In June 2024, Nyetimber, an English wine producer, completed its £71 million (US$89m) acquisition of The Lakes Distillery, a single malt whisky maker based in England’s Lake District. The deal marks a significant step in Nyetimber’s expansion beyond sparkling wine into the spirits market. CEO and owner Eric Heerema shared insights into the company’s plans for integrating The Lakes Distillery and leveraging synergies within the portfolio.
Strategic Expansion into Spirits
Heerema explained that Nyetimber had been considering producing its own spirits, particularly whisky, due to the shared artisanal approach between whisky and sparkling wine production. “Whisky stood out because of its craftsmanship, which aligns with the way we make sparkling wine,” he said. This interest culminated in an accidental connection with The Lakes Distillery in late 2022, which was seeking investment. After over a year of negotiations, the acquisition was finalized.
Heerema emphasized that bringing an English spirit into the Nyetimber portfolio aligns with the company’s vision of establishing an English luxury drinks group. While The Lakes Distillery had faced financial struggles, including a reported loss of £1.3 million (US$1.6m) in EBITDA for the year ending June 2023, Heerema remained undeterred. He pointed out that Nyetimber itself had faced similar challenges but was on the verge of profitability. “We have a long-term financial outlook, and we’re well-prepared for the long road ahead,” he added.
Long-Term Strategy for Profitability
Heerema’s strategy for The Lakes involves increasing production and investing heavily in the brand. While profitability is expected “years down the line,” he believes that the right financial commitment and long-term vision will guide the distillery to success more swiftly than Nyetimber’s 19-year journey.
A key factor in The Lakes’ potential growth is the upcoming geographical indication (GI) for English whisky, which Heerema views as crucial for elevating the industry’s reputation and ensuring quality standards. As a founding member of the English Whisky Guild (EWG), Nyetimber is actively involved in shaping the future of English whisky production. Despite opposition to the GI’s proposed regulations, Heerema confirmed that The Lakes complies fully with Scotch whisky regulations, dispelling any concerns about potential production conflicts.
Navigating Tariffs and Trade Uncertainty
The ongoing trade war and the possibility of punitive tariffs on British spirits present a looming challenge for The Lakes and Nyetimber. However, Heerema expressed cautious optimism. “These tariffs could be difficult, but they also present opportunities,” he said, referencing potential discussions with Canadian distributors looking to introduce English whiskies to the Canadian market. While the situation remains uncertain, Heerema remains focused on navigating these complexities while advocating for stability in international trade relations.
Exploring Synergies Between Whisky and Wine
Heerema sees potential synergies between The Lakes’ whisky and Nyetimber’s sparkling wine, particularly in marketing and sales. Both brands share a luxury positioning, which could open doors to cross-promotion, joint sales activations, and even cocktail collaborations. Despite the differences between whisky and wine drinkers, Heerema believes there is room for overlap, especially through targeted marketing strategies. He also alluded to potential future collaborations between the two products, such as aging whisky in English wine barrels, although this would be a small-scale experiment.
Sustainability and Environmental Commitment
Beyond the operational growth of The Lakes, Heerema is focused on improving sustainability and reducing the environmental impact of the distillery. Nyetimber is already working on projects to enhance waste management at the distillery and introduce environmentally friendly production processes. As part of these efforts, the company is creating reed beds to naturally filter waste, although the strict environmental regulations of the national park where the distillery is located pose challenges.
Heerema’s focus on sustainability reflects a broader commitment to maintaining the integrity of the Lake District’s natural environment while ensuring that The Lakes Distillery operates efficiently and responsibly.
Looking Ahead
As Nyetimber Group embarks on this new chapter with The Lakes, Heerema remains optimistic about the future. The acquisition marks a strategic move towards building a diversified portfolio of luxury English drinks, with The Lakes poised to benefit from both the expertise of Nyetimber’s leadership and the growing demand for English whisky. While challenges remain, Heerema’s long-term vision and commitment to quality will likely play a pivotal role in shaping the future of The Lakes Distillery.
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