Insider Tips on the Business of Artisan Drink Production
In episode #013 of The Artisan Food & Drink Business Show we hear again from Mike Hardingham from Ludlow Vineyard and Distillery, which is based near Ludlow, Shropshire, UK.
Mike talks about his income streams, what he’d do differently if he had his time again and what is most likely to keep him awake at night.
Mike is a producer of three distinct ‘classes’ of alcoholic beverages: wine, cider and a range of distilled products. He therefore has a vantage point that enables him to compare and contrast the challenges and upsides of the business and manufacturing side of these three different liquid domains. Mike provides insights and advice for any one thinking of setting up as a winemaker, or a cider maker or a distiller.
This is the second of a two-part series with Ludlow Vineyard and Distillery. It’s a good idea listen to part one (episode #012) before listening to this episode.
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If audio isn’t your thing, you can download a transcript of the show here: Ep #013. Ludlow Vineyard and Distillery (2). Tips for Growing a Successful Artisan Drinks’ Business. You can also find the full transcript of the show at the end of this post.
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Key Points from the Show
- Competition is fierce in the artisan food and drink market. How can you make your products stand out from competitor products? One way is to highlight your production method. For example, if you make fruit liqueurs using spirit distilled by yourself, make this clear on your product label and on the product page of your website. Not all liqueur producers can make this claim in their marketing materials.
- For more ideas on what you could be telling your potential customers about your company and your products so they stand out from the crowd check out Marketing Donut’s How to Stand Out From the Crowd.
- Keep your product range under review. Don’t be afraid to drop products if they are a not a good fit for your portfolio. Do you know what each of your products adds to your bottom line? You might want to assess their scaleability, their transportability and their labour-intensiveness.
- If you’re ever stuck for a name for a new product you could consider asking your customers (or followers) for ideas or for feedback on product name ideas you’ve come up with yourself. You could run a crowdsourced name contest on social media. Crowdsourcing product naming can produce viable product names and can be a good way of drawing customers into your brand. However, there are many warnings to heed when crowdsourcing product names.
- When sending products via courier mail order, be extra careful with your packaging, especially with fragile and breakable products. Breakages shouldn’t be a problem if you use a specialist fine food wholesaler or distributor.
- Don’t be surprised at how tough it can be to sell product. There are more and more artisan food and drink products vying for the limited contents of customers’ purses and wallets.
Very Sounds Bites from Mike Hardingham
Check out the infographic below for some direct quotes from Mike during the show.
Thanks to Mike for being so generous with his time in order to do this interview with me. To find out where you can buy his products check out the Links and Resources section next.
Links/Resources Mentioned in the Show and Other Useful Links
- Ludlow Vineyard and Distillery website
- Ludlow Food & Drink Festival
- Blakemore Fine Foods
- Shropshire Damson Eau de Vie from Ludlow Vineyard and Distillery.
- The paperwork required for applying for a distiller’s licence in the UK.
Thanks for Listening
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Transcript of the Show
Catherine: Hello, and welcome to episode #013 of The Artisan Food & Drink Business Show, the show where artisan producers tell their brand story and share the secrets of their success. I’m your host, Catherine Moran.
This is the second of a two-part series with Mike Hardingham of Ludlow Vineyard and Distillery, an artisan producer of mostly alcoholic beverages that is a based near Ludlow in Shropshire, England. If you haven’t listened to part 1 yet — which is episode #012 — you should really do that before listening to this episode.
I apologise for the quality of my voice today. I’ve got a bad dose of hay fever so I’ll cut to the chase in this introduction. If you are thinking of setting up as a wine maker, or cider maker, or as a distiller Mike has some great insights for you.
Here, now, is my conversation with Mike Hardingham, founder of Ludlow Vineyard and Distillery. We kick off by talking about Mike’s product range.
Catherine: Talking about quality products like yours, we still haven’t established what your range of products is.
Mike: I’ve spoken about the things, which are, perhaps, the easiest things. So we talked about the wine, the cider, the apple juice, and the walnuts. The rest of our range concerns distilled products. Those fall into three distinct areas. We produce liqueurs. There are quite a lot of people out there producing liqueurs. In a lot of cases, they are produced by people who are buying the vodka or gin or neutral spirit of some kind from supermarkets or fairly cheaply. We distil all our own and then we mix with fruit syrups, and so on. There’s quite a big market out there for fruit liqueurs but you have to have a good product. That’s one area.
The more specialist area, which is of a lower volume in terms of sales, is our eau de vies and apple brandy and grape brandy. The reason that it’s lower volume is simply that there are fewer people out there who actually drink neat spirits. And most of the products I’ve named there usually are traditionally drunk neat. There are not that many people out there who drink neat spirits, therefore, those are our most specialist products in terms of the potential clientele for them, and the two things go hand-in-hand.
Also, it’s very rare to find any producers who are producing eau de vie in this country. There’s more of a demand for those kind of products in continental Europe, in Germany and France and further afield, as well.
The third product range, which we haven’t actually produced… or we haven’t put on sale yet — it’s in production — is the whisky. We have started producing whisky. It is something for which there is a much larger market. There are, perhaps, a few more English and Welsh whisky producers than there are producers of fruit spirit eau de vies, apple brandies, and so on. But whisky is a more popular product than all of the others and it’s quite good fun to make. It’s something that we have started to make, we’ve got a license to make now, and we’re moving forward with that.
If you come and interview me again in five years’ time I anticipate — I may be wrong — that we will be focusing almost exclusively on whisky by then. The reason that I say that is that we started our life planting a vineyard with an aspiration that one day we would have a distillery. We started making cider and apple juice because we could, because there was fruit, because it provided something for us to sell when we didn’t have any wine. I think we now find ourselves doing too much.
Catherine: In terms of the variety?
Mike: In terms of the variety, just in terms of how much work we’re putting in, because this was a second career, early retirement activity. We have too much to do.
Catherine: Of course you’re taking care of all of the trees as well, aren’t you?
Mike: Yeah, and we enjoy that. Yeah, there is the stuff out in the field. There’s the stuff in the bottling room. There’s the stuff in the distillery. There’s going out and selling.
From a lifestyle thing we’re not really interested in expanding this into a business where we employ lots of people and we become managers. We’ve done that earlier in life. So we’ll probably be cutting down on some of our things. We’ve already cut down on the walnuts. I would say that within a few years we will probably sell the cider and apple juice business. The vineyard is something that we enjoy doing and that we keep. And so we will always be selling wine, but I think the distillery will take more of the effort.
We will be striving to produce perfection in the fruit spirits and the eau de vies, and so on. We will be trying to produce the best whisky that we can. We’ve only just started distilling that. It has to be three years in the barrel. There is a product, so-called ‘white whisky’, which is a very young whisky, which isn’t technically whisky. It becomes whisky when it’s left in the barrel a bit longer. We may be selling that because there’s quite a bit of interest in that. There’s a market for it, but into the long-term I’m expecting that the distillery will be spending most of its time producing whisky rather than anything else.
Catherine: And, of course, you can use your still for your new product, the whisky-
Mike: Yes, yes.
Catherine: -which is a no-brainer, which is great. What ingredients are in your whisky?
Mike: Just malted barley.
Catherine: Just barley.
Mike: Of course, one of life’s big ironies is that if you talk to any farmers who are growing barley, particularly in the south of England, almost all of their crop is going to Scotland. Scotch whisky, although it’s distilled in Scotland, much of the barley comes from England.
Catherine: And then it’s exported. A lot of it, a huge amount of it, is exported to the Far East, I think.
Catherine: Do you have a name for your new whisky yet?
Mike: No, we don’t. The product that we will be launching in the next few months is called Stolen Youth. This is the malt spirit, which is not yet whisky. No, we don’t have a name for the product. We’ve got plenty of time to think about that. We don’t have whisky for, effectively, three years. For Christmas 2017 there will be a whisky.
Catherine: How absolutely wonderful. Naming of products is so important, isn’t it?
Mike: Yes, it is, because obviously we’re near Ludlow here. We’re in a foodie area. Ludlow has got that cache. Certainly, in terms of brand naming, anything with Ludlow on the bottle or on the jar or on the packet is a very good start, so that helps, yes.
Catherine: We’ve spoken about your range of products and, in my opinion, an extremely exciting product in development, the Shropshire whisky, although I know you’re not calling it Shropshire whisky.
Mike: We might do!
Catherine: Yes. Perhaps you could run a competition or something to see what consumers might suggest. That’s very much what a lot of the, I think, the bigger food and drink companies are doing now. They’re sort of crowd-sourcing naming from their consumers, which a lot of copywriters are quite upset about because, of course, it’s potentially putting them out of a job. But anyway, let’s talk very quickly about your sales and your revenue streams. What are your revenue streams?
Mike: Starting closest to home, we don’t have a shop here. We do get the occasional visitor or somebody ringing us up saying, ‘Can I pop past and buy a bottle or a box of something?’ We do mail order. Those packages you tripped over on the front doorstep are due to be picked up by the carrier today. That’s a couple of things people have ordered over the weekend. Mail order isn’t huge but it’s there.
In terms of direct retail ourselves we do a local market in Ludlow every week on Fridays. We do the farmers’ markets, which are every two weeks in Ludlow. We attend things like the Ludlow Food Festival and some other food festivals. We go to the occasional other agricultural show, or whatever. That’s very important because you get a lot of direct feedback from customers, you know.
We invite people to taste. So, at markets, we see plenty of people and get them to taste the product. We’ve been hauling in all of our friends as they pass the store, all the ones we know that like whisky, for example, and say, ‘Here, have a taste of this. It’s been in the barrel three months. What do you think?’ Gives us valuable feedback.
The direct retail is very important. It isn’t where most of our sales come from. Most of our sales come from local shops and some other distributors; Blakemore Fine Foods, for example, who run a distribution business for artisan foods in the West Midland area. Our products are in their catalogue, and so on. Then the obvious retail outlets for artisan drinks in Shropshire and Worcestershire and Herefordshire, the immediate areas.
Catherine: Yes, with your online shop, of course, you will get to supply nationally.
Mike: Yes, yes. We do have the online shop and we use things like Google AdWords to direct people to our website and our online shop. And I probably have to say that we have probably made more money from trade customers seeing those … googling something and saying, ‘Oh, there’s Ludlow Vineyard and Distillery. They produce that. That’s interesting.’ They ring us up and then we supply their shop, because obviously a trade customer is potentially much higher turnover over a few years than an individual customer.
So, our web activity is probably more crucial in getting us trade customers than the mail order, which is problematic as for many artisan producers who are out in the middle of nowhere as opposed to being in a town, or whatever. The nearest post office or other carrier outlet is a long way away so we’re relatively reliant on people that will come and pick up from us at relatively short notice. I wouldn’t say that mail order sales are a huge thing for us but it’s significant. It’s trade sales that are three-quarters of our revenue.
Catherine: Right, so very important then. Have you ever considered exporting?
Mike: We’ve thought about it on occasion. We don’t at the moment have a product, which we think is particularly suitable for exporting. I’ve had discussions with people who are very interested in exporting our cider to Portugal, for example, because cider is becoming big in Portugal, they say, but we can’t … cider being heavy is quite … for the unit price of the product the transport is a killer on that one.
Catherine: It’s a constant Achilles’ heel, really, the distribution of products, particularly if they’re heavy. I don’t know how fragile your products are. I guess to a certain extent it depends on how you pack them.
Mike: The packing is key. I’m not mentioning any names but I used to deal regularly with somebody local who did a lot of mail order. They complained that one in five of their packages actually had breakages and it was costing them a lot. Then one day I saw the parcels they were sending out and I wasn’t surprised that one in five of their packages got …
Catherine: Oh, I see.
Mike: If you’re an artisan producer and you send stuff out that’s fragile, you have to recognise the journey it takes in lorries and things. If you can’t drop your package from three feet up onto concrete onto a corner or a side or whatever without the contents inside breaking, then you’re not packing well enough.
Catherine: Sure. I absolutely agree. I do think that while you hope people are careful, ultimately, really they-
Mike: They’re busy.
Catherine: -Yeah, they’re busy and you need to take full responsibility, don’t you, for ensuring things are tickety-boo? We’ve spoken about your sales. Let’s touch briefly on your marketing, although we have spoken about the whole web side of things, which is so important and going to become increasingly important, I think, as time moves on. What is your opinion of the value of things like social media?
Mike: I think it’s probably a lot more valuable than I give it credit for. We don’t use it. Not something we’ve got into. I’m quite sure that it would be valuable. I know people who do a lot on this and swear by it. It probably would be. It’s one of those things that we perhaps ought to be looking at and never get round to doing it.
Catherine: Well hats off to you for being so successful without having this huge, what they call digital footprint. If you set up, say, a Twitter account and started tweeting about the imminent arrival of your whisky I would be absolutely fascinated,
Catherine: And things like your… you make the most amazing Shropshire Pune damson eau de vie, which is an extraordinary-tasting spirit. It’s intensely plummy.
Mike: I can tell a blag [using guile or cheekiness to obtain something] for a free bottle when I hear one, Catherine!
Catherine: Not at all! No, no, no. I think you’re missing a trick there, really. I’m sure you’ve got plenty on your plate. Let’s wrap it up because you have been extremely generous with your time. I would love to know what keeps you awake at night.
Mike: [Lots of laughing] Well, I have to say that many things have kept me awake at night during my earlier career but since I’ve been doing this that I really enjoy doing, I don’t think there’s a lot that keeps me awake at night, apart from the nightmare that every producer has that somewhere they’ll make a mistake. Somebody will turn up at the store or give us a ring and say, ‘I’ve got a bottle and it tastes really odd,’ or, ‘I’ve got a bottle here and it’s gone mouldy’.
It’s that sort of nightmare that you always have to be so clear, so careful, with your production and with your production schedules and keeping things clean and keeping things consistent and making sure that the product doesn’t spoil. Does it keep me awake at night? No, not really.
Catherine: You’ve clearly got a very good HACCP [hazard analysis and critical control point] plan in place.
Mike: It could always be better.
Catherine: I expect many producers would say that. When you started out, if you knew then what you know now [Mike laughs] about being an artisan food or drink producer, even, what would you have done differently?
Mike: If you ask my wife she’d probably say, ‘Not done it at all’, but I don’t think there are any big things. I’m sure there are things that I wish I had known because you learn so much as you go along. But, is there anything I would have done differently? No. I can’t think of anything. That’s probably because I’m in a sort of complacent bubble of not admitting mistakes.
Mistakes, there have been plenty. There have been products that weren’t successful… that we didn’t… most of them we didn’t get as far as selling, but we’ve certainly experimented with quite a few things, which just haven’t been as successful as we would like.
I think one of the things… and I suspect that many artisan producers would tell you the same… is that everybody underestimates how hard it is to sell anything, and it gets harder because people… whereas back in the ’90s perhaps, people would spend 10 pounds on something without thinking about it. Now, they’re not even spending five pounds on something without thinking about it, two pounds without thinking about it. People are very much more careful because they don’t have the disposable money in their wallets that they did. That, I think, makes it quite difficult for artisan producers now.
Catherine: I don’t think products, no matter how good they are, really will sell themselves. I think they have to be promoted and you have to engage with your potential customers. I do remember a few years ago when I was doing a farmers’ market in Hereford city and I was setting up my stall. I was next door to a cheese seller. I don’t think this person was the cheese maker, but he set up his stall, which was all very neat, and he took out a blockbuster of a novel, a huge, very thick book, and sat down and got through many, many chapters, I think, of this book throughout the whole market. He didn’t say ‘boo’ to a goose. If anyone came along, yes, he’d serve, but that was it. There was no trying to engage the customer. I was absolutely amazed. I know you engage with your customers.
Mike: Yeah, we do. I think we don’t go and haul them off the pavement to our stall. I think one thing — you learn a balance on this — that you can be too keen. You can spend all your time trying to talk to people, get people to taste things. You can get rid of a lot of free samples like that. These days we do slightly engage with people and at almost every retail event that we go to we are offering tastings, but we tend to only ask people if they want to taste something when they’re already looking pretty interested. We don’t ignore them but we’re not terribly proactive I have to say.
Catherine: Yeah, it’s a matter of balance.
Catherine: Last question, Mike, which is what advice do you have for people considering taking the plunge and setting up a business as a wine or spirit or cider maker?
Mike: I think wine requires quite a lot of investment and quite a lot of luck, luck with the weather because we don’t know what it’s going to be like. If I take one year, last year we had more grapes than in the preceding six years put together. Now, if you’re unlucky you’ll plant your vineyard and you might have no wine for 10 years. There will be ups and downs.
Cider is a more straightforward product in that there are always apples. Let’s say it’s very, very rare, perhaps one year in 10 there might be no apples or hardly any apples. And I think that there are different problems with cider. If you can grow the wine and send the grapes to a reputable winemaker as we do … we don’t try making it ourselves … then you will definitely have a product that will be quite nice and will sell.
Cider, the problem there is will you have a nice product? I think having a mediocre product is not too difficult. Having an excellent product is probably quite hard.
Distillery: the problem with a spirit business is that it requires a lot of research, a lot of hard work, and a lot of money to actually get the distillery … particularly you get permission from HMRC [Her Majesty’s Revenue and Customs; the much-loved (kidding :-;) part of the UK Government responsible for the collection of taxes] to actually have a distillery. So, the barrier to entry on a distillery business is much higher, much more money required, much more time, much more effort. It’s very hard to get in. Once you are in you then face a long period to learn how to do it properly or you pay an expert to come in and you pay somebody to distil for you, which is probably not quite the … the artisan producer really is not somebody that just spends the money and hires the expert. The artisan producer is somebody who wants to do it for his or her self.
Catherine: Of course, yes. That’s absolutely terrific, Mike. I think we’re all done and dusted here. Thank you very much for your time.
Mike: I apologise in advance or in retrospect for having bored all of your listeners.
Catherine: Oh, not at all, I promise. It was absolutely wonderful hearing your thoughts. Thanks again, Mike.
Mike: Ok. Thank you, Catherine.
Thank you, Mike, for giving us the inside track on the business of artisan drinks’ production. To find out about Ludlow Vineyard and Distillery’s selection of drinks, and to see where you can buy them online, check out their website, which is www.ludlowvineyard.co.uk.
If you would like a transcript of my conversation with Mike visit myartisanbusiness.com, where you can download it for free. Don’t forget to check out the show notes for this episode where you can see some great photos of Mike and some of his products. If you’d like to connect with me online you can find me on Twitter as @FoodDrinkShow.
Until next week, I’m your host, Catherine Moran. Happy cooking, happy brewing, happy fermenting and thank you for listening.
You can listen to the podcast episode with Mike at myartisanbusiness.com/podcast.