Successful businesses have great teams
Nigel Mills, chairman of The Lakes Distillery and The Entrepreneurs’ Forum talks to Ian Gilthorpe, senior partner of Square One Law, about his career and ambitious new venture, The Lakes Distillery in Cumbria.
In April 2012, Nigel Mills launched his latest venture, The Lakes Distillery, and in that short space of time he has seen it grow to a turnover of nearly £3m, create award winning brands in whisky, gin and vodka, employ 75 people, welcome 25,000 visitors, have an official royal opening and has recently been awarded as one of the 50 iconic visitor attractions in Cumbria. An amazing achievement in such a short space of time.
Nigel’s previous business was very different from The Lakes Distillery. He built up The Mills Group, which consisted of 77 news agency shops and then sold it to Tesco in 2011. He had built the business up from 1986 with his father acting as his mentor, but this was not a business that had been handed down to each generation as Nigel explains:
“My grandfather, set up a news agency after the war and built up 12 shops before he fell ill. My father who had served his National Service in the Royal Air Force in Canada wanted to become a geologist, however as the oldest son had to help run the business in my grandfather’s absence. My father continued to build and run the business, and to help expansion, he set up a joint venture with Elliott Ward and North British properties.
“In 1972, my grandfather died and the business now comprised of 16 shops in the joint venture, Mills North British Ltd and 16 wholly owned by the family, FW Mills Ltd, 32 in total.
“As is the problem with many family businesses, the founder didn’t want to give away any shares. When my grandfather died the death duties were £4-5 million in today’s terms.
“There was no will, no transfer of ownership and sadly he died intestate, when capital transfer tax was 80% and consequently the business had to be sold.
“So all the hard work that had been put in to building up the business had gone, because he hadn’t planned ahead. As cChairman of The Entrepreneurs’ Forum, I now regularly say to people who are setting up their own businesses that they need to make sure they get personal planning advice and make a will.”
Both businesses were sold to Thompson regional newspapers (now Trinity Mirror), meaning Nigel’s father was out of work at 36 with a young family and bills to pay.
Nigel continues: “My father was the Managing Director of the business until 1982, growing the store numbers to 80 plus when he left.”
Nigel always wanted to be a golf pro, but his father persuaded him to go to university and become a chartered accountant. He went to Lancaster University where he studied Economics with Accountancy and Law and when he graduated he joined Price Waterhouse and worked in the North East from 1980 – ‘84 and then London from ’84-’86.
Nigel said: “During my time as an accountant I was being mentored by, Geoffrey Lurie, a very good friend of my father and he advised me to buy several properties.
“You get nowhere in this world without good mentors, and you learn so much from someone you admire and respect and who will take the time to talk things through with you.”
Nigel’s father went into semi-retirement in 1982 and in 1986 he rang him to say there was a business opportunity to buy eight news agency shops and his father was prepared to act as his mentor which was very important, because from day one he got credit from suppliers because of his dad’s reputation.
From the original eight shops, Nigel went on to build up a substantial chain of shops that stretched from the North East, Cumbria, South Wales, Yorkshire and down the A1 to Leicestershire. Then in March 2011, after 25 years, he sold the Mills Group to One-Stop, Tesco and Ian Gilthorpe was his commercial lawyer who worked with him on the sale.
Nigel explains: “This was the first time I’d sold a big business so the process was very new to me. It actually took 13 months to complete and over that time Ian kept my sanity. It was a complicated process; sometimes the deal was on and then it was off so you went through a complete emotional roller coaster. However, Ian and his team’s loyalty and commitment to us and the cause, went above and beyond anything I had ever had from a professional adviser before.”
Ian said: “A stand out feature of this project was the way in which Nigel and his FD, Martin Stokoe, and the Mills Group management team retained such a sharp focus on ensuring the ongoing performance of the business, during the protracted negotiations, and this proved critical in avoiding a price chip and maintaining the value.”
After the sale of the business, Nigel was looking for an investment opportunity and an article in a newsletter from Architects Plus, of Carlisle caught his attention. He read that Paul Currie had planning permission to build a distillery near Cockermouth, but the project had run out of funds.
Nigel knew the Lake District well as he had bought The Trout Hotel in Cockermouth in 1989 and two other Cumbrian hotels with two other investors. Immediately he could also see the potential for a tourism link with his hotel business and rang Paul Currie. They agreed to meet up to discuss the project.
Paul’s experience came from setting up and running an independent distillery in 1995 on the Isle of Arran with his father, Harold Currie. Harold had been managing director of Chivas Brothers so fully understood the whisky distillery business and was an excellent mentor to Paul.
However, Paul decided to leave the distillery business in 2002 to become a drink industry consultant, but said that his dad had the idea of a Lakes Distillery even before they started Arran, so when he identified the ideal site near Cockermouth he could see the dream starting to take shape.
Nigel and Paul drew up a new business plan as a prelude to launching a concerted fund-raising drive aimed at private investors, public bodies and institutional investors.
Nigel said,” I wanted someone respected in the industry to read the plan and was introduced to Dr Alan Rutherford who is a leading figure in the Scotch Whisky industry and when he gave us the feedback that it was one of the best he had seen for a new distillery, it gave me the confidence to go ahead with the project. Having persuaded Alan to become a board member, we then set about the process of fundraising, giving lots of presentations and even flying potential investors over the site in a helicopter.
“We all felt there was a real opportunity as there is going to be change in whisky production that will challenge the dominance of Scotland, similar to how Australia and other ‘New World’ producers challenged the European wine industry years ago and now have a sizable market share.
“The principles of whisky distillation have changed little over the years, but today the difference is the use of technology and more sophisticated equipment. However, what you do need is years of experience and knowledge so Alan Rutherford introduced us to Chris Anderson, a Master Distiller with 43 years previous experience in many of Scotland’s leading distilleries.
“Chris said what persuaded him to come out of retirement was the team of people and their values. The distillery’s values come from the quatrefoil motif that recurred in the old buildings. The quatrefoil is an ancient Celtic Christian symbol which denotes faith, hope, luck and love and he said these were very evident in everything the company does, especially faith.
“Most industries make something today and you sell it tomorrow, but the world of whisky is not like that. Chris could see that the people running the company understood this and could see a great future for the distillery.
“Chris’s role is also to be a mentor to John Drake, a Cumbrian-born and bred man who had been an IT expert but was so passionate about whisky that he contacted Paul saying he wanted to be involved. That meant he had to go back to studying and he enrolled on the Brewing and Distilling, post grad diploma at Edinburgh’s Heriot-Watt University.
“John is now the Distillery manager and with Chris’s help has been able to spend time at some of Scotland’s most prestigious distilleries. John appreciates how lucky he is to have Chris as a mentor and we all understand it is the people involved that can make the difference between a routine whisky and one that shines.”
Nigel continues, “Knowing that the malt whisky is a 7-10 year journey, so a longer term investment, we started to look at what we could produce from day one, using all this expertise that we had. To attract investors we needed to demonstrate our expertise not only in blending but also in brand development and production. That was when we came up with the idea of creating the first ever British Isles blended whisky (one that has whiskies from Scotland, Ireland, Wales and England) which we have called ”The One”. Newcastle design agency, Hedley McEwan helped us develop a great contemporary brand and it was launched in September 2013 at the Taste Cumbria Food Festival and we sold £6,000 in 2 days from a little wooden bench.
“We also realised we could make a Cumbrian Gin, made with local botanicals & distilled in our Artisan Still and a Cumbrian Vodka produced in the traditional way. Both lovingly crafted in our small handmade copper pot stills, which maintains their delicate aromatics and flavours.
“This was the catalyst for bringing the project to life because people could see something tangible was being produced.
“The next stage was to make the distillery a visitor attraction and alongside our tasting room and tours, we needed a first class bistro, so I contacted my good friend, Terry Laybourne. Terry responded very positively to the vision we had for the distillery and like Paul and I, could see we were creating something very special and wanted our brands to be “world class”.
A highlight came in July 2015 when, Her Royal Highness, The Princess Royal officially opened The Lakes Distillery as the newest visitor attraction in Cumbria and England’s premier whisky distillery.
Nigel said,” It was a special day and we are very proud of our team and our facilities which are already producing award-winning spirits. All of the hard work has been worth it, and our amazing team have made that happen. We have a great depth of industry expertise but I also have people who were with me at Mills Group who have invested time and trained themselves to understand this new market sector and care passionately about the business. I am very proud of what we have collectively achieved and it is clear to me when I look at all my businesses, I’ve always had a great team around me.
“Though the Distillery is new, we have worked hard to create a feeling of heritage, both of the Lake District and the art of whisky making itself. However, our vision is to look forwards, not back.
“We have absorbed every drop of knowledge that is of value, yet applied the experience and flair of our uniquely talented team to break new ground, to push the boundaries and breathe fresh life into this ancient craft.”