It wants to collaborate with more spirits producers and ramp up its innovation pipeline following the positive reaction to a limited-edition beer it produced in collaboration with Laphraoig.
The 7.4% abv amber ale was slowly matured in casks that previously housed Laphroaig 10 Year Old single malt. It offered peat spoke and brine combined with the deep, malty flavour of Innis & Gunn, and it sold out rapidly.
Founder Dougal Gunn Sharp says: “We want to create more of our small batch ranges and limited-editions. We’re collaborating with lots more companies in terms of barrel supply.
“Innis & Gunn is known for these innovative cask matured beers. There’s a lot of unusual and interesting casks out there, full of incredible spirits and wines, and that’s what really excites me. When you multiply that by the number of beer styles, it’s really exciting.”
Sharp says that sales at its online store increased by 900% during the lockdown. “Our Islay whisky cask aged beer and our Vanishing Point series were popular,” he adds. “The dynamics behind direct to consumer have changed forever. The pandemic has shone a spotlight on the opportunities that are there. We need to invest in developing its capability, and we can sell these limited-edition beers to fans online.”
Innis & Gunn owns a chain of bars, which had to shut down for several months due to the pandemic. It had also built up a strong on-trade business thanks to the strength of its lager and IPA, but that vanished overnight. “On-trade went to zero,” says Sharp. “It was quite scary to watch.”
He adds that it was tough to furlough bar staff, but they are now returning to work as lockdown measures are eased. “Like everybody else in the sector, we’re having difficulty in recruiting new staff members. That’s definitely an issue for the sector to overcome. We do have staff to operate our sites, but opening new sites and expanding ours will prove a challenge.”
The pandemic also forced Innis & Gunn to shelve plans to build Edinburgh’s first major brewery in 150 years. Sharp has struck a deal with Heriot-Watt University to build a brewery at its research park in the west of the city, and it had initially hoped to open the doors this year.
“We’ve put it on hold. At the moment, we’re still waiting planning permission, although we expect that will be granted in the coming weeks. There have just been delays. We still want to do the project. We don’t think now is the right time to do it. Everyone wants to rebuild their balance sheets as we exit this pandemic.
“We also want to wait for disruptions to supply chains in building materials to end. It has pushed the price of building materials up to what for us would be an unaffordable level, and I’m not going to overinvest in this brewery. I want to build it at the right price, at the right time. Unfortunately, none of those things are in our favour at the moment.”
In the meantime, Innis & Gunn can continue to produce beer at C&C’s Wellpark Brewery in Glasgow, while experimenting with more limited-edition brews in Perth. C&C, which produces Tennent’s lager, also owns distribution companies Matthew Clark and Bibendum, and it is now supplying Innis & Gunn beers in England, so that should drive growth.
Sharp reports that off-trade sales performed very well during the pandemic, as did exports to core markets Sweden and Canada. “The off-trade exploded, as people flooded in. We’ve entered into a new distribution partnership in Italy, and we’re looking to do something in France too, and we’re seeing demand exploding in Spain.”
The core beers have been repackaged in clear glass bottles to show the colour of the liquid, which should also help off-trade performance, and Sharp is optimistic about the future. “I’m very confident that the gains that craft beer has made will not be given back. We continue to drive a dynamic shift among consumers towards better beer.”
