Adventure Capitalisn – Gold, Diamonds, Zinc, Oil and Whiskey. The Cooley Bootleg Box Set Vol 1

Adventure Capitalisn – Gold, Diamonds, Zinc, Oil and Whiskey.  

The Cooley Bootleg Box Set Vol 1

There were no signs, no hoardings, not even a hint that somewhere up this small lane heading into the hills on the Cooley Peninsular that you are about to arrive at Ireland’s only Irish owned whiskey distillery business, the Cooley Distillery.

No indications of a distillery business, except of course if once you begin your drive up the lane, you open your windows.

Then the full beauty of what is going on here rushes into to greet you.

It is a mixture of smells that transports me simultaneously, to a childhood breakfast table and to the French town of Cognac.

A giant warm cereal smell, envelops the car.  The smell is like a swimming pool filled to the brim with hot milk and giant Weetabix. This is the various mashes of warm cereals and grain that are brewing up to become the base beer from which whiskey is distilled.

The other smell is a clean, sweet, caramel and honey perfume a smell of polished mahogany, that hangs over the hedgerows and small buildings almost exactly as you get in the heart of French distilling in Cognac.

Except that this is deepest rural Ireland, and off in the distance, the Mountains of Mourne, are indeed sweeping down to the sea

Then the distillery itself.

Which turns out to be a series of square tall buildings, many made of endlessly repeating square metal panels painted in a sort of olive green, semi gloss paint. State built and designed in 1936 it is Irish Free State Industrial Chic meets the Maginot Line.

Transformed into a distillery three decades ago, today it is the heart of a growing Irish whiskey power, one which earlier this year was awarded ‘Best Distillery of the Year’ by the leading US spirits magazine The Malt Advocate, but two years ago Cooley was named both ‘World Distiller of the Year’ and European Distiller of The Year’ at the largest and best open competition it the world the Internationals Wine and Spirit Competition in London.

When I visit wineries across the wine world, at their front door they usually proudly hang their elaborately framed silver, bronze and occasionally gold medals from the IWSC, if they win a regional prize you are dragged over to see it and be told, at some length about it. If they won winery of the year their boasting might see you trapped for a week.

Not here. In the characteristic under-stated style of the entire Cooley Distillery operation and indeed Chairman and main player behind Cooley, Dr. John Teeling, nothing is said, at all.

Master Distiller Noel Sweeney greets me, he is responsible for almost 300 Gold and other medals for the Cooley Distillery’s Whiskeys, he does not mention it and you would have to look hard to find any clues.

As I enter the part laboratory, part 1950s office that is Noel Sweeney’s office and HQ past piles of pipettes and rows of tiny bottles all with varying degrees of brown, gold and amber liquids in them on the wall, above a desk overflowing with technical reports and figures I see the IWSC award amongst the calendars and post-its.

This combination of brilliance and understatement runs through every aspect of the Cooley Distillery story and the story of the man behind it Dr. John Teeling.

The Adventure Capitalist –  John Teeling

John Teeling’s doctorate is from Harvard University and it is directly the inspiration for founding the Cooley Distillery. While studying in the United States in the late 1960s and early 1970s, he also took an MBA at the University of Philadelphia, John Keeling was examining monopolies and marketing. Without too much difficulty this brought him to think about Irish Whiskey marketing and portions of his thesis tuned into that issue.

His place in Harvard and Philadelphia, like his primary degree in UCD were scholarships. Teeling’s father, an insurance salesman died when he was 14 leaving the family with little and so aged 14 he had to get on his bike, literally, and carry on part of his father’s business collecting small debts.  It was a character forming baptism in the business world, of a sole trader for the 14 year old Teeling.

“Monopolies breed arrogance. All monopolies. I believe that if you are in business and you find you are up against a monopoly then you have an opportunity, because you can outmanoeuvre them in their arrogance. In price and speed. Of course it has to be a special kind of operation, something that others cannot simply move on as well, so whiskey was perfect. Irish Whiskey is firstly a great product, a unique and brilliant drink, which can only be made here. In Ireland.” Says Teeling.

“Of course no matter how good the product is, if you cannot get people to notice it, if you cannot market it, then it makes no difference. That’s where I was looking, because at that stage things were looking very poor for Irish Whiskey, all the efforts were failing branding Irish Mist and the like, and the Scottish distillers, United Distillers Trust I think it was, and of course as we know other large multinational companies were ready to drop in an snap up what remained of an ailing industry.” Says Teeling.

The arrival of Pernod Ricard and Diageo was far into the future when Dr. John Teeling as he then had become arrived back into Ireland and took a familiar route for young intellectually able men and women in the 1970s he began what would become a career in academics spending the next 20 years lecturing and writing on Business and Finance in UCD where he became an important figure in driving the entrepreneurial spirit into the rising generation.

“I always kept my hand in the business side of course” says Teeling, “and I travelled, I went out looking for opportunities.”

The opportunities that he found have become the basis of one of the most exciting and attractive business empires in the Republic.

A business empire build in the most solid and fundamental elements of all.

Elementary, Doctor Teeling, Elementary

“No one has said that to me before, honestly. I have never thought about it in those terms. Rocks, oil, diamonds, ore, earth, water, grain. But I see what you are saying.” Says Teeling.

“I am, it seems, yes indeed, I am a fundamentalist.” Says an apparently surprised Teeling.

“And, of the earth, in a fundamental way. Ore, water, grain, mines. I am happy, thank god very happy to say, that I absolutely never got involved in the whole property business.” Says Teeling.

“The property business in this country never made sense, economic sense.” Says Teeling.

John Teeling pointedly using the word “property business” with virtual parenthesis around those two words.

“Yes, I thank god on that, two of my weaknesses, which are weaknesses, have transpired to be great strengths.”

“Firstly, I was never involved in the whole property bubble and it was always there, waiting, because I think in Ireland, for the longest time, property had always been priced un-economically.” Says Teeling.

“Now, what I mean by that is farms and farmland for instance, for as long as I’ve been a looking, as a student, an academic, a long time, they were always priced at a non economic rate, there was never a link to the rate of return. Which made no sense to me. This country and property, I have just never been interested.” Says Teeling.

“Ftom a macro-economic perspective, bubbles come in cycles, 25 years or more not infrequently, so like many of us watching on from the side, from that perspective the bubble was not in my opinion driven up just in the last few years, it has been on the rise as a problem since the 1990s. It has also done huge damage to Irish business life and to a generation of people who might have otherwise gone into long term viable business. Now I am not blaming anyone, if I had been starting later, would I have done what I did, would I be looking for diamonds, or Zinc in Limerick would I have been flying around the world.” Says Teeling.

“So I never did it, never invested in property. By complete accident you could say then.” Says Teeling modestly.

The Teeling Empire extends to diamond mines, oil fields and metal mines across the world from Peru, Columbia, Iraq, Botswana and Guinea to Connemara and Limerick, and of course now two distilleries, one in Cooley and the latest, Ireland’s Oldest in Kilbeggan County Meath.

“The other thing that was a complete accident, this one stemming from my second weakness is that I never bought a good share so I never bought the banks, never bought CRH.” Says Teeling smiling.

“I just don’t, do, blue chip investments. I just don’t. And of course now I’ve worked out to seem clever, through no fault of my own. I don’t think any of our companies have lost 95% of their value like the banks, I think its amazing.” Teeling pauses for a good time, looking out at Dublin Port and its mountain like stacks of lorry containers.

“I think its amazing, but, not unexpected.” Says Teeling

“No, definitely never interested in that stuff.”  Says a reflective Teeling.

John Teeling stands up and walks over to a set of shelves which has all the bottles that the Cooley Distillery makes, it includes Whiskey Brands I know well, and a raft of labels that are less familiar. This is because one of the early ideas on how to make the distillery pay for itself without any established brands was to make and bottle whiskey for others who had brand ideas but no Irish whiskey.

This has lead to a very solid income for Cooley in being the source for Irish Whiskey in Irish Whiskey brands for almost all the major European Supermarket own brands from Tesco, Sainsbury’s, Dunnes Stores and France’s huge Carrefour Group. These keep the cash flow in what is a phenomenally difficult business to get into.

The barriers to entry in the whiskey world are legal, social and stark.

Firstly you need to find and build a distillery, which is then going to have to be filled with the most expensive and large plant and equipment that money can buy. House sized copper pot stills and funnels, hand made 50 foot tall beasts that are more like commissioning a ship than having some hitech industrial plant installed.

Then cathedral sized grain silos, a warren of food grade pipes, vast cellars to store your whiskey product, contracts with barrels makers around the globe and this is all before you heat up the first still to see if any of this will work.

Now, you are ready to begin whiskey production, but from the first time you begin to mill, malt and brew your grains and cereals until the first pea sized bead of distilled alcohol rolls out of your still and into a bottle that can be sold, will take 3 years.

That is 3 years from when you finish spending every last drop of capital you have gathered together.

But of course, 3 years is the minimum legal age at which the distilled liquid can be legally called Irish whiskey under Whiskey Act 1980, the latest in a 300 year history of such Acts.

Unfortunately the consumer market is filled with 8 year old Sherry finished this, 25 year old single Malts, 12 Year Pot Still offerings. So the 3 year old infant in its barrel is simply rolled down the hill in Cooley from the distillery to the series of vast cellar warehouses and settled down for another decade of gentle snoozing.

Trying to sell this as a business plan to financiers requires genius.

“I think you can see that family and friends become important in this kind of business and in mining too, in fact in all my businesses. Mining and looking for oil, all prospecting is a long, long game. It’s a rewarding thing, but it all takes time, concentration and patience.” Says Teeling.

“So yes, the whiskey business did not really phase me, I knew, ok, I couldn’t have known exactly how long, but we knew it was a long timeline. That is why we looked to all the surrounding opportunities to bring in revenue.” Says Teeling.

“What I did know was that it would be about creating the best. It would be about creating a world class, quality defining product. We absolutely knew that was the way to go. There was no way we could compete with the financial muscle of Irish Distillers, Pernod Ricard now or Diageo, we would have to do it with the product. I mean look at how long it has taken, how much effort and money has gone into building those brands of theirs. Its worked but if you are not going to wallpaper the world you need an award winning product. Quality is what we have gone for and if you look at the results you can see we are getting there.” Says Teeling somewhat modestly.

At a large French wine exhibition this year, as every  year in France, Germany and Spain drinks writers ask me about the pleasure of living within driving distance of one of the world’s greatest distilleries. Cooley’s status as both European and World Distillery of the Year seems to pass by many Irish ministers in search of a feel good story and indeed many Irish consumers.

That is about to change, Cooley and its new Kilbeggan Distillery are about to shake up the Irish Whiskey World again, but this time at home and in uncharacteristic fashion.

The Headquarters of the multi-million euro Teeling Empire, seat of a dozen mining, drilling and distilling companies is a two storey, brown bricked set of offices overlooking the strand at Clontarf. If the definition of a bureaucracy is that the first person you meet cannot help you, then Teeling’s operation would be like Kryptonite to Bureaucrats. The entire building is like a the pictures of Einstein’s office, a random arrangement of stalagmites made of books and reports growing from tables, desks and the floor. Rows of neat filing cabinets, full. And absolutely everywhere walls of books and reports, charts and maps.

Carpet tile, stout wooden chairs and desks dominate here, it all has the charm of a comfortable kitchen table. Fit for purpose.

You can feel the immediacy of it, the excitement. Three weeks ago shares in Connemara Mining, another Teeling Company jumped by a third with the announcement that they had struck a huge Zinc seam in County Limerick.

A sweet spot that was high grade ore and shallow, the two most beautiful phrases in the mining business.

Future Plans and Coming Water Wars

“There is great satisfaction in what we do here. The basic elements. The basic industries that we have are food and drink, drink is as old as food, the metals and supplies, the very basic things that people want. Its what I like.” Says Teeling.

“I am not saying that 40 years ago if I had had a different kind of cash flow that we might not have gone a different route, but I’ll say this, looking forward, if I was given another 40 years, and I suppose its asking a lot!.” Says Teeling laughing out loud.

“Then I think these basic blocks are going to be even more important.”. says Teeling

“I think there are going to be food problems, definitely, so agriculture long term is going to very good and I absolutely think there are going to be massive water problems. Really. Which I believe will unfortunately lead to wars.” Says Teeling.

“If I was able to get into water. I would. But I don’t know how too, because I can’t figure out a technology to make that work, and finding water is not like drilling. And most of all there are the metals, oils and renewable. I am now in renewables. I am there because I look at oil and I know its going to have problems.” Says Teeling

“Not Peak Oil and that idea, I don’t believe in Peak Oil, I believe that technologies and price will solve that but it is going to be expensive. But these are the fundamental building blocks that people will have to have and that is why we should be in them, now and long term. The  more I say this the more I think maybe I am conservative.” Says a questioning Teeling.

Beyond the listed companies for which he is well known like Mining and oil companies, Connemara Mining, Persian Gold; Petrel Resources and Pan Andean Resources;  the African Diamond concern that has at site AK6 in Botswana hit a seam of diamonds that could produce a million carats of diamonds a year and the Cooley Distillery, Teeling is also involved with unlisted companies. Some of those are indeed in the renewable sector such as a renewable company that is transforming algae into bio-fuel along with leading players in the Irish Hi Tech Renewable sector like John Travers, and John Heffernan and Simon Dick, of bio-energy operation Clearpower.

“And then of course, for Cooley and now for the Kilbeggan Distillery we have big plans, big, not fast. Nothing in Whiskey is fast.” Says Teeling.

The Irish Whiskey Story

“I am passionate about this, about our story, that is the Irish whiskey story. I think we, I mean Ireland. Have a fantastic resource here, one with an immense heritage. But am immense  future too. I think what we at Cooley are doing is only the start.”

“I can see in the future dozens, and dozens of small whiskey operators across Ireland and they will be making every different style. As we are now doing and as we will continue to do.”

“The US is our largest market, but there is an even greater potential in the Asian market. Global sales of Irish Whiskey are growing at 10% a year. In the worst conditions for decades. Best of all there is more growth available.” Says an enthused Teeling.

The figures speak louder in many ways, Scotch Whisky, without the –e-, sells around 90 million cases worldwide every year, by comparison Irish Whiskey sells around 5 million cases. Our whiskey tradition is longer, we have a much larger and more self conscious multi generational Diaspora and most spirits markets are in a white spirits backlash.

Ireland does not need to create new markets here, though the Asian market is set to grow massively, with India becoming along with China whiskey producing and consuming nations. It seems clear that what Irish Whiskey needs to do is simply regain its place on the bar counter, regain some parity with our Scottish cousins.

Why did Irish whiskey fall away after having the lead is a question many books on whiskey ask, John Teeling suggests that simply money was the issue.

“It was all about competitiveness.” Says Teeling. “There were hundreds, I mean hundreds of Irish distilleries throughout the 18th and 19th century. In every town and city. They were Pot Stills and they were doing well, you look at the two large Pot Stills we have now moved into Kilbeggan and what you are looking at there is power and wealth.”

“The Scotch industry was as disparate as ours, but they combined, the acquired column stills and soon they were able to outmanoeuvre us here. They could produce more, cheaper and faster. The big Pot Stills were as a result of trying to compete with Scotch and column stills. Now then we began to change the product we made, change it to try and compete, move away from peat, from turf, from heavier whiskies to triple distilled, to light to smooth to un-peated. It was not wrong but it was not a stylistic change it was a commercial change.” Says Teeling.

“Then prohibition, then drops in sales, no marketing. Was there a loss of interest, I don’t think so, but as we know by the 1960s it was all swept up into a giant monopoly, Irish Distillers who had a total monopoly on the sale and distribution of Irish Whiskey from 1966 to 1987. Think about that.” Says Teeling.

Mention of PernodRicard/Irish Distillers brings a smile to Teelings face.

Two decades of legal exchange, competition, attempted takeovers and a lot of lawyers fees has shaped not just relations between Cooley and IDL/Pernod Ricard but the entire potential for any development of the Irish Whiskey business.

“In 1980 the Whiskey Act was passed which sought to rewrite history and to freeze in place in the interests of the monopoly. And why not, its what a monopoly would do, but I am uncomfortable with the ongoing and more recent moves to reshape and retell the Irish Whiskey story.” Says a competitive Teeling.

“Turf and Pot stills, peat and single malts were the order of the day. It was only much later that as I said we changed our style to triple distillation to try and compete. It is perfectly clear that is not what Irish whiskey used to be.” Says Teeling

“200 years ago, it was like, French Cognac. Single Pot, small operations. For example there were three, three distilleries in Kilbeggan. One on either side of the road and one on the far side of the bridge because they needed the water. It was turf fired. The coal had gone, it was only about 1830 that we started getting coal back in here. The type of whiskey that was made was much like the crofters in Scotland. It is hard to find out just how peated it was, but there is a wonderful piece in the 1886 or 96 memo from the chairmen of Bushmills to the distillers saying, what are you doing, he had the whiskey over his porridge and he says you are changing the whiskey I can’t taste the peat in it anymore. Anymore. This is our history, which has been written out.” Says Teeling

“Of course to the victor goes the spoils, So Irish Distillers redefined Irish Whiskey into what Irish Distillers made. Historically as you come through into the 1870s the Irish distilleries found that they could not compete with the column still, just could not compete at all. What did they do they went for economies of scales in the size of the pots.”

“They were able to do that because they still had power. Big Pots are money. One of the joys for me about the Kilbeggan Distillery is that over on one side you have the 1830s, small pot, and across the yard you have the three huge Pots.

“So, the first thing they did to compete was economies of scale, but the second thing they did and it may not be over yet, is that they introduced un-malted barley, why, because it is was a third of the price of malted barely. So then over time the mantra became Irish Whiskey, it was always made in big Pot Stills from un-malted barely. It absolutely wasn’t, just plain wasn’t. They were simply trying to compete.”

“Now is there anything wrong with that. Nothing at all. And they triple distilled to compete directly with the lightness of column still whiskey. Perfectly understandable commercial decisions, failed commercial decisions from a failed attempt to compete with Scotch. A miserable failed attempt.”

“It had failed by 1900, and the Scottish distillers who had formed themselves into a trust, the United Distillers Trust, came into the country and bought up the best of the distilleries and the rest is history.”

“But to now try and stunt the Irish Whiskey business, to try and confine it to a false heritage is unacceptable and so wrong.” Says Teeling.

“So, we as you know have now reignited the Kilbeggan Distillery, not begun, restarted what is Irelands Oldest Whiskey Distillery, we have done it on site, and with all praise to the local people and the heritage groups there and to the dedicated individuals who kept the licence alive. All through the years they did not let it lapse and we have begun whiskey making again.”

The fist release of whiskey made at Kilbeggan is now coming on stream, it is available at the Distillery itself and will be in shops in the autumn, when in September we push ahead with our next big plan, opening up the distillery to the public. The whole of it, as a working, living distillery. You will be able to tour around seethe whole process and we have some beautiful large open wooden malting vats and a lot of very beautiful equipment and good whiskey of course.”

“I believe that tourism to green Ireland, to clean, artisan Ireland is going to play an important part of our collective future and this we certainly hope will be seen as a fine new spot on the map. The new motorway has also transformed the trip. It’s a short hop for tour buses, we hope.”

“I know there is a great deal of gloom around these days in this country. I feel it too, we all do, but. But I believe, no, I know that we have men and women in this country that won’t be diverted into the dead end of speculation again, we need to invest in people who are going to manufacture and provide  word class services, world class products, we have done before, we lead the world in some areas. I am confident about Cooley, about Kilbeggan, about Ireland. About the future, I’ll tell you now, 150 years from now, Kilbeggan will still be there, I don’t know the form, but there it will be.”

If governments and investors in this country had put more support and money into the business and economic model adopted by John Teeling and his fellow adventure entrepreneurs in productive, hardcore, exciting elemental businesses like his portfolio then it might have been a slow burn, but rather than being edge on to the gutter, as a Republic we would perhaps be in the lush and stable economic uplands by now.