And they're off. Crowdfunder launched With the building warrant coming in this week we are allowed to start construction work converting the old Dornoch fire station, built in 1881, to the Dornoch Distillery.
Thanks for your patience. A campaign went live this morning on a Scottish based crowd funding platform. We had to pull it straight away as the pledge system couldn't do non-uk banks despite the company being aware we had lots of international interest. We have been working hard today (while Phil ran the hotel and I had my stay at home dad day with a teething baby) to put together our own direct model on our website. This has been working since this afternoon and tested by people in the UK and EU. Note that our own system takes payment straight away, as opposed to a pledge based system where payment is taken when a target is achieved.
We are attempting to get up and running without bank loans or equity investment, both of which we have had offers for.
Given the long term nature of a distillery and my inability to predict the future, we have been working so far with our own finances and want to start up and continue to trade without debt or shareholders. Who knows what will happen in the future. If the world economy or the whisky business takes a turn for the worse then we want to be as hard as a tick by not having debt that could become unsustainable or pressure from shareholders. Hence our small scale that can be achieved on a small budget. Fiscally strong roots to grow from and hard to blow over if a storm comes
We are still a bit short from being able to comfortably pull this off. We are still awaiting the sale of a property which is fairly well paid off. The collapse in oil has softened the local housing market so we are not accounting for the sale very soon but it will give us a big bonus in barley and barrels in the future.
With that in mind we decided to raise some additional funds to help complete the distillery and run her for a while. Rewards based crowd funding is in line with our business philosphy as it can be a win, win, win situation. We need additional cash funds to ensure completion. A lot of people have expressed interest in our spirits and casks. We would rather have the financial involvement of hundreds of whisky and spirits enthusiasts who can be rewarded with an obligation that we can prioritise and take care of in our first months of production and we can be satisfied that our obligations are sitting in cask in our warehouse or can be with you not long after we are producing, in the case of our gin.
In order to do this we have to offer balanced fair value taking into account our extremely high cost of production, tiny production capacity and that if our production theory, once enacted, comes close to reality then our whisky will show new generations what whisky can be, without spending a fortune at auction.
Maybe we know whisky and business better than we know how to put together a video. Additional information on our production can be found below in our news section and in our spirits page.
The one thing we got asked about the most when we formally announced this project how to buy a barrel from us. We have privately made available to 15 hogshead barrels to whisky friends who have been asking for years to get a barrel. We are also offering up to 100, 50 litre octaves as part of the crowd funding campaign. We do not intend to offer any more barrels more in the future so this'll probably be the only chance to get them.
In terms of value, our octaves are similar or less in price than other new distilleries in scotland but our production cost is around triple because of low yields and floor malted, organic, heritage varieties of barley that we need to make an old style spirit. The first fill ex-craft organic bourbon barrels and the logistics to get them to us adds a bit more. On our production regime we can only fill 10 octaves a week or 2 hogsheads. Relatively not cheap but not expensive and we believe fair value given significantly higher cost of production and tiny capacity.
The first whisky and casks is what people want from us. What I want from you is is to participate to help us with our gin production. In order to keep making whisky without debt or shareholders we need to start making money from white spirits production. With gin it's not as easy as you might think. The influence of the botanicals is determined by both time and temperature. This means that a recipe on a small experimental still will not upscale exactly and the only way to develop and refine your recipes is to do it one batch at a time, full scale. On top of that we are making the spirit from scratch and want to keep a balance of spirit and botanical influences. Thats why we are tying in the experimental gin batches to most of the tiers. I need my work to be evaluated on a meaningful scale to get feedback. The reward for helping us with this is a 500ml bottling for further evaluation, with a production based on your feedback. If the experimental tasting panel experiment yields meaningful feedback, we would look to continue the program. I'm sure it will.
I should also add that we have decided that our standard bottle size will be 500ml. There has been much debate about this but the eventual reasoning is that the production is so small that 500ml allows us to make it available to more people. Also we have a preference for higher %ABVs but we won't know what will work best for our spirits until later.