Sipsmith’s sales have decreased for the fifth consecutive year, intensifying financial challenges.
- The London-based distillery reported a turnover of £14.2 million in 2023, alongside a pre-tax loss of £17.2 million.
- 2018 was the last profitable year for Sipsmith before a continuous decline in turnover and escalating losses.
- Sipsmith’s UK market turnover fell significantly, as well as notable decreases in other global markets.
- Looking forward, Sipsmith will cease managing its UK market operations from February 2025, focusing more on gin production.
Sipsmith, a renowned gin producer based in London, continues to experience financial difficulties as it reports the fifth successive year of declining sales. According to newly filed accounts with Companies House, the company’s turnover reached £14.2 million in 2023, contrasting sharply with a pre-tax loss of £17.2 million. This represents a considerable downturn from the previous year when Sipsmith reported a turnover of £18.2 million and a pre-tax loss of £13.1 million.
The last profitable year for the company was 2017, when it recorded a pre-tax profit of £753,000. Since 2018, when the turnover peaked at £22.7 million, Sipsmith has seen a continuous decrease in sales. Turnover figures show a reduction to £22.3 million in 2019, £21.7 million in 2020, and further down to £20.3 million in 2021. As losses have exceeded a staggering £60 million since the last profitable year, the company faces mounting financial pressure.
In 2023, Sipsmith’s sales in the UK market experienced a significant drop, falling from £15.3 million to £12.1 million. Likewise, turnover from European markets decreased from £893,000 to £514,000. In the USA, however, a slight increase was recorded, with revenue rising from £1 million to £1.1 million. Despite this, the overall revenue from other global markets diminished from £982,000 to £438,000, compounding the financial strain.
Owned by Suntory Global Spirits, a New York-headquartered entity known for brands like Jim Beam, Sipsmith is narrowing its focus exclusively to gin production. A statement from the board highlighted, “The company continues to incur a loss as a result of ongoing investment in the brand in the UK and leveraging the company’s position within Suntory Global Spirits.” This strategic change signifies a shift in their operational focus, anticipating that Sipsmith Limited will discontinue overseeing the route to market and related commercial activities in the UK from February 2025, though production will persist.
This pivot comes against a backdrop of contrasting performance figures within the spirits industry, with reports indicating that other gin producers have seen substantial growth. For instance, sales of brands like Glenfiddich and Hendricks Gin have soared, reaching nearly £2 billion in sales, with profits exceeding £500 million in 2023. Such figures underscore the competitive challenges Sipsmith faces as it adapts its business strategy and operational focus.
Sipsmith’s ongoing financial struggles highlight the need for strategic realignment as it seeks to stabilise and grow in a highly competitive market.
