For the latest instalment of our popular Brand Story series, we caught up with Frank Lampen, founder of Distill Ventures, to learn about the company’s progress and success.
Can you tell us a little about your background and the company?
Frank Lampen, CEO and Founder, Distill Ventures: It feels like a lifetime ago, but after graduating from university I embarked on a career in television before moving into consulting within the digital space, where I worked with a variety of larger brands before starting up several businesses both inside and outside drinks. Food and drink is a personal passion and I wanted to bring this more into my working life as well.
Coincidentally, during this time a good friend of mine was setting up a gin business. They were incredibly frustrated about how difficult some aspects of it were, how much bureaucracy there was to overcome, and how little guidance there was out there. It posed the question, why have so little support for new drinks brands but so many routes to investment for tech start-ups? ‘Start-up’ seemed to be a buzzword that only referred to the tech world, and it seemed clear that the ecosystem for founders in drinks was lacking.
How did the idea come to you for the company?
We could see that there were so many visionary drinks entrepreneurs with the same issues being witnessed first-hand by my friend, so with my co-founder we started to develop an idea for what an accelerator for the drinks industry could look like. We were clear that offering investment was critical, and so we needed a funding partner. We approached Diageo to gauge their interest, and they said they would like to be the sole investor. So in 2013 we launched the world’s first accelerator for the spirits industry. Our business is independent, but Diageo is the sole investor in our portfolio.
How did you achieve awareness?
We just went out and met people initially – and this was as much about continuing our learning regarding what was needed as it was about raising awareness. After the first couple of years, we used trade shows, putting on a day of talks and workshops aimed at those thinking of setting up a business, and that introduced us to a wider audience. We’ve used online channels – after all, if you’re thinking of starting a business one of the first things you do is search, so we work to ensure our content is one of the things you come across. Then the announcement of some of our investments, for example Starward, Stauning and Westward whiskies, followed by the announcement of some of our portfolio companies – Belsazar and Seedlip – being acquired has cemented our reputation.
How have you been able to gain funding and grow?
Our growth has come from finding great opportunities and helping them secure investment from Diageo. After an initial investment, we work with the companies to grow their brands, and this requires further investment from Diageo. So our growth depends on two factors: great companies performing well, and Diageo continuing to support them. We’ve been fortunate on both fronts, with successes like Seedlip and Ritual demonstrating fast growth, and Diageo have been a great partner in backing these founders to scale their business.
What are the key successes?
It’s really broad ranging, with over £100m invested in the portfolio. Key areas of strength for us have been building an exceptional portfolio of modern whisky brands, supporting the creation and growth of the non-alcoholic spirits category, and now supporting the growth of eCommerce in spirits.
In whisky, our portfolio of new world whiskies is amongst the best there are – every single whisky brand in our portfolio secured at least one Double Gold medal at the San Francisco World Spirits Competition this year. In non-alc, we followed up the category defining success of Seedlip with investments in Ritual Zero Proof and Wonderleaf – leading brands in the US and Germany respectively. More recently our focus on building eCommerce in spirits meant our portfolio brands were well-placed for the massive shift to at-home consumption and online ordering that the pandemic ushered in last year.
Underpinning all of that is our team, and our success is really built off the amazing group of professionals we have built, and the phenomenal job they do in finding and supporting the best new brands.
What were/are the challenges and how have you overcome these?
Building our expertise in eCommerce was a challenge because hiring in this space is super-competitive. Great eCommerce practitioners need broad experience, solid commercial understanding, and the ability to adapt and assess new opportunities brilliantly. And the people who have these skills are in high demand across all consumer sectors, so hiring is tough.
We focused on building capability through multiple routes: contractors, consultants and agencies, alongside our own team. We prioritised knowledge sharing across the portfolio and creating easy pathways to “test and learn”. There’s always more to learn as it’s a space which is evolving so fast, but we feel good about the progress our portfolio is making in becoming leaders within eCommerce in spirits.
What are your plans now/for the future?
Many of our current portfolio companies are now reaching the scale stage, so we’re focused on continuing to support them. At the same time, we’re thinking about the next generation of spirits start-ups.
Ownership within our industry is generally not very representative of wider society, and when you look at one of the reasons why, start-up ecosystems have historically worked to favour certain groups and haven’t provided easy ways for women and certain ethnic groups to access early-stage capital and support.
We’ve recently launched a new Pre-Accelerator Program dedicated to early-stage founders from underrepresented groups. We aim to invest $5 million in drinks entrepreneurs over the next 12 months through this initiative. Through the Pre-Accelerator, we have created a more accessible runway to unlocking seed funding, which is a key barrier reported by entrepreneurs from underrepresented groups.
What would you like to share with others to encourage them to start their own entrepreneurship journey?
What’s most important is to know what you’re getting yourself into. Optimism is great, but naivety will kill you. Talk to as many people as possible about their journey, and really dig into the lows as well as the highs. You’ve got to be sure you have the resilience – personally and financially – to cope with failure before you set off on the journey. When considering a new opportunity, I sometimes ask myself: “If it fails and I lose all the money I’ve put in, will I still be glad about the time I put into it?”.
You can never be sure about financial success, but you can ensure that every experience helps you learn and develop, so that even the ventures which are financially unsuccessful can be ones that you look back on as being a valuable part of your own personal journey.
Can you share your top 5-10 tips for entrepreneurial success?
- Have a well thought through proposition that brings something new to the market – don’t overestimate how well you think you’ve cracked a problem or need
- Can you honestly answer the question of why the world needs your product/service?
- Make sure your pricing is aligned with your vision – if you need mass market volumes but you’re charging a luxury price point, your business model is doomed
- Don’t do it alone – whether it’s a co-founder or assembling a great team, you’re going to need excellent people to make this succeed
- Be honest with yourself about your own strengths and weaknesses. Play to your strengths and have a plan to cover your weaknesses (for example by hiring a great team)
Who are the people who inspire you the most?
Current inspirations include:
- Andrew Wong – chef patron of Restaurant A Wong, which has been a favourite since it opened a decade ago. I always liked the restaurant, and his book is a great reference on dim sum, plus recently I’ve learnt so much more from his podcast, XO Soused. The level of research and thinking that is the foundation of his food is incredible.
- Kris Yenbamroong – chef and owner of LA’s Night + Market. I miss my regular trips to LA and in particular, I miss the amazing food and incredible natural wine list at this restaurant. He also owns a gallery and spent lockdown delivering wine in his Cadillac.
- Jose Andres – another chef – but in his case it’s his work in organising feeding programmes in the wake of natural disasters and the pandemic which is inspirational. He’s relentless in doing something simple but fundamental: getting food to people who need it. https://www.instagram.com/chefjoseandres/
What are your favourite inspirational /motivational quotes?
“It is not your responsibility to finish the work of perfecting the world, but you are not free to desist from it either.” Rabbi Tarfon
What are your social handles and website links so our readers can connect with you?
- LinkedIn: https://www.linkedin.com/company/distill-ventures
- Twitter: https://twitter.com/distillventures