The number of distillery businesses in the UK has increased from 131 in 2016, to 170 in 2017, a 30 per cent rise in just one year.
Consumer demand for craft spirits in unusual and innovative flavours has grown in popularity, particularly among young consumers, as has preference to ‘buy local’ from smaller, urban breweries and distilleries.
This surge in demand is generating high sales growth and larger returns, making businesses attractive M&A targets for larger companies, which are paying high prices to acquire the brands.
- At the beginning of 2018, the Spanish group Diego Zamora acquired a 45 per cent stake in Reformed Spirits Company Ltd, owner of Martin Miller’s Gin.
- Earlier this year, the Liverpool-based company Halewood Wine & Spirits acquired the Cornish spiced rum brand Dead Man’s Fingers.
- In September 2017, the drinks wholesaler BI Wines & Spirits acquired a 25 per cent stake in Westmorland Spirits, the producer of Giplin’s Gin.
Following in the footsteps of urban gins, craft rum is now seeing a significant rise in popularity, with sales hitting £1 billion in 2017, up from £960 million in 2016, according to the Wine and Spirit Trade Association.
Distillery businesses are increasingly being seen as profitable businesses and attractive acquisition targets. If you are looking to invest in a brewery or microbrewery business, our experts at Beavis Morgan are able to identify and review potential targets on your behalf, as well as undertake due diligence, deal structuring, and advise on efficient tax planning. We are also able to provide a comprehensive range of professional services to help you make the most of your investment.