Welsh whisky company Penderyn is aiming to double its travel retail business over the next two years and its new £15 million distillery and visitor centre in Swansea, which opens today, is key to powering growth.
TRBusiness has been on location for the launch celebrations for the new facility, which is located at the city’s historic Hafod Morfa Copperworks.
The site’s rich heritage makes it an especially fitting address for the company’s third distillery (around 1850, the Wales city produced over half of the world’s total output of smelted copper, giving rise to Swansea becoming known as ‘Copperopolis’), and the link between copper and whisky making are referenced throughout the venue.
The distillery, which is expected be operational mid-August, is set to unlock significant growth for the business, by increasing the number of bottles Penderyn is able to produce each year by up to 130%, from around one million today to 2.2-2.3 million.
The Swansea site is capable of outputting 400,000 litres (of pure alcohol per year), adding to the 400,000 litres per year that’s currently being achieved at the original distillery in Brecon Beacons. A further 100,000 litres is produced at the company’s smaller Llandudno distillery, which opened in May 2021.
“At the moment we are selling roughly one million bottles a year, so we are pretty much selling nearly all we can make,” Simon Roffe, Director, Business Development, Penderyn Distillery told TRBusiness.
“The bulk of that (70%) is sold in the UK and 30% goes into international markets, including travel retail. Our travel retail business in 2022 is double what it was in 2019, so we have more than recovered from the couple of years of challenges.
“This has been due to working harder and better in the UK with our key partner Dufry, and expanding distribution to key strategic travel retailers around the world. We try to follow where we see single malt whisky growing and aim to work with travel retailers in those locations.
“Of course, we haven’t got enough juice to fill everyone’s needs, given the nature of the travel retail margin model we wouldn’t want to sell everything to travel retail. So we are very clear about why we do it – it’s a window for the brands.”
Penderyn has won a number of new listings of late, including with James Richardson (JR) in Tel Aviv and with China Duty Free, as well as in Cyprus Duty Free with ARIME.
“We have a few more targets to try and tick off the list,” said Roffe.
The company’s share of sales from the channel is currently around 5% and Roffe revealed that “if we get that near enough to 10%, that’s where we need to go.”
“We aim to double our travel retail business in the next two years and, at the same time, drive up the value of what we are selling by bringing in special editions, making sure we have more appropriate packaging for different markets, and bringing in litre products, which will happen by the time we get to Cannes.”
The TREX Penderyn Faraday, a 46% whisky presented in a bespoke Gold Range 70cl bottle, will be the first product in the portfolio to receive the one-litre treatment by October.
Additionally, we can expect to see the Dragon Range reveal a new carton design format. This is being launched in international markets now, including in travel retail.
Penderyn has a solid travel retail presence with Dufry across the UK, spearheaded by the channel knowledge of Roffe, who joined the company in May 2020.
VIDEO INTERVIEW: Simon Roffe, Penderyn Distillery in Cannes 2022
“There’s a new Icons of Wales edition that will appear in September – a collaboration between Penderyn and the pioneers who went from Wales to Patagonia, South America,” said Roffe. “There is a distillery in Patagonia, so we will be producing a whisky that is jointly made between us and the Patagonian distillery which is called La Alazana.
“That will be a blended malt whisky, so is a little bit of a departure for us, but it will be a limited edition of 15,000 bottles.”
Whether travel retail buyers will want to list it will be seen following Cannes, said Roffe.
“What people like about Penderyn is that the Icons of Wales are all different with funky finishes – perhaps something they wouldn’t have had before, so it has become a collector’s collection.
“One of the challenges I have with retailers, however, is finding the space for ‘world whisky’,” he continued. “It’s not a tag we always want to play with, but it’s an important one as whisky is now being made in around 40 countries around the world beyond Scotland, Ireland and the US – so where do retailers put them on their shelves?
“If we end up being merchandised on a Speyside shelf, it sends the wrong message. So clearly education and improving retailer’s perception of the products and how they merchandise it is one of the key category initiatives we have to drive on.”
Dedicated, exclusive casks are an option for Penderyn’s dedicated partners in the channel, which can carry bespoke labelling highlighting the name of the retailer it has been exclusively chosen and bottled for.
“At the moment, we are hopefully having one limited edition for Dufry, as a test in Terminal 3 in London, as well as Bristol and Cardiff. As there will only be 220 bottles, once it’s gone it’s gone.”
Above: The Morriston Orpheus Choir perform for guests at the opening of Penderyn’s new £15 million distillery and visitor centre in Swansea.
The Swansea distillery has been around eight years in the making and is the result of a collaborative effort between Penderyn Distillery, Swansea Council, Swansea University, and several funding sources.
The National Lottery Heritage Fund, Swansea Council, Welsh Government Economy and Transport funding, and Penderyn collectively contributed £15 million to restore and transform the former copperworks into a modern distillery and visitor attraction.
“Opening our new facility in Swansea is a major step forward for Penderyn as a business and a brand,” said Penderyn Distillery’s Chief Executive Officer, Stephen Davies.
“We are adding a significant amount of additional production capacity to allow the business to continue its trajectory of continued high growth and also beautiful new visitor facilities that will ensure that people can experience our brand story as well as being able to discover and enjoy world class single malts from Wales.”
Penderyn’s Chief Operating Officer, Neil Quigley, added: “We’re delighted to be opening our third distillery in Wales, on one of Swansea’s greatest heritage sites. It’s exciting to see the site coming back to life once again, and we’re looking forward to welcoming visitors as we continue our whisky-making tradition.”