Isle of Harris Distillery - Case study

Long before it opened on 24 September 2015 (with the biggest ceilidh the island had ever seen), the Isle of Harris Distillery was designed to be more than just another drink producer. Described as a ‘social distillery’, the project - founded and chaired by retired musicologist Anderson Bakewell - aimed to create an enterprise that would not only enhance the local community for years to come but would take the island’s name and ethos around the world.

The first legal distillery on the previously ‘dry’ Harris produces a multi-award-winning gin which reaches customers through an innovative direct-to-consumer online ordering system and has achieved results beyond expectations. All distillation, bottling and order fulfilment takes place at Tarbert on Harris. Meanwhile, casks of its single malt, The Hearach, are maturing in its warehouse by the shores of Loch an Siar near Ardhasaig.

Although being a whisky distillery at its core, early success of the business has been down to the popularity of the Isle of Harris Gin. “We had relatively modest ambitions for the gin when we set out,” explains Simon Erlanger, Managing Director of Isle of Harris Distillers. “But when we produced it and got the consumer feedback we realised we had a big opportunity on our hands. Sales vastly exceeded our expectations and we’re employing a lot more people than expected.”

The number of visitors wanting to see the distillery for themselves has been double what had been forecasted. Initial visitor targets had been in the region of 40k per annum but in the first year they reached 60k and in 2017 visitor numbers were just over 80k.

The direct-to-consumer model and the level of tourist interest has played a large part in the company hitting its longer term target employment rate within two years. Isle of Harris Distillers currently employs around 30 permanent members of staff and has played an important role in reducing the Harris community’s reliance on companies based elsewhere.

Simon believes that by connecting consumers and customers to the ethos of the project and the island, wherever they are in the world, is having a catalytic effect – encouraging more people to come and visit Harris and the Hebrides in general, and therefore, driving more indirect employment.

“We’re part of the story of the island now,” he says “When people talk about Harris they talk about Tweed, the beautiful landscape and they’re now also talking about the gin and the distillery experience.”

Isle of Harris Distillers raised £11m to build and fund the distillery from a number of public and private investors. The company successfully applied to the Scottish Government through its Food Processing, Marketing and Co-operation scheme and in January 2013 was awarded a £1.9m grant towards the distillery, as well as securing an investment of £1.5m from the Scottish Investment Bank.

To date, Isle of Harris Distillers has received grant approvals from HIE totalling over £1.25m assisting with the construction of the distillery, and off-site warehouse, business development costs and attendance at trade fairs. The company also leases the land it occupies from HIE.

Gordon Macdonald, HIE Account Manager for Isle of Harris Distillers, has worked on the project since 2011 and feels that the distillery has transformed the economy of Harris, creating a world-class product and an internationally significant destination in the heart of Tarbert. “There is absolutely no doubt about the importance of the distillery to the economy of Harris and the part this has played in reducing the community’s reliance on companies based elsewhere for employment opportunities,” he says.

For Simon, the assistance from HIE has been more than just money to set up the distillery. “It’s a very close and active working relationship,” he says, describing the support he has had from Gordon Macdonald and Rachel Mackenzie (HIE Area Manager for the Outer Hebrides).

Simon concludes: “HIE provide us with a lot of local knowledge and expertise. They understand how the Islands work, and that’s been invaluable.”

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