Masters of Risk | Season 3 Ep. 3: Nc'Nean Whisky Breaking the Barriers

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Stewart Webster 00:00:23

Today's guest is Annabel Thomas, the Founder and CEO of Nc'Nean, an award-winning sustainable scotch whisky distillery that's rewriting the roles of a century's old industry. After a career in strategy consulting, Annabel made the bold leap into distilling driven by a vision to create a whisky company that champions sustainability, transparency and innovation. Nestled on the remote West Coast of Scotland, Nc'Nean became one of the U.K.'s first net zero whisky distilleries and one of the first in the world to use a 100% recycled clear glass bottle. Under her leadership, Nc'Nean has not only won a claim for its environmental ethos that has also captured the attention of a new generation of whisky drinkers with its fresh modern brand made by nature, not by rules. Annabel is a true master of risk, combining entrepreneurial courage with purpose-led leadership, and we're thrilled to have her with us today. Annabel, thank you for joining.

Annabel Thomas 00:01:52

Thank you so much for having me. I'm very excited to be here.

Stewart Webster 00:01:55

Absolutely. So we definitely have a jam-packed session today, and I think our audience will find it very insightful. Now I guess let's just start from the beginning. For those who may not be familiar, can you start by telling us a little bit about Nc'Nean, what it is, what makes it different and why you actually started the company?

Annabel Thomas 00:02:13

Absolutely. So we are a single malt scotch whisky distillery right up on the West Coast of Scotland, as you said, in a very remote place. And I think really, there's 2 things that make us different. One is our focus on sustainability, and I'm sure we'll talk more about that, but I really wanted to create a distillery that was the most sustainable possible in Scotland. And the second is our focus on innovation. And by that, I mean making whisky in a different way, but also communicating whisky in a different way. And why -- I guess the broad reason for the why I started it is I wanted Ncnehan to become a broader church -- sorry, scotch as a whole via Ncnean, but for scotch to become a broader church to invite more people into this wonderful drink. And to do that, I think we need to create a whisky that tastes delicious, but also tastes a bit more maybe approachable to those that aren't into it, but also to appeal to the next generations values, and that's one of the reasons why sustainability is so important. But I guess if we take a step back, I came to it via a few different routes. The first is that it's on my parents farm on the West Coast of Scotland. So that was kind of part of the original inspiration. But I then went to visit a few distilleries because we'd had this idea of putting a distillery on the farm, and I really felt they were saying, all thing, in fact, we're doing things the way they've always been done. And whilst tradition in scotch is amazing, I felt maybe there was a different way, maybe we should be focusing more on sustainability and maybe we could bring as a new distillery a bit more innovation to what is a very old industry.

Stewart Webster 00:03:55

Absolutely. That's definitely an interesting story. Now I guess just looking at your career trajectory and also your biography, you actually left a stable career in strategy consulting to actually start this distillery. And that's a move that most would probably call risky. But what made you confident enough to actually take that leap and start your own company?

Annabel Thomas 00:04:15

Yes, it's interesting, isn't it? And I think -- I'm not sure I take Well, I haven't -- I didn't take such a structured approach to my career perhaps as I do to business decisions. And I didn't see it as a major risk at the time. I think partly because I knew I didn't want to stay a strategy consultant. So I knew I wanted to leave that career. I think I've been at my firm for 8 years. I loved it. I'd learned a whole lot, but I didn't see the rest of my career there. So I was looking for the next thing. And I didn't -- and this sounds naive now, but I didn't necessarily think I would do Nc'Nean forever. I thought maybe I'd set it up and then someone else would do it. And of course, these things just spiral and here I am 12 years later, still doing it. So I guess it didn't seem as risky to begin with to me as it now may appear in retrospect. But I think what were the other things that made me feel confident about it? I really believed in the idea. I really felt it was both a really good opportunity for Scotch to be different, but also a kind of need in the sense that if Scotch doesn't modernize and move on, the whole industry might find itself in decline. So -- and I think that and having enough financial stability that I'd saved up from my last job to feel, but if the first couple of years didn't go my way, then that was a risk that I was prepared to take.

Stewart Webster 00:05:43

Absolutely. And I guess, in terms of risk, were there any single scariest decisions that you actually had to go through in the early days of Nc'Nean?

Annabel Thomas 00:05:53

Well, I think -- and again, you look back and it doesn't seem very scary, but we -- Nc'Nean was not the original name of the distillery. And when we were -- so the first 2 years, 2013 and 2014 that I was working on Nc'Nean, we were basically raising money, and we had developed a brand in order to help us raise money because I wanted to be really clear to our investors that this was not going to

look like a traditional scotch. And this brand had -- we'd raised the money off it, and we then started building in 2015 and about halfway through 2016, I basically realized that this brand wasn't good enough. It just didn't cut the mustard. It was not compelling. It didn't really tell our story properly. It was quite beautiful and quite arresting and you noticed it, but it didn't have any soul. And we had spent what was at the time for the company, a lot of money on this branding. But I basically had to make the decision to throw it in the bin and start again and spend more money on our branding exercise. And I'm so glad now that we did and the money we kind of threw down the drain is so tiny in comparison to the issues we might have had if we continued with it. But at the time, it felt like a very scary decision.

Stewart Webster 00:07:13

No, absolutely. And you talked about developing a compelling story as well as a background of soul, right? The name Nc'Nean, it's quite unique and it's steeped in mythology. And from my research, Nc'Nean is a name derived from the agent Gal Godis name, Nit Neoh, who was a hunters and protector of nature. Can you tell us about the story behind choosing that? And then also, I hope I pronounced Nit Neohan correctly.

Annabel Thomas 00:07:39

You did an amazing job. You're basically the only person outside the company who can say it. So congratulations. So yes, Neachneohain, the ancient Gaelic goddess. She's from the pre-Christian time, so the Pagan period. And I wanted the name of the company and the name of the whisky to represent what we stood for rather than, I guess, the traditional option would be just the name of the place. So we looked back in the history books to try and find someone or something that could represent our mission rather than just our place, albeit the place is important. And we found this Nishneohain Gods and she -- we say she was known as a protector of nature and for walking her own path. She lived in the woods. She didn't hang out with the other gods and Gdesses. She just did her own thing in the woods. She had lots of little animals with her and spirits and nips

and things. And she was known for kind of protecting that natural area, the woodland and for just doing her own thing. And we thought that so perfectly summed up our mission that we chose her. And the other nice kind of synergy to what we're doing is that Nishneohain also can mean Queen of spirits in this sense, in the spirit of the nips and things that she was hanging out with. But obviously, that translates really nicely to whisky as well.

Stewart Webster 00:09:01

That's a nice story. And I've been fortunate to get my hands on the bottle of Nc'Nean. And I have to say the design alone, it's very eloquent. The bottle is made from 100% recycled glass and decorate with hand-painted firs, heather and snow drop plants, which is a nod to the beautiful landscape of Scotland. And for the audience who's listening on audio, I'm holding a bottle of Nc'Nean's original single malt organic scotch whisky, which has no age statement on the bottle. But for a more astute audience, they should know that scotch must be aged for at least 3 years to be called a whisky. So there is some maturity in the bottle here. And over the weekend, my wife and I sat down and we tried it together, and we actually put together some tasting notes. So I'm going to go ahead and read those now. So on the nose, we've got a lovely fruitiness, bright citrus, a touch of grape fruit and soft hints of honey. We also noticed a scent of pear. On the pallet, it's thin and silky, not heavy, not syrupy just clean and smooth. And the finish, surprisingly smooth for a younger whisky. It doesn't linger too long. There's not a ton of persistence. And personally, it's a pleasant relief from the overly pedy scotches or heavy carmelace bourbons that dominate a lot of the shelves. So as we head into summer, this is a great summertime whisky to have in your cabinet. How are those tasting notes?

Annabel Thomas 00:10:30

Amazing. I love it. Yes, really Yes. Some great notes in there and very much what I get. I mean I think the fruity is key. And -- but also that silkiness, I'm glad you picked up on that because not everyone thinks about texture when they're tasting, but I think it's so important. It's actually a real key feature of what we're

trying to create, and it's partly driven by the fact we use organic barley. So it's a nice kind of link also to the sustainability side, that lovely silky creaminess. So yes, spot on. And I would agree, great in summer, but also in winter.

Stewart Webster 00:11:04

Great all the time, right? Going back to starting Nick. So when I think about the whisky business, it could be capital intensive. So I'm thinking about pot stills, mash tons, cask, barrels, warehouses to store those barrels. So you took on the challenge of building a capital-intensive business with a long runway before any return. And many scotches are matured for 12 years, 15 years, 18 years or more. So how did you approach fundraising in those early days especially convincing investors to buy into a vision where the first whisky wouldn't be ready for years.

Annabel Thomas 00:11:39

Yes, it's definitely a challenge, and it took us 2 years from me leaving my old job to having our first investment round in the bank was 2 years of fundraising. I always say that the key to success was a small part having a good business plan and a large part perseverance. And just about asking everyone, any of us knew who were involved in those early days about whether they knew someone that might be interested in funding the distillery. And I think it's -- it's a very niche proposition. It's highly unusual, as you say. All of those factors make it very different to any other investment that you would normally look at. And that made it a particular challenge because if you're pitching a tech business, for example, you might be saying we've got no revenues now, but we're going to be a $1 billion company in 5 years, and that's actually plausible, but that's not plausible and whisky. So it took finding investors who not only believed in the bigger mission, but who weren't too wedded to the kind of VC type metrics and were willing to take a punt. And generally, that meant they also believed in something else about what we were doing. like our social or environmental mission or they love whisky or they love the area that the distillery is in.

Stewart Webster 00:12:55

So when the mast was a risk podcast, we often talk about the financial risk of operations or we talk about the operational risk of enterprises. But how does Nc'Nean prepare for and hedge against physical risk? So what I'm thinking about is fires, droughts, extreme weather that you may experience that could threaten the whisky production. And what immediately comes to mind is in 2019, in Kentucky, there were 2 warehouses that were destroyed by fire, the bourbon distillery warehouses. And there were an estimated 45,000 barrels that were lost, which could be quite catastrophic, not only for the distiller but also for the customer, right? So how do you hedge those physical risk?

Annabel Thomas 00:13:36

Absolutely. And it's particularly acute. I mean, it depends on the type of whisky business you are, but we -- under Nc'Nean, we can only bottle Nicknean, right? So even if we can't just -- we couldn't just buy stock to replace stock if our warehouse is burned down, we would have to find another solution. So how do we think about that risk? I mean the first is trying to ensure it doesn't happen, obviously. That's the best thing to do. So we are very strict about our fire protocols in both the warehouse and the distillery. The second is trying to mitigate the risk where it happens. So for example, we store most of our barrels on site where I am now, but we also store some down in Glasgow. Now I can't take full credit for this because the reason we started storing some in Glasgow is because the project to build the third warehouse was delayed and we didn't have enough space on site. But having stored some in Glasgow, we realized that this was really an excellent risk mitigation because if the warehouses here burned down, then we would at least have some stock to keep us on kind of key shelves while we build stock back up again, which I think is really important when you've invested so much in establishing a brand, you can't just have it disappear from the shelves because you'll be starting again when it comes back. And then the third is obviously insurance. And I think that is particularly key. Our insurance is very complex, I think, for a relatively small business. And we have insurance, obviously, against the loss of profit if we -- if the stock were to be lost. But we also have business interruption insurance in case the distillery itself were to be

lost because we also couldn't just borrow another distillery and start producing it there. We would have to rebuild the distillery before we could produce nic in single malt again.

Stewart Webster 00:15:28

Absolutely.

Annabel Thomas 00:15:29

So it's complex, but we have very excellent insurance brokers, and they help us think through all of those risks.

Stewart Webster 00:15:35

Yes. I never actually thought about the risk of single malt whisky, right, because you have Dignan and you're only bottling ignan. However, if you are a blended whisky, there are other whiskys that you could purchase if they were -- happen to be caught on fire or destroyed. So.

Annabel Thomas 00:15:50

Exactly. And also if you're a blended whisky, in all likelihood, you've also got your stock more spread across the country as well because you've probably bought it from different brokers. It was probably in a different place. You probably haven't moved it. So the kind of risk of losing substantial portions of your stock is also much lower.

Stewart Webster 00:16:08

Absolutely. And being in business for several years now, what do you think is the most underrated risk of the whisky business?

Annabel Thomas 00:16:15

Well, a really big picture one here. I think the most underrated risk to Scotch is that it doesn't modernize. I think there is -- Scotch has been the -- at the top of the kind of pinnacle of whisky for so long that I really think there is a risk of the industry resting on its laurels and not appealing to the next generation. And that is why Nick Leon exists. In terms of more day-to-day business risks, I think the Scotts are quite risk-averse people. So -- and we've also been doing this for an awfully long time. So I think most of them are pretty well thought through. We have had probably the only event we've had where we weren't insured was actually having 2 pallets of whisky stolen out at the back of a lorry. So that theft risk really, and I'm sure this exists all over the world because it's a valuable commodity with easy kind of routes to sale. And that was tricky because it didn't fall under our insurance and so on. So I think that's -- I think when the whisky leaves the premises, you sometimes think, well, that's it off our books, but it didn't turn out so simple in that instance.

Stewart Webster 00:17:28

Well, yes, definitely interesting risk there. Now I guess shifting over to sustainability as a strategy. Nc'Nean is known for being a B Corp. It's a carbon-neutral distillery. I've read that you guys are net zero as well. So what actually makes your operations sustainable? And was it risky to lead with sustainability in an industry that's not exactly known for being sustainable?

Annabel Thomas 00:17:51

Well, in terms of what makes us sustainable, we always talk about 5 main things and 4 of those were in place from day 1 and kind of had to be because they're an

integral part of the distillery. So the first is organic. Everything we make is organic, and that really means that the barley that we buy to make the whisky is farmed organically. And that's important because it's much better for the biodiversity on the farms. It sequesters soil -- carbon into the soil. And there are a host of other benefits to water and all sorts of other things as well. The second is energy. Distilling is very energy intensive. If you've ever been to a distillery and stood next to the stills, you can feel how warm they are. So we use 100% renewable energy to power those stills, which we actually get from biomass, which the timber, the forest is just 1 mile from the distillery here. And that kind of using renewable energy for all of our operations on site is, to me, really, really important given what we know is going on in the world. Then the 2 that people don't think about so much are water and waste. So water -- people don't think water is an issue in Scotland, but it actually is we've just had something like a drier spring in the south of Spain. And for our cooling water, which is the most of our water needs, we actually have a pond and we just recycle it in a closed loop. So we're not disturbing a river. We're not using a cooling tower. And then the last is waste. And for that, we actually use a traditional solution and the cows on the farm eat the leftover grains and the leftover liquid in the stills is spread on the fields as a fertilizer. And then -- so those -- all those 4 things were built in from day 1. And then as you mentioned earlier in the podcast, we also use 100% recycled clear glass for our bottles. And that is so important because the carbon footprint of the 100% recycled glass bottle is 40% lower than normal Flink glass, and that makes a huge impact in terms of what our packaging does to the planet. And was it risky to lead with sustainability? Yes, probably. I personally couldn't have slept at night if we hadn't. I think whisky is not a necessity in this world. So to start a new whisky distillery and not be as sustainable as possible would have been unforgivable in my mind. But I think the other thing, though, is that in some ways, because it's not known for its sustainability, we also stand out for it. So that's a good thing as well.

Stewart Webster 00:20:24

And you touched upon this earlier. Scotch is a deeply traditional space. So when I look at the distillers in Scotland, some of them have been around for hundreds of years. There are stereotype

gentleman with a double-breasted suit, all these different stereotypes that are very far from the truth. And your brand is helping destroy those boundaries and destroy those borders. So did you face resistance or skepticism from the industry when you started your brand, especially as a woman in a male-dominated field?

Annabel Thomas 00:20:54

So I think the industry itself as in the actual people in whisky in Scotland know. And this to me, I have to say, was very surprising because I did expect all of what you just said for the obvious reasons. But I really have never met a more friendly and cooperative industry. And that goes back generations, partly because Scotland and Scotch is a relatively small industry and everyone starts and generally ends their career in scotch, everyone moves around and knows each other. but also because the blends trade commercially. So these distilleries are also trading partners, which has created this quite tight bond. And that kind of collaboration has continued into the next generation of distillers. So just this morning, I was on the phone with really what should be one of my competitors telling him what I knew about launching in the States and offering to introduce him to my contacts because that's the way the industry works. However, I think what has been more challenging is the peripheries of the industry, by which I mean bartenders, for example, or people who assume that I don't like whisky or I must be doing it with a man because a woman couldn't possibly launch a whisky distillery on her own. Those sorts of stereotypes don't exist so much in the industry, but they definitely do around the periphery. And they also still exist with consumers. I think that's actually our biggest challenge because there's sometimes a risk that we become known as the distillery that's run by a woman, which is not what I want our defining feature to be. I want people to be talking about our sustainability and our amazing whisky, not the fact I'm a woman. And I think because it's so unusual that a woman runs a whisky distillery, sometimes that's the story people tell and that's not ideally what I would like.

Stewart Webster 00:22:53

And just thinking about your rich background that you have from strategy consulting to actually founding this distillery now, what's the biggest entrepreneurial gamble that paid off for you? And what's another one that you wouldn't take again?

Annabel Thomas 00:23:06

So I think the biggest one that paid off is actually making the bottle look so different. You did a brilliant job of describing it earlier, but it really looks nothing like a traditional whisky bottle. And there was a lot of teeth sucking and questioning faces when we -- in amongst that are kind of in a circle and also more broadly when we were considering it. So that definitely felt like a risk but has definitely paid off because it's become very iconic and recognizable for us. I mean, in terms of ones, I wouldn't take again loads, but I actually found this quite a hard question to answer because I think part of running a business and keeping optimistic is not dwelling on the things that haven't gone right because otherwise, you can let yourself get down. However, I picked one out of my deep archive of things I've forgotten about, which was -- when we were building the distillery, actually, there were a couple of things which felt to me that they were unnecessary. And I listened to the so-called experts. And indeed, it turned out that they were wrong. So for example, the cooling pond that I mentioned earlier, which is how we cool our water, the engineers couldn't get their head around it and basically told me it wouldn't work, which is the same with many things that we did. And I -- so they encouraged us, which I accepted to install these subcoolers and like basically the ability to put in electric cooling for the stills were necessary. And it has never been necessary, but it was just them covering themselves in case it didn't work. And I wish but I had just pushed back more strongly on that and said, I don't believe it's necessary.

Stewart Webster 00:24:53

And last question here. As the master distiller of Nc'Nean, what's your favorite pour for a celebration?

Annabel Thomas 00:24:59

Well, this isn't always the same answer. But at the moment, I am really loving our Nick and cask strength. So it's actually basically the same barrel mix of the whisky that you so eloquently described earlier, but it's a car strength, which means it's at the strength it comes out of the barrel. That's normally around 59%, but it can vary a little bit. So it is strong, but it is intense, and I really love that intensity. So some of those flavors that you described earlier are just like really ramped up in terms of what you get from the whisky, and I think it's absolutely delicious. And it's also got -- all of Nc'Nean is a bit citrusy, but this has got a lovely zippy citrusiness to it. So that's my one of the moment, but you ask me in 2 months' time, it will be different.

Stewart Webster 00:25:43

I'm excited to try it. Annabel Thomas didn't just launch a distillery. She reimagined what the scotch whisky industry could be from leaving a secure consulting career to building a values-driven brand on Scotland's remote West Coast, her journey shows what it means to take thoughtful long-term risk in pursuit of something bold. Nc'Nean isn't just disrupting whisky, it's reshaping what a modern business can stand for. In an industry built on tradition, it's setting a new standard for sustainability, transparency and long-term thinking. Whether you're an entrepreneur, a whisky lover or simply someone inspired by bold thinking, Annabel's story is a reminder that progress often begins where comfort ends. If you enjoy this episode, don't forget to like, share and leave a review. It helps us grow and brings these stories to more people. Thanks for listening to Masters of Risk. We hope you will join us again soon for more stories of risk, resilience and bold decisions.