There are some ideas for a new business that seem so obvious you can’t believe someone has not thought of it before. Like Still In Cask. A business model based on the idea of having a blockchain powered website on which distilleries from all over the world can put up casks of aged spirits for people to buy individual cask shares worth one bottle each for as little as £20. Be it a whisky, rum, tequila or whatever aged spirit a distiller might want to offer. It hopes to open up spirit investment to the everyday spirits lover and, in particular, attract a new younger generation of spirits drinkers, and give distilleries the chance to get much needed cash into their business. It’s all the idea of the team behind craft distiller, Circumstance Distillery, Liam Hart and Danny Walker who are working in partnership with Illy Jaffar, managing director of Kinetic and formerly of Pernod Ricard, and entrepreneur Zak Hirt, to what they call “democratise” the ownership of cask spirits whilst creating and bringing together a community of spirits lovers online. Richard Siddle hear’s how it is all going to work and how the the idea first came out of The Buyer’s first One Step Beyond innovation conference last March.
Still In Cask is a simple concept that has the potential to grow, evolve and include distilleries all over the world and bring aged cask spirits to a new audience.
“Democratising the ownership of cask spirits” sounds like half a line stolen from a political slogan, but it is the powerful clarion call that encapsulates what the team behind Still In Cask is trying to achieve with its new business.
It essentially wants to bring to life spirits that are lying dormant in casks all over the world, for years on end, waiting for their time to age and then finally be bottled for spirits lovers to buy. For distilleries, wholesalers, retailers, bars and consumers, alike, that can be a very long wait.
What Still In Cask does is open up those casks to potential consumers all over the world who can pay up front for their own mini shares, the equivalent of a maximum of six bottles, and then watch, and be part of how that spirt matures, grows, and develops over time before bottling.
It gives them a unique insight into what actually goes on in those years of ageing, the chance to talk to the distillery team, the blenders, the brand owners and even taste their own spirit on its own journey to being bottled.
It also gives distillers access to much needed cash that they can get into their businesses during the ageing process, allowing them to invest in future distilling and brand projects, secure in the knowledge that they have casks of pre-sold spirits ageing quietly away.
The A Team
It’s all the idea of Liam Hirt and Danny Walker, the brains behind the innovative Circumstance Distillery, drinks and experiential consultant, Illy Jaffar, and Zak Hirt, Liam’s brother, a management accountant and founder of hospitality epos and ordering system, napkin.co.uk.
The concept actually came out of the innovation debate that Hirt and Jaffar took part in at the first One Step Beyond event held by The Buyer and Sophie Jump in March 2020. They met, chatted and started to think of ways they might work together, which crystallised after the second One Step Beyond event held online last autumn.
Hirt said he had been playing around in his head with the idea of a spirits ownership scheme and talked it through with Jaffar who quickly saw the potential of what it could achieve.
Jaffar explains: “What compelled me to get involved was the journey a consumer can go on just by buying a bottle. By having that whisky ageing in a cask they can see how its story evolves over the years. You are not just buying into a ready made story of a brand, but you are actually creating your own story, your own brand. You can talk to the actual distiller at each stage of that journey. It’s such a unique opportunity.”
Jaffar and Hirt also realised if they were going to make the idea happen they needed to pool resources and create their own A Team of talent. Hence Danny Walker, or “business wife” as Hirt calls him and Zak Hirt were brought in for their spirits, and software skills respectively.
Liam Hirt says he has been intrigued by the world of cask spirits for some time and the fact that distillers and brand owners have done so much in recent years to make brands and spirits more accessible and appealing to a younger and wider audience – yet cask spirits have been very much seen as only for older, more traditional, classic spirits drinkers.
If distilleries did make any casks available they were usually bought up by corporates, or by syndicates groups and serious investors where they were often sold back to the distilleries.
That’s where the “democratising” of cask spirits comes in, says Jaffar, and a chance to open up the cask spirit market to a whole new audience.
“We wanted to divide each cask up into cash shares, the equivalent of a bottle, so that they were far more affordable for people to buy,” says Hirt.
“They have got these aged spirits all sitting in warehouses, but how do they get them to consumers?” this was the challenge Hirt looked to meet. “That way we can get cask spirits into the hands of people as they are ageing.”
The idea is to be able to offer the cask shares at a very early age so that consumers can invest and be involved from the start. How long each particular cask share programme goes on for depends on the distiller but they could be 18 months, three years, 15 years or 20 years or whatever.
“It makes it an ideal gifting opportunity as well,” says Hirt. “Why not buy a cask share for your new baby or grandchild that they can have when it matures at 18 years? Or use it for a special anniversary and occasion down the line”.
The site is being set up to allow people to go and see when the bottle date is planned for a specific cask, or at least a 12 month window.
Building a community
It’s clear, adds Jaffar, there is a ready-made market of younger consumers with plenty of disposable income, who might not be able to get on the property ladder, and are looking for more fun, innovative and interesting projects to get involved in. You only have to look at the number of young investors with their share of crypto currencies to recognise that.
“It’s the younger consumer who gets this immediately,” says Jaffar. “They want to invest in bottles that they can eventually drink. This is what this is about. They want to have some fun and get really involved in it.”
Jaffar says that in time the number of cask shareholders will be able to create their own community online and share ideas, stories and experiences. “We are creating a community of people who love spirits and aged spirits in particular,’ he adds. “We want to have a lively forum on the site where distillers can come online and talk directly to the investors. Where we can have those conversations, make it interactive and allow those with a passion for spirits to share that enthusiasm online.”
The Still In Cask team is looking at ways it can help bring the cask shareholders closer to their casks and their distilleries, be it through online tastings, regular catch up calls with the distiller and actual visits to the distillery to meet their teams and see their cask for themselves.
Trust in blockchain
But making such a long term investment is quite a leap of faith, particularly as some cask shares could be going for thousands of pounds, when you have no guarantee that the distillery is going to be around in 10, 15, and 20 years, let alone Still In Cask.
That’s where the blockchain comes in”, stresses Hirt. “New technology that is also very much part of a younger consumer’s vocabulary and understanding. Any trust and guarantee assurances that customers might have about committing to such a long term partnership with Still In Cask are covered by the blockchain that collates and records all transactions and data relating to every cask sale investment”, explains Hirt.
“With a blockchain you don’t have to rely on trust,” he adds, comparing a blockchain to a digital ledger that is visible and transparent wherever you are in the world. “If we disappear all the accounts of our customers and their cash shares are stored on the blockchain which can pay out on request.”
To even get to this stage has also involved a lot of conversations and work with the HMRC to ensure Still In Cask complies with all alcohol and taxation rules, stresses Hirt. “It was a bit daunting initially as no-one has tried to do this before, but we have worked our way through it.”
Ready for launch
Still In Cask has been able to sign up four distilleries ahead of its official launch this week. They include: Nc’nean, Circumstance Distillery, Cotswolds Distillery, Mackmyra and Connacht Distillery.
The Nc’Nean distillery in McMovern in the western Highlands was one of the first to sign up. Matt Hastings brand ambassador explains why the distillery was keen to be involved: “Everyone at Nc’nean is incredibly excited to be part of the Still In Cask program. Cask ownership is a fantastic way for us to really connect with whisky lovers, and making that process more accessible to a wider range of enthusiasts is truly wonderful. We’re looking forward to building a unique group of people here that can join us as we continue to grow our young distillery.”
Still In Cask hopes to invite other distilleries to sign up, and is particularly keen to get a good mix of spirit brands and businesses involved so that it can offer a wide range for its customers to invest in, says Jaffar.
“We would like customers to have a portfolio of aged spirits. So not just all about whisky, it could be mezcal or a tequila or a rum. We can just keep on bringing distillers on board,” he adds.
“This offers real opportunities for new distillers, in particular, to give them a voice in what is such a competitive and traditional sector. We are starting that conversation with a lot of potential partners.”
“We are also not restricted in terms of how many distillers and casks we have on the site,” adds Hirst. “We can offer casks from right round the world. So far it has been the more progressive distillers that have been the most receptive. We can see, for example, a lot of potential in rum.”
Jaffar knows from his own career, working on major spirits brands such as Chivas Regal at Pernod Ricard, that it can take a while for some of the bigger, branded players to make a move. “They like to watch and see what happens,” he explains. “But I am sure they will come knocking.”
Particularly as they will have the opportunity to have their own community board on the site where distillers can talk and engage with shareholders and build up personal relationships.
Still In Cask also wants to promote the innovation and steps being taken by distillers to experiment and trial and introduce new spirits to the market. Simply by releasing the capital that is sitting in their casks, by offering cask shares, distilleries can bring much needed cash flow into the businesses to then invest in projects that normally they would not have the capacity to do, says Jaffar.
The Still in Cask business case
Hirt says once Still In Cask makes the introduction of a shareholder to the distillery, it is then down to them to handle all the administrative side and all investment payments are made to the distiller.
Still In Cask does not receive any upfront funds for that initial transaction. Where it hopes to make its money is through a subscription Reserve Club, which will be free to join, but then cost £5 a month to be part of. That will help cover its initial overheads and then, as the scheme grows, allow it to build up its own business.
The key advantage of being part of the Reserve Club is members get advance notice – of two weeks – of any new casks and distillers that have joined the programme for them to invest in before it goes out to the open market.
All members will receive regular updates about their individual casks, newsletters about the overall business, and the chance to take part in special tastings and events.
Hirt says “The only concern at the moment is not having enough casks in the initial roll out phase for the demand that it is out there. Which is why it is working with distillers for free as it needs their support and buy in to make the concept and scheme work”.
“We could get to the stage when new casks become available and they are quickly snapped up by Reserver Club members,” he adds.
Jaffar describes Still In Cask as very much a start up, “bootstrap” business but with a clear focus and growth plan. The more people that invest in casks, the quicker it can grow.
“It’s a sort of spirit equivalent to the en primeur model,” he adds. “We are confident, though, that this will grow quickly by word of mouth and as the excitement builds amongst members being involved and taking part. That’s why we see it as a democratising of passionate spirit drinkers.”
Part of the industry
It is also why, stresses Hirt, it has not looked to bring in initial investment money and be heavily seeded from the outset. “If we did that people might just look at this as being an investment vehicle for us. We are very much part of the craft spirit industry and we want to see great brands grow and if we do we will then grow with them as a business.”
The beauty of the online, blockchain model is that Still In Cask can launch as a global business and welcome both distilleries and members from anywhere in the world.
“Although the initial focus will be recruiting distilleries from around the world to the UK drinker we are looking to grow organically here through word/recommendation of mouth. We then have a strategy in place to promoting further through digital marketing. “We are very much looking to appeal to the first and early adopters,” says Jaffar. “They will be really important to us in terms of spreading the message and we will be looking to leverage that community.”
Hirt says it has deliberately made investments as low and easy as possible for members to join – with initial cask shares starting at just £20. It is also limiting the number of shares any investor can have per cask to six, to make sure it is as open to as many people as possible to join and take part.
“That way we also guard against people seeing this as just an investment. We don’t want to see bottles ending up on eBay. It would not be good for us, or the distillery.”
- You can find out more about how Still In Cask is going to work at its website here.