Drinks veteran Cooney warns of long recovery for the pub trade
Pat Cooney could have taken it easy after selling Gleesons instead he rallied his family and built a distillery, writes Fearghal O’Connor
VETERAN drinks industry supplier Pat Cooney is hearing increasing tales of hardship right across the sector that concern him.
The owner of Drogheda’s new €20m Boann Distillery has focused almost entirely on exports of The Whistler — Boann’s offering in the booming Irish whiskey market — to avoid reliance on the domestic market.
But he blamed the pandemic as “the last straw” for his firm’s struggling craft beer operation, which he shut last year.
Cooney told the Sunday Independent that, in his previous company, wholesaler M&J Gleeson, he had experienced the difficulty of a domestically-focused business when the Irish economy was troubled.
Cooney sold Gleesons to C&C in 2013 before starting his distillery project. But he said the pandemic fallout would take a long time to get over for many in the trade.
“The number of pubs and restaurants that are just not going to open, the number of bad debts and the knock back that is going to have on suppliers is going to be huge. We can’t get paid from a lot of pubs because they don’t have money because they are not open.”
Huge amounts of product had been sent back and this had also caused difficulties for the brewing business.
“We had to take a load of kegs back and of course you’re not going to get paid for that and it’s money down the drain. There’s difficulties then claiming back the duty on the kegs. It has just been a nightmare for a lot of the brewers.”
Many people in the trade who could not open for business were struggling to pay off loans and bills.
“How are they going to carry on? It’s very difficult. A lot of these people don’t know anything else. If you are a publican you have likely been a publican for a long time and they don’t become plumbers or carpenters or something else. What do they do? It’s extremely difficult.”
Cooney says that things are much worse now for many than they were during the recession a decade ago when he was running Gleesons, then the biggest wine supplier in the country.
“At least during the recession you knew things were bad but they’d probably get better. Now things are bad but will they go back to where they were? Probably not. So there is a huge amount of uncertainty for all the affected industries as to what shape or form it is going to take when it does actually come back.”
EVERY lunchtime when the Cooney family sits around the table for a chat they are enveloped in the sensory reminders of the whiskey they make. The long boardroom table looks out from a balcony across an intricate working of pipes, vats and stills gently humming below at the family’s Boann Distillery and the warm aroma of malted barley wafts in the door. Cooney has worked six days a week with four of his children over the last few years to build the distillery and to launch The Whistler, a collection of single malt pot still Irish whiskeys — named after Cooney himself and his habit of whistling a tune.
“When I was a young fella everybody whistled, whether they were milking a cow or whatever. But now no one whistles. It’s a lost art. But I’ve whistled all my life and I enjoy it,” he says. It would be a mistake to underestimate Cooney’s easy nature for any lack of business pedigree.
Now in his early 70s, the distillery is a second career. In 2013 he sold M&J Gleeson, the wholesale business he bought in 1974 for IR£75,000. The deal was reported to value the firm at €58m.
Others might have been tempted to sit back. Not Cooney: “I enjoy it. As the fella says, what else would I do? I’m not a guy given to spending much time on the beach or travelling to exotic places. You can only read so many books.”
So most days Cooney and his adult children sit down for lunch and discuss the business.
“We try to be democratic. But when democracy doesn’t work I make the decision. I don’t put down the foot, but somebody has to make the decision.”
The new distillery — a €20m investment overall — is based in a now extended former car showroom with a huge three-storey floor-to-ceiling plate glass window situated on the outskirts of Drogheda. Three impressively large copper stills — as well as a fourth smaller craft gin still — stand in the window where luxury cars once stood.
“It’s an ideal building for a distillery. When we sold Gleesons in 2013 we held on to the Merry’s Cream Liqueur Brand. I decided to build a distillery and a brewery, and was in the right place at the right time to get this building.”
Cooney always loved Irish whiskey, as a drink and for its history. But he was also tempted into the industry by predictions that sales are expected to more than double to 30 million cases by 2030.
It took three years to build the distillery and the copper finally began to produce a steady flow of spirit at the end of 2019. Those first casks of whiskey will be ready to sell in about three years.
“It’s a complicated process to put it all together. I knew bottling... I knew how to make cream liqueur, but I’d never done distilling.”
He didn’t wait to conquer the distillation process before bringing The Whistler to market, buying in spirit in 2016, ageing it in barrels and bottling it for export alongside Merry’s Irish Cream brand.
The distillery is capable of making 800,000 litres of pure alcohol a year and will soon add a third shift a day to bring it to that capacity. A third of the spirit will be matured in casks for the Whistler brand in a 30,000 sq ft maturation warehouse he hopes to start building later this year. A third of the casks will be sold to the public and to whiskey investors, while a third of what is produced will be sold on to other whiskey producers.
“That will give us turnover of about €5m to €6m initially. But when it matures and we are selling it to customers turnover will be maybe €15m to €20m. It will be a substantial business. With the cream liqueur, the two businesses this year will have turnover of over €20m. Over the next five years we see that growing to over €50m.”
It has not been all smooth sailing. Up until April the firm produced the Boyne Brewhouse craft beer brands, since sold to another brewing company.
“We went into the beer business in quite a significant way and it just didn’t happen. We closed it down last April and we’ve quite an expensive piece of kit sitting idle and we are waiting to sell it.”
There has been interest from potential buyers for the €7m worth of brewing equipment that sits unused in the Drogheda facility, but Covid restrictions have meant they cannot come to see it.
“We are delighted with how the distilling is going, but clearly going into the brewing as well was a bad decision. We had to make the hard decision to cut our losses. There was just no future for it. Covid was just the last straw.”
But, in other ways, the pandemic has not hurt. Sales of its spirit brands, which are produced largely for export, rose strongly in the US as bars shut and people purchased for home drinking.
“So we already had a network of agents in 35 countries for Merry’s and a lot of them have taken on our whiskey too. In the US, where we export 60pc of our whiskey, our agent is the fourth-largest importer of wines and spirits. And we’ve just signed a deal with the third-largest distributor in Russia. We’ve agents in Belgium, Holland, Sweden, Germany, Australia and a lot of other countries. You have to get out there and knock on doors and we did a lot of that before the pandemic began.”
Cooney grew up in Drogheda, the youngest of six. “There were chickens, ducks, cows, goats and sheep and everything at home. My mother was a bit of a higgler (type of trader) and was well known in Drogheda. It was an interesting house,” he says with a laugh.
The week Cooney was doing his Leaving Cert at the local Christian Brother school, his father, a coalman, died. He had been ill but it was still a big shock. His aspiration to go to university ended then too.
“You grow up fairly quickly when that happens. I had to go and find my fortune so I did accountancy and qualified at 21. It was the only profession you could do at the time that you didn’t need money or to go to university to do, so it was an obvious choice for me.”
After qualifying he worked for a joinery company in Tullamore but went to London in 1971 to work with Deloitte for two years, while also studying economics and management accounting.
“I got into mergers and acquisitions in London. It was an exciting place and the difference between light and dark in those days between Dublin and London. I never saw myself as an immigrant. I went there as a qualified accountant to get experience not because I had to go. It was the height of the Troubles and I was well aware there was an anti-Irish feeling. But I was the only Irish accountant out of 700 and I never felt any prejudice of any kind. It was a good experience.”
When he came back to Ireland he joined accountancy firm Coopers’ new M&A department.
“But I’d always wanted to do something on my own. So in 1974 myself and my brother Nicky bought a little wholesale company down the country in Borrisoleigh called MJ Gleeson.”
They paid £75,000 for a firm that then employed 10 people. Soon after the sale the Guinness agent came around to introduce himself and wish the new owners good luck: “But Pat,” said the agent, “I think it’s only fair to tell you, there’s 105 wholesalers in the country and you’re 105th.”
“It was a challenge,” says Cooney. “The biggest challenge was finance. The banks were ultra cautious in those days and interest rates were extremely high but we made money every year.”
After ten years, Cooney was in a position to invest in acquisitions and in building a new soft drinks plant in Tipperary. By the time he sold the firm to C&C in 2013 it had 750 staff, 10 distribution depots and a €300m turnover. It had become Ireland’s biggest wholesaler and wine importer. It manufactured cider, soft drinks including Finches and Country Spring, freeze pops, cream liqueurs and Tipperary Spring Water.
When the recession came it hit Gleesons hard and it lost 20pc of its turnover. Cooney saw no future in wholesaling. The big retailers were all looking to build their own distribution and move to centralised warehousing.
“The wheels came off the Irish economy and we were essentially based in the domestic economy. Things had been difficult with no indication they would improve. C&C was our biggest customer and we began negotiations that went on for six or nine months. It was tough, but we came to a satisfactory arrangement at the end.”
A confidentiality clause means he cannot discuss the price: “We did ok out of it. Not as well as we might have in former times. We signed the contract in Goodbody Solicitors at about 3am and the next morning we’d to go in and tell the staff that we’d sold the business and that was difficult. But they were all secure in their positions. We were joining a much bigger outfit. It should have been a marriage made in heaven.”
C&C was a PLC, Gleesons a family business. Cooney stayed on as executive chairman. There were two different cultures and he was happy to move on after six months.
“They had their way of doing things. It’s not really fair for me to comment. We didn’t share the same management philosophy I suppose is the nicest way of putting it.”
The craft beer revolution was under way so he decided to develop a brewery. He also saw an opportunity to fulfil a dream: to make whiskey.
Craft beer aside, he has no regrets. The three copper stills are now producing a steady stream of whiskey distillate, filling wooden sherry and bourbon barrels that will infuse the clear spirit with distinct flavours and a golden hue. Those casks are priced between €3,000 and €10,000 apiece.
“Lots of people are interested in investing in Irish whiskey. We’ve one particular person who is interested in investing quite a lot of money. I’m not talking thousands. I’m talking hundreds of thousands. Another fella is interested in investing millions in whiskey and we are talking to them as well. Whiskey as an investment asset class has been increasing by 20pc to 25pc every year.”
So could Cooney look to sell the distillery in time to come as he did with Gleesons?
“You never say never, do you?” he says. “If someone comes along with €100m why wouldn’t you talk to them? But, essentially, this is a family business and the family would have their say in that. That’s a decision for the future.”