39 new distilleries were opened in the UK in 2017 as demand for niche craft spirits brands response continues to grow, says UHY Hacker Young, the national accountancy group.
The UK’s spirits industry is benefiting from this global trend amongst consumers to spend money on prestige, limited run drinks rather than ubiquitous globalised drinks brands. This boom has ranged from new whisky distillery openings in the Highlands of Scotland through to urban micro gin distilleries as part of the UK’s ‘Ginaissance’.
Boutique distillers are now squeezing big brands off the shelf. For example, pub companies are increasingly competing on the range of niche and artisan gins that they sell. Gin is seen by some pub companies as an opportunity to replace the explosive sales growth of Prosecco that is now slowing down.
Recent HMRC data shows that sales of spirits in the UK rose to a record high £3.5 billion in 2017, up from £3.3 billion the year before
A string of M&A deals has also been tempting more entrepreneurs to try their hand in spirits. In total, 201 new distilleries have been opened in the UK in the last five years.
The trend for drinks giants buying up artisan distillers for high multiples is both a UK and global trend. For example, in 2017 UK drinks industry leader Diageo entered a $1 billion deal to acquire American tequila brand Casamigos, which was co-founded by George Clooney in 2013.