Manchester gin makers claw back lost revenue with a pivot and a good deed
Manchester gin-maker Didsbury Gin took lockdown as a chance to go direct-to-consumer with a new ecommerce website. A selfless side-hustle into hand sanitiser had surprising benefits too.
Just three years since launch, finances were looking strong for this gin startup, with a £1.5m turnover last year and a forecast of £4m for 2020.
Pre-coronavirus, around 70 per cent of sales came through on-premise trade – outlets like bars, restaurants, clubs and hotels. The business had just secured a number of national listings and signed a new distribution partnership when the whole hospitality industry shut down overnight.
Invest in online channels
Founders Liam Manton and Mark Smallwood had been wanting to improve their direct-to-consumer offer for some time. They saw shutdown as a perfect opportunity to accelerate those plans and make up for lost sales. The two invested heavily in online presence, with a new website focusing on a slick customer journey and refined consumer marketing.
“A lot of consumers who haven’t shopped online before or who prefer not to shop online are now starting to,” explained Liam. “Those buying habits are going to be here to stay. It’s massively important that brands have a great B2C offer.”
Same production line, new product
In the hiatus at the start of lockdown, Didsbury also found an innovative way to use its distillery equipment to meet the needs of an entirely different customer base. The company discovered that local police and NHS staff couldn’t get hold of hand sanitiser.
“We found it baffling that frontline services couldn’t get what they needed to do their job. So we switched operations into making hand sanitiser using the ethanol that we would have used for gin,” added Liam.
In the space of two and a half weeks, Disbury made nearly three million 50ml units of hand sanitiser, selling it unbranded and at cost to the public sector.
“We didn’t intend it to have a knock-on effect on the gin side of the business, but it led to some positive stories around the brand and we saw a spike in online sales,” he commented.
What are the right conditions for innovation?
In many ways, Didsbury has been lucky to have the time, cash and resources to push ahead with innovations.
“Our clients have honoured payments,” said Liam. “We’ve also seen some really good practice in the way that some supermarkets have given us immediate or seven-day payment terms. It’s been really positive. Some suppliers were flexible and others were reliant on cash coming in. Being open and transparent has been crucial.”
Now, like the rest of the food and drink sector, Didsbury is facing gaps in its financial forecasts. Until further government guidance is released, it’s hard to forecast on-premise sales and investment in ecommerce looks set to become a permanent shift.
“Even when bars and restaurants reopen, it’s a question of whether they can operate at the same capacity, so I think online will remain key to our business.”
Have you made small tweaks to the way you handle your finances? How is your business emerging from lockdown? We’d love to hear about your experience. Here’s how.