The stark reality of how hard it is to make an Irish Whiskey distillery work is sure to flood the wider distilling industry's feeds after today's announcement of Waterford Distillery being placed into receivership. This won't be surprising to many who are close to the industry here in Ireland as it was widely rumored that the business was in trouble. Without knowing its ins and outs, some lessons/reminders can be alluded to.... 1. It is incredibly cash-intensive to run any distillery, never mind one of this scale. With the ability to run at 1million LPA+, that's a lot of barley, a lot of water, a lot of energy to heat, a lot of casks to purchase, then fill, transport and store. Add in the expense of producing single farm spirits and your costs continue to increase. I wouldn't be sure of the exact figures but an educated guess would put it in the millions per year. 2. Creating an amazing brand, being bulletproof on your identity and releasing adventurous products isn't enough to make the business a success. I have critiqued Waterford in the past for releasing too many products and arguably overcomplicating the importance of its terroir project. Regardless of this, their recent focus on Cuveés has seen the release of some truly outstanding products... Too little, too late? Maybe, but there is certainly more to it than that. The lesson in that is, there're many brands popping up that don't have an ounce of the originality, authenticity, transparency or outright beauty (in terms of brand execution) that Waterford have, and if I were those brands, I'd be incredibly worried about the future of my product. Even with an apparent failure, Waterford Distillery set a standard that should be aspired to. 3. Mark Reynier cited that not having the right partner in the US caused a drop in sales in recent years, and through my work in the US I can attest to this. Your choice of distribution partner is vital to the success of your brand, you should be spending the time and whatever money you can doing market research, properly segmenting your potential markets and becoming laser-focused on your target partners. This should in turn feed into your positioning, allowing you then to set clear objectives for the business. I'm not saying that Waterford did or didn't do this, I'm saying that other young brands/businesses should. To bring my thoughts to a close, I hope this doesn't adversely affect their team too much as I know them to be graciously kind, fun and talented people. I will be massively shocked if this is the last we see of Waterford Distillery, I truly believe they were just beginning to land on a product proposition that was going to bring to life the great work their team had done to date in creating what I think is truly incredibly spirit, with an outstanding wood program that will eventually set the whiskey world alight. Perhaps one of our multinational friends will see this potential and fancy a bash at a comeback story... I know I'd be keen.
Very accurate summary Mark .Thank you for the kind words and support .I'm sure we will chat in the new year .It's not the end game for Waterford yet .
In USA this means the end is near and banks will sell off assets. USA tarriffs will occur with IRELAND as the EU is lopsided now with us. Note, I am a recent IRISH full citizen but reciprocality will occur one way or another. Due to continued inflation, Ireland will not gartner a premium in USA as even Costco sells very inexpensive IRISH wiskey. Over time this is a typical cycle of a brand. Build a plant in USA it can be done. 👨👩👧👧
I’ve followed the growth of Waterford for the last few years and can honestly say what the whole team has achieved to date is mind blowing. I’ve learned so much from their social media presence, stuff I never knew about whiskey. The Terroir concept is truly a revolutionary move within Irish whisky. Most of the “big” Irish whiskey brands amounts to nothing more than caramelised Vodka imho. The Cuvee Argot is a truly beautiful dram considering it’s the most affordable from the range. Hopefully this is just a short term situation for everyone’s sake especially the amazing team. Nobody can match the traceability which the Waterford brand has benchmarked. Slainte team Waterford Whisky.
Speaking from experience, it is gut wrenching to see another distillery facing this fate. There are so many factors affecting distilleries and brands, and unfortunately most of them are negative. We were very lucky to have an incredible partner in the US but that still didn't keep us afloat in Listoke. Thoughts for the team who will be feeling this hit for the next while, its not an enjoyable one! Fingers crossed we see a comeback, Waterford Distillery are one of the good ones for the Irish industry.
Hopefully, it's not the end, there's a great bunch of people working there. truly an innovative and original brand. Not just sourcing their whiskey from another distillery and using a corny Irish brand name.
I truly hope a solution can be found. There is not a better, more focused group of workers anywhere. Thinking of you all at this stressful time
Distilling Entrepreneur
3wMark. The best layed plans and all that. The cock up here was my backup plan 'for when things go wrong' did not anticipate pandemic fu%&wittery, interest rate spike, 'super cycle' collapse; cost of living crisis, energy rises, market bulk saturation - all at the same time, precisely when we are trying to establish the brand. My plan. My problem. Which I will do my damnest to resolve, not least for the guys who helped me make this happen, but because I know we have something very special. And I don't intend to give it up quite so easily.