Raising spirits: the rise of small batch vodka

Makers of small batch vodka have experienced a boom in sales that has taken some by surprise, including the distillers themselves. By Douglas Blyde

ACCORDING TO Mintel, the UK white spirits market, driven by vodka, saw sales rise 2.5% to £4.3 billion in 2013, and is set to reach £4.7bn by 2018. Although Smirnoff and Absolut led the growth, small batch vodka producers have mushroomed in recent years. The zeitgeist can be gauged by listening to people at the heart of the business, such as new-wave distillers, market leaders, specialist importers, high-end retailers and dynamic bartenders.

William Borrell of Vestal Vodka steers the canal boat Disco Volante towards Islington at three knots. The cruise is Borrell’s way of “saying thank you” to purchase and bar managers and the public who support his product. “I feel affinity with Slow Food,” he tells passengers from the tiller. These include front of house from on-trend burger eatery, Patty & Bun, who offer Borrell’s Vestal with a mixer for £4.50. “I don’t want to keep playing a small harp but have to,” he says of the cruise that his PR terms a Vestal Voyage, although he prefers to refer to the first floating pop-up bar as “a temporary erection”.

Over at Sipsmith Independent Spirits, Gerard Evans peels open the Nasmyth Street garage door revealing shiny still, Prudence. Trained at Heriot-Watt, Edinburgh, which he calls “the Harvard of distilling”, Jared Brown has attended the whims of the Sipsmith still since 6am, although he only finished last night’s batch at 11:15pm. “We’ve reached the ceiling of capacity,” he says. Meanwhile, co-founder Sam Galsworthy orders foamy coffee. “We’ve grown to 11 people. At 10am, Monday, we’ve 30 builders going into our new site. Our growth took us by surprise. We were the first to get a licence to distil in London in over 200 years, beginning with barley vodka on 14 March, 2009.” Galsworthy continues: “In April our new distillery opens in an equally idiosyncratic chauffeur’s garage. We could have swanned off to an industrial estate, but using your hands to make things in small batches makes for a better taste.”

James Chase recommends the beef skirt at his recently-acquired Mayfair pub. He sits below a wooden horse’s head at a rudimentary table inherited from the previous operator and declares: “Our concept this year is to sell direct from the farm, what the French call direct d’agriculteur.” While Chase continues to support UK distributors supplying the on-trade, he plans an online platform showcasing the output of the Herefordshire distillery.

The Running Horse has become the brand’s “great shop window”. He says: “We’re hosting tastings, training, Meet- the-Maker and even pub opera.” Chase views the building in a similar way to a time when all breweries owned pubs. He raises a bottle of Bermondsey brew, Kernel and says: “And it’s home to similar brands like Chase: ones that aren’t simply fabrications of a west London marketing house.”

NAMES AND LABELS

The term “small batch” lacks clarity says Brown. Lee Potter Cavanagh, group bars manager for Corrett Restaurants explains the predicament: “It’s used by so many companies when they’re making a product I’d consider definitely not small batch.” However, although Cavanagh considers perceptions of “craft”, “luxury” or “small batch” as often misplaced, a large scale product can be “authored” or “craft”, he says, “if they are open about their production methods.” Cavanagh adds: “Also if it has a time-honoured recipe or heritage. But I often find anything new is considered craft when in fact it is just new.” Claire Smith, head of mixology and creation for Belvedere, believes the brand, billed “the world’s first super-premium vodka” remains – despite its large scale – artisanal at heart. She remarks: “We’re not a factory pumping out billions of gallons although I’m sure our finance team would love that! First and foremost, the liquid is important and we want to respect what we produce and produce it from.”

Smith helped develop the firm’s raw spirit programme in collaboration with the University of Lodz “to share knowledge around the cultivation of rye and become more sustainable. To do that, we have to think small – something which doesn’t always tally with a large- brand mentality.” Smith believes vodka needs reference. “You need to build-up a muscle memory. When we do training on the vodka landscape we compare raw materials, production methods and provenance. It’s not a homogenous neutral spirit. Bartenders see straight through you if you say there’s only one vodka and it’s ‘X’.

With small batch producers bringing different styles it’s important to explore: reject and enjoy. Lots of vodkas don’t deserve the title of vodka, but are worth having as a conversational point.”

Meanwhile, Maurice Ajanaku, communication manager for Ketel One claims his is the largest “crafted” vodka. “We are proud of our 300-year plus craft heritage through the Nolet Distillery. Ketel One was one of the first crafted vodkas [brought to the US in 1983]. We continue to support those who do what they love and support the rise in crafted vodka, embracing new brands helping to grow the category.”

However, Chase says many brands claiming to be artisanal are “not owning up” to distilling vodkas from neutral grain spirit rather than own-farmed potatoes, grains or even milk. “We’re the only operation in the UK from field-to- bottle, from any base. You have to look at what new ‘craft’ distillers say they distil. In many cases it’s neutral grain spirit that comes from halfway across the globe. Our base spirit costs £4/litre to produce, although we could buy neutral grain spirit for £0.10p/litre. But we’re farmers from a part of the world where the crop grows best, allowing us to carry out what others shy away from.” Chase, whose family owned Tyrells crisps until it was bought by Investcorp for a reported £100m in 2013 today also tends a vineyard in Luberon. He draws a comparison with wine. “Imagine if great wines were made with bought-in juice? It’d be a scandal. Vodka deserves the same transparency.”

When asked if one chief difference between being small batch and large scale is the ability to pay a bar’s listing fees, Chase is quick to point out: “I’m not a capitalist by any means. But we need to talk about profitability. A lot of people forget that. Having said that, I’ve never paid listings fees.”

VODKA SURPLUS

Borrell knows bartenders who migrated to gin. “They see too many commercial vodkas as boring. The horse meat of the spirits world.” However, unlike more obviously governed drinks like Cognac, there is confusion as to what vodka actually is. Chase disappears to his cocktail bar The Whip to fetch a bottle. On one side the label reads: “Single Botanical Gin”; the other: “Juniper Vodka”. “I threw a curve ball,” he says. Admittedly, the 1,000-bottle run proved hard for retailers to stock on account of the albeit-legal duality.
Neil Mathieson, managing director of Marussia Beverages, importer of Mamont, Square One, Cold River and Leopold’s, considers whether gin’s amplified popularity is to vodka’s detriment. He decides: “It increased the total number
of cocktails sold on-premise, but I don’t think off-sales are affected greatly by the small volume increases in the other spirit.”

Sam Galsworthy, who like Chase produces gin and vodka, appraises the picture historically. “The 1980s-90s saw an awesome boom for vodka in the UK, although it’s not quite like in the US where for every one bottle of gin sold there are nine vodkas.”

Cavanagh believes artisan vodka never had it so good. “The vodka boom became the gin bubble, taking the negative pressure off small producers actually
trying to create interesting vodkas because the big players and entrepreneurs are all focused on gin and other areas. Just this past year I’ve discovered new vodkas which genuinely excited my jaded palate. Black Cow 100% milk and Vestal Podlaskie single estate taste great with an interesting or craft story that 10 years ago might have got lost among a sea of vodka distilled from angel’s tears then filtered through moon rock imported by James Bond himself!”

Galsworthy believes we are enjoying a golden age of spirits overall, characterised by the rise of the fanatical consumer. “They’ve met the individual and been to the distillery. Sipsmith, Chase, Adnams are new world spirits houses welcoming consumers through their doors because the big guys historically did not. Now the consumer is king, championing the producer. People buy from people.”

Globalisation has changed palates says Galsworthy. “Being adventurous says a lot about an individual.” Alongside this accommodating vision, Brown, who previously worked in the US, underlines “community”. “Don’t look at other craft distillers as competition. We’re locking arms.” Galsworthy adds: “Think what old worshipful companies and livery firms would do; it should be about category development not on-shelf fighting.”

TASTE FOR INNOVATION

An entrepreneur, Borrell glimpsed success and tasted failure in equal measure. Past endeavours included establishing a kitesurfing academy in Morocco, a Channel Islands goji berry farm and a New World wine import business in Poland. Like Chase, he applies a word more associated with wine to the potato – terroir. “It must be defined by that word because it lives in the ground.” Although his idea was first met with scepticism, Borrell gradually reaped rewards through vintage vodkas. “Simon Difford rated our 2010 an unprecedented 5+/5.” Borrell talks of Podlaskie 2012 from horse- ploughed fields of “virgin potatoes” in eastern Poland. He reveals: “Last year we were left with 12 cases. I heard a Kensington vodka and caviar bar sold one of the scarce 50cl bottles for £2,800. While the language we use is wine, our business model is whisky.”

The market for premium vodkas from hitherto unknown personalities is of interest to Dawn Davies, buyer at Selfridge’s. “We’ve found two trends in the category: bling brands that sell mostly on look, then the small guys like Konik’s Tail or Sipsmith,” she outlines. “This year we’re re-looking at the whole category to add interest because we feel there’s opportunity for growth. We did this two years ago and again last year with gin and are seeing 40% growth.”

Promoting diversity is the future says Neil Mathieson. “Look for points of difference referencing source and flavour, i.e. Siberia/wheat, Poland/rye.” Mathieson’s sales director, Bruce Perry adds: “If that range is diverse stylistically then a perception of specialism leads to trust and repeat business.”

While Mathieson observes increased “straight drinking”, Perry is loathe to ignore vodka’s role as a mixer, flavoured spirit, or indeed as a bartender- customised product. “Horse first, cart second! What are we offering? Cocktails? If so, which ones and what will we need to make the best ones within our budget? If flavoured vodkas are important to the plan, then yes. But it is absolutely not essential. A top class place might say I’ll add my own flavours to the cocktail that includes vodka and I’ll do a better job of it with fresh, seasonal, local…”

LICENCE TO DISTILL

Chase says that in the last 12 months 30 licences have been granted for stills in the UK. But the inventor of marmalade vodka says he is accused of having too many products. “We need to innovate. I’ve 30 staff, including four on the farm, four hand bottlers, four distillers and one on fermentation.” A future project is hopped whisky, for example. Chase must fly to Switzerland for vodka week. But before leaving he shares an anecdote gleaned from a civilian at Taste of London two years-ago. “‘Potato vodka? Isn’t that pocheen?’” Fortunately, he says such a comment is increasingly rare. “If people understand the drink, they can respect it.”

Galsworthy needs to check the new site. “Our philosophy hasn’t changed since 14 March, 2009, regardless of where we grow: not being a performing monkey.”
Disco Volante has returned to Granary Square. Borell prepares a kettle of punch for the afternoon’s second cruise. “Four years-ago I was told I was crazy to go into the most saturated drinks category. Eight out of 10 establishments closed doors in my face. UK distributors were only concerned with how big my marketing budget was. Today, a company started with £100 has won over some of the greatest bars in London, New York and Paris. Vestal is like a cult band: we have real devotees, but are far from mainstream.”