As London’s pioneering boutique gin distiller, Sipsmith helped spark the craft spirits revolution in the UK.
*This feature was originally published in the August 2018 issue of The Spirits Business
In the early 19th century, portable stills were the bane of HM Customs and Excise in its battle against illicit distillation. Excisemen would raid a Highland bothy after a tipoff, only to find the bootleggers had bolted on horseback, dragging their pot still behind them. At some point, so the story goes, Edinburgh’s chief excise officer – a distiller on the side – looked at his own 400-gallon (1,800-litre) still and declared that henceforth anything smaller would be illegal. This became law.
In the early years of the millennium, Sam Galsworthy was working as a brand ambassador for Fuller’s Brewery in the US. “While I was there I saw this real groundswell, inspired by the trade but driven by consumers, around ‘craft’ – from micro-brewing to craft distilling and coffee roasting,” he says. “No longer was big beautiful. Small, authentic, touchable, transparent was beautiful.”
His enthusiasm for the craft revolution was shared by his friend Fairfax Hall, who was then on a Diageo-sponsored MBA in Pennsylvania. “We’d always grown up on gin, and suddenly saw this gaping hole of an opportunity, with gin begging to be re-inspired,” Galsworthy says of their discussion to set up Sipsmith in London in 2006. That said, it wasn’t quite the gin desert of previous decades when Gordon’s and one or two others continued their stately decline beneath the waves of vodka. Hendrick’s had been around since 2000.
However, thanks to that Edinburgh excise officer, there were no US-style craft distilleries in Britain at the time. It took almost two years of lobbying for parliament to overcome its phobia of portable stills, though when it did, Sipsmith received a scruffy sheet of A4 with ‘distillery licence’ scribbled in biro. No doubt that will be changed to a parchment scroll and wax seal if Hollywood ever retells the tale.
That licence made Sipsmith the 12th gin distillery in the UK when it launched in 2009. “In the crystal ball we had, we could see that gin was likely to be invigorated a bit,” says Galsworthy, but he had “absolutely no idea” of the gin craze that was about to explode. There are now more than 300 UK distilleries, with probably the vast majority engaged in quenching the nation’s newfound thirst for gin. According to the Wine and Spirit Trade Association (WSTA), Brits consumed the equivalent of 1.32 billion gin and tonics in the year to September 2017. Sipsmith’s name was inspired partly by Hall’s father, a silversmith, with ‘sip’ “conjuring up quality and a sense of lingering and sharing”, says Galsworthy, who also explains how master distiller and cofounder Jared Brown insisted that it had to be a classic gin. “He said ‘I don’t want to make a wacky, left-field, super-flavoured gin. It has to be in a one-shot fashion, on copper, cut by hand’.”
Sipsmith has always been a London Dry gin, which, despite the name, can be produced anywhere. Yet the brand, whose original distillery was in Hammersmith before moving to neighbouring Chiswick, could never come from anywhere else. “It’s great to have a London Dry gin that’s genuinely made in London in the way it used to be,” says Galsworthy, who began supplying the city’s five-star hotels from his scooter. Wobbling and weaving through the city streets with five cases of gin wasn’t part of the original business plan but, unfortunately, no wholesaler could be tempted. Eventually, having built up around 100 steady accounts, Coe Vintners lent a hand, while foreign importers began buying the odd pallet – or rather more in the case of Australia.
Breaking into the US was another matter and it has taken Sipsmith three attempts with different importers to establish a reasonable base. From his time there with Fuller’s, Galsworthy had seen the supply chain littered with dead brands that had spread themselves too thin. “You have to be really strategic and go in narrow and deep,” he says. “We’ve now got a gentle, latent demand, and we’re growing in some interesting markets like Austen, Denver and Seattle, but we’ve by no means cracked it.”
By 2016, Sipsmith had 35 staff and was growing at 60%70% a year, with exports at 30%, but: “The reality was we were struggling on the international stage,” says Galsworthy. “To get a share of voice or any sense of priority is so difficult, even if you are the founder. It became apparent that we needed to do more than plant flag poles. We were in danger of not realising our mission – to be available in a meaningful way in all four corners of the world, and to be around in 200 years’ time – if we didn’t move quickly.” So Sipsmith sold a majority stake for a reported £50 million to Beam Suntory, which appeared to offer the best fit among various suitors.
Getting into bed with an elephant, even the most gentle, zen-like elephant, carries the risk of being squished in the night. Yet Galsworthy insists that Beam Suntory is fully aware of this, and says: “They told us, ‘don’t let us crush the butterfly – you’ve got to bully us, we’re not going to bully you. We want this to be a longterm play, and we’re not even going to sleep in the same bed’.” He adds: “The brand is still operated out of west London, with strategy driven by west London, and in the UK we remain independent with a dotted line around us.”
Corporate giants like Beam Suntory could obviously start their own small brands, but it’s not something that comes easy. “Every one of them would admit they’re not going to be as good as people who are unshackled and enabled by an entrepreneurial spirit,” says Galsworthy. Curiously he refuses to take the credit for having the potty pot still law overturned, yet he and his cofounders certainly influenced the decision. Without Sipsmith the UK boom in craft spirits could have been something of a damp squib.
Click through the following pages to see the timeline of Sipsmith’s brand history.