Keep it simple and follow the rules 

Inspired by his entrepreneurial family, Nigel Mills bought seven newsagents with his father in 1986 and spent the next 25 years growing it into the nationwide Mills brand comprising 85 convenience stores and employing 2000 people. He sold his Mills empire to Tesco in 2011 and for his next venture has co-created a multi award-winning whisky distillery in the Lake District that attracts more than 100,000 visitors a year – despite its first malt whisky still maturing in their casks (three years in the making, this epic milestone for The Lakes Distillery will not happen until summer 2018). Here, Nigel talks to Alison Cowie about his career and why one-page business plans and addressing the five challenges of business have been key to his success

Tell me a bit about your background… 

I went to Kings School in Tynemouth before going to the University of Lancaster where I studied economics, accountancy and law. I joined Price Waterhouse [Coopers] in Newcastle in 1980 and qualified as an accountant in 1984. I worked in the London office for two years before returning to the North East, where my father and I set up the Mills Group, as it became known.

Was it always your intention to start a business? 

My grandfather and grandmother began a chain of newsagents towards the end of World War II and, along with my father who joined the business later, grew it to 35 shops before selling them in 1972. I grew up with this background but I didn’t inherit the business. My father was my mentor for the first seven years of the

Mills Group, as well as a family solicitor called Geoffrey Lurie. My father stayed in the company for the first seven years and over 25 years, the company grew to a chain of 85 stores based across the North East, the North West and in South Wales. We had 2000 employees and about £170 million going through the tills.

What do you think was the key to this success? 

We had a very simple business plan which was to attract people to the store – either through the sale of newspapers, off licence goods or convenience groceries – and while they were there, we’d offer them great service and a lovely ambiance in the hope that they’d buy other things too.

What was your highlight during this time?

When we won The Grocer award for best independent retail chain in the UK, in 2007.

What was your biggest challenge with Mills? 

Managing change. For instance, between 1986 and 1994, we traded from a monopoly position whereby newsagents had the sole right to sell newspapers and magazines. In 1994, three things happened. The Government deregulated the industry so that everyone could sell papers and they also introduced Sunday trading. We lost two of our big USPs. On the positive side, we secured the National Lottery in every store, which effectively put back the profit that we’d lost from the other two pieces of Government legislation. Businesses go through cycles; the world never stops changing so you must keep evolving.

Was it always the plan to sell? 

Yes. I had two children who were relatively young and I didn’t want to burden them with the responsibility of taking on that business. We were looking to exist up to three years before the end and finally sold to One Stop, which is part of Tesco, in March 2011.

How did your involvement in The Lakes Distillery come about? 

During the Mills time, we had developed other businesses and had up to three hotels, which I jointly own with other people. When we sold the business in 2011, we were left with a portfolio of investment properties and one jointly-owned hotel called the Trout Hotel in Cockermouth, Cumbria. One day, I was reading a newsletter from a firm of architects in Carlisle called Architects Plus and it said that they’d got planning consent to build a whisky distillery in an old model Victorian farm around six miles from the Trout Hotel. I thought, ‘that’s interesting; there’s going to be tourists and we have a hotel located close by. I must meet up with them’.

I met Paul Currie and Gary Thornton who had devised a business plan and had managed to find the site and get planning consent, but in April 2012, when I met with them, all of their funding had disappeared. I sat down with them and we drew up a single page business plan which had seven different income streams that would generate income while the whisky was produced – which takes at least three years.

What were these extra income streams? 

To produce gin and vodka – which you can distil and sell virtually straight away.To create the best facilities of any whisky distillery in the world with a world class bistro – fortunately [renowned North East chef and restaurateur] Terry Laybourne joined us to help us do that – as well as a retail site and an ecommerce presence. We also said we must be distillers and blenders, so we’ve produced a world’s first which is The One, a British Isles blended whisky. We also planned tours of the distillery and members’ clubs. All of these streams have been used to build the brand of The Lakes Distillery company.

What’s been your biggest challenge in creating an English distillery? 

We’re in the Lake District National Park and we still have planning issues six years in – although they’re virtually resolved now. Another challenge has been raising the funds. It’s not easy to create an English distillery business. Fortunately, Paul Currie and his father, Harold Currie, built the Arran Distillery in 1995, which was a success, and we’ve been lucky to be joined by one of the world’s leading authorities on the Scotch whisky industry, Dr Alan Rutherford, who’s recently moved from Scotland to near Hexham. All this has helped build our credibility.

How have you raised the funding for the distillery? 

To start, we raised our funding via high net worth individuals through an Enterprise Investment Scheme [EIS]. Any single project like this has a limit of £12 million and over the course of six years, we’ve raised £10 million either through EIS equity or through grants. This November, we also launched a crowdfunding campaign through Crowdcube. We raised about £1 million in about 48 hours, which was the minimum amount we set ourselves. We’re now looking to push that on to £1.75 million, which represents the last of the EIS shares. The deadline for this is December 8.

You must be thrilled to have raised so much in such a short space of time through crowdfunding. Why do you think it proved so popular? 

People have the opportunity to own a piece of English whisky history. We’ve also spent six years building the brand – with our gin, vodka and The One blended whisky – so we aren’t a start-up and a lot of the initial risk has gone.

Crowdcube said it was one of the best fundraising exercises that they’ve been involved with, which is fantastic.

Newsagents and a whisky distillery are obviously very different. What are the common business themes that echo in both? 

All businesses have five fundamental challenges. One is leadership and you must have the right person with the right vision to take the business forward. The second one is finding the right skills and the right people to build the business and over the years, we’ve learnt to do that pretty well. The third is finding the right form of finance and The Lakes Distillery has done that through EIS and peer-to-peer loans and crowdfunding. The next one is finding new customers and we’ve done a great job doing with our branding, while my 25 years’ experience in the grocery industry has also helped. The last thing is navigating the infrastructure challenge in terms of office accommodation, communications and planning. The experience of all of the team has come together to allow us to tackle these key challenges head on and make the progress that we have.

How does The Lakes Distillery set itself apart from the competition? 

We have a philosophy of constant improvement. For instance, we’ve improved the gin liquid and have created The Lakes Gin, which is a premium gin, and The Lakes Gin Explorer which is a super-premium gin with a big botanical flavour. We also changed the packaging of the bottles and the cartons within 18 months of launch to make sure it was modern and edgy. In addition, we’ve launched our gin and vodka liqueurs in October this year, and our Christmas baubles that are proving really popular.

What are the distillery’s plans for 2018? 

In May next year, we’ll launch the first-ever blended malt, using scotch and English whiskies. It will be called Steel Bonnets, after the Anglo-Scottish Reivers who used to fight over the border between the 14th and 17th centuries. In June, we going to auction the first 101 bottles of the Lakes Single Malt through an auction site called www.whiskyauctioneer.com and we hope to get around £5000 to £10,000 for bottle number one, which would create the world’s most expensive English whisky ever produced. We’re also launching a sherry wood expression of the Lakes Single Malt called The Quatrefoil Collection next August and, in October, we’re launching the first Lakes Single Malt called Oriens, which is Latin for ‘I’ve arrived, I’ve begun and I am here’. Whisky is set to become much more of a feature for the company but the gin and the vodka are incredibly important to us, too. We are also currently exporting to Australia, Taiwan, France and many other countries in Europe but next year we hope to launch into Japan and the US.

You’re also involved in the Entrepreneurs’ Forum. Do you think North East business is in a good place? 

I was one of the founding members of the forum in 2002 and became a board member in 2008 and chairman in 2011. I think that we are in a very challenging place in terms of the UK economy because we’ve decided to come out of Europe but organisations such as the Entrepreneurs’ Forum are essential for moving business forward.

In the North East, we have the passion, the desire, the history, the courage and the ability to turn this region around and transform these challenges into huge opportunities.

The Lakes Distillery 
www.lakesdistillery.com
@LakesDistillery

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