Organic Growth Masterclass: The Artisanal Spirits Company, backed by Inverleith
Upgrading the user experience, expanding the product range and pursuing international growth have significantly driven organic growth at the The Artisanal Spirits Company, says Paul Skipworth, Managing Partner at private equity firm Inverleith.
The Artisanal Spirits Company is a Scottish-based business that owns and operates The Scotch Malt Whisky Society (SMWS) and other brands. When Inverleith invested in the business in early 2018 the majority of sales were UK-based, with online sales making up about half of the company.
USER EXPERIENCE UPGRADE
Paul Skipworth, Inverleith Managing Partner, says: “SMWS is a membership-based proposition. Membership enables access to the world’s largest collection of single malt, single cask whiskies, entry to bespoke SMWS values in Edinburgh, London and Glasgow and invites to events to partner bars in the likes of the USA, China and Japan.
The membership offering was a core area that we wanted to enrich. We invested significantly into building out this area to provide an exciting and engaging membership model and create a ‘club’ that was highly desirable to be a part of. We worked on every element of the mix, from improving online user experience, revamping our membership magazine and building out events around whisky education and tastings. We were probably ahead of the zeitgeist on this front, given how much subscription/ membership models and the online experience sector boomed during the Covid-19 pandemic. We were already rich in terms of providing attractive content and customer engagement.
During the lockdowns, online events could happen in multiple countries around the world on the same night. We were able to be really creative during lockdown and keep our membership engaged - hosting education, tasting and music nights online. Members could order tasting kits through the website to receive at home, which included four or five small bottles of whisky and then they were able to log in and sample those single malts, being tutored through the testing with information and advice from SMWS experts live online. Since those lockdowns have been lifted, we’ve been able to translate those nights into physical events in our venues again.”
PRODUCT RANGE EXPANSION
Paul says: “The primary reason for becoming a Society member is the product. Members want access to intriguing and unique whisky and other spirit stock. We therefore wanted to heavily invest in buying more stock in order to give members a greater choice of product and introduce them to a wider array of spirits, building on the single malt single cask scotch whiskies that we are famous for and it at the heart of our heritage, whilst also introducing products from new and different distilleries, not just from different regions of Scotland, but also from different parts of the world.”
Paul says: “Another significant area of growth was building the business, which had traditionally been a UK focused company, into an international business. We really set out to grow the US market and the market in China and Japan.
To support, we brought in an experienced international commercial director from our networks and opened subsidiaries in both China and Japan with teams ‘on the ground’ in those countries to run those subsidiaries. We built a team in Shanghai, a team in Tokyo and set up a representative office in New York, all with people we knew and had worked with previously from the industry. Our ability to set up these teams with trusted people from our networks helped tremendously.”