From crisps to vodka - what else can you make from potatoes?

Will Chase, founder of Tyrrells Crisps, has found a new use for the potatoes grown on his farm in Herefordsire – distilling vodka. An article in yesterday’s Times Magazine makes interesting reading. Having successfully managed an exit strategy of selling 75 per cent of his stake in the upmarket crisp company to venture capitalists in March this year, he found that he couldn’t just sit back and enjoy the money but needed another entrepreneurial challenge and is ploughing some of the £40 million he pocketed into a traditional micro-distillery.

The economics of the business are interesting: at £30 a bottle, his vodka is nearly three times the price of supermarket brands which range from around £10 to £15. Waitrose’s online shopping website does feature a handful of specialist imported vodkas at around £30 and ‘Stolichnaya elit’ at £40, so Chase is firmly positioning his brand at the top end of the market, as he did so successfully when he introduced Tyrrells crisps in 2002. Chase says the value is in the quality of the product, which is too good to be diluted with Red Bull or other mixers. “It tastes of creamy mashed potato. It’s very subtle. We’ve been careful not to strip the flavour out. Most commercial vodkas just taste of alcohol, but ours is so carefully made because we’ve tried to preserve its origins.” Perhaps there is some justification in the mark-up on raw material costs: at Tyrrells, each 2p potato would be converted into £2-worth of crisps, but it takes 250 potatoes to make each bottle of Chase Vodka. Fixed costs per unit must be relatively high - production is miniscule at only 1,750 bottles a week and takes place in a room not much bigger than a church hall. There are ten permanent staff, including Chase’s sons, Harry, 22, and James, 19. The drinks are even hand-bottled on site. Still, Chase expects to break even in three to four years, with 60 per cent of his market in the US and 5 per cent drunk here.

This is an interesting story about a classic entrepreneur whose great idea and energy launched Tyrrells crisps as he recovered from bankruptcy as a farmer at the age of 30, and now is bursting with other ideas that he wants to try out – from a country house hotel to anti-ageing skin creams. The Tyrrells website retains its slightly quirky nature, with the feel of a small scale local business, and the new Chase Distillery site , while quite different in character, echoes that feel for the central image of the brand. The vodka production makes some sense as a new product development for Will Chase as it uses the same raw ingredient, but I wonder if here he is trying to break into an existing niche market with many competitors already well established, whereas introducing premium ‘home-produced’ crisps to the market back in 2002 was more of a new niche which he could carve out and create without the risk of competitors freezing him out?