Why whisky firm's new chief executive is in high spirits

At today’s prices the amber liquor is worth £100m as the world goes mad for a whisky increasingly supplied by a Cumbrian distillery.

The decade-old story of The Lakes Distillery is the stuff of movies as two men – Paul Currie and Nigel Mills – fulfilled an ambition by converting a model farm into a model business that now produces the luxury drink and helps to attract millions of visitors to the county.

After attracting the former lead whisky maker at The Macallan, Sarah Burgess, to the distillery near Bassenthwaite lake, The Lakes Distillery also has a new chief executive, James Pennefather, who has returned to his spiritual home.

“My great great grandfather and my great grandfather were from Broughton-in-Furness and my grandmother met my grandfather when his ship was being built in Barrow,” says James. “The family has always kept a home here, now in the Duddon Valley. While we spent time travelling the world, the place we always had for stability was the Lakes.”

James has followed suit. The son of a Royal Marine, he was educated at a boarding school in the South before studying classics at Oxford University.

For the past 24 years he has worked globally in premium spirits, initially at Diageo, where he held strategy, innovation, sales and marketing roles including a period as UK brand director for Diageo’s whisky portfolio that included Talisker.

“When Talisker won the Best Whisky in the World accolade in 2007 I saw the impact, with annual sales increasing from 90,000 cases to 400,000,” he says. “When I heard The Lakes Distillery had won that same award it was a real indicator of quality that can lead to great things in the future.”

James also set up and ran Diageo’s super-premium spirits division in East Africa where an emerging middle class were keen to learn and show off their knowledge of fine single malt whisky.

He then moved for five years to lead William Grant & Sons in India, the world’s biggest market for whisky, where the opportunities for expansion seemed boundless, with Scotch whisky initially having only a two per cent share of the total whisky market. The company’s sales have since grown 20-fold.

“Just before Covid I moved back to the UK to run operations in Africa, the Middle East and India which meant I had 42 per cent of the world’s population in my region,” he says.

“We have seen a huge growth of interest in premium spirits, such as whisky, and when this role came up in the Lakes it was the perfect means to come back to the place I love,” he says. “I’m now doing the job I’ve spent the past 20-plus years preparing for.”

His timing could not have been better. Last year The Lakes Distillery passed a major landmark, producing its millionth litre of ‘pure alcohol’ in its Still House. While the Still House is capable of doubling production James’ team is now looking for more warehousing for the casks.

“In the past two years we have doubled spirit making and we are going to double it again in the next five,” he says. “Last year, from July to December, we saw 31 per cent net sales growth and single malt whisky sales have grown by 85 per cent year on year, so we are in a very rapid expansion phase. Bringing in Sarah to be the lead whisky maker is very exciting and has been transformative.”

Her first release – Decadence, for the luxurious Rosewood Hotel in London – sold out in 90 minutes, while the 1,002-bottle Cascade went in just days with its £180 a bottle price tag.

Sarah has also been working on a permanent range, due to be released this year, after finding a consistency from the casks which comes through in the flavour time after time. The various casks can add myriad flavours depending on what they used to contain. These range from toffee, caramel and nutty to citrus, vanilla and coconut.

“Our philosophy is to create layers of flavour with an indulgent finish,” says James. "I first visited The Lakes Distillery on a tour with my family and was extremely impressed. I was blown away by the ambition of the company, the vision and the quality of the whisky.

“What shone through was a passion to create a remarkably complex and multi-layered liquid, and an unwavering ambition to reach way beyond its borders. Our ambition now is to win a one per cent share of the $10bn global, luxury dark spirits market by 2030. We have already achieved four per cent in the UK, but with the UK market itself only representing two per cent of the global market the opportunity is for international expansion.

“This is certainly an exciting prospect for a small distillery in a Victorian model farm in the Lakes. I really believe we can do this and the 2022 world’s best single malt award fills me with confidence.”

The distillery is targeting the world’s top 20 markets including Taiwan, USA, South Korea, Nigeria, Canada, France, Dubai and Australia, working with sales forces, distributors and wholesalers. They are also starting conversations with China, Vietnam, India, Turkey and Monaco, taking care to build the brand “in the right way”. The label is already well established in Japan, the Netherlands, Belgium and Italy with repeat business that is growing fast.

“This is a very hands-on company and I have been given the responsibility of looking after a number of distributors in Nigeria, Turkey, Monaco and I’m talking to contacts in India,” explains James.

“We have also set ourselves up as thought leaders in sherry wood maturation,” he adds. “We use eight different sherry wines to season our oak casks. The temperate climate here, which is similar to the west coast of Scotland, with a lot of rainfall and lower variances of temperature extremes throughout the year, is perfect for making whisky. We have a very simple way to explain to the trade and consumers how this all impacts the flavour of our whisky."

The company expects to make almost £8m revenue this year and hopes this will rise to £25m in the next five, which is also expected to boost staff numbers from the existing 70.

“The hard work was done before I arrived and the quality of the liquid and the aesthetics are both amazing,” he says.

“All the country’s whisky makers work well together as it’s in our interests to build a reputation for producing premium products. We are also a founding member of the English Whisky Guild which is trying to establish global representation for quality which will benefit us all.”

Nigel remains a non-executive director, coach and mentor, and Paul is still involved, recently showcasing the distillery’s whisky at the Houses of Parliament.

Nigel says: “I have been thinking about succession for some time and believe that in a little over ten years we have built a modern and progressive whisky distillery with the building blocks in place for a very exciting new era of growth and innovation.

“I’m immensely proud of what we have achieved but also know that James’ experience in domestic and international markets is exactly what the business needs at this stage of our journey. I look forward to seeing The Lakes Distillery develop and scale under his leadership.”

James will divide his time between the Lakes, Newcastle, London and travelling abroad. “But I think of the Lakes as my base and always feel happiest here,” he says. “I love bird watching and am involved in nature conservation projects, such as one to plant 190,000 trees in the Duddon Valley. I also love walking and foraging for mushrooms. I’m really enjoying experiencing the seasons much more than I used to when I only visited for holidays.”

He makes no secret of his pride in the business. “I think everyone should feel proud that The Lakes Distillery is based here making the ‘best single malt in the world’ for consumers around the globe.”