In 2023, British distillers were hit with an unholy array of challenges: high inflation, a 10% increase in alcohol duty, an increase in the main rate of corporation tax from 19 to 25%, high energy prices, and significant increases in the cost of goods. In addition to higher prices, the availability and lead-times of goods have also worsened.
“Despite the UK leaving the EU three years ago, there is a seemingly ever-changing administration burden and lack of knowledge as to what is required in terms of paperwork and customs clearance. Goods (bottles, closures, etc.) can be unexpectedly delayed for days or weeks whilst the bureaucracy is resolved,” says Joe Barber, director of The Wrecking Coast Distillery and RRS Distribution.
These conditions have seen a number of distilleries close their doors to be consolidated or taken over by other firms in attempts to find savings and economies of scale, and this looks set to continue into 2024, although there are hopeful whispers of a better outlook for 2025/26.
Whisky and Rum on the Rise
On a more positive note, English single malt is getting a lot of attention at the moment. There are now over 45 active whisky distilleries in the UK. Some are focusing on flavor profile rather than age statements, and this approach is also being adopted by new distilleries in more established regions such as Scotland. The English Whisky Guild has recently submitted a proposal for the technical definition of English single malt whisky, with the intention for it to be given a similar protected status to Scotch whisky.
The full production (fermentation and distillation) of rum is now firmly established in the UK, with a number of firms preparing to release five-year-old bottlings of rum that they have produced in-house. Flavored and spiced rums also continue to play an important part in the overall market.
“Rum is one of the only spirits bucking the trend and actually growing in the UK, and with this growth comes a better understanding of authentic rum by consumers,” says Peter Holland, an independent rum expert. “The main area of concern is with spiced or flavored spirit drinks being labeled and sold as authentic ‘rum,’ which can cause confusion; hopefully, as knowledge grows this will improve.”
Gin Stumbles and RTDs Mature
Gin, one of the UK’s most popular spirits, saw some turbulence in 2023. After 15 years of incredible growth, largely driven by new craft distilleries and fruit-flavored gins, the increase in domestic demand has plateaued. The value of UK gin exports fell by 9.6% in the first six months of 2023. This setback came after a large increase (33%) in export value in 2022, during which UK gin exports reached nearly $900 million.
UK gin consumers are often looking for a bargain, but the market has seen a growing number of gin super-fans that are happy to pay upward of $50 for a unique imported spirit, so opportunities are there for the right U.S. producer.
In terms of Ready to Drink (RTD) and Ready to Serve (RTS) products, the UK continues to show strong demand, and that looks likely to grow. Popularity focuses on canned spirits and mixers such as gin & tonic or rum & cola. These are particularly popular choices on transport and picnics, allowing consumers to take advantage of the UK’s relatively relaxed rules on public drinking.
“The COVID love affair with hard seltzers has well and truly ended. RTDs in the UK are moving to tried and tested classics such as negronis, old fashioneds, and espresso martinis, packaged for convenience and perhaps with an unusual twist,” says journalist Millie Milliken.“There’s also a move towards more transparency in RTDs — understanding what the ingredients are and where they come from. High-volume, low-quality RTDs using unspecified ingredients just don’t cut it anymore.”
Two British companies that have made an impression in this space are Moth Drinks (which have just launched in the U.S.) and Whitebox Cocktails. Both companies have gone down the route of the “solo serve” for drinks such as the negroni, margarita, and old fashioned. This contrasts with the prominence of Beam Suntory’s On The Rocks brand, with its share-sized bottled cocktails, which, whilst popular in the U.S., have yet to arrive in the UK.
In an exciting first for the UK, March 2023 saw the opening of London’s first brandy distillery — and the country’s only dedicated brandy house — in the form of Burnt Faith, situated in East London. They use the only Charentais still in Britain: an onion-shaped still that is typically used to make Cognac.
Historically, the British have been great brandy lovers, which is why the nomenclature such as V.S. (very superior) and V.S.O.P. (very superior old pale) is in English rather than French. There are perhaps half a dozen British distilleries that have made some version of grape brandy, but sadly they have had little impact. Perhaps Burnt Faith can find the spark that will usher in a new appreciation for British brandy.
