20 Feb 2018 | 03.02 pm
Interview: Jack Teeling, Teeling Whiskey
Why Teeling brothers took Bacardi on board
20 Feb 2018 | 03.02 pm
Jack Teeling (41) and his brother Stephen Teeling (36) have achieved a lot since they founded Teeling Whiskey in 2012. In the Liberties area of central Dublin, they’ve built a whiskey distillery from which their own whiskey stock will start to emerge next year. They’ve also opened a busy visitor centre that occasionally hosts neighbourhood parties.
Thanks to family connections, Teeling branded whiskey has been available in domestic outlets and international markets for years, and in 2017 the venture agreed investment and a supply and distribution deal with Bacardi. To cap it all, Jack Teeling was selected as best up-and-coming entrepreneur by the judging panel in the EY Entrepreneur of the Year awards.
The brothers were shareholders in Cooley Distillery, the whiskey business started by their father John Teeling which was sold to US drinks firm Beam for €73m in 2012. Jack and Stephen grossed around €6m from that deal, which gave them the financial firepower to get going with their own venture. They got to work building their distillery to make whiskey, a process takes a minimum of three years. The company’s own-produced whiskey will start being bottled in 2018.
In the meantime, Teeling Whiskey has been selling whiskey that was distilled by Cooley. Jack Teeling (pictured) explains: “I was the managing director of Cooley when it was sold. I left with a supply contract for some new whiskey and mature whiskey. It was a relatively small amount but also in 2012 there was an opportunity to buy large parcel of inventory which we moved on quickly. Basically all the money that my brother and I had taken off the table from Cooley went back into whiskey inventory.
“Because I was cash positive, I could make a decision there and then and pay for the stock immediately. This enabled us to purchase whatever stock became available in 2012, get it under our own roof and then transform it through extra steps to make it different and to give us a unique talking point for consumers and also the trade. So that’s why our very first volume of Teeling Whiskey came out in February 2013 and we have built on it since then.”
In 2017, Teeling’s ‘Revival’ single malt won the top prize at the 2017 Irish Whiskey Awards. Revival is a 15-year-old whiskey aged initially in ex-bourbon barrels before being finished for over 12 months in Muscat Port barrels. The fourth release in a series of five, 10,000 bottles of Revival were dispatched to market, with a premium retail price of €120. Teeling Whiskey’s most exclusive tipple is a single malt distilled in 1983 and then matured for 33 years. One of the 275 bottles of this exclusive firewater will set you back €3,300.
Teeling Whiskey’s own pot still whiskey won’t be so pricey, but it will be premium. “From day one it was our strategy not to tackle the whiskey mass market,” says Teeling. “What we have created is a discovery brand within the category, and when people are looking for something new to discover that they can find us.
“We have crafted our liquid profile to be different, and we do that through added steps and bottling at a higher alcohol strength. We know we’d never be able to compete directly with a brand like Jameson. You have to find where the wide space is and create your offering to justify why people would pay a little bit more for you, and we think that we have.”
Teeling Whiskey has been distilling large volumes of whiskey since the distillery commenced production. Jack Teeling says the annual output is half a million litres, or potentially 125,000 cases of premium whiskey. That’s a lot of product to shift and this year the brothers decided to de-risk the project by taking Bacardi on board as equity partners.
In June 2017 the company sold shares to Bacardi for €4.9m and the rum-maker acquired a 7.7% stake for its investment. Like Teeling, Bacardi is a family firm. It has its roots in Cuba and in 1960, as the company website relates, “revolutionary government forces illegally confiscated all company assets in Cuba — a devastating heartache for a business just shy of its 100th anniversary”.
Bacardi had established distilleries in Puerto Rico and Mexico long before the Castro takeover, and in the 1990s the company doubled in size by buying Martini & Rossi, followed by Dewar’s Scotch whisky, Bombay Sapphire gin, Grey Goose vodka and Cazadores tequila. So Teeling Whiskey is now lining up beside some big brands, and the product’s route to market is now much improved on a year ago.
America is the most important market in the world for Irish whiskey and for Jack Teeling the logic of the Bacardi deal was to find a suitable distribution partner. “We knew from the Cooley experience that it doesn’t matter how good your brand is if you don’t have the right distribution partner in the US,” says Teeling.
“We had done reasonably well using an independent importer but to scale the business we needed someone else. Bacardi had kept in touch with us over the years and I reached out to them at the end of 2016. They expressed an interest in taking on the brand in the US but only if they had some skin in the game.”
For the company founders, giving up equity and inviting new directors around the boardroom table as a tough call to make. “I sit here in my ivory tower and used to decide everything myself,” says Teeling. “When you bring in another stakeholder, you are answerable to other people rather than just yourself. However, it was a strategic decision and the right one. There are a lot of new players entering the Irish whiskey category so it was an appropriate time in the evolution of our brand to link with Bacardi.”
Bacardi’s cash investment is handy too, as the whiskey business is very capital intensive, especially at the start. According to Teeling Whiskey’s latest accounts, in December 2016 the company had €10.6m tied up in raw materials and €1.4m in finished goods. Tangible asset investment at the Liberties distillery and visitor centre has amounted to €10.4m. This has been funded with €5.3m loans from the founders and family, and Ulster Bank, whose loan finance increased from €5.6m to €12.1m through 2016.
“We have been laying down a lot of stock for future growth,” says Teeling. “2018 is a transitional period for us and in 2019 we have the scope to really scale the business and take advantage of the work that went into developing the distillery operation over the last few years.”