“Belfast is a city on the upswing,” Joe Babiec tells me.
He’s paying a visit to the city on a suspiciously sweltering day. But nestled in the airy heart of McConnell’s Distillery, temperatures are more habitable. Joe’s here for a few days paying attention to the city’s newest distillery tour and whiskey producer – housed in the former A-wing of the Crumlin Road Gaol in the north of the city.
And to get here, it’s been a $30m journey over an eight year period.
“For us, this is $30m worth of investment – a lot of that was raised in the US, and then it’s the eight years of cumulative time, put into it as well by literally scores of people,” he says.
Joe is one of the primary investors behind the distillery and newly-launched visitor experience, alongside other funders. He’s an entrepreneur who has also other business ventures and interests in his native US.
“We’re not looking to monetise the investment in the near term, because we’ve just got open here,” he says.
“We’re just getting the business going, so it’ll be several years. But then I think we do want to offer the opportunity for investors to put in their money to get a good return.
“It won’t be tech returns, but it’ll be able to be solid investment return. And then, from the ongoing nature, the business is built to be sustainable, so it wasn’t capitalised with the idea of running a loss in order to maximise brand growth at the expense of sustainability to get case sales up, to do a strategic exit.
“It’s been designed to do a sustainable business so that for our investors, we’re preserving the option to either bring in more capital, or sell portions of the business, or do other things with it, within our own control, not dictated by outside forces.”
McConnell’s Belfast Distillery Company is headed by chief executive, John Kelly. Joe jokes he’s been allowed to hold on to his managing director title, but day-to-day running of the business is very much in John’s hands.
The distillery has just moved to a 24/7 production operation and Joe says that will see it produce 500,000 litres of alcohol a year – amounting to some two million cases of finished whiskey.
That will eventually see it moving away from bought in malt spirit – something fresh distilleries have to do due to the at least three-year time lag in aging spirit to where it can be classed as whiskey – but it, like the majority of other producers, will continue to buy in its grain liquid.
“It allows us to put our own liquid away for longer periods, so that as we look further out, we have a sustainable program of aged single bonds,” he says.
“We have some aged liquid now that we’re able to sell [a 20-year-old], which we’ve saved for the opening of distillery. You can only get it here.
“And then we have some other aged liquid that we’ll be bringing out in the coming years, and that’s pretty appealing. But obviously we want that to ultimately [use] the distillery-produced liquid.
“So in eight to 12 years, those products will start to emerge and beyond. We’ve already been approached about doing bulk sales to other distilleries, which we are looking into.”
Joe says the initial attraction was entering a market which is only on the up. Irish whiskey sales are up considerably across key markets – from the US, to China and India.
“So the cornerstone of all this, what makes it sustainable, is putting a business in play, into a market that’s growing, not over competed, and has a lot of room left to run,” he says. “Right now, the tide is lifting all boats.”
In terms of the markets in which it’s competing, the US remains key, Joe says. “For all Irish whiskey companies, it’s like The Beatles – you have to go to America.
“The presence that we have in the US market is really important, and at this point, we’re now established.”
But he says the “local market is enormously important” for the brand. “It’s really important that we continue to build on the relationships we have here… when people come over, or people are here, they see McConnell’s has a real presence.”
He says it’s increasing its sales presence in the Republic and also seeing growing visitor numbers coming from south of the border.
“We will to look at some other leading European markets… as well as markets like Australia and South Africa that have been had been good for us – we do have some strong international footprint.”
He also has good things to say about Belfast as a whole.
“Belfast is a city on the upswing,” he says. “Looking at all of things which have opened since I’ve been coming here, all the new things that happened, the things that have grown.
“[Before] it wasn’t zero, but it’s now much more vibrant. It’s as good a market to be in because you are part of an economy and social environment that’s getting more and more vibrant, which means we get people who are more entrepreneurial.”
He said the business was welcomed with open arms from the business and hospitality sector, along with support from the local community.
“I think if you come straight forwardly, then people in Belfast are very welcoming and will be very straightforward back with you about what they see and what the opportunities are.”
He said while the complex project got over the line, with so many different government departments playing a role, the challenge in future may be to “take a fresh look” at how similarly ambitious schemes come to fruition.
“We touched so many different parts of government because of the nature of this project,” he said. “Co-ordinating all of those pieces of government to work well together was a challenge which we and the government had to figure out together.
“Belfast has ambitions to attract other complex projects like this,” he says. “The challenge is to take a fresh look [and say] ‘okay, how did this, and maybe some other projects, you know, work from that perspective’.
“Again, are there opportunities to make that work more effectively, both for the government and for us, as the investor. There are opportunities to streamline and just clarify whose roles are what.”
And David Mahon’s plans to potentially turn the adjacent Crumlin Road Courthouse – which has sat vacant for decades – into a hotel, Joe says it would be “terrific”.
“I won’t presume to tell someone else how to run their business… but on what he’s announced, at least initially, in terms of bringing the hotel – it would be terrific,” he said.
“I think it would be another great piece. It would bring more people here. We keep them resident in north Belfast, which is important.”