GREAT NORTHERN DISTILLERY the Renaissance of Irish Whiskey
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The Renaissance of Irish Whiskey- September 2020 GREAT NORTHERN DISTILLERY 1 The Great Northern Distillery is a private Irish owned company operating two large distilleries in Dundalk, Ireland. It is the second largest distilling complex in Ireland and the largest independent. Mission: We make good whiskey Strategy: 1. To supply Malt and Grain bulk whiskey at varying ages to customers with their own brands of Irish whiskey. 2. To supply a range of bottled whiskey to Retail Own Label customers. 3. Offer the Burkes Range GND is a one stop shop. We work with brand owners / buyers to create their own unique whiskey. We blend, cask (supplying the wood) warehouse and can arrange bottling. 2 Introduction • Private 100% Irish owned company owned by the extended Teeling Family, Jim Finn and David Hynes. They have long experience in Irish whiskey. They established and operated the Cooley Distillery and Lockes of Kilbeggan until they sold them to Beam Suntory in 2012 • Two distilleries operate on the site of the former Harp Brewery in Dundalk (Exhibit 1 & Appendix 1), which is 90 km north of Dublin on the way to Belfast – a 5.0 million litre pot still and an 12 million litre column still distillery (24/7 capacity) • Current production on 5 day week, 8 million litres of grain whiskey and 7 days a week 3.5m litres of malt. • Markets are Bulk and Own Label, Retail Own Label, small branded operation (Burkes) • The premium branded Teeling Whiskey Company distillery in Dublin is owned separately by Jack and Stephen Teeling. 3 Exhibit 1 - Great Northern Distillery (GND), Dundalk, Co. Louth 4 Market Opportunities in Irish • Rapidly growing markets provide opportunities • In newer world markets, whisky/whiskey is being introduced so established brands are not embedded resulting in a level playing field for new entrants • Pernod / Irish Distillers do not make malt, producing pot still whiskey instead • The bulk market is growing as entrants realise they do not need to own distilleries. This was the historical position with Whiskey Bonders. • The Retail Own-Label segment in Europe and the US is growing but is poorly served • Almost all new distilleries are pot still only. Most need grain to make blended products • Exhibit 2 shows producing and planned Distilleries 5 Exhibit 2 – Map of Existing and Start-Up Distilleries 2020 6 Directors & Management Management Board of Directors John Teeling – Chairman John Teeling Jim Finn Founder, in 1987, and former Chairman of Cooley Distillery, which was sold in early 2012 to Jim Beam for $95m. John Teeling holds degrees in Economics and David Hynes – Director Business from University College Dublin (UCD). He holds a doctorate from Harvard Business School in Holds a degree in Chemical Engineering from UCD and an MBA from addition to an MBA from Wharton. He has extensive Harvard. He worked in the chemical industry in the US for many years business experience and has set up numerous ventures in constructing new plants. After his MBA he worked in Business resources and manufacturing. He lectured Development with Air Products and FMC. On his return to Ireland he on business and finance in University College Dublin for was a marketing consultant before joining Cooley Distillery where he 20 years oversaw the construction of two distilleries and was managing director until 2010. Jim Finn- Finance Director Jack Teeling – Director Co-founder the Teeling Whiskey Company (TWC) based in A former director at Cooley Distillery. He has worked with Newmarket, Dublin which is a premium branded pot still malt John Teeling for 30 years. Mr. Finn has extensive distillery. TWC buys grain for the Teeling brands and malt and grain for experience in administration, control and corporate Third Party brands. Having worked in banking he joined Cooley finance. He holds a degree in Management from Trinity Distillery in 2001 and rose to become Managing Director in 2010. He College Dublin (TCD) and an Accounting qualification. He holds a degree in Commerce and a Masters in Finance from University has been responsible for listing several resource sector College Dublin (UCD) and a Masters in International Business from companies on AIM in London. He supervises the financial Trinity College Dublin (TCD) aspects of GND. Stephen Teeling – Director Brian Watts – Distillery Manager Co-founder of the Teeling Whiskey Company where he is Commercial Director. Worked in banking prior to joining Cooley in marketing. After the sale to Jim Beam he was Global Marketing Manager Irish whiskey Brian has extensive distilling experience in Scotland. He has for Jim beam. He holds a business degree from TCD and a Masters in spent over 25 years in the industry. He was production International Business from UCD. manager at North British a 100 million litres grain distillery in Glasgow. He holds an engineering degree. Alan Wall – Director Nominee of the EIIS Shareholders 7 The Story of Whiskey • Whiskey is Irish not Scottish, American or Canadian • The word derives from the Gaelic “uisce” meaning water and “beatha” meaning life, local dialect turned uisce to “fuisce” which became whiskey • Ireland, with its mild island climate, fresh water and good barley, is the perfect location to make whiskey – which is why it developed in Ireland • In the early 19th century Ireland had about 60% of world whiskey sales and 1200 to 1500 distilleries. A change in technology to column stills decimated the industry. By 1886 there were only 28 large distilleries. 8 Whiskey Background (contd.) • A decline started in the 1850s which continued until finally in 1973 there was only one company, a monopoly, Irish Distillers, with three operating distilleries, two in Midleton and one in Bushmills which made malt only and still does • Irish sales fell to 2% of Scotch sales – 2 million plus cases of Irish sold annually against 100 million cases of Scotch. In 1912 there were 12 million cases of Irish produced • The revival began in the mid 1980s with the establishment by the GND principals of the independent Cooley Distillery. In the late 1980’s Irish Distillers was acquired by Pernod Ricard • But the main cause was the turn to brown spirits by young drinkers starting about 2000 • Irish whiskey is now the fastest growing brown spirit in the world with growth rates of 12.5% annually across 100 countries • There are now 33 working distilleries and over 10 being built or planned. Most of the multinationals have entered the sector. 9 Distilling in Dundalk • The town of Dundalk has always been ideally suited to foster a distilling industry. It allowed easy access to water, grain, and yeast - the three essential ingredients for successful distilling. • The rich agricultural hinterland supplied barley and the town boasted a skillfuled and varied workforce in the 17th century. • The founders of GND have re-established a substantial distillery presence on the site of the former Diageo owned Harp Brewery which began operations in 1895. The brewery which closed in September 2014 sits on 5.5 hectares. 10 World Irish Whiskey Market • From a low of 2 million case sales in the early 1980s, of which 50% was in the domestic Irish market, sales were 12 million cases of 12 x 70 cl in 2019. (Table 1). • The rapid changes and growth in Irish whiskey markets are shown in Table 2 • Sales are expected to rise to 20 million cases by the end of 2024 • Three market forces are driving this: Young drinkers in the US and Europe where Irish sales are growing over 12% a year The opening of Eastern Europe and Russia (Russia now the second largest market). Emerging middle classes around the world turning to imported spirits • Irish is now growing at double digit rates or more in 100 countries 11 Table 1. Irish Whiskey Sales 2019 – (cases of 12 x 70cl) Estimated US 5,000,000 Baltics 100,000 Ireland 600,000 Ukraine 100,000 UK (incl. NI) 500,000 Israel 50,000 France 400,000 Benelux 50,000 Nordic 300,000 Travel Retail 650,000 South Africa 400,000 Bulk 300,000 Russia 600,000 Rest World 1,360,000 Germany 390,000 12,000,000 Poland 300,000 Bulk Irish is used in liqueurs e.g. Baileys Bulgaria 200,000 and in some overseas whiskeys Czech Rep 300,000 Portugal 100,000 Australia/NZ 200,000 Canada 300,000 12 Table 2. Irish Whiskey Sales - (cases of 12 x 70cl Estimated) Volume Volume Volume Volume Volume Country 2015 2016 2017 2018 2019 7,859.7 8,814.1 9,857.9 10,791.5 11,934.7 United States 3,118.0 3,670.8 4,161.3 4,602.5 5,011.8 Russia 291.3 338.0 404.0 477.8 605.8 Ireland 495.3 523.9 551.9 581.8 590.5 United Kingdom 324.5 341.0 369.0 414.8 467.8 France 389.5 382.3 390.3 386.0 401.5 South Africa 297.0 335.0 353.3 368.5 399.8 Germany 305.3 301.0 336.8 366.0 389.0 Czech Republic 191.5 204.1 218.3 238.0 300.3 Poland 83.5 102.3 201.0 233.9 299.8 Canada 179.3 203.5 236.0 275.0 293.0 Australia 112.0 122.0 154.0 167.0 192.0 Bulgaria 166.7 178.2 172.8 188.3 191.4 Ukraine 51.3 62.3 74.6 97.5 126.3 Sweden 99.0 103.0 104.0 107.0 116.0 Portugal 106.3 102.8 104.3 107.8 110.8 Slovakia 62.0 76.3 86.5 93.0 102.0 Denmark 94.0 100.7 99.8 100.8 101.3 DF British Isles (Inc.