Distil and British Honey Co end joint venture

31st March, 2020 by Nicola Carruthers

Red Leg Spiced Rum owner Distil and The British Honey Company (BHC) have terminated their joint venture due to the coronavirus outbreak.

Distil executive chairman Don Goulding (left) and BHC master distiller Jamie Baggott (right)

In February this year, the two companies entered into the partnership to create a range of botanical spirits. Both Distil and BHC had planned to invest £30,000 (US$39,000) into the venture.

However, in a corporate update from BHC, the firm said the covid-19 pandemic had led the firm to “review its operational focus given its impact on the distribution channels available to the company”.

It will instead focus on “market-ready or near-market ready alcoholic beverages” and the production of hand sanitiser. The company said initial orders of its Drip+Drop hand sanitiser have been “particularly strong”. BHC is currently using spare capacity in the UK to make the disinfectant but is also exploring methods of producing an active alcohol sanitiser.

The company added that “the development of untested alcoholic products is not an operational priority at the present time”. As such, BHC served notice to Distil to end the deal.

The BHC added that no funds had been spent yet under the partnership and that it “remains committed to the development of further new products in the future”.

Strategic partnership

In addition, The BHC has announced a “strategically important” partnership agreement with Florida-based List Distillery. The new alliance will see BHC and List collaborate to develop a broader market for each of the company’s existing products.

The English producer will supply List with high-concentrate London Dry gin, which will be bottled and marketed by the Florida firm under BHC’s Keepr’s brand in the US.

The arrangement gives BHC access to List’s “extensive” distribution network, which covers more than 12 US states. The BHC said the partnership was a “highly cost-effective way of market entry given the fragmented nature of the retail spirits market there”.

The two firms also “recognise the significant growth opportunities for premium craft distillers, with customer preferences increasingly favouring specialist artisan spirits over large global brands”.

List will use its expertise and experience of the US market to promote BHC’s brands. The deal will also see BHC’s master distiller Jamie Baggott “enhance” List’s imported rum, American whiskey and Bourbon to suit the UK market.

The BHC said the US has an estimated spirits market by value of more than £65 billion (US$80.3bn) annually. The company said it is looking to focus its overseas marketing efforts in the market, as well as China.

BHC CEO Michael Williams said the deal “will enable us to extend our global reach and take advantage of significant growth opportunities in the US”.

He said: “The team at List are renowned distillers with excellent knowledge of the infused spirits market in their home country.

“Meanwhile, both distilleries are cooperating in the manufacture of alcohol sanitiser. Daily conference calls between the respective management teams are taking place, sharing experiences and product modification, demonstrating the already close affiliation we enjoy.

“Whilst we are disappointed to have to put on hold the development of new drinks products, our energies must now be devoted entirely to market-ready or near market-ready products.

“This includes the production and supply of alcohol sanitiser as part of our programme to support the NHS and other institutions in need of immediate supply. BHC have enlisted the help of Dr George Tranter of Chiralabs Limited, Oxford, in exploring the development of new products that will help in this national emergency.”

Thomas List, president and owner of List Distillery, added: “We at List Distillery are very happy to have found a business partner like BHC which shares our passion and enthusiasm for the opportunities existing in the global spirits market.

“Besides our common business strategies, we also share similar values in wanting to give something back to our communities by jointly producing alcohol sanitiser, donating to the public and supplying the medical community.

“We believe this collaboration will allow us both to exponentially grow our respective businesses.”

Earlier this year, BHC acquired Dodd’s Gin owner The London Distillery Company for an undisclosed sum.

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