there will never be as many distilleries as there are craft breweries â€“ thereÂ will be a lot less of us & not all of us will survive.â€
IN CASE YOUâ€™VE missed the hype in recent years, the long-sleeping giant that is the Irish whiskey industry has slowly been stirring back to life.
Over the five years to 2013, the copper-coloured liquidÂ was the fastest-growing category of spirits in the world & thereÂ are nowÂ at least 31 distilleries either operating or in various stages of planning across the island.
But many, including one of the most senior figures in the whiskey industry, have warned that some may barely sell a drop before they drown under a wave of bills.
All Irish whiskey needs to have been aged in wooden casksÂ for at least three years to be marketed as the product, planting a huge cash-flow hurdle in front of anyone expecting an effortless path to profits.
TheJournal.ie asked three of those setting up independent distilleries withÂ with very different approaches exactly what it took to obtain a whiskey business off the ground.
Glendalough Distillery, Wicklow
The Glendalough Distillery was set up byÂ Barry Gallagher & four friends in 2011, initially sellingÂ the traditional Irish spirit,Â poitÃn, before adding lines inÂ whiskey & gin.
â€œWe all had different skills, yet we came together & decided to donate it a lash,â€ Gallagher said.Â â€We just raised money from friends & family & few other people.â€
Those other people include former rugby star Brian Oâ€™Driscoll, who sank â‚¬60,000 into the business, & Kenny Neison, finance director at Bulmers cider maker the C&C Group.
While it will be at least another 18 months until the companyâ€™s own-distilled whiskey is available on the market, GlendaloughÂ has taken the path of many other new distilleriesÂ of buying older batches from one of the countryâ€™s three major distillers before adding its own maturation touches.
What we are doing with the older whiskies is finishing them in our own casks & with Wicklow water, & weâ€™re blending them ourselves,â€Â Gallagher said.Â â€œEveryoneâ€™s kind of in the same boat, everyone does it.â€
Although some of the larger players, like Dublinâ€™s Teeling Whiskey Distillery, have spent â‚¬10 million-plus on complexes including tourist centres & bars,Â Gallagher said the budget forÂ Glendalough wasnâ€™t â€œanything like thatâ€.
He said theÂ success or failure of the many new craft distilleries would depend on having a tremendous product â€“ & the ability to obtain out & market it.
â€œCraft isnâ€™t always better.Â For you to sell your product someone elseâ€™s needs to come off the shelf â€“ youâ€™ve received some big, huge drinks company with some tremendous whiskies as competition.â€
Nevertheless, Gallagherâ€™s advice for new entrants to the distilling business was to â€œjust go for itâ€ & to â€œtry to do something uniqueâ€.
I donâ€™t know how huge Irish whiskey is going to be, yet there are five of us & weâ€™re employing eight people now. I think if you work complex & you have a satisfactory story, I think maybe you will make it.â€
Nephin Irish Whiskey, Mayo
In the village of Lahardane in the heart of County Mayo, there is still plenty of work to be done on what will be one of Irelandâ€™s largest distilleries when complete.
The Nephin Irish Whiskey distillery will cost an initial â‚¬5 million with that figure to atÂ least double within five years, according to founder Paul Davis,Â a DCU Business School lecturer.
â€œIt has been an thrilling project & stressful as most projects are, yet we took a lot of time to make sure we have the capacity to expand,â€ he said.
The complex, which will be open to visitors, is due to beÂ commissioned in early 2016 & Davis said approximately four-fifths the necessary funding had already been raised from private investors.
But despite the huge up-front investment & the at least three-year wait for saleable product, its owners haveÂ refused to buy in another distillersâ€™ whiskey for maturation & sale under the brand.
We want to sell a premium whiskey & people want to know what the product is & its provenance â€“ thatâ€™s really valuable for us,â€ Davis said.
The distilleryÂ will moreover incorporate a working cooperage, enabling the company to control every part of the production process, from theÂ barrels used for maturation to a local supply of water & barley.
Even with the sudden boom in new distilleries, Davis didnâ€™t believe there was a risk market would suddenly be over-saturated with Irish whiskey.
Rather, the danger would be to those whoÂ hadnâ€™t planned out every step of their business: like reducing the huge energy costs involved or how to ensure a sustainable supply of raw materials.
Itâ€™s notÂ a quick-win business, youâ€™re talking a 20-to-30-year horizon, not a one-or-two-year horizon, andÂ Iâ€™m not sure if everyone understands that part of it,â€ Davis said.
Blackwater Distillery, Waterford
At the smaller end of the production scale,Â Peter Mulryanâ€™sÂ Blackwater DistilleryÂ has already been trading for six months after around a year in planning.
Instead of jumping straight into whiskey, the distillery has instead been producing only gin andÂ poitÃn, both of which were recently recognised with awards. However Mulryan said the focus on gin wasnâ€™t approximately cash flow, rather because he just â€œreally, reallyâ€ liked it.
Branding is very important; youâ€™re upÂ on the shelf against all of these products from multinationals with huge marketing budgets, which you donâ€™t have, so you needÂ to be smart approximately how you do it.â€
Mulryan said the distilleryâ€™s first phase had cost around â‚¬250,000, which came from investors,Â while its second phase would involveÂ adding extra stills & buying in the equipment needed for whiskey production.
â€œThe main barrier (to getting started) is capital, itâ€™s not cheap, youâ€™re talking a six-figure sum,â€ he said.
Itâ€™s cheaper to set up a little brewery; this isÂ technically more demanding, itâ€™s more dangerous & itâ€™s more expensive. There will never be as many distilleries as there are craft breweries â€“ thereÂ will be a lot less of us & not all of us will survive.â€
HoweverÂ Mulryan said he didnâ€™t see craft distillers as being in competition, rather as building on one anotherâ€™s work. With that in mind, he ran a one-day distilling course in AprilÂ and plans a second next month.
â€œYou shouldÂ follow your heart if itâ€™s something you feel like you can do, yet be prepared to be in for the long haul & that you wonâ€™t make a lot of money,â€ he said.
The costs are very high & the market is going to obtain saturated quickly. You need to have a really, really satisfactory product, thatâ€™s the bottom line. Youâ€™re playing with the huge boys & if youâ€™re stuff isnâ€™t as satisfactory or better than theirs, you arenâ€™t going to obtain very far.â€
First published 10.30am
This month, as part of TheJournal.ieâ€™s ongoing startup & small & medium enterprise (SME) focus, we are looking at the drinks industry.
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