Isle of Harris Distillers’ chairman has revealed the launch of The Hearach single malt whisky will swiftly double the size of the enterprise to a near-£8 million annual turnover business, and highlighted plans to ramp up exports while also targeting the UK market.
The distillery, at Tarbert on Harris, will put The Hearach on sale on September 23 after an official launch the previous day. It expects to bottle the millionth bottle of its award-winning Isle of Harris gin about a week before that.
Isle of Harris Distillers now employs 45 local people – around double what it promised.
Ron MacEachran, executive chairman and chief financial officer, told The Herald in an exclusive interview: “Whisky moves us to a different scale – more or less doubles the size of the business within eight weeks.”
He projected annual turnover would rise from between £3.5m and £4m to the £7.5m to £8m range with the launch of The Hearach, and underlined the importance of exports to growth ambitions.
Mr MacEachran said: “It is a step change for a business of our size.”
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He added: “From there on in, it is about scaling the business, not being complacent about the short-term challenges because they are going to be there for a while.”
In terms of the short-term challenges, Mr MacEachran noted gin markets were “tight” and flagged “marked cost inflation”.
Looking ahead to the launch of The Hearach single malt, named with the Gaelic word for a native of Harris, Mr MacEachran declared: “Short term, we are very hopeful. We need to assess the reaction to it. The objective is, over the next five years or so, to scale the business to a stage where it is stable, self-sufficient, the jobs are secure, we are supporting the community effectively, and rewarding our investors, who have been extremely patient.”
He noted that Isle of Harris Distillers has 18 investors, one of which is taxpayer-funded economic development agency Scottish Enterprise.
Mr MacEachran added that the rest of the investors were individuals, from the UK, elsewhere in Europe, North America, and Asia. This investor base includes individuals from Taiwan, Switzerland and the Netherlands.
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He declared: “Most of those have been with us from the get-go [with] a slight change. Five sit on the board. They are very engaged and supportive…They are not passive. They very much challenge us. That is reflected in the way we manage the business.”
Simon Erlanger, managing director of Isle of Harris Distillers, noted the impending millionth bottle of gin milestone and approaching launch date for The Hearach and said: “We talk about this as being the end of the beginning. We now go into a different momentum, a different era. In a way, we have gone through a lot of growing pains [with] a very inexperienced team.
“We have 45 local people now, which is double what we said we would deliver.”
Mr MacEachran noted that one-third of this workforce was under 30.
On the exports front, he said: “The ambition we have [is] to grow the business in key markets internationally. That is what is going to give us scale ultimately. We are in territory where we are assessing which of these markets are going to come through for us. We have always predicated this on being an export-led business with a very substantial UK business.”
Mr MacEachran flagged plans, on the export front, to focus on “half-a-dozen key markets”.
Mr Erlanger meanwhile underlined the continuing importance of the UK to Isle of Harris Distillers, declaring this was going to be the company’s “most significant market in the short to medium term”.
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He said: “We need to look after the UK primarily – we have got such a loyal customer base, consumer base.”
Mr Erlanger noted that, while Isle of Harris Distillers’ original focus was on selling direct to consumers, it had as the world emerged from the Covid-19 pandemic moved to make its brand “more available”.
He added that the distiller was now selling its gin in about 250 independent retailers throughout the UK, as well as its Tarbert base and online.
Looking at export markets, Mr Erlanger said: “The USA will probably be the major driver of growth in the short term. We are very interested in China. All the trends are suggesting single malts are exploding over there. Medium to long term, that might be a major prize for us.”
He flagged France and Germany, as well as Taiwan, as other export markets which might be targeted.
Mr Erlanger noted The Hearach would be at least five years old, declaring Isle of Harris Distillers will not publish an official age for it.
He said: “It will be at least five years old. It will be older than that as well…It will be more than one age.”
Isle of Harris Distillers “symbolically” filled three barrels with spirit in December 2015. The first quarter of 2016 was spent “optimising” the spirit.
Mr Erlanger noted that the distillery would produce The Hearach in batches of about 13,000 bottles.
He flagged its use of bourbon, oloroso and fino casks in the maturation process.
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