The Big Interview: Ian Stirling, co-CEO and co-founder of The Port of Leith Distillery
Ian Stirling is the co-chief executive and co-founder of The Port of Leith Distillery, the company behind the forthcoming £12 million "vertical" facility that hopes to become a landmark visitor attraction for Edinburgh on its completion in 2022.
It was announced a year ago that work had begun on the building in Leith, located a "stone's throw" from the Royal Yacht Britannia.
Spirits boss Mr Stirling spent his teenage summers working at the Edinburgh Fringe Festival, and his first job after university was in PR for West End theatre in London. He then decided his future was in wines and spirits.
His career in the industry included the "job of a lifetime" with Roberson Wines. His role there saw him travelling the world, securing major listings with multiple retailers, and developing brands as he went – and he "began to build the naive confidence that perhaps he might be able to do it all for his own company one day".
Mr Stirling established Muckle Brig with his lifelong friend and business partner Paddy Fletcher in November 2014. "We have always been passionate about whisky and it's been a long-held dream for us to create an amazing, modern Scotch whisky distillery in our home city. It began ten years ago as a mad idea over a dram when we were working together in London and it grew from there," Mr Stirling said in November 2020.
The new vertical distillery in Leith is an ambitious project, how have you funded it, and where are you with its progress?
Twice we had pledges of support from investors but they pulled out because we lost the original site. Once we secured the current site we had an investor within a week. Others came in when they learned that the distillery would be built next to the Royal Yacht Britannia.
Initially, we were able to bring in seven investors who gave us £400,000 and just under £10 million in total after touring ten states in the US, and Hong Kong. We now have investors in eight countries.
We also developed a revenue stream through our Lind & Lime gin distillery in Leith. We had not intended to make gin, but because the whisky distillery would take time to build and move into production, we saw gin as a revenue stream and something to talk about.
It has been more successful than we expected and we are relocating the gin distillery and warehouse to premises in Coburg Street, Leith, six or seven times larger, hopefully in December or January. The gin business is already generating gross profit of £1m.
We have converted the lease on the site of the whisky distillery into a purchase and we hope to be in production this time next year. All of the finance is from private investors and we are now raising a further £2.5m through the crowdfund platform Seedrs to allow small investors to get involved.
How is the business structured?
Myself and Patrick (Paddy) Fletcher are co-founders and co-chief executives of Muckle Brig, the parent company for The Port of Leith Distillery and Lind & Lime gin distillery.
It is a private limited company with about 100 private investors. There is no institutional finance or shareholding. There are about a dozen employees and Neil Aitken recently joined as brand growth director from Artisanal Spirits company after it was floated on the stock market, which is a route we will consider in due course.
What was your career before forming The Port of Leith Distillery? How did you get into the spirits industry, and what has been the most pivotal moment so far?
After working in PR for a West End theatre in London I decided my future was in wines and spirits. I worked in retail and deliveries for Majestic Wine and then Roberson Wines where I established an off-trade department, selling to UK retailers and international importers. It involved travelling the world, securing major listings with multiple retailers.
Lifelong friend Paddy and I were passionate whisky fans and decided to build a distillery. We set up the parent company Muckle Brig in November 2014 and began looking for investors.
One of my favourite things ever was raising money in the US. The enthusiasm they showed for two young guys raising money was great for morale.
Probably the most pivotal moment was when we were introduced to our current site by Ocean Terminal, close to the Royal Yacht. It was absolutely perfect and a week after we had a lease on the site our first investor signed up and I instructed the architect to start work.
Paddy was working in a number of tech start-ups and became European finance director at the office-sharing company WeWork. It enabled him to gain a lot of knowledge and experience in finance and running a substantial business. We were getting to know people in the investor community.
How did the pandemic impact your business and what steps did you take to navigate through it?
There have been a lot of challenges but we have weathered the storm. Construction was delayed as we had to close the site.
Demand for our gin grew but there were problems getting cardboard boxes, while delivery of our unique glass bottles from Italy was extended from two weeks to two months. "Just in time" became a thing of the past and now we place bigger orders to make sure we have enough stock of materials.
You recently launched a White Port under your Cask Partners range. Can you explain how your collaboration with other producers works and what makes this unique in the industry?
One of my jobs in the wine industry was to find producers for customers like Marks & Spencer.
It struck me that sherry and port have played a big role in Scotch whisky. They were shipped into Leith and empty casks were used for whisky. We decided that launching a sherry and a port was a way of highlighting the Scotch whisky story, so, we import a sherry from a family producer in Spain and a port from Portugal. They will not make us rich but they give us a way to engage with customers.
Do you have plans to introduce further products?
Yes, we want to create a trading entity with the Leith Export Company to launch a Champagne brand, and other products that we do not make but will distribute and trade under our name.
This is what used to happen in Leith and we are reinvigorating that tradition of trading in wines and spirits.
Is your business focused on the UK market or are you also looking at international growth?
We are already in 24 markets with our gin and export considerably more than we sell in the UK. We intend to sell our whisky into these same markets.
Next year we will be exporting into the US for the first time and we have new markets in the pipeline. There is a such a high demand for products from Scotland, which is an incredible brand. You talk to importers and when you tell them you are from Scotland a broad smile spreads across their face.
What is your biggest challenge?
We wanted to create something new and distinctive but we never set out to build a vertical distillery. However, it was clear from the site that we had to go upwards. There is one in Sweden but not with tasting rooms and a bar at the top, which requires additional safety considerations.
Where do you see the business in five years' time?
It is going to be an incredibly exciting place for our two distilleries. We have about a dozen employees now, which I see growing to 60, and we will be tasting our first legally designated Scotch whisky.
As founders we do not want to sell the business. However, we do recognise that our investors need a return and an opportunity to exit. The business will generate significant revenues further down the line and there is a prospect of dividends for shareholders.
We are watching with great interest the way Artisanal Spirits Company (owner of the Scotch Malt Whisky Society) floated on the Alternative Investment Market and we would like to think we can do something similar.
Paddy and I had to sell a lot of equity to raise funds and now own 25 per cent of the business between us. It means that the ownership of the business is ultimately in the hands of the majority of shareholders.