Once a pioneering craft farmhouse spirits producer whose vodka was voted the world’s best, Chase Distillery is no more.
Buried deep in full-year accounts for the Diageo-owned company published last month was the reveal that a “brand redesign programme” for Chase had resulted in the “transfer of all production activities to Diageo Scotland Limited”.
When pressed, Diageo said the move was necessary in order to “future proof” the Chase brand amid “substantial change in the vodka and gin categories”.
And while the booze giant is right to say these tipples are far from booming right now – off-trade volumes of gin and vodka are down 12.1% and 4.7% respectively [NIQ 52 we 10 August 2024] – by uprooting Chase from its rural home in Herefordshire, it risks losing much of what made the brand special.
Why did Diageo buy Chase Distillery?
When Diageo acquired Chase Distillery in 2021, the brand’s agricultural and sustainable credentials were mooted as a key attraction.
Chase’s spirits portfolio was “distilled from scratch using British-grown potatoes, apples and all-natural botanicals on the Chase Farm in Herefordshire”, it said at the time.
And that wasn’t all. Steam energy used to run the distillery was “produced on site from a biomass boiler powered by prunings from the apple orchard, with potato waste used as fertiliser to feed the farm’s cattle”, Diageo boasted, further reinforcing its point of difference.
Now that production of Chase’s gins and vodkas is being moved to Cameronbridge Distillery in Fife, why would shoppers chose them over cheaper products like Gordon’s and Tanqueray, which are also produced at the same site?
In forgoing the brand’s USP in favour of efficiency gains, Diageo risks taking its customers for fools, and undermining its own premiumisation mission.
Is the consolidation necessary?
Apologists for this kind of consolidation – frequently seen after larger suppliers swallow up craft competitors chipping away at their market share – will say it is part and parcel of scaling a brand towards a sustainable future.
Diageo’s decision to consolidate Johnnie Walker production in the late 2000s was widely decried at the time, but the whisky is now one of the most valuable brands in Britain – Kantar research from 2023 estimated its worth at $10.9bn (£8.8bn).
But Chase was ticking along perfectly well until Diageo came along, with revenues a healthy £11.7m in the last full year pre-acquisition. They have since more than halved to £5.3m.
Some of that decline can certainly be attributed to changes in the flavour of UK spirits consumption, but it’s hard to make the case that Chase has benefited from becoming a part of Diageo’s roster.
What does Chase Distillery’s future hold?
Chase’s owner insists it has acted with the brand’s best interests in mind, however.
“To future proof Chase, we took the decision to renovate the liquid, revitalise the packaging, and transform the brand supply to drive its efficiency,” a spokeswoman for Diageo told The Grocer. “These developments are designed to create future growth opportunities for the brand.”
Those opportunities will no longer reside in Herefordshire, however. And with 13 of the 17 staff working at Chase having exited, the brand’s recipes set to be “renovated” and packaging “revitalised” it could be argued that little remains of what Diageo was so keen to invest in.
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