin Distillery Startup
A business plan was formed and the next 2 years were spent on:
- Developing the maiden Salcombe Gin release ‘Start Point’
- Securing a waterside premises for the distillery
- Raising funds to start the business
Investors were found through networking with people that had a connection to Salcombe and pitching to them either online or in person (requiring frequent trips up to London). Finally, by March 2016 an initial £400k had been secured, shortly followed by a further £200k. In June 2016, gin production began and Salcombe Distilling Co. started trading.
Establishing Company Values and Vision
From the outset Howard and Angus set three core values of the business which would guide everything Salcombe Distilling Co. did going forward: Passion, Integrity and Attention to Detail. Defining values may seem a bit clichéd but these were extremely useful. To this day they are still powerful in providing a basis for the culture of the company, its people and its products. There was also a simple vision set out from the start: for Salcombe Gin to be recognised as “The World’s #1 Luxury Gin”. This ambition still holds true and has guided the business to this day.
Early Challenges of Starting a Gin Distillery
Salcombe Distilling Co. had many challenges in the early stages, from finance and staffing, to premises. As is often the case with building -projects, the construction of the distillery overran by a good 6 months. Initially, the business had to operate from a small industrial unit just outside of Salcombe. This meant that after launch the team would often distil and blend in the morning at the industrial unit. In the afternoon one of them would head over to Salcombe to put up a trestle in front of the distillery building-site. There they would sell the early batches of Salcombe Gin to passers by. This actually transpired to be a really effective way of generating some early sales, brand awareness, and support.
World-class Quality gets Recognised
Some great early successes for the company were Salcombe Gin ‘Start Point’ being awarded gold at the World Gin Awards and double gold at the San Francisco World Spirits Competition. These were awards the founders had been following for years, and to win them in the first year was brilliant.
Managing the Accelerating Growth
Salcombe Distilling Co.’s main challenge for the next few years was balancing growth and use of funds until the next investment round. Sales grew rapidly during this period and there was a continual need to increase production capacity. Space in the distillery building in Salcombe quickly became a huge issue. There was need for a larger labelling machine and increased storage space for finished goods, raw materials and packaging. This meant that even normal operations required complicated planning. This went on for about a year to the point where it was not going to be possible to service the sales volume. The stock and distribution issues were resolved when another large warehouse nearby was secured.
The Competitive Gin Market
The other big challenge for a gin startup is growing market share in a highly competitive marketplace. When Salcombe Distilling Co. began, the gin category had already started to grow quickly with many other brands cropping up. This trend has continued to accelerate. According to the Office of National Statistics, by the beginning of 2022 there were 820 gin distilleries in the UK alone! Being able to stand out amongst the rest of the brands and obtain listings has been a continuous strategic focus for the company. Concentrating on ensuring Salcombe Gin, Salcombe Rum and New London Light each have a unique market position in terms of their quality and branding is of paramount importance to Salcombe Distilling Co. The company is also constantly striving to evolve how they market and sell through different channels. This has been hard and will continue to be, but at the same time it ensures a constant drive to deliver outstanding results.
Raising Funds through Seedrs as a Gin Business
Navigating through the coronavirus pandemic was daunting for many businesses. Fortunately, Salcombe Distilling Co. had completed an investment round with Seedrs just prior, which meant that the company had some capital. It was able to refocus on (and double the size of) its eCommerce channels to get through a challenging two years. This was followed by another investment round with Seedrs at the beginning of 2022, with again seemingly very fortuitous timing given the subsequent and continuing increased costs of materials, energy, transport and living. There is currently a huge squeeze on sales and margins, with a tough outlook for the next 12 months. Once again, Salcombe Distilling Co. is defining a strategy, built around its core values and vision, to succeed in this environment.
Closing Words of a Successful Gin Distillery
Having core values of Passion, Integrity and Attention to Detail to guide business decisions alongside the flexibility and funding to be able to adapt, has helped Salcombe Distilling Co. navigate successfully through these challenging times. The company now has a team of over 30 people, a multi-million pound turnover, strong national distribution, a growing export business, industry leading products and a bright future ahead!
