Kate Lester CEO and founder of Diamond Logistics and Hilary Whitney, co-founder of artisan drinks brand Sacred Spirits, have a fireside chat as part of IMHX Connect’s 2021 retail agenda.
Kate Lester (KL): So, talk to us about the Sacred Spirit story. What was the idea behind producing this vital product?
Hilary Whitney (HW): I started the company in 2008. My husband worked in finance at that point, and I'm a journalist. Thanks to the crash of 2008, he was out of a job and I was also looking for something new.
Ian was always interested in distillation, he studied science at university. He also had an interest in alcohol, as he collected Bordeaux wines. And he is from London, so he thought it'd be really nice to make a product that was from London. So, we decided on gin.
Now, there's so many gins around, it seems like an obvious choice, but that wasn’t the case in 2009. How we’re different to other gin distillers is that we use vacuum distillation which means it’s distilled at a much lower temperature. This makes it fresh and smooth. This process was also one which we could do in our house. We distilled in our house until 2019, now we have a distillery in Highgate.
KL: And that's the incredible part of your start-up story, your home distillation. Our relationship actually started around September 2020, which was part of your scale-up story really.
At that point you were more orientated towards retail, bars and restaurants.
HW: Retail was very important, as were bars and restaurants. Until the pandemic came, and we saw bars, restaurants and shops close. So the online part of Sacred Spirits became very important.
When we first started selling online in late 2008 it was my job to pack up all the orders and take them to the Post Office. I mean, more or less what Diamond now do for us. But I didn’t do it half as well, or with as much care.
One Christmas you could not get in our hallway because it was filled with packages. I went to the post office so often that when it wasn't busy, they’d ask if I'd like a coffee!
KL: I think that's the point where you have to look at what parts of the business your talents are properly utilised for, and I imagine that was when you first considered the outsourcing of elements of your business?
HW: Yes I couldn't do anything more, I was meant to be doing press and customer service, all kinds of things. Ian and I were just doing everything. You wear many hats!
KL: When your time is finite, you've pretty much got to choose the areas that you're going to be focusing on and outsource the rest. We weren’t your first fulfilment centre were we?
HW: No. We did use another one and we really liked them but unfortunately it was difficult to keep track of what stock we had.
KL: Why is the visibility of stock so important to your business?
HW: You need to be aware of stock levels, especially at Christmas, because you're sending products out constantly and there are different promotions in place. That was a challenge with our former logistics partner.
Also, it’s difficult to send a single parcel of alcohol abroad. We never quite worked out how to do it. If you have a good fulfilment centre, like Diamond, they arrange all that for you. (See Diamond’s guide to alcohol fulfilment here)
KL: So what has our technology done for you? In terms of integration with your online platforms and visibility of stock?
HW: It's been really good. Stock controls are very important, and if a customer calls asking where their parcel is, it’s easy for us to track it and notify them.
Although we’re growing, we’re still quite small, so people expect a personal service on the phone. It's really important that our logistics company can deliver that.
Ultimately you need to be able to choose a partner that is congruent with the values and beliefs of your business.
KL: Hilary, each time I receive goods from Sacred Spirits it’s like Christmas. How important is design and packaging to the customer experience?
HW: It's really, really important. We have printed tissue paper and sustainable boxes, which I think is really important. Diamond has helped us a lot with that.
The packaging we thought about very, very carefully. Yes, it must have a sense of occasion when it arrives. It must feel special, especially if it’s a gift. I no longer have to worry about having enough boxes. Diamond does all that. (See Diamond’s guide to alcohol fulfilment packaging here).
KL: So how has Brexit impacted your business?
HW: So, for example, we don't always need a full container to transport materials. Often we would share a container with another business. But now there is more paperwork, and if the other business gets a piece of that paperwork wrong, then the goods are stuck.
So, we’re being pushed towards using a whole container which is a really expensive call. It also takes a long time to complete the forms.
KL: So is this impacting on the cost of your raw materials as well?
HW: Definitely. We're trying to swallow that cost as much as we can. But I I'm not sure what will happen. It's inevitable that Brexit will impact inflation.
KL: What advice would you give to fellow eCommerce traders in the alcohol sector?
HW: Outsource your logistics if you can. If we hadn’t had Diamond as a partner during the pandemic we wouldn’t have been able to manage the volume. We couldn’t have set up a staffed warehouse ourselves. It was a lifesaver.
KL: I don't know about you, but I don't do my tax return. And I've not got an accountant servicing my car, I've got a mechanic. It’s the same with logistics. Small brands think it’s expensive. But they would be saving money in the long term. You guys probably shouldn’t be spending your time packaging parcels.
See our CEO Kate Lester trial some Sacred Gin cocktails with the Diamond Logistics fulfilment team.
KL: And what advice would you give in regards to Brexit?
HW: Allow more time to build-up stock. We weren't able to do much bottling throughout the pandemic. And so now with Brexit, it's hard to get goods in and out of the country. So you do need to build a lot of time into the schedule if you're thinking about bottling or manufacturing.
Just-in-time is dead. Now we need to actually build-up a surplus in the supply chain.
KL: Finally, let’s talk about the future of retail. (Check out our Future of Retail report here). What’s next for Sacred Spirits?
HW: Well, we're going to continue to pursue partnerships with restaurants, bars and retailers. We’re in Liberty and Selfridges, but we’re not in any major chains. We’re eager for customers to find out that they can buy us online. That's really important.
KL: And what about the direct-to-consumer trend? Is that route more profitable for Sacred Spirits?
HW: It’s interesting in terms of retaining your profitability in quite a price sensitive market. And in traditional retail shops, there isn’t room for all the new brands anyway. There's some big sneaker brands which have stopped stocking shops and going down the direct-to-customer route.
KL: So finally, any new product developments at Sacred Spirits that I need to know about, so I can keep some space for it in my home bar?
HW: We have got something coming out next year ̶ next spring ̶ but I can't say what it is. It’s top secret.
KL: Well, everybody watch this space, to see how Hillary continues to grow Sacred Spirit's success with Diamond logistics, as we support her with her eCommerce logistics. Thanks for listening.
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