In the heart of Hanseatic Szczecin, Starka SFW – a brand and distillery site going to auction this year – offers a unique opportunity to revive a heritage spirit and redevelop a site dating to the 19th century.
A distillery is never truly down and out. While the alcohol industry can be volatile and sites temporarily shuttered, careful management will often see a revival of once-closed sites. Indeed, a period of inactivity can often remind consumers of the quality they have missed.
Examples abound. Take Brora, Port Ellen and Rosebank distilleries in Scotland: having been mothballed for decades, they are now making whisky again. In other segments, you find heritage brands given a new lease of life, such as Langs Rum, Chicken Cock Whiskey and Sazerac de Forge & Fils Cognac.
Rarely, however, does an opportunity appear with as much heritage as Starka. That is the emblematic product of Polish distillery SFW Starka, founded in the historic port city of Szczecin in 1863.
The product is distinctive, sitting between categories. It is an aged rye spirit flavoured with small quantities of select botanicals, giving it characteristics of vodka, whisky and traditional European flavoured spirits.
Due to a period of mismanagement and litigation, Starka has not been bottling in the last few years. Yet the distillery is being carefully maintained, and therefore is ready for a new owner to realise its substantial potential.
The sale package represents a significant bundle: it comes with associated intellectual property, operational production facilities, cellars full of ageing spirits, and development rights across portions of the site.
Rather than think of it as a simple distillery asset, its spokesperson David Lesperance believes that the brand is a rich story in its own right: “Starka is more like a cat with nine lives.”
Centuries of history
As a business, Starka has already proved its resilience. Lesperance divides its story into distinct phases.
“Its first life was very fulfilling and lasted a few centuries,” he explains. That is a succinct summary of a remarkable story. The spirit dates to at least the 15th century and comes with its share of traditions – for instance, a barrel would often be filled to mark a birth and only opened on that child’s eventual wedding day.
The Starka distillery was constructed in 1863, an impressive monument to the local spirit. Its good fortune carried into the 20th Century.
“Its second life was during the Communist period where it continued to thrive due to its extraordinary product – aged amber vodka – that was famous throughout the region,” Lesperance says.
However, more recent history provided a turn in fortunes. It did, however, fare better than competitors: Starka is now the only producer of the eponymous spirit.
“Its third life was in the post-Communist period when it struggled to survive due to lack of qualified management,” says Lesperance.
Then, its fourth life arrived when Lesperance and his group invested and refocused the core business on aged vodka, though its fifth life followed under a local owner who “saw Starka as a golden goose and tried to extract too many eggs”.
Starka’s next life beckons as Lesperance works to find a buyer that fits perfectly with the brand.
“We are looking to attract a buyer who will recognise and appreciate the remarkable product, history and opportunities represented by Starka,” he comments.
A wealth of opportunities
Starka does not offer a commonplace investment, the kind of brand that seems identical to many others. Instead, it is a unique proposition with a wealth of development opportunities.
Vodka is a category that is on the up. In the US, the Wine & Spirits Wholesalers of America’s SipSource tool estimates the vodka category will outperform the core spirits market over the next 12 months.
Aside from the opportunity to keep making the emblematic product, Starka’s immense reserves provide a historical bounty is ready to drink. The cellars are full of ageing barrels of Starka to be bottled as premium products.
That includes more than 50,000 litres aged for at least 33 years. There are also exceptionally rare heritage barrels, dating back as far as 1947. One of them, barrel 45, is believed to be filled with distillate from 1947-1956, professionally valued at Polish złoty 123,841,433 (approximately £24 million/US$23.2m).
Thinking more broadly, investors can expand revenue streams thanks to the remarkable building and its position.
The distillery is in the heart of the historic Hanseatic city, and previously attracted 10,000 visitors each year with minimal promotional activity. Spirits tourism is an area that could see substantial growth, particularly as there are direct rail links to Warsaw and Berlin, the latter of which is receiving a major upgrade.
In addition to the heritage production facilities, the complex has broader development opportunities. A prior-approved redevelopment project for the site included five multi-family residential buildings (containing 316 apartments), 584 square metres of commercial space, and 322 parking spaces.
To fully explain the opportunities on offer, Starka is hosting a webinar next week for potential buyers and real estate developers. The session, at 3pm BST on Tuesday 11 August, will run through the history and potential of the site.
To sign up for this webinar, click here.
For a behind-the-scenes look at the distillery and its opportunities, check out the video below.
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