Jason Connolly: In this episode this week, we’re speaking to Felix Elliott-Berry, co-founder of Sibling Distillery. First of all, how did you come up with the idea for Sibling Distillery, and the gin, at such a young age?
Felix Elliott-Berry: Actually, we’d always planned on working together on a project. In our family, working in family businesses and things like that, it’s actually a more conventional career path than traditional education. My sisters and I were away on holiday with my parents, I guess it was in mid-2013, and as you mentioned our parents run a microbrewery. It’s always been quite a small-scale, local, supplying local pubs and things like that. While we were away, they get an e-mail from a company who contacted them and said, ‘We’d you be interested in buying your gone-off beer or your leftover beer to turn it into whiskey.’ That gave us a real lightbulb moment, of, hang on a second, what we’ve never really thought about business-wise is stepping outside of the beer side of the industry and going into distilling. Actually, the raw materials are similar, the processes are similar, and since I was twelve years old I’d been helping out my dad making beer. We thought, actually, that might not be a completely ridiculous idea. On top of that, the only thing that we’d worked on together for as siblings was we made some sloe gin and sold it on a farmers market stand that our parents had at Christmas time, and we made some sloe gin, we sold it for just one morning and sold it. We thought, ‘This is an easy industry to be in.’
Jason Connolly: Sounds like slight naivety at the start perhaps?
Felix Elliott-Berry: The naivety was honestly spellbinding. We built our whole business based on naivety, really. A lot of the decisions that we made later on, down the line, we definitely wouldn’t have done had we known how difficult it was going to make life for ourselves, but it did give us that boost to go on without worrying too much about whether it was a ridiculous idea or not. We got this e-mail, we thought about it, and we thought, yes, why not? We’ve going nothing to lose, now’s a good time to really throw ourselves into something that could be a bit of fun, or could turn out to be a business.
Jason Connolly: Your parents starting the microbrewery, was that quite a driving factor and inspiration to your success, or was that a home-craft beer company which led the way?
Felix Elliott-Berry: We, again, naively thought that we’d make the most of our parents’ customer list, and things like that. All we’ve got to do is create a product, and we’ll be able to piggy back off a few of the pubs that they supply, but what we really quickly realised was that our market was almost 100% different to our parents’ local microbrewery market, and actually, that because of the four of us were involved, even start to make it pay and make it sustainable for the four of us, we had to turnover about six times the amount that they were turning over as well, just because of the way the business was set up. Within a few weeks, it became blatantly obvious that the crossover that we’d been expecting to be there just purely wasn’t, so we had to really find our own feet and really make it on our own. We did hope that was the case, but we found out very quickly that it really wasn’t hugely helpful.
Jason Connolly: You left school after sixth form? It looks like you had these plans to go to university, but it was deferred by a job?
Felix Elliott-Berry: Yes. I had planned to go to university, and then, whilst in sixth form, I worked in a pub, and got very friendly with the man who went on to be my boss in my first job. Shortly before I got my exam results to find out whether I’d got into my university of choice, he said, ‘If you decide you’d rather, I’d happily give you an internship at my business,’ which was a creative brand agency. To be honest, that sounded pretty appealing to me. I’ve been someone who’s worked since I was twelve years old, so really I wasn’t afraid of getting stuck into something that I didn’t really know anything about. At the time, I knew nothing about branding and advertising apart from the series Mad Men, which I’d watched and quite enjoyed. I thought, why not? We’ll give it a go, and I’ll defer my university for a year. It’ll still be there when I come out. Midway through that year, my boss sat down with me and said, ‘What would you like to achieve here?’ I said, ‘If I decide not to go to university, I want a guarantee that I’m in a better position after three years than I would have been if I went there,’ and he said, ‘Okay, I can help you make that happen.’ I gradually went off the idea of going to university, because a lot of what I was doing in my job was what I was going to study, and I was getting paid for it. It wasn’t that I was against the idea of university, but as it happened, neither of my younger sisters or my younger brother have gone to university either, so we’ve all followed a similar path, got a bit of experience, and then threw ourselves wholeheartedly into the distillery project.
Jason Connolly: You spent time as well at a creative brand agency. Did that give you a basis for how to get this product off the ground?
Felix Elliott-Berry: Yes, definitely. Actually, looking back, more so than I appreciated at the time as well, because when we meet other people in the industry or other people at similar stages in their business, I’m quite often staggered by the lack of thought people have given to brand guidelines and brand stories and things like that. We started very much with that at the forefront of our mind, as well as the manufacturing side of it. Definitely, having that bit of background of understanding managing brand projects and so on really gave us a bit of a head start when it came to designing our brand and logo and website, and things like that. We wanted everything tied together from the outset, so when we approached some of the more marquee stores in the first few weeks that we were launched, places like Harvey Nichols and Fortnum & Mason, we were market-ready. It didn’t look like a home-made project, even though it was done on a tiny scale, it had that feel of a brand that was a little bit bigger.
Jason Connolly: It sounds to me like quite a deliberate move. You had a very clear focus on where you wanted this product to be and a target market, which I guess is very important?
Felix Elliott-Berry: It absolutely was, but what we had was an ideal target market, and then what we found was that actually where we made our revenue wasn’t necessarily from that ideal target market. We approached the places like your big department stores and high-end off licences and so on, and that was great. We got listings in them, but found out we were not doing anything like the numbers that we needed to through those shops, so we actually took it back to the beginning and went back to the farmers markets and started selling every weekend at the markets. Whilst doing that, approached shops in the towns that the farmers markets were in and said to them, ‘We’ve just sold 100 bottles this weekend in your village, that’s almost one per every hundred people that live here. We’ve told them all that you’re going to stock it, and so we’re hoping that next week you’ll have it in, so when they come to replenish it, we can direct them to you.’ We went through it that way.
Jason Connolly: You actually went back to where you started, rolled up your sleeves, got your hands dirty. That sounds like a really different and refreshing way to do things. What drove that?
Felix Elliott-Berry: We thought it was very important initially to get some marquee customers. We got customers like Whole Foods, Harvey Nichols, Fortnum & Mason, those bigger department stores and flashy industry names. We thought that that was the correct thing to do, because we thought they’re going to drive more volume than these smaller independents, but what we realised really quickly was that those bigger shops demand bigger margins, they want more commitment from you, they want you to be doing tastings and bending over backwards to keep your shelf space there. Actually, what we needed was quick cash flow and quick turnover, so that we, having quit our jobs, could actually afford to live, because when you start a business, you want to build a brand, but you also do need to be able to put food on the table.
Jason Connolly: That’s one of the number one reasons why businesses go under, it’s getting cash through the door quick enough, isn’t it?
Felix Elliott-Berry: Absolutely, and cash flow in the early days is hugely important, because your bigger customers want longer credit terms and so on, and with no reserves, you can’t really afford to support that. We had to go back to things that were making instant cash, but we also needed to be growing our trade customer base. The best way to do that, we found, was actually rock up every week at different farmers markets around the country, around the south of England mainly, and we were selling quite a lot of gin because we could do direct-to-customer selling, and that’s something which all of us are reasonably competent at. We would sell 100 bottles on a Saturday or something, and then we would approach whatever was the local off licence or the local independent farm shop there and say to them, ‘We’ve just got you 100 new customers, they all live in this village. Now would be a good time to list our gin, because probably by next weekend, they’re going to want another bottle, and we need to tell them where they can get it.’ That was really how we went about building our customer base to start with, because we were making money on that weekend, but we were then securing an outlet in all these different parts of the country that we wouldn’t necessarily have thought of.
Jason Connolly: It makes total sense.
Felix Elliott-Berry: It was through necessity, really, because we didn’t have a marketing budget where we could pay £40,000 and put a print ad in GQ or whatever. It was really, we had to make our marketing make money as well.
Jason Connolly: I’m assuming that you’re no longer going to these farmers markets now necessarily?
Felix Elliott-Berry: No, we still go. Not as frequently and maybe not us in person all the time, but they still make money, and so we’d be mad to stop doing them. The only reason we stopped doing them now is in areas where we have a lot of retailers, because then we’re treading on their toes, so some of the places historically, we would have done Cheltenham, which is our home town, farmers market, but we actually stopped because there are just so many retailers within the town centre who carry our lines that it’s not really fair on them to rock up on their doorstep and do it. If there’s an area where we don’t really have a lot of outlets, we’ll certainly still do it.
Jason Connolly: You’re one of the only distilleries in the UK that makes the gin entirely from scratch, which I would just have assumed every distillery did that?
Felix Elliott-Berry: We’ll go back to your naivety point at the start. We naively assumed the same, and that if you were going to make a gin, what you would do is start with the raw materials and make yourself a gin. We had no idea, when we first started out with this, that actually the majority of the market work from a few suppliers who make base gins or base alcohols, and then add their signature flavour, or even just brand it themselves. We had no idea when we started that what we were doing was really putting us in just a handful of places in the UK that actually make spirits from start to finish, but it’s actually paid dividends in the end. We’ve questioned whether it was the right thing to do almost every day since we started, because it is a lot more work, but it does mean that nowadays we do a lot of developing recipes for other companies and contract-making of gin and so on, so even outside of our own brand stuff, it’s allowed us to grow our business, making other people’s gin for them, and also just gives us a much better experience on distillery tours, when people come and visit us. They can see how the process works completely from start to finish.
Jason Connolly: I guess it was a bold move, because it must have put your start-up costs much higher?
Felix Elliott-Berry: Let me tell you a little bit about how we managed to afford our start-up, because it’s actually quite funny. Starting a distillery, if you do it in the conventional way, is an extremely costly process. Buying an off-the-shelf still, just one of similar size to ours, if you bought it from one of the manufacturers in Germany or Italy or somewhere like that, it’s going to cost you in the region of quarter of a million pounds, before you’ve found a premises and before you’ve found people to operate it. You’re already quarter of a million in the hole. Obviously, being a few kids who had moderate jobs, or moderate to poor jobs, and no real savings to speak of, and also, as you can imagine, not having banks falling over themselves to invest, we had to find a way to do this on a slightly more shoestring budget. We found a designer of stills in Australia who was working at the time on a design that hadn’t quite made it to market yet. It was made of glass and stainless steel, with only parts of it made of copper, as opposed to the normal full copper still. It was made in different parts that you could reconfigure and move around and so on. It was basically a slightly groundbreaking bit of kit that hadn’t really been tested on a commercial size. We convinced him to build it for us just for the cost of the materials, and we would basically trial it for him, and report back to him on whether it worked or not, so that he could have a case study of which to take it to investors and to market it. Covering the cost of some glass and stainless steel obviously was much more affordable than buying an off-the-shelf distillery, and it just so happens that the design is actually very good, and now there are thousands of them around the world, but we had the very first one that ever went into production on a commercial scale. That, again, cut our start-up costs down to about 10% of what they would have been otherwise.
Jason Connolly: Did you have any staff in the beginning then, or was it literally just yourself and the siblings who started it up?
Felix Elliott-Berry: For two years, it was just myself and my siblings. In the very start, we were living off £40 a week each for about eighteen months whilst we pumped everything back into the business to keep affording trade shows, keep affording markets.
Jason Connolly: An endless supply of gin?
Felix Elliott-Berry: Yes. It made life a bit easier.
Jason Connolly: What’s it like working with your siblings, because I can’t imagine. What’s the dynamic life?
Felix Elliott-Berry: You’d be amazed at how easy it is to get on when you’re extremely busy. We just found that the only time that we’ve ever got under each other’s skin a little bit is when things are quiet. We’re normally extremely busy, and we very much don’t tread on each other’s toes in the areas that we work in. I work mainly in branding, sales, and production management. My youngest sister runs all of our events, which is quite a big side of our business now. My other sister is our finance director. My younger brother is our production manager. We definitely try and stay out of each other’s way when it comes to our day jobs. Then, we try and make it fun when we have to do stuff together. I would say what it does is cut out the amount of waffle in meetings, which is handy, means we can get things done a little quicker, and it does probably make our decision-making a little more rapid, because we don’t have to go through layers of management and things like that.
Jason Connolly: There’s no corporate red tape or anything like that, which sometimes gets in the way of people making decisions?
Felix Elliott-Berry: Yes.
Jason Connolly: I think you know each other and you all trust each other?
Felix Elliott-Berry: Exactly, and it was definitely a learning curve, because you go from spending your whole teenage years winding each other up to trying your best not to wind each other up when you’re working together. It wasn’t a long transition period before we were working really well together. Actually, all it really took was us taking some office space instead of working from home. We were all, to start with, working around our mum’s kitchen table, but as soon as we took some office space and made it a little more professional, it all clicked into place pretty well.
Jason Connolly: Do your parents still do the craft beer?
Felix Elliott-Berry: They do, but actually, as of just into the lockdown this year, our business, so Sibling Distillery, acquired their share in it. We actually now run their part of the business. We saw an opportunity in the craft beer market, and so we bought a new brewery, and then installed all of that on the same site as our distillery, and have just relaunched it as a slightly more lager and craft beer brewery, as opposed to a more traditional real ale brewery, but we own the share now.
Jason Connolly: In year three, you had a successful crowdfunding campaign to renovate the building that you were based in. What made you decide to go down that route?
Felix Elliott-Berry: In the start of year three, we moved into a much bigger premises that we’d been in, and that’s not saying much, because our initial premises was shoebox size. We took a bigger premises, but it was extremely run down. We wanted to start doing events there, we wanted to make more of a visitor centre, get some people in for tours and so on. The way that we did our crowdfunding was we didn’t have enough cash reserves to really put the amount of money into it that we wanted to. The way that we did it was we actually sold corporate events to people. Instead of selling equity or anything like that, we just did discounted corporate events, but sold in advance, so basically you could pay £500 or £1,000 for a business team day, or for a business Christmas party or something like that, but we just sold it ahead of time so they got a discounted rate on it. That helped us raise about £30,000, just to do the place up a little bit when we moved into there.
Jason Connolly: It’s not like they get a share in the company, and it’s a way to raise capital?
Felix Elliott-Berry: Yes. We never really wanted to take external investment, because obviously for a relatively small business at the time, there were already a few shareholders involved, so anyone coming in was going to probably end up being the majority shareholder, which is not something that we wanted at the time. This just seemed like a sensible way to raise some capital that we needed in the short term, just to make that place what we needed it to be. We’ve actually moved on since then to a new building which we’ve got a long-term lease on, which is a converted barn on a Cotswold farm, which is great fun.
Jason Connolly: You’ve actually gone into, since the COVID lockdown, the hand sanitiser business, which seems like a good market to be in in current times. How did that all come about?
Felix Elliott-Berry: It was something that, a week before we were doing it, we’d never thought of before. When I said earlier about how you can make decisions pretty quickly when all of the management team are family members, this was one of those occasions where we could make a decision within a few hours that it was, first of all, the right thing to do. We got approached first of all, when things were starting to look serious with the whole pandemic thing, the Met Police and Gloucestershire police force basically got in contact with us. ‘We can’t get sanitiser from anywhere, and we need quite large volumes of it. Is there any chance that you know anybody who is in the industry that you buy alcohol from or so on?’ Within an hour, we were like, ‘Why don’t we just do it?’ We went back to them and said, ‘We can make that for you in the short term until you’d found a proper supplier.’ Obviously, being one of the few places in the country that actually manufactures alcohol, the nationwide ethanol shortage that ensued when everyone went mad for hand sanitiser and surface cleaners didn’t really affect us, so we were able to pivot pretty quickly and get on board with that. We made some fairly rushed stuff for the police forces, just so that they could get back out on the beat, and then we put in some proper development time to making some more high-end nice sanitiser, which we now sell to Michelin Star and Rosette-standard restaurants around the country. We moved quite quickly from doing the bulk stuff, which we did for about a month, into now more in line with our gin stuff, the high-end, nice-smelling sanitiser for your high-end restaurants and hotels.
Jason Connolly: Moving on then to your success habits. What are your success habits, Felix? Do you have things that keep you on track, keep you focused, keep you moving forward?
Felix Elliott-Berry: Yes. One of the best lessons that I learnt from the boss that I had in my first job was that if you’re going to start a business, you really have to forget the idea of a work-life balance, and you have to just roll it all into one and see your business and your work as just part of your life. You don’t separate the two as one being good and one being evil, if that makes sense, because a lot of people have quite an unhealthy idea of a work-life balance where work is the bad part of their life and the rest of it is the good part. First of all, I try my best to not separate that out too much, but then also there has to be some quality of personal life as well, that doesn’t involve just work. One thing that I’ve actually found really useful recently has been the enforced step back that the lockdown made everybody take, and really look at whether I’m spending too much time doing purely work stuff, and whether I could maybe combine that with some of the things I enjoy as well a little more. There was a time when we first started where, I think, year two or year three, I counted that I’d had only eleven days in the year where I hadn’t been working the whole day. I thought, that’s probably not giving me enough time to have a bit of variety. First of all, not seeing work as completely separate from enjoyment, but also just finding enough time to not be completely obsessed with just your whole life being a profit and loss sheet, and actually just enjoying some things that are completely mundane and completely separate from that.
Jason Connolly: You’ve had challenges along the way. Do you have a strategy for when you get a challenge? How do you overcome those?
Felix Elliott-Berry: It depends on the challenge, because there are some things that you can just bulldoze your way through and make work, and there are some things that really do make you step back and look at whether what you’re doing is right or not, and whether there’s a different way to do things. Take, for example, a challenge that we had in the early days was one of our competitors reported to Advertising Standards Authority that we were using underage models on our website. What they were referring to was that we had an ‘about us’ page on there, and that the picture of myself and my siblings, at the time we were all under 25, and there’s a law that says you’re not allowed to use models who are under 25 in alcohol advertising. Basically, they came down on us and said that we needed to remove any trace of anything about the founders of our business from all of our social media, all of our website, all of our print marketing.
Jason Connolly: That is the brand though?
Felix Elliott-Berry: Exactly. That did give us a bit of a challenge. We had, for the first year of trading, built up this idea that we were a major part of the brand and so on. That just forced us to think of it differently, and we had to go much more down the route of promoting our methodology and promoting the fact that we make everything from scratch and so on, and actually, in the end, that turned out to be a really valuable part of our time development, because it made us really realise that was quite an important part of what we do, and maybe let’s put the product first for a while.
Jason Connolly: Maybe the backstory isn’t enough? Maybe it’s more you can really focus on the product?
Felix Elliott-Berry: Yes, exactly, and maybe we’ve been reliant on that a little too much, and we needed to really focus on developing new products and really bringing new things out more frequently and upping our production, and maybe doing more where we invite people in to meet us in person, because that was the one time where we were allowed to use ourselves to promote it. Some things you can use to pivot around, and then some things are just a challenge that you really need to bite down on your gumshield, put your head down and go through it, and those are things like increased competition or having a competitor that’s trying to push you out of a market. These are things that really, I think, sometimes you just graft your way through. You sit down together and go, ‘Are we ready to battle this one? Yes, we are. Okay, let’s just get on with it and realise that the next six months are going to be tricky, but we’re going to find a way through. As long as we manage our finances sensibly, and as long as we keep determined, we’ll get there in the end.’ I do think that there is a time and a place for that as well.
Jason Connolly: It seems like you’ve got a really sensible outlook when it comes to the challenges. That must have been highly difficult, but it sounds, in a way, maybe they did you a favour?
Felix Elliott-Berry: Absolutely. I think all these challenges, you learn something from them. When you’re young and in business like we were, learning is the most important part, really, because we’re well aware that we came into this with a distinct lack of experience, so we’re bound to learn a lot of lessons, and we’ve just got to make sure that you’re present enough to understand at the time that you’re learning a lesson, and not to get in a, ‘Why always me,’ sort of mentality.
Jason Connolly: I’ve been through the same journey, starting a business. I might make a mistake, but I learn pretty quickly, and I don’t make the same mistake twice. When you start a business, you do have to go through that process.
Felix Elliott-Berry: When it’s personally costing you money, you learn very quickly.
Jason Connolly: What’s next for Sibling Distillery?
Felix Elliott-Berry: With our brand, with Sibling, more of the same, really. We’re just gradually chipping away at building our market. We’ve got some good export opportunities coming up, so that’ll be a growth area for us. We’re doing more targeted work in the on-trade, which is great fun, but actually, one of the things that I’m most excited about is we’ve just launched a new brand in partnership with a major wine brand, and that’ll be fun because they’re going to start at the completely opposite end of the spectrum to how we started Sibling. They already have the routes to supermarkets, they already have the routes to export, they already have the budget to packet it and market it well. We’ve worked, we’ve developed the recipe for them, we’re making it all for them, have the contract to make it all, and we’ll be partly representing them on it.
Jason Connolly: Going from back to front?
Felix Elliott-Berry: Exactly, that’s a really exciting opportunity for us to see it be done in a completely different way to the way that we’ve done it, and be part of that journey as well, so that’s a lot of fun. Then, obviously, having just acquired the brewery as well, we’ll be moving into the craft beer space under a slightly modified version of our parents’ branding, and that’ll be a really interesting learning curve for us too. The theme here is a lot of learning and a lot of watching how things are done by other people, and seeing whether there are ways we can tweak what we do with Sibling, which is what we’ve been doing for the last six years.
Jason Connolly: If you had to give one piece of advice to someone who’s perhaps listening to this episode, who’s just starting out in business or has an idea, a product that wants to go to market, what advice would you give them?
Felix Elliott-Berry: Make sure that what you’re focusing on at the start are the things that are actually important. We wasted a lot of time focusing on things like launch parties and things like high-end customers and sponsoring cocktail bars in London, and sponsoring boat parties and things, and it was all just dead money. Really, what was making us money at the time were the farmers markets and the independent farm shops, and independent off licences. Although that was the less glamorous part of what we were doing, that was actually what was making us money. Had we realised that sooner, we would probably have had a more profitable business quicker, and we wouldn’t have been living on £40.
Jason Connolly: I think a lot of businesses in those early days could get so caught up and consumed in the social media bubble, but when it actually comes down to it, it’s pounds, pence and shillings that matters.
Felix Elliott-Berry: Absolutely, and it’s very easy to get blinded by the lights. There are a lot of opportunities that will come along that sound great, but just make sure you keep your feet on the ground a little bit and do the things that are bringing in the cash flow, and making sure you can pay your suppliers, because it’s all well and good sponsoring bars on the River Thames, but when you can’t afford the cases to send your bottles out in from your supplier, you don’t have a business any more. For us, that was a lesson that we learnt very quickly, and realised that actually you really need to build it up from the ground, and don’t run before you can walk on that sort of thing.
Jason Connolly: Watch cash flow, make sure that you’ve got cash coming in before you go out spending money on somewhat fancy marketing events?
Felix Elliott-Berry: Even if you’re doing it in an unglamorous way, cash flow really is king, and it’s very easy to spend a lot of money that doesn’t bring you any quick returns, and in the early days, what you need are quick returns.
Jason Connolly: Felix, it’s been so nice talking to you. Thank you so much for joining us. Anyone interested in Felix and Sibling Distillery, where can they find the product, Felix?
Felix Elliott-Berry: The easiest place first of all is just SiblingDistillery.com, because we have our full range on there, and then the easiest thing to do if you want to find a physical retailer is drop us an e-mail at firstname.lastname@example.org, just give us your postcode and we’ll point you to your nearest physical retailer, if you’d like to go and see it in person.
Jason Connolly: Fantastic. Thank you so much, Felix.