From the editor: With the methodical hand of a cartographer, Matthew Westfall maps out the regions of his beloved archipelago with every small batch of gin he distills. Westfall is the founder and head distiller of Full Circle Craft Distillers, an internationally-acclaimed Filipino producer of craft spirits. Though he launched the distillery startup in 2018, his flagship product, Archipelago Botanical Gin (ARC), was a recipe ten years in the making—blending 28 botanicals, 22 of which foraged from small farms across the Philippines. From the soaring Cordilleras to the plantations of Mindanao, it’s a spirit born of exploration, steeped in tradition, and teeming with pride.
Following a series of landmark partnerships that would see their award-winning spirits championed across new markets in North America, Europe, and Asia, Full Circle is waving a Filipino flag from the top shelf. But while ARC gin makes its global tour, Westfall himself is planted firmly in his Laguna distillery, trying new recipes with Magnum, his bespoke pilot copper pot.
Most often, Westfall lets his gin do the talking. But today he sat down to share his musings on the past year, and on the road ahead.
Matthew Westfall, founder and head distiller of Full Circle Craft Distillers, in his own words:
The Independent Investor: Not many businesses can say the last couple years were good to them. But your company went from collecting international accolades to gracing the top shelves of bars and hotels across Hong Kong and Singapore. And now you’re building on your international expansion with some really impressive strategic partnerships. How do you make sense of the success you’ve seen with Full Circle so far?
Matthew Westfall: Looking back over the last two years, it’s amazing to see how far we’ve come as a small, hungry, family-owned startup distillery. We started 2020 with a bang—literally—with the eruption of Taal Volcano in January that blanketed our brand-new state-of-the-art craft distillery in ash.
A month later, the pandemic arrived, along with a sudden drop in tourism. By mid-March, Manila was in lockdown, kicking off what was to become, and remains, one of the world’s longest lockdowns. We took a number of steps to pivot, and ironically the pandemic opened up more opportunities for us.
True enough, liquor bans were imposed in major cities across the country; the country’s hotels, bars and beach resorts were shuttered. Travel retail, or Duty Free sales, at airports came to a halt, as did the construction of our new Tasting Room and Museum at the distillery. With 110 million people confined to their homes, we noted that everyone seemed to be climbing the walls, looking for some sort of way to socialize.
Our first response was to launch a series of Virtual Gin Masterclasses, where we provided virtual tours of our distillery, shared our passion for authentic craft spirits, and ended with creating ARC cocktails at home. These sessions became a hit, as they offered a means for their communities to come together, learn about craft and enjoy a few cocktails.
In parallel, we developed a line of DIY cocktail kits, and set up a network of community resellers in Metro Manila, who could deliver to their neighbors. This, in turn, triggered a wave of new interest in home bartending and home gin carts, and in turn, more Virtual Gin Masterclasses, now with a craft cocktail component. To mix it up, we also partnered with some of Manila’s leading bars for collabs and launched these over Zoom.
As our on-premise sales dried up, and people were learning to make sophisticated drinks at their home bar, from B2B we needed to beef up our B2C, and started expanding our retail outlets. We are now available in most supermarkets and bottle shops in Metro Manila.
Through our exposure from curated Virtual Gin Masterclasses, we were approached to develop and distill private label spirits by several hotels and resorts who were rethinking their cocktail menus while their doors were closed. And then came a number of notable corporate clients keen to celebrate with something special amid difficult times.
Over the past year, we developed a world-class gin for Amanpulo Resort, using botanicals sourced from their organic island farm, which is now in regular production.
We also produce a special handcrafted gin for Txanton, called Txanton 150 Acorns Gin, a tribute to Paulino Txanton Aboitiz, the founder of their corporate empire who arrived in the Philippines 150 years ago. For this distillation, special acorns are imported from the top Spanish dehesas, feed for the black pigs that become the inimitable jamon Iberico, along with a dose of the best Spanish extra virgin olive oil.
We have produced private label projects for key corporate clients and individuals to commemorate special events or for Christmas giveaways. These private label exercises have revealed our core strength: our ability, as a small and nimble artisanal distillery, to handcraft custom spirits on demand.
All the pandemic-induced downtime has also allowed us to advance several initiatives that we just did not have the time to tackle in normal, healthier times.
None of this should have been possible in a pandemic. But somehow, as one door closed, another door opened.
TII: Many other doors opened, you might say. ARC Botanical Gin is now being sold across the US, the UK, Europe, and Southeast Asia. Just recently you became the first Filipino firm to partner with Preiss Imports to deepen your operations across North America. How did you manage that amidst all the innovating you did at home?
MW: Not easily. As a PEZA-registered enterprise, we have been focused on exports from our launch in late 2018. The challenge, as we came to discover, is a classic chicken-and-egg dilemma – how can one export without overseas demand? How can one generate overseas demand without exporting? Any credible importer or distributor in any key export markets will want to see a solid sales trajectory and proof of concept before signing a new brand.
How do we get traction? We start by building a compelling case for our brand that leverages our integrity and commitment to authentic craft by transparently showing how we craft our spirits on our German copper stills.
As an independent, family-owned craft distillery, we highlight our philosophy and ethos, anchored on authenticity, precision, and a passion to put forward the very best of the Philippines. We share a family history in the Manila beverage industry dating back to 1918. We highlight our long list of top international awards, along with international reviews by influential industry leaders.
And then we taste: and simply put, our ARC spirits win hands down in any taste test, blind or otherwise.
For leading importers and distributors, they are typically looking for something special, different, that will stand apart in their spirits portfolio. They are also looking for real partners, who will proactively help build the brand in a new market with them, by their side.
It becomes clear that we are not looking for short-term gains or a quick win; rather, we are in for the long-haul, and committed to building a meaningful Philippine brand that resonates, underpinned by our legitimate historical narrative and authentic craft processes. And so it goes: one market at a time.
As lofty as that all sounds—and despite a few inevitable twists and turns on our journey—it has been our uncompromising focus to true craft production, aiming for a world-class product on par with the best in craft globally, that is allowing us to now see tangible dividends.
While we are exporting to the US, UK, Germany, France, Austria, Switzerland, Singapore, and Hong Kong, we are now shifting to longer-term, more sustainable partnerships that will greatly increase our depth and reach in these markets and continue to drive our triple-digit growth.
As you mentioned, we recently partnered with Preiss Imports in the US, a third-generation importer who is one of the most respected and influential craft spirits importers in the US. Henry Preiss himself is a legend in the industry, offering a highly selective, curated portfolio of craft spirits sourced from around the world. Preiss Imports offers Full Circle and our Archipelago brand access to all 51 markets across the US as part of a national roll-out. As we understand, we will be the first and only Philippines spirits brand—across all spirit producers, large and small—to enjoy this unparalleled opportunity.
We are in the middle of closing partnerships in other key markets: in London for the UK market and in Hamburg for the German, Austrian and Swiss markets.
In parallel, we are establishing an EU distribution hub in Germany, to be operational in early 2022, which will allow us to respond rapidly to distributor requests across the other 25 European Union countries.
We continue to focus on Asia, our own backyard, with new importer arrangements in place for Singapore, where ARC is in nearly all top-tier hotels and bars, and in Hong Kong, with plans in place for other regional markets as soon as the pandemic subsides.
TII: With all those investments you’re making in deepening your reach in foreign markets, how have your local operations fared? Any expansion plans in the pipeline for the Philippines?
MW: We have enjoyed a surge in local interest, which has been deeply gratifying, and the pace and tempo of sales is impressive. On-premise is still our main target, however, with an aim to be the premium pour at all leading 5-star hotels, top bars and the best restaurants. All of that is now coming back, so we are investing time to renew those important relationships.
Our artisanal spirits are available on a number of popular online channels, from Boozy.ph to Pick-A-Roo, to The Bow Tie Duck to Winery.ph, as well as a growing number of brick-and-mortar outlets, from Bacchus Épicerie to Real Food.
We have also made a successful push into supermarkets and big box stores. ARC is now available in The Marketplace at all premium locations across Metro Manila, All Day, Landers, Robinsons, Uniwide, Cash & Carry, Makati Supermarket, and Landmark.
Each channel, I should highlight, requires intensive coordination, accreditation, and marketing and sales support once our spirits are on shelves. As we saturate our coverage in Metro Manila, we have also been working in parallel to reach the regions, which, ironically, are often more difficult to reach than export markets halfway around the globe.
We are actively looking for the best partners, and in the case of Cebu, we are working with the leading wine and spirits retailer, D+B Wines & Spirits, which is bringing ARC into key on- and off-premise accounts. We are a big supporter of secondary cities and are now actively working to place ARC across Northern Luzon, Visayas, Palawan and Mindanao.
Not to be overlooked is the travel retail market, which, with the pandemic, is now shut down but previously served as a major sales channel. ARC was selling briskly as the country’s top-ranked craft spirit in these airport channels and served as a major source of our revenue. As soon as airports reopen, and travel resumes, we will have our spirits available once again at all NAIA outlets, Clark and Cebu.
TII: So ARC Botanical Gin is a multi-awarded, internationally-celebrated spirit. You’ve pioneered new engagement channels and revenue streams throughout the pandemic. And you’re striking new partnerships and rekindling old ones around the world. What’s next on the docket?
MW: We operate Full Circle on a carefully calibrated, data-driven business plan and strategy, informed by deep research into the best distillery and craft spirits brand comparators in Europe, the US and Australia. Our model assumes a methodical plan for expansion as we build demand and reach new markets. But those plans are now being fast-tracked, as over the past three years we have been growing at 265% annually, nearly tripling our production year-on-year. It’s a good problem to have, so we are moving things up.
Brand building across multiple export markets and facility expansion go hand-in-hand, as we can see with several of the impressive models we use as our benchmarks, such the Monkey 47 Gin brand. They launched in 2008 at the Stählemühle Distillery on a smaller version of our copper stills. They experienced similar triple-digit growth year on year, expanded with new copper stills and a state-of-the-art tasting room, and was eventually acquired by spirits giant Pernod Ricard in 2020.
Similarly, the London-based Sipsmiths Distillery, makers of Sipsmiths Gin, launched in 2008 on the same German copper stills as ours, and demand grew, they too expanded production capacity with additional copper stills, only later to be swallowed up by Suntory Beam, the world’s third largest spirits company in 2016, for a reported sum of £50 million.
Four Pillars in Australia, maker of Four Pillars Gin, was launched in 2013, again on the same German still as we have at our plant in Calamba, which they augmented with two larger stills over time. In 2019, Four Pillars sold off 50% of the brand to Australian brewing giant Lion for an undisclosed sum, and since then, have doubled exports around the globe, with a focus on the UK, EU and Africa.
In studying those models, we can see each distillery methodically rolled out product while ensuring they did not leave themselves over-extended, and incrementally brought into play a series of larger, higher volume stills to expand their production capacity.
Typically, we can see this happens around year six. However in our case, given our current and forecasted demand, we are looking to implement our expansion plans in year four.
The one fundamental difference with the models above is that we are building this business as part of a family legacy, and are here for the long haul. In fact, one of the most interesting discussions to have centers around how big can a true craft brand grow while remaining true to craft.
As an authentic craft distillery, we continue to experiment, formulate and release new spirits, either as part of our core SKUs or as seasonal, limited releases. It’s really what makes the whole thing so much fun and endlessly entertaining.
This holiday season, for example, we are once again releasing our highly popular Christmas Gin, a special spirit featuring the holiday flavors of cinnamon, nutmeg and allspice, with a rich, red color of hibiscus. We also are releasing a special Mountain Espresso Vodka, our copper-distilled vodka infused with upland coffee beans sourced from Atok, Benguet—perfect for that White Russian or Mudslide.
In early 2022, we have several new core products that we will add to our line of ARC spirits. We are working intensively on a range of heirloom cane, agricole-style rums. This groundbreaking initiative is part of a small but growing movement that aims to shift the focus from bulk imported and blended rum products that are questionably pitched as “Products of the Philippines,” and harks back to our roots as a legitimate country producer of high-quality rum. Sadly, we lost that capability some 25 or more years ago, and it’s high time to bring that back.
We have much more on the docket. The amazing thing about the Philippines is the depth and breadth of botanicals, fruits, flavors, and spices—literally a distiller’s dream!
TII: As 2021 comes to a close, what are you looking forward to in the new year?
MW: As we work through the pandemic, we are preparing to launch our holiday limited edition releases, and to complete our distillery space in Calamba, Laguna, so we can begin to host visits, tours and tastings, along with private and industry events. And of course, a key focus will be on getting our exports out the door, in order to hit our PEZA targets.
We also have some exciting collaborations underway, with the country’s leading craft brewery, with a top artisanal chocolate maker, and a few private labels.
Our 5,000sqm distillery space, with its indoor and outdoor bars, courtyard entertainment space, museum and gardens, will be a major venue for us to showcase our spirits, share what we do, and interface with our growing following of craft spirit enthusiasts. At the distillery, we will be able to offer hands-on training and seminars, and also offer a range of experimental, seasonal, and limited-edition releases.
With all the new initiatives in place, it really does feel like we have arrived at a game-changing moment, where we have broken through and now have the momentum to be on par or exceed the achievements of our international competitors.