08/06/2020 - 15:48

Distillers crank up the creativity

08/06/2020 - 15:48

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New products, cheaper bottles and a push to buy local are on the cards for craft distillers, despite the disruption caused by COVID-19.

Distillers crank up the creativity
James Young hopes the move to buy local survives after COVID-19 restrictions are fully eased. Photo: Gabriel Oliveira

New products, cheaper bottles and a push to buy local are on the cards for craft distillers, despite the disruption caused by COVID-19.

Old Young’s founder James Young has only been in the distilling business for five years, but says he feels like an old timer.

Mr Young was certainly early to the game in Western Australia, with 16 distilleries having opened since 2016 when Old Young’s launched in the Swan Valley, according to BNiQ data.

(click here to view a PDF version of the full special report)

New players to enter the market last year include Fremantle Spirit Company, Gidgegannup- based Old Macdonald Distillery, and the Republic of Fremantle.

Mr Young told Business News the days of the single-founder business could soon be over, with many operations employing a head distiller from day one.

“All of it proves that there is a place for it,” Mr Young said.

“What’s your reason to buy a bottle of Bombay Sapphire when you can buy a Spirit of Little Things, Sin Gin, us [or] Tattarang Springs,” he added in a nod to the quality of the local product.

“We will see what happens, but hopefully out of COVID we might have this situation where that concept of buy local sticks around.”

Mr Young said COVID-19 restrictions had affected his business, given the 75 per cent drop in revenue from its tasting room.

He said the remaining 50 per cent of the business was split between retail, which was trading as normal after an initial spike in March, and on-premises sales in bars and restaurants, which had been reduced to nothing.

Thanks to JobKeeper, Mr Young said he had been able to retain all his staff, even after recently expanding his team with five new employees in the past 12 months.

In addition, Old Young’s received a grant from the federal government’s Manufacturing Modernisation Fund in April for an expansion of its production facilities.

The distillery was awarded $100,000 from government in matched funding.

The expansion will be finished by the end of 2021, and will increase production capacity to between 30,000 and 40,000 bottles per month.

“We are talking about new distilling equipment, expanding the shed, a bottling line [and] some distillery software,” Mr Young said.

The team at Old Young’s has taken advantage of the COVID-19 hiatus to develop new products, including a gin of the month club, and has been working with other distilleries to create bottled cocktails.

Whipper Snapper Distillery in East Perth has also been creative while its venue has been closed, creating hand sanitiser and a special moonshine using unused kegs of beer, which otherwise would have been sold in bars and restaurants.

The moonshine, called Brew Moon Rising, used 2,200 litres of kegged beer from 21 WA craft breweries to make 250 bottles, Whipper Snapper Distillery co-founder and head distiller Jimmy McKeown told Business News.

“The whole point of it really is to build that public awareness campaign around supporting local producers and raising a bit of cash for them as well,” he said.

Mr McKeown said the brewery had lost 40 per cent of its business in on-premises sales in bars and restaurants in the two months it was closed. Retail sales, which made up 40 per cent of its business, were also down.

He said there was a trend towards the bigger local players producing cheaper whiskey.

“It’s purely economies of scale, so a lot of the bigger ones who can, who do have the capital, are expanding to produce more whiskey,” Mr McKeown said.

“And the more they produce, the lower the overheads so the cheaper the whiskey; so that’s a real way to kind of get it into the mainstream but also compete with the big imports.”

According to Mr McKeown, Whipper Snapper whiskey was about the third cheapest in Australia at the moment.

“We are still looking at potentially making another product that is more affordable, but that probably won’t come online until we have bigger production equipment, which requires capital, which is always a struggle to get,” he said.

Great Southern Distilling Company has recently released Dugite Whiskey, its first to sell below $100.

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