Introduction
So let’s put our cards on the table right at the beginning. This is intended to grab the attention of whisky lovers all over the world and hopefully encourage them to be a part of our project. It’s a fairly chunky read but our opinion is, if you don’t have the interest to stick around and read what we have to say, you were probably never seriously interested anyway. Right?
Our Mission
Primarily it’s about making better whisky and more interesting whisky for whisky lovers and making that whisky more affordable. But within the context of being a business and operating under normal, logical approaches to business. Business, profitability, creating a return on investment for shareholders, and offering world-class products that are great value for consumers really is possible. ROI, quality, and value can all exist in the same place.
The “Investment Regulations Caveat”
As a startup that has been bootstrapped since day one and essentially funded by the drinking money of what is now over 200 people, we’re not about to start taking gambles with laws, rules, and regulations around investment offerings and opportunities. We think we need to be aware of certain things we believe we can say, and probably can’t say.
Ironically there seem to be stacks of people flaunting the rules that we think exist and do regular shoutouts to fundraise publicly, and even right here on LinkedIn. But we’re going to err on the side of caution and simply tell you all about our project and encourage you to get in touch if you’re interested to learn more about what we’re doing and find out ways that you could perhaps get involved.
For The Busy Folks
It’s 2023, and everyone is either too busy with their life or has the attention span of a root vegetable, hence the popularity of those TikTok-type things. So if you want to just jump right in and reach out to us, you can CLICK HERE. But please do us the favor of at least skimming the headings here to make sure your first questions aren’t already covered. Remember, bootstrapped, every penny counts, we don’t have armies of people sitting around waiting for your questions because they are all busy working day and night to make this project the success that we know it can be.
Let’s run with the good old-fashioned (one of our favorite whisky cocktails for the record) who, what, why, where, and when.
Who
Who are we? We’re Nine Rivers Distillery. We’re made up of just over two hundred whisky lovers from (literally) the four corners of the globe.
While that might initially sound like a rag-tag band of misfits (and it kinda is) there is a serious board of directors that lead this project.
Stephen Davies – our Chairperson who has been involved as a mentor since our project was just a monthly debate at whisky nights in Shenzhen.
Jeff Olyniec – the second investor and our deputy Chairperson, who helped shape our idea into something that resembled a real business, starting on the back of napkins in a McDonald’s in the ‘burbs of Shenzhen.
Joy Tan – a passionate whisky lover and a founder investor since the very beginning of the project.
Daniel Liang – a founder of the project and a mentor to many of the people working on the numerous work streams required to deliver our project.
Jan Lægaard Broni – our resident Viking (doesn’t every startup distillery need a Viking?) and another leader and mentor to many of our work streams.
Jay Robertson – our CEO who has moonlighted on our project as an excavator operator, loader operator, truck driver, steel fabricator, welder, plumber, bricklayer, and drone pilot – all within our project.
What
What are we? We’re a startup whisky distillery that aims to be something of a disruptive force in the crafting of world-class whisky and making it affordable for all. Consider us the caped crusader and the likes of Diageo and Pernod Ricard being Lex Luthor (Diageo) and The Silver Banshee (Pernod Ricard) – the DC Comics Nerds will get the references there.
However, we’re not your typical startup.
While not taking anything away from a typical startup distillery (sincerely, we admire them all because we know what it takes to turn an idea into a distillery – we’re living it) we’re bigger than most. In fact, we’re building towards a 7.5 million LPA (LPA = liters of pure alcohol – essentially 1000ml of 100% alcohol by volume – an industry standard for measuring capacity) distillery. An average startup distillery could be 100,000 to 200,000 LPA and even a big startup would almost never be more than 500,000 LPA.
If you prefer bottle numbers, 7.5 million LPA is likely to be about 17 million bottles (depending on bottling strength that might fluctuate a little) a year, or around 50,000 casks a year.
Why
Why – in the context of why do we exist? Why did we start this project? Well, that’s an easy one to answer. We exist because of two drivers. Firstly, because a bunch of whisky lovers over here in China, got into the habit of debating three things:
- Why does decent whisky cost so much money?
- Why does whisky crafted 20 or 30 years ago, taste noticeably different (and almost always better) than their modern counterparts from the same distillery?
- How could decent whisky be crafted better and still be affordable?
We came to the same conclusion pretty much every time. Big corporations pretty much control whisky production all over the world, and being driven by shareholders and the need to shell out dividends, everything is driven by profit.
Why in the context of why did we go so big? Surely by building something that will eventually have 7.5 million LPA of production, then we become the very thing we are trying to beat? Nope. We simply need economies of scale.
There are literally hundreds of startups across the world in the last decade or so. Some of them are creating some really amazing products. Far too many to list. But it really doesn’t matter how amazing a product is, when you’re mashing, fermenting, and distilling at a small scale, your costs of production are so high, that you don’t have enormous amounts of money to spend on marketing and advertising that the big players have.
It’s a never-ending circle that almost always constrains small startups into only ever being small startups – unless of course, they cash in to one of the big multinationals, get a big injection of moola to brand build and save money using the distribution network of the big multinational……and of course then they become part of the monster.
Larger scale production = lower production costs per bottle = we can pass on savings to end consumers with better pricing, and we can make more money to help us brand build. But let’s come back to brand building.
Where
Where are we? We’re in China. To be specific, we’re located in Beixi Village, in Da Chi Town, Longyan City, Fujian Province, China. Probably not somewhere that anyone outside of China would have heard of, but Longyan is a city of 1.4 million people, it has connectivity to the national high-speed road network in all directions. It has a significant high-speed train station with trains to every major city in China multiple times each day. It has a small airport just outside the city with another one being built in the south of the city in 2 years. It’s also about 50 minutes by train to a significant international airport at Xiamen.
At Da Chi, we’re surrounded by mountains up to 1500 meters above sea level, and our site is at 515 meters above sea level. So we have our own special microclimate that can be between 10 and 25 degrees cooler than the downtown city of Longyan (which is about a 40-minute drive from us). It can result in a daytime temperature fluctuation of up to 40 degrees celsius. Even an average swing can be 20 or more degrees. As all whisky lovers know, the change in temperature each day can be very good for maturing whisky.
People typically ask us “do you have enough water to make whisky”, which is when we typically point out the name “Nine Rivers” comes from the fact that the mountains around us have literally Nine Rivers every time it rains, which at this time of the year (August through September) is multiple times each day.
When
When did we start? The history of this project goes back to 2016 at a network of whisky nights that popped up all over China, starting first in Shenzhen. There was a lot of time invested into researching the possibility of making whisky. Then some of us spent a lot of time developing processes to make better whisky – some of which has resulted in patents being filed and granted. But in terms of real tangible and visible things, we’d probably frame the start (as in forming a company, and the founders chipping in their coins) to 2019.
We first visited Da Chi in February 2020. It took us about a year to find the perfect location and secure the land. We had a “groundbreaking” (a bit early in all fairness, but there’s a mildly amusing story about that) in February 2022 but the really good stuff (the excavation and construction) really started to happen in February 2023. It took from December 2022 through to the end of January 2023 just to level the land parcel.
When are we looking for more people to get involved? Right about now. Now is the perfect time for anyone interested in whisky to get in touch and learn more.
The timing of this is deliberate, and we’re happy to explain why. For one simple reason – credibility.
The 200-odd people that have helped us to get to where we are today are people that are connected to us. Typically they are personal friends, or professional contacts of either one of our board members, or someone else that is involved in this project.
The starting group of founders was made up from whisky lovers who regularly attended one of the whisky nights – in Shenzhen, Dongguan, Guangzhou, Wuhan, Shenyang, Shanghai, Beijing and Xiamen. Everyone that has got involved since are in some way directly connected to one of these founders or one of the board members. That friendship was important for the huge amount of trust it has taken between us all to fund this project and get it to where it is now.
But now we’re at a point where trust is mitigated by the fact we’re no longer just a slide deck and wishful thinking. We’re real.
Now it’s time for the How
How are we going to make better whisky, and still make it affordable?
Quality
Quality is massively influenced by the quality of raw materials, the production process, and the maturation process. Sure, cuts on distillate could be included in this, and there’s lots of marketing and PR around the mythical “Master Distiller”, but let’s not go down that Rabbit Hole and end up with every single self-appointed Master Distiller having a rant about how we have belittled their skill. Let’s stick with what we can prove.
Grains
Using the best grains for purpose (we’ll not use the word quality as that can be argued as a matter of opinion). Let’s simply say that we will be using the grains that we believe carry forward the most flavor and aroma as opposed to the grains that will give the best yield of alcohol per ton of grain – which is how the big corporate producers determine if the grain is good or not. We’ve talked about our approach to grains in some of our previous social media posts. The grains we will use will naturally cost more per bottle produced.
Fermentation
Using yeasts and fermentation timescales that again, focus on developing flavour and aroma as opposed to just converting as much of the grain-derived sugars into alcohol as quickly as possible. Big producers focus on what we refer to as industrial yeast. They need as fast a fermentation as possible. Faster fermentation means more batches of wash per month, feeding more wash stills, and producing more whisky.
We’ll be taking a craft beer approach to our fermentation. Longer, slower, and cooler, to utilize yeasts that are specifically developed to enrich fermentation with much more flavor and aroma that would typically be associated with large-scale alcohol production. Plus, lots of variants as opposed to just cranking out the same old wash, going through the same distillation process, to create the same, bland, mass-market offerings that most large-scale producers have got into the habit of churning out, year on year.
Leading this part of the production process is Neil Playfoot, a brewing consulting with 27 years of experience crafting world-class beers.
Wood Management
Anyone who knows anything about whisky will know that wood (in the form of oak barrels) is responsible for around (let’s not split hairs) 60% of the final aroma and flavour of the bottled product. To state that wood is critical to good whisky is fair to everyone but wood for the sake of clocking up the required years is currently the industry default.
There is an accepted shortage of oak barrels across the world. Reasons why aren’t important but the big producers are struggling to get enough oak barrels for their own production. There are barrel brokers popping up all over the world quicker than anyone can count because where there are shortages, there is money to made by those with little or no ethics.
Smaller producers are mostly being dumped with low-quality and well-used barrels. Of course, many of them have spun this as part of their marketing, proudly labeling their product with subtitles such as “Made with STR Casks” or quoting a plethora of random wines that would never have been considered suitable for whisky just a decade ago. Second and third-fill casks are the new norm for mass-market products and all those gardening enthusiasts are unable to find any wooden barrels to make planters for their garden anymore, because what would normally be up for grabs in their local garden center, is now being repaired and filled with bulk spirit for export markets.
Quality has dropped everywhere. With the two major barrel producers squabbling with each other and shaving dollars and cents off production so that they can supply the massive bourbon producers, by the time those ex-bourbon barrels trickle down into the whisky industry they are already much less of a barrel than they were a decade ago. That’s without us even touching on the whole barrel rinsing that now happens because even bourbon producers are not immune to the demands of shareholders and the need to cut costs and deliver better returns to investors each year.
The only solution to all of these problems that affect quality is to simply make our own barrels in our own cooperage. Sourcing our own green timber, cutting it to rough staves, seasoning it on site and then crafting our own barrels.
None of this is going to be easy. Coopering is an ancient art and training an apprentice to the status of Journeyman Cooper takes years. Having a few power tools in your shed and having done some DIY is far from coopering and although there are some really exciting success stories for boutique cooperages across the world, we decided to bring on board one of the best in the world to lead our cooperage project – Stuart Macpherson, former Master of Wood with Edrington and Macallan with a 43-year pedigree in the industry.
Offsetting These Costs
Better grains, longer fermentation, better quality barrels – they all cost money right? So how do we offset these costs, and make amazing whisky while not only being competitive – but being better value?
We have a few tricks up our sleeves which include some really clever tech (that we have patented) around energy recycling throughout the production process. We have some patents around crafting casks too. We’ve got some smart architecture which again massively reduces energy consumption and that makes a huge dent in the overall costs of producing whisky.
But the real big game changer comes from the people involved in our project and what they bring to the table. Literally, everyone who has invested in our project brings something, and absolutely everything helps.
We have a pool of investors that includes architects, structural engineers, mechanical engineers, product designers, graphic designers, copyrighters, marketing gurus, business leaders, experts on literally everything that any startup business needs.
Whether it’s as simple as just sharing content on social media or running workshops on designing our building, layouts and immersive visitors experience when we are producing spirit and have our doors open – this has made a massive impact into our costs and will continue to do so.
Let’s make a quick comparison to help you to understand just one benefit of having all these whisky lovers with a shared passion, involved in our project.
Distilleries In China – what does it cost?
Before we look at how much this project is costing us to build, we need a baseline.
Here’s a press release from November 2021 (click here) where some blobs of concrete, some roofing tiles, and some grass was reported to be a US$150 million investment, which at the time was equivalent to 1 billion rambos (renminbi, or Chinese yuan). Forget all the other waffle in the press release, what matters is it’s a 2 still setup and believed to be about 1 million LPA of production capacity.
Diageo’s project up in Sichuan province on a press release the same month (click here) seems to be half the money (US$75 million, or 500 million rambos) for a 4 still setup and believed to be about 2 million LPA.
We’re going in on 10 stills, 7.5 million LPA and (with all due respect to both architecture firms involved in those other two projects) something that we think looks infinitely better visually. Our total budget to build? Considerably (!) less than both Pernod Ricard’s and Diageo’s for sure – especially since we don’t have all those suits to pay for!
We didn’t have armies of top-tier consultants in expensive suits, and we definitely didn’t have a second (smaller) army of consultants supervising the first army either. We just have a bunch of whisky lovers all chipping in when they can. A few even rocked up on-site and had a blast on the excavators and the loaders with some of them living on-site in dormitories for weeks on end just to be a part of what we’re doing. That has created massive savings for us and it benefits everyone invested in the project.
But it won’t end there.
Ambassador Investors
Everyone invested in our project, from the smallest micro-investors to the ballers with a wheelbarrow full of greenbacks, is an Ambassador for our little startup project. They tell everyone that they know about who we are, our mission, our commitment, and our drive. Essentially grass routes brand building and creating brand awareness.
When we’re producing, this Ambassador approach becomes our default marketing. With everyone having a bit of skin in the game, we all benefit from sharing the story of Nine Rivers Distillery and creating an interest in our products. We all benefit from sharing a bottle with friends, which solves the biggest challenge in any business in any industry – getting new customers to take a chance and try your products.
That’s the other major cost-saving for our startup business. Brand building, marketing and advertising. All huge financial drains on any business in any industry. So to essentially have all this not just in-house, but in-house at almost zero cost, is a really big benefit for us.
The Opportunity
We’re looking for people who are interested in being involved in our project as Ambassador Investors – owning a stake in our business as a micro-investor, who want to contribute as little as an hour a week of their time to share our story with their friends in person, and on social media.
We don’t think we can legally outline the terms here (although, as mentioned, others have) but we encourage everyone to reach out and contact us for a one-pager overview of the numbers and all that legal stuff.
For anyone worried about the fact we’re in China, the opportunity is with our parent entity, which is registered offshore. Essentially it’s a huge challenge for non-Chinese to invest directly into China as an individual (there’s a really boring process for ODI, or “Overseas Direct Investment”, hence the offshore entity that ultimately owns our Chinese operating company.
As for the buy-in. We want people more than we need money. The more people we have involved as Ambassador Investors in our startup, the faster awareness of our project will grow. With more awareness, there’s logically going to be more people interested in trying our products once they are in the market. And of course, we’re quietly confident we’ll deliver on quality, and customers will come back time and time again.
That’s why the buy-in is 500 bucks. Yes, $500 (or the equivalent in other currencies so at the time of writing this it is €466, £400 ₣445, $682 in Canadian dollars, $784 in Australian dollars, or you can look up your own currency on the internet. Sure, people are welcome to pile in more if they want to, but $500 is the entry point.
If that’s enough to get you interested in our little startup and you’d like to know more, you can CLICK HERE to go to our website and find out how to contact us. If you’d like to read more first, here are some links that might be of interest:
Links
Here’s a quick summary video that tells you our story.
Here’s our company page on LinkedIn.
Here’s our company page on Facebook.
Here’s our company page on Twitter (not sure if it’s still called that, but anyway…)
If you use WeChat you can scan this QR code to follow our WeChat official account.
If you use WeChat the short videos platform, you can scan this QR code to follow our channel.
