Artisan Spirit: Spring 2019 by Artisan Spirit Magazine

SPRING 2019

Acrolein

YEAST MONOLOGUES THE

A REAL TEAR JERKER CHOOSING

WHO'S READY FOR

BOTANICAL SPIRITS

THE RIGHT STILL FOR THE JOB

Jenever

THE ORIGINS OF DUTCH COURAGE

Brand Design for the Craft Spirits Industry.

DESIGN FOR PACKAGING, LOGOS, CUSTOM BOTTLES, COLLATERAL, SIGNAGE, WEBSITES & NAMING 2787 napa valley corporate dr, napa, california 94558 t | 707 265 1891 www.cfnapa.com

TABLE of CONTENTS A LETTER FROM THE EDITOR

QUARTERLY GUILD REPORT

What’s going on, state-by-state and province-by-province

WHAT’S UP AHEAD IN THE 116TH CONGRESS From the American Craft Spirits Association

VACUUM DISTILLING

BRITISH HEART, AMERICAN SPIRIT

Take the (atmospheric) pressure off your process

Distillery inspired by the traditions of Great Britain opens in Minneapolis

ACROLEIN 99

5 TRENDS IN CRAFT SPIRITS PACKAGING Brand Buzz with David Schuemann

WE FINALLY DID IT AND WE STUCK THE LANDING A journey from sourced to 100% in-house

29 33

Bringing tears to your eyes!

GROWING SMART

106

SOUTHERN DISTILLING COMPANY

108

Scaling up with thought

of Statesville, North Carolina

ECONOMIC OUTLOOK

THINKING SMALLER FOR SUCCESS

10 QUICK THINGS (MOST) SPIRITS ENTREPRENEURS CAN DO TO GET BETTER SLEEP

112

HEALTH AND WELLNESS IN THE SPIRITS INDUSTRY

Q&A WITH STEVE GRASSE

116

THE "DISTILL-PUB"

BIERBRAND 119

RUTTE SHINES A LIGHT ON A DUTCH TREAT

GOD SAVE THE QUEEN (OF RUM ROW)

122

PUSHING THE LIMITS

TESTING YOUR MEDAL

124

KENTUCKY PEERLESS DISTILLING CO. REVIVES A LOST PIECE OF BOURBON HISTORY

128

THROUGH THE LENDER’S LENS

131

SEEDING SUCCESS

134

How broader trends could impact your bottom line

Size matters when it comes to your distilling operation

Prioritizing yourself in the name of well-being

Two worlds collide

Small-batch genever made in Dordrecht, Netherlands

Bourbon doesn't need to be boring

BOTANICAL SPIRITS 61 Who's ready for this new category of spirits?

Heed this advice to do right by yourself and your business

Thirty years of Quaker City Mercantile

One of German drinking culture’s best kept secrets

Malahat Spirits of San Diego, California

A look into distilling competitions in the US

A return to the family business in Louisville, Kentucky

WILDERNESS TRAIL DISTILLERY

of Danville, Kentucky

Preparing your distillery for financing

THE YEAST MONOLOGUES 72 What is your yeast trying to say?

Apples are at the core of Neversink Spirits’s Gin and Brandy

HOW TO LEAD A TASTING 303

Tasting scripting and the storybook tasting

Ensuring you have the right tools to satisfy your specific needs

RESERVOIR DISTILLERY

of Richmond, Virginia

JENEVER AND THE ORIGINS OF DUTCH COURAGE 85 A historical dive into the initial juniper spirit

SHERRY 88 The finest of finishing woods

UNDERSTANDING DISTILLERY CO-PRODUCTS AND EFFLUENT FOR WASTE MANAGEMENT Keeping an eye on your distillery's other kind of output

from the COVER

CHOOSING THE RIGHT STILL FOR THE JOB 136

TRÄKÁL: THE SPIRIT OF PATAGONIA COMES TO NORTH AMERICA

140

“WHAT DO YOU MEAN I CAN’T NAME MY ARTISANAL GIN AFTER MY DOG?”

143

ADVERTISER INDEX

146

A love of land and a little advice from mom makes for a unique booze

It’s not that simple: Do’s and don’ts for trademarking your craft beer, spirit or wine

Reservoir Distillery in Richmond, Virginia. Image by Amanda Joy Christensen. See their story on page 80.

Issue 26 /// Spring 2019 PUBLISHER & EDITOR Brian Christensen CREATIVE DIRECTOR Amanda Joy Christensen SENIOR WRITERS George B. Catallo Devon Trevathan

Margarett Waterbury

CONTRIBUTORS

When you need high-purity

grain neutral spirits for

Luis Ayala Candace Lynn Bell Colin Blake Kris Bohm Jeff Cioletti Brian B. DeFoe Carrie Dow Chris Dreyer Andy Garrison Reade A. Huddleston Paul Hughes, Ph.D. James E. Hyland

Tim Knittel Aaron Knoll Dr. Jordan Leasure Rich Manning John McKee David Schuemann Scott Schiller Tracy Sheppard Gary Spedding, Ph.D. Matt Strickland James W. Vermillion III

ILLUSTRATOR Francesca Cosanti PHOTOGRAPHERS Amanda Joy Christensen Elliot Clarke

Carrie Dow Matt Strickland

SALES & MARKETING Ashley Monroe You’ve come to the right place. Since 1943 Grain Processing Corporation has supplied the beverage industry consistent, high-purity grain neutral spirits. And of course we offer a full complement of sensory, analytical and customer service to back up every order. You can rely on GPC for quality and value with delivery that’s on time and hassle-free.

ARTISAN SPIRIT is the endorsed publication of the American Craft Spirits Association. ARTISAN SPIRIT is a quarterly publication by Artisan Spirit Media. www.artisanspiritmag.com facebook.com/ArtisanSpiritMagazine

twitter.com/ArtisanSpiritM

General Inquiries (509) 944-5919 Advertising (509) 991-8112 PO Box 31494, Spokane, WA 99223 All contents © 2019. No portion of this magazine may be reproduced without the written consent of the publisher. Neither Artisan Spirit Media nor ARTISAN SPIRIT magazine assume responsibility for errors in content, photos or advertisements. While ARTISAN SPIRIT makes every effort to ensure accuracy in our content, the information is deemed reliable but not guaranteed. We urge our readers to consult with professional service providers to meet their unique needs. At ARTISAN SPIRIT, we take the opportunity to enjoy many different craft spirits and adult beverages. However, it’s also our responsibility, and yours, to always drink responsibly. Know your limit, and never drink and drive. ARTISAN SPIRIT’s number one goal is to share and celebrate the art and science of artisan craft distilling. But please remember to follow all the laws, regulations, and safety procedures. Be safe, be legal and we can all be proud of the industry we love.

THANK YOU TO ALL OUR SPONSORS. Our mission at Artisan Spirit Magazine is to share and celebrate the art and science of artisan craft distilling. We are humbled by the support of our sponsors. With their help, we can further our common goals of supporting creativity, innovation, and integrity within the industry we all love so much.

BSG is focused on supplying craft distillers with the best ingredients from around the world. The craft distilling market trusts BSG to deliver the finest ingredients at competitive prices, without sacrificing customer service. With distilling malts and grains from Rahr Malting Co., Weyermann®, Simpsons, Crisp and Malting Company of Ireland, as well as a full range of yeasts, yeast nutrients, enzymes, botanicals, and finishing products, we have a wide range of distilling ingredients to help you create high quality, artisanal spirits.

The American Craft Spirits Association exists because of real-world momentum and a perceived need for a trade association in the U.S. governed by licensed craft distillers on behalf of craft distillers. Our mission includes legislative advocacy in support of a strong business environment for distillers, and through outreach to consumers help build brands and increase consumer awareness. We welcome your ideas, suggestions and participation.

The American Spirits Exchange is a national importer and distributor serving the alcoholic beverage industry (spirits, wine and beer). We provide domestic and international companies with access and support to the U.S. market. Regardless of your size — from micro, craft distiller to publicly traded multinational — our focus fuels your growth. Our flagship Foundations™ program provides companies with access to the U.S. market. We handle your business-to-business functions from start to finish: permitting, brand approvals, purchase order processing, invoicing and compliance.

Cage and Sons Distilling Systems build premium distillation systems and equipment for premier distilleries.

Unlike other agencies that work within a blinding myriad of industries; our focus is 100% within the spirits, wine, beer and other alcohol sectors. This specialization has allowed us to become experts in the alcohol beverage category. We have an exceptional understanding of design that sells, complimented by professional project management and flawless production oversight. The result has been strategic solutions that consistently produce both critical acclaim and strong measurable return on investment for our clients.

Every element of Cage and Sons equipment is designed and crafted to provide you with the very best distilling experience at an affordable rate because we know that bottom line matters, but so does function. At Cage and Sons, adequate is never an option, and we continue to develop and design new high functioning, cutting-edge distillation systems that enhance the distillation industry. Cage and Sons works every day to bring you the very best distillation systems for the very best value.

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Distillery Products is your “Go To” source for wholesale premium branded distillery merchandise for your Distillery. Specializing in custom branding and engraving on Glassware, Premium Flasks, Cocktail Tools and Insulated Tumblers and more… Our Marketing Team will work with you to create your custom merchandise line to elevate your brand and capture your market identity. Our goal at Distillery Products is simple, have your target market think of you, your company and your brand first! Distillery Products is your innovative partner and “Go To” source in brand development and brand identity.

Decorative label solutions…we’ve got you covered. Fort Dearborn has the expertise and creative appreciation for development and application of labels for the spirits market. Whether your application needs cut & stack labels with specialty hot stamping and embossing, the “no label” look of pressure sensitive film labels or full body graphics using shrink sleeve labels, we have a product to meet your needs. We service brands large and small. Contact us today to discuss your brand building objectives.

G&D Chillers is as committed to the cold as they are to their clients. They strive to build long lasting partnerships by offering on-going technical support from their team of engineers, all backed by their satisfaction guarantee. G&D Chillers offers a widerange of options from small portable chillers and heaters, to large custom chilling units. All units are ETL approved in both the U.S. and Canada. Most of their standard package chiller designs have been tested for over 20 years in the field.

Trusted Oak Expertise Since 1912.

Lallemand Biofuels & Distilled Spirits is the industry leader in supplying fermentation products and value-added services to the distilled spirits industry. We specialize in the research, development, production and marketing of yeast and yeast nutrients as well as a solid belief in education of the distilled spirits industry.

ARCHITECTURE ◆ ENGINEERING ◆ CONSTRUCTION

Haskell delivers Architecture, Engineering, Construction (AEC) and Consulting solutions to assure certainty of outcome for complex capital projects, both within existing facilities as well as new brownfield/greenfield projects. Haskell is a fully integrated, single source firm with highly specialized, in-house design, construction, procurement and administrative professionals working across diverse market sectors. The Beer, Wine & Spirits Division is one of Haskell’s most mature markets having served discrete and distinguished clients for decades. Haskell is defined by its people, a culture of transparency and trust, and the delivery of value. WWW.ART ISANSP IRITMAG.COM

We’ve been in this industry for over 100 years, during which time we’ve learned a thing or two about what makes a great barrel to age great spirits. Our R&D team and account managers have hundreds of barrels currently in experimentation. Partnering with distillers, we think outside the box to develop new products that push your vision forward Our Mission: To craft world-class oak barrels and other cooperage products so our employees, customers and communities flourish.

A vital part of the alcohol production process, fermentation products from Lallemand Biofuels & Distilled Spirits have been designed and selected to create value by tailoring objective solutions to distillery needs.

Live Oak Bank specializes in financing solutions for craft distilleries nationwide. As one of the largest originators of small business loans in the country, our loan options allow you to meet your customers’ demand and take your business to the next level. Our team is guided by craft experts and peers who have a combined 75+ years of lending expertise in this space. With access to a cash flow business model, industry knowledge and innovative technology, you’ll be able to grow your distillery with a committed partner. Financing can be used for expansion, equipment purchases, refinance, working capital, construction and more.

MGP is known for its mastery in formulating, fermenting, distilling and maturing world-class spirits. The company’s expertise in blending art and science to produce premium bourbons, whiskeys, gins and grain neutral spirits serves as the foundation of a lasting legacy steeped in know-how. Customers benefit from MGP's in-depth experience, state-of-the-art capabilities, and strong penchant for developing tailored formulations and meeting precise product requirements. MGP's entire team, with distilleries in Atchison, KS, and Lawrenceburg, IN, takes great pride in delivering the highest quality results with each and every product made. For details visit mgpingredients.com/alcohol.

Moonshine University is located in Louisville, Kentucky on the Beverage Campus with its sister company, Flavorman. Moonshine University offers a variety of classes for enthusiasts, entrepreneurs, industry professionals and those seeking careers in the distilling industry. Our distillery was designed as part of our classroom, and all classes incorporate hands-on learning and sensory evaluation in order to provide a complete and comprehensive education. In addition to its knowledgeable instructors, Moonshine University hosts a range of renowned industry experts for specialized instruction and training.

O-I is the world's largest glass container manufacturer and the preferred partner for many leading spirits brands. O-I delivers safe, sustainable, pure, iconic, brand-building glass packaging to the growing craft spirits market.

For over 60 years our company has produced cork stoppers and a wide variety of bottle closures. Family-owned and operated since its inception, Tapi USA continues to develop new products and enter new markets. Tapi USA is proud to support the growth of the artisan distillery industry and is honored to be the Bottle Closure Sponsor for Artisan Spirit Magazine.

Total Wine & More is the country’s largest independent retailer of fine wine, beer and spirits. Our strength is our people. We have over 5,000 associates, who must demonstrate comprehensive beverage knowledge before they are invited to join our team. After coming on board, all of our team members undergo an extensive initial training program. We believe that an educated consumer is our best customer. We want to demystify the buying experience for our customers so they will feel confident in choosing the bottle that is perfect for them. Total Wine & More works closely with community and business leaders in each market it operates to support local causes and charitable efforts.

Glass effortlessly conveys a superior image and delivers the unmatched quality that craft beer consumers expect. In addition to the wide range of bottle options offered through our Covet and Heritage collections, we also offer custom glass design and decoration expertise. Find out more at o-i.com.

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DistilaMax

& DistilaVite

Quality yeast and yeast nutrients for beverage alcohol fermentations.

For more information, visit

www.lallemandbds.com

For sales or technical support, call 1-800-583-6484.

A LETTER FROM THE EDITOR: Lately the team and I have been talking a lot about “types” of distillery business models. Large, small, medium, farm, distill-pub, contract operations, and so on. Everyone has an opinion on what works, what doesn’t, and what the future holds. I have my own opinions on what can make a distillery viable, but in the end what we keep coming back to is that there is no universally “right” way to build your distilling business. Want a hobby distillery? Go for it! Building out a team of heavy-hitting investors with solid returns in mind? Hell ya, make that happen. It’s hard work whatever path you pick, but you are not alone on your journey. We are damn lucky to walk alongside you all and support this growing industry. We are incredibly proud of what we have built here at Artisan Spirit Magazine, and we owe it to our distilling family to keep delivering content and education with an integrity that you have come to expect and should demand from a trade publication. With that in mind, it’s just as good a time as ever to re-affirm our mission as a company and as members of this community. When we set out to create a publication for this industry, we made our own decisions on what sort of business model to pursue.

We discussed our mission and the values important to us as individuals and committed ourselves to guiding principles we knew would lead to a publication we’d be proud of.

A low ad-to-content ratio — Advertisers never feel lost in a sea of ads. Readers only see industry suppliers and vendors who place value in our long term investment in an educated industry. It’s a win-win. No advertorials — To maintain editorial integrity we do not solicit or accept payment in return for articles. Submissions and article requests are welcome and published at the sole discretion of our staff. Independence with collaboration — We are 100% independently owned, but we are lucky enough to work and partner with many of the guilds, groups, and associations that support the distilling industry. These collaborations allow us a greater understanding of the industry as a whole and encourages article topics that help our readers stay better informed. Promote safety — We want our distilling family to live long and healthy lives so we cover topics that keep our readers physically, legally, and financially safe. Diversity of thought — It is the position of this publication that diversity within our industry is a

good thing. We value unique blends and new expressions in spirits and the people who make them. We seek to give voice to differing opinions while covering the whole gamut of issues distilleries must face. Each issue should challenge preconceptions, celebrate tradition, and encourage innovation.

Promotion of lifelong learning over profits — Our profits come largely from sponsorships and advertisements. Every registered DSP in the United States qualifies for one free subscription and every single issue of our magazine is available on our website in digital format for free, leaving plenty of money on the table. We truly believe in investing in a good education and live to serve as a reminder that lifelong learning is important and incredibly valuable. We also know firsthand the barrier that money can play towards attaining that education and want to do our part to help ease the burden. This business model isn’t right for every publication, but it’s what feels right and works for us. Some may call it naïve, but if our passion didn’t meet that of the industry we represent, then this publication wouldn’t be worth a damn. Thank you to all our readers who continue to support us, challenge us, and keep us honest every step of the way. We look forward to continuing this journey together for many years to come.

Brian Christensen (509) 944-5919 /// brian@artisanspiritmag.com /// PO Box 31494, Spokane, WA 99223

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Experience Matters. Design & Construction Experts

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Y L R E T QUAR EPORT R D L I GU

eme ne core th f there is o ng 2019 in the Spri word orking ate, its the the hard w h it Guild Upd w p u te t a ugh every st and get ca .” Almost s. Read on se “legislation a re c in t. tax re! docke ant to sha dangerous ing on the ing they w potentially th e to has someth m , ls so il s b a dh g room if your guil ficial tastin t us know le d From bene n a y, tr coun around the guilds from

ACSA STATE GUILD COMMITTEE We just wrapped up this year's Annual American Craft Spirits Association Conference in sunny Minneapolis! As always, the Guild Roundtable discussion was a great opportunity to discuss guild related issues with leaders of the other state guilds. This year’s topics included:

• FET (Thanks to Senators Wyden and Blunt for reintroducing the Craft Beverage Modernization and Tax Reform Act (CBMTRA))

• DTC, we are working with state guild leadership to find possible state legislative avenues to open direct-to-consumer shipping.

• What legislation are you running? What is moving the industry forward in your state?

• Problematic legislation? What is holding the industry back in your state?

• Common legislative priorities? • Lobbying: what works, how are you doing it? WWW.ARTISANSPIRITMAG.COM

• Organizational structure • Revenue generation, dues, sponsorship, events — what is working and what isn’t?

• ACSA State Specific Economic Data Study: we are really excited about this study that should more granular EDS info at the state level.

• COOP trade events: is it useful to work together to reduce costs of large industry trade shows?

• Open discussion, what’s on your mind? Stayed tuned for updates in the next issue of Artisan Spirits Magazine. Cheers,

P.T. Wood ACSA Board and Chair State Guild Committee, Wood’s High Mountain Distillery in Salida, CO pt@woodsdistillery.com

ARIZONA ARIZONA CRAFT DISTILLERS GUILD The number-one priority of the Arizona Craft Distillers Guild (AZCDG) for 2019 is focusing its efforts on pushing the FET tax reduction to be made permanent. Along with the push for FET permanence, our guild is working to grow consumer awareness of locally distilled and produced craft spirits in the state of Arizona.

FLORIDA FLORIDA DISTILLERS GUILD The Florida Distillers Guild will continue working to reduce the prohibition era laws governing craft distilleries and create parity to statutes currently governing Florida farm wineries and craft breweries:

MAINE MAINE DISTILLERS GUILD The Maine Distillers Guild, MeDG, held its annual meeting this month at Hardshore Distilling Company in Portland Maine. The members voted in a new guild president, Ned Wight, owner and distiller of New England Distilling, established in 2011 and a founding member of the MeDG. The guild appreciates all the hard work and leadership of outgoing president Ian Michaud of Liquid Riot Bottling Co. Maine continues to expand the reach, quality, and variety of the craft beverage industry with 17 members strong and more in the process of bringing their projects to fruition. The MeDG’s major focus for 2019 is on legislation as the Maine legislature meets every two years for non-emergency bills.

Individual Arizona distilleries have reached out to their senators, congressmen and congresswomen to speak to them on the topic of FET permanence. In the winter of 2018, Grand Canyon Brewing + Distillery met with US Representative Tom O’ Halleran and got his commitment to vote for FET permanence. Our goal is to meet with all state representatives by summer to ensure Arizona is doing everything it can to support craft distillers and craft brewers. To grow awareness of the craft spirits industry, AZCDG is putting together a

passport style map which lists several distilleries throughout the state. The goal of the passport is to encourage Arizonans to visit the many wonderful distilleries in the state, with a discount on spirits given to passport holders. If any Arizona distilleries are interesting in being a part of the passport book, please contact the guild. Cheers to a great 2019!

»» Remove the limit on bottles sold to

»» Ability to ship spirits direct to out-of-

consumers from tasting rooms. Ability to have additional manufacturing locations. (Breweries are permitted up to 8 locations in the state.) Ability to hold a vendor's license at primary and additional locations (breweries).

state consumers who visit distilleries (wineries). Ability to self-distribute (wineries). Increase limits on annual production.

»»

Kris Bohm Head Distiller Grand Canyon Brewing + Distillery

»» »»

Philip McDaniel CEO St. Augustine Distillery

MAINE DISTILLERS GUILD OFFICERS President — Ned Wight

Secretary — Jeff Johnson

NEW ENGLAND DISTILLERY COMPANY

STROUDWATER DISTILLERY

Vice President — Jordan Milne

Treasurers — Keith & Constance Bodine

HARDSHORE DISTILLING COMPANY

SWEETGRASS WINERY & DISTILLERY

Partnering with the food and beverage division of the Bernstein Shur lobbying firm, the MeDG’s efforts are centered around three bills which aim to allow a greater number of tastings at retail locations, bottle sales at off-site events and festivals, and a lower fee for products sold in our own tasting rooms. The MeDG continues its efforts in other arenas, specifically participating in and creating guild-wide tasting events, marketing to on-premise businesses as a guild,

partnering with Maine Spirits, the exclusive wholesale distributor for spirits in the state of Maine, deepening our relationship with BABLO, the liquor control and licensing division for the state of Maine, finding creative ways to engage the public through our website www.MaineDistillersGuild.org, the Maine Distillery Trail, and at our individual businesses. Keith and Constance Bodine Sweetgrass Farm Winery & Distillery

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ATCHISON , KS

LAWRENCEBURG , IN

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MARYLAND MARYLAND DISTILLERS GUILD The Maryland Distillers Guild continues to focus on three main areas: legislative progress, educational opportunities, and consumer events. The board is thrilled to renew their relationship with their management group Grow & Fortify, a non-profit that aims to support valueadded agricultural organizations and the businesses they represent. Kevin Atticks, founder of Grow & Fortify, has served as the director of the MDG since its formation in 2015. The guild credits much of its successes, both legislative and marketing, to the powerful partnership with the G&F team, which also represents Maryland wineries & breweries.

MONTANA MONTANA DISTILLERS GUILD Last quarter, I reported that the State of Montana was about to release our individual formula information. This has since been resolved through attorneys (thanks to Headframe Spirits for being on top of this), and the State of Montana has agreed with our point of view, based on the trade secrets act. If anyone wants individual formulas, that person will need to sue the State of Montana for this information. We are bringing four pieces of legislation forward this year with the help of our lobbyist, Abigail St. Lawrence. 1) SPECIAL EVENTS: Allowing nonprofits to serve liquor as well as the currently legal beer and wine at special events as a fundraising tool. 2) PROOF GALLONS BILL: Currently our cap on production if we want to

LEGISLATIVE FOCUS: The MDG continues to advance the industry through legislation, introducing three bills for 2019, which all increase retail opportunities & customer engagement, and show signs of broad support: HB549 — Revisions to the current off-site permit to allow distillers to attend more farmers markets and other off-site events; HB550 & HB551 — onpremise consumption permits to authorize a local liquor board to create and issue a permit that permits a Class 1 distiller (and one for a Class 9 distiller) to offer limited mixed drinks to customers of legal drinking age. EDUCATION: MDG continues to use their resources to develop educational opportunities for distilleries and consumers alike. Most recently MDG hosted a barreling workshop with presentations from distillers, blenders, and a cooperage focusing on

have a tasting room is 25,000 gallons. We would like to see this raised to 200,000 proof gallons. This number is referenced in several places in statute regarding tiered levels of taxes, so it isn't just an arbitrary number. 3) TASTING ROOM PARITY: Currently we are allowed to serve 2 ounces on premise, and sell 1.75L of off-premise products. Our current hours that consumption is allowed is from 10 a.m. - 8 p.m. We would like to increase on premise consumption to 4 ounces, selling 9 liters of off-premise products, and allowing for a 'consumptive hour' to 9 p.m. (rather than pulling all drinks right at 8 p.m.). 4) SELF-DELIVERY BILL: Currently a micro distillery is allowed to selfdeliver (not sell) one full case to a state liquor store (we are a control state). We would like micro distilleries

both functional care and maintenance of barrels to flavor profiles of finishing barrels and age. EVENTS: The recently formed events committee is dedicated to enhancing the consumer experience at guild events. Focusing on higher consumer quality experiences, the events committee is reworking the quarterly tasting events as well as the larger November distillery celebration 'Proof'. The MDG currently has 51 active members: 25 licensed distilleries, 8 start ups distillers in planning, and 18 affiliate/ industry members.

Jaime Windon Owner/Co-Founder | Lyon Distilling Co President | Maryland Distillers Guild

to be allowed to self-deliver less than one case to a liquor store as well as allowing for a split-case to be available through the state distribution during the promotional period. These bills all directly affect our effectiveness of marketing, allowing smaller stores and distilleries to more efficiently promote their products, increasing our manufacturing rights (which equal jobs), and increasing the amount of products a singular person can sample. We have hearings run through February, and they are sure to spark lively conversations among all liquor industry members. Again, I'm always happy to discuss any of these issues via phone or email. Feel free to contact me any time.

Robin Blazer World Headquarters Willie's Distillery, Inc.

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DISTILLING YEAST PINNACLE M | PINNACLE MG+ | PINNACLE G | PINNACLE S

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NEW MEXICO NEW MEXICO DISTILLERS GUILD The New Mexico Distillers Guild met in retreat at the mountain home of Glencoe Distillery in Ruidoso, NM in December

NORTH CAROLINA DISTILLERS ASSOCIATION OF NORTH CAROLINA Goals and initiatives for 2019 follow directly from those established for 2018 with a focus on: 1) NC Legislative Agenda, 2) Developing a sustainable revenue model for DANC, and 3) Continuing to work within the control system to improve the working relationship between craft distillers, the Commission, and local boards, with a goal of increasing market access and competitiveness to NC craft distillers. FOCUS ON OUR LEGISLATIVE AGENDA Significant progress with respect to state law reforms favorable to NC spirits producers has been made over the past several years thanks to a strong grassroots effort by NC distillers coupled with targeted lobbying efforts by DANC. There is currently a vocal movement afoot in NC to dismantle the existing control system in favor of a more open market-based system. This has become a polarizing political “hot potato” in NC and has occupied much of the conversation around alcohol legislation over the past year. To the uninformed, a move toward a less restrictive market-based system sounds like a great idea. To those of us who have been in the industry and have fought for shelf space in both control and open systems, we recognize that there is no perfect three tier system. And, that in fact trading the foe you know for the one you do not isn’t always the best strategy. That

2018 to set the agenda for the coming year. Now 11 members strong, the guild has an infusion of spirited new members who are spearheading initiatives on the legislative and public events fronts. Legislatively we are pursuing a state excise tax reduction that mirrors the 80% federal excise tax reduction as well as the ability to use

said, DANC has elected not to pick a side in this debate and instead opted to simply fight for reforms that best support the longterm viability of our members. In short, DANC has adopted a position of “Alcohol Equity”, which essentially equates to legislative parity with NC producers of beer and wine with respect to market access, freedom to self-distribute, and tasting room regulations. IMPROVING DANC’S FUNDING MODEL DANC continues to struggle with developing a reliable and sustainable revenue stream. DANC is continuing the shift away from our current funding mechanism comprised of a voluntary per-distillery contribution of a percentage of tasting room bottle sales. We are now experimenting with a more sustainable funding model based on a series of day-long tasting events that will serve to educate our consumer base, while building brand awareness. Events will be open to the public and will be held in various metro markets across the state. Our first event was held in Q4 2018 with mixed results. We learned a lot from the inaugural event and will improve on the model as we look to host multiple events in 2019. RELATIONSHIP BUILDING WITH NCABCC DANC leadership invested significant time in 2018 to bolster relations with the North Carolina Alcoholic Beverage Control Commission. Midway through the year the Commission went through a significant leadership change with the appointment of a new administrator. With the change in leadership came changes in Q4 to listing practices and more rigorous enforcement of

our distilleries for private celebrations. The events committee is charged with developing a signature event to showcase New Mexico craft spirits. 2019 is shaping up to be a positive and transformative year! Greg McAllister Co-Owner, Algodones Distillery

2018 DISTILLERS ASSOCIATION OF NORTH CAROLINA BOARD OF DIRECTORS 2019 BOARD TO BE ELECTED AT FEBRUARY ANNUAL MEETING

Pete Barger — President SOUTHERN DISTILLING COMPANY STATESVILLE, NC

Scott Maitland — Vice President TOPO DISTILLERY CHAPEL HILL, NC

Zeb Williams — Secretary OLD NICK WILLIAMS LEWISVILLE, NC

George Smith — Treasurer COPPER BARREL WILKESBORO, NC

Cary Josef — At Large SOCIAL HOUSE VODKA KINSTON, NC

listing requirements that had not previously impacted NC distillers in a significant way. These changes rang the alarm bell for many NC producers and DANC leadership responded by engaging directly with the Commission to 1) stave off immediate actions that would negatively impact NC distillers, and 2) provide a voice for NC distillers to ensure that long term policy actions are not detrimental to the success of DANC members and the broader industry. Pete Barger DANC President Principal, Southern Distilling Company

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OREGON OREGON DISTILLERS GUILD The Oregon Distillers Guild is excited for our 9th Annual TOAST scheduled for Saturday, March 9 at the Tiffany Center in Portland. The Annual Meeting will happen the same day starting at noon. At the meeting we will elect our board of directors and act on any other business that may be brought before the members. TOAST is our premier event for Oregon distilled spirits. This is an opportunity to taste from a wide variety of over 120 spirits from

TENNESSEE TENNESSEE DISTILLERS GUILD TOURISM: The Tennessee Distillers Guild has joined forces with Aero Service Group and Marshall Retail Group to open two new Tennessee whiskey-related experiences in the Nashville International Airport (BNA). In conjunction with Minneapolis-based airport restaurant operator, Aero Service Group, the Guild will launch Three Casks, a restaurant and retail store featuring local cuisine, Tennessee distilled spirits, local craft beer, and Tennessee Whiskey Trail merchandise. Tennessee Whiskey Trail distillers will be partnering with Aero on developing the restaurant’s cocktail menu, spirits infusions, and tasting experiences for BNA travelers. The new restaurant will be located in the airport’s Concourse C and is

WYOMING WYOMING DISTILLERS GUILD It’s been an active past few months for us here in Wyoming as we work continuously to improve the business climate for the distilling industry. At the time of this writing, we are quite optimistic that two of our three legislative initiatives will pass and become

Oregon. TOAST allows small distillers and producers to showcase their handcrafted spirits, while providing an opportunity for the public to experience the diversity and quality of craft spirits from Oregon. This year's TOAST features five of Portland's best restaurants. Each restaurant will offer a selection of small bites throughout the evening. On the legislative front, Senate Bill 108 is our most important priority. The ODG Board and lobbyist Dan Jarman continue to work with Senator Lee Beyer, Oregon Liquor Control Commission (OLCC) and other legislators to significantly reduce the tax we

pay in the tasting room. We are encouraging all of our members to communicate with their legislators to support SB 108. The current draft of the Oregon State budget is asking OLCC to raise the price of all distilled spirits 5% to help balance the budget. The ODG Board feels that an additional 5% on top of the 104% markup is too much for us to bear. We are working with DISCUS and other interested parties to prevent this price increase.

expected to open in November 2019. The Guild has also partnered with Las Vegas-based Marshall Retail Group to open a new Tennessee Whiskey Trail retail store, The Trailhead, which will feature spirits distilled exclusively by Tennessee Whiskey Trail distilleries. The Trailhead will be located in Concourse T of BNA’s new airport expansion, which is slated to open in 2023.

LEGISLATIVE UPDATE 2019: The Tennessee Distillers Guild welcomed new legislators to the 111th Tennessee General Assembly, which convened in January 2019, as well as a new Tennessee Alcoholic Beverage Commission (TABC) executive director, who was sworn in in February 2019. The Guild is also working with the Tennessee Department of Agriculture on new distillery inspection criteria.

TRAIL NEWS: The Tennessee Whiskey Trail, which is now in its third year, continues to thrive. Two new distilleries, Prichard’s Distillery and Brushy Mountain Distillery, have been added as stops on the Trail and are available for check-ins on the app and stamps on the new 2019 TN Whiskey Trail Passports. More than 110,000 passports have been distributed and more than 5,800 users have downloaded the TN Whiskey Trail app, with thousands of Trailblazers visiting TN Whiskey Trail distilleries each month.

law. Both have cleared significant hurdles and are moving through the House and Senate with nearly unanimous support. One of these initiatives will allot 12 “manufacturer’s off-site permits” per year. These permits will allow us to sell and promote our products at special events (farmer’s markets, concerts, fundraisers, etc.) without the need of piggy-backing on a retailer’s permit, thus making it easier for

Jamie Howard Owner, Sinister Distilling ODG Board Member, Treasurer

UPCOMING EVENTS: Tennessee Distillers Guild members are gearing up to participate in several upcoming whiskey events, including the Cornbread and Moonshine Festival in May, the West Tennessee Whiskey Trail Celebration in April, and the Tennessee Whiskey Experience in October.

Mariko Hickerson Founder & CEO, Huckleberry Branding

us to grow our local brands and increase recognition in our on and off-premise customer accounts. The other initiative is a bill that will allow distillers to self-report state taxes and physically transfer product from the bonded premises to the tasting room. Currently, as Wyoming is a control state, we need to freight all product to the state warehouse, only to then pay to have it shipped right

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back to our tasting room. This initiative would save time, energy, and money. The bill that we chose not to pursue this session is one that would allow for at least one additional off-site tasting room. This initiative was viewed to be ruffling some feathers with our valuable retailer accounts, so we will likely enter discussions with our state alcohol trade organizations and work on a future draft of

ING? GUILD MISS ru E T A T S R U O c IS Y victories, re r latest Share you

this bill that will work for all parties. Of course we continue to urge those of influence to support the permanent extension of the Craft Beverage Modernization Act. Every member of our guild has experienced significant benefit from the current structure, and we will do

whatever is necessary to make this change permanent. Travis Goodman Secretary, Wyoming Distillers Guild Partner, Jackson Hole Still Works travis@jhstillworks.com

pliers! rs and sup e ll ti is d ft cra dience of llow guilds. national au a h c a d inspire fe re n a to y s, it e g n n u e rt ll o cha opp your latest out on this s to solve n Don’t miss io st e g g su D! rs, request GET INVOLVE it supporte

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WHATâ&#x20AC;&#x2122;S UP AHEAD in the th 116 CONGRESS W RITTE N BY J A M E S E . HYL AND, ESQ, PENNSYLVANI A AVENUE GROUP, A ME R I C A N CRA FT S P IRITS A S S OCIATION PUBL I C POL I CY ADVI SOR AND L EGI SL AT I VE AF FAI RS COUNCI L

he election on November 6, 2018 ushered in significant changes that will certainly impact the Federal Excise Tax (FET) debate in the next Congress. The Democrats picked up 41 House seats. They needed only 23 to gain a majority, so they now have a comfortable working majority in the House. The GOP picked up a net two Senate seats, so the new balance of power in the Senate is 53 to 47 in favor of Republicans. As for the House, one of those defeated on the GOP side was Rep. Erik Paulsen (R-MN) who was the lead sponsor of H.R. 747, the House bill that would permanently lower our FET from $13.50 to $2.70 for those producing less than 100,000 proof gallons. Rep. Paulsen was from a suburban Minneapolis district and like many Republicans in those swing districts, he was not re-elected. Ironically, his opponent, Dean Phillips, has had family in the distilling business. Because the 115th Congress concluded on January 2, 2019, all legislation must be re-introduced in the 116th Congress. ACSA and the other beer, wine and spirits groups are currently working on new legislation in 2019. There existed the potential for year-end tax legislation in 2018 and ACSA was looking at this as a vehicle to extend our FET tax WWW.ARTISANSPIRITMAG.COM â&#x20AC;

treatment. Our Association, along with the other major beer, wine, spirits and cider groups, signed a joint letter to Senators McConnell (R-KY) and Schumer (D-NY) requesting that our FET issue be addressed in any final tax bill. Unfortunately, the Congress ended with the government shutdown and no new tax bills were considered. The new Congress was sworn in on January 3, 2019, and with it a number of new Chairmen of key Committees in the Senate and House on tax issues. First up, in the House, the House Ways and Means Committee, which handles all tax bills, has appointed Richard Neal of Massachusetts. Rep. Neal was a supporter and co-sponsor of HR. 747. Rep. Neal has served in the Congress for nearly three decades and is a very well-liked and respected member on both sides of the aisle. ACSA expects that he will be favorable to our legislation. In addition, Rep. Ron Kind of Wisconsin was the lead Democrat on H.R. 747 in the last two Congresses. We expect that Rep. Kind and Rep. Mike Kelly of Pennsylvania (R-PA) will play an active role in 2019 and likely lead the FET permanency effort in the U.S. House in the new Congress. In the last Congress, we had over 300 co-sponsors.

Our industry will again have to kick into high gear and engage in significant advocacy to get the Senate and House to support an extension or permanency of the lower FET and parity for craft distillers. 25

ACSA’s goal is to again garner that many co-sponsors in 2019. Next, in the Senate, with the retirement of Senator Orin Hatch (R-UT), Senator Chuck Grassley of Iowa will take over as Chairman of the Senate Finance Committee. Senator Wyden of Oregon will continue as the top Democrat on Senate Finance. Senator Roy Blunt (R-MO) remains in the Senate and moves up in the GOP leadership ladder. ACSA and others worked with Senators Wyden and Blunt to have a re-introduction in the Senate of legislation in 2019 that would make our FET reduction permanent. That new bill, S.362, was introduced on February 6, 2019. ACSA was pleased to have Sen. Wyden as a guest at our Board of Directors meeting in Portland to discuss the best means of making the FET permanent for craft distillers. ACSA and a number of other leaders in the beer and wine industry visited with our key supporters, including Senators Wyden and Blunt and Congressmen

Kind and Kelly to map out a legislative strategy in early January 2019 to get this accomplished sometime this year. We will continue to meet with key members of Congress to press our issues. ACSA also had the opportunity to sit down with Senator Rob Portman (R-OH) who was a lead Republican member in the Senate on the FET reduction in the Senate Finance Committee. He is acutely aware that we need new legislation passed in 2019. Additionally, after our meeting, and as a direct result of his discussion with ACSA, he took to the Senate floor to also decry the negative effects of the government shutdown on label approvals and the setback to our industry. The challenge we face will be unique. Because the House and Senate are split along party lines, there is not a natural desire to hammer out a new tax bill, such as there was in 2017. We are going to have to think strategically about how we get this accomplished in 2019 with both parties looking differently at tax reform.

Most important to this effort will be the grassroots of the craft distilling industry. Our industry will again have to kick into high gear and engage in significant advocacy to get the Senate and House to support an extension or permanency of the lower FET and parity for craft distillers. While we feel good about our prospects, 2019 will be a year of working hard to insure our success. For that reason, we call on all craft distillers to come to Washington D.C. from July 22nd – 24th to make our mark in the U.S. Capitol. ACSA will again be hosting our legislative fly-in in which we will make our personal plea to Congress to make a reduction in the FET permanent. We hope each distiller recognizes the significance of this event and will plan on showing up in support of these efforts.

Visit www.americancraftspirits.org for more information on American Craft Spirits Association and to join. Contact James E. Hyland, Esq. by emailing Jim@PennsylvaniaAvenueGroup.com.

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BRAND BUZZ

5 TRENDS

IN CRAFT SPIRITS PACKAGING WRITTEN BY

DAVID SCHUEMANN

The craft spirits boom has flooded the market with thousands of new brands that have successfully carved out a niche for themselves by leveraging package designs that promise quality through evocative design and hand-crafted sensibilities.

ver the past few years, many trends in craft spirits packaging have emerged. Some are proven to work well, others may be played out, and some new ideas may be starting to gain traction. There is no silver bullet, however, knowing the lay of the land is critical when developing or repositioning your brand through packaging.

NOSTALGIC

SENSIBILITY

One of the most popular trends over the past few years has been a historic look that leverages the rich history of a region or brand via elaborate designs. Often the packaging uses a contemporary twist on nostalgic, turn-of-the-century design aesthetics from the US and Europe. This trend is optimized by:

>> >> >> >>

Flourishes and elaborate detailing Gold foil accents Historic and hand-drawn typography Elaborate crests and seals

This trend is rampant in craft spirits and has been largely successful in the market to express:

>> >>

Luxury product sensibility

A simpler, more honest promise of quality

A positioning that captures the rich opulence of historic European and Victorian age design

The market has been flooded with brands that leverage this design sensibility. While it appears that packaging with a nostalgic look will continue to be desired, a point of saturation is quickly approaching and this look may no longer have the ability to help a brand stand out among its competitors.

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BOOTLEGGER & PROHIBITION As one of the more popular design routes in craft spirits, this trend is inspired by the Prohibition-era days of bootleggers and speakeasies. It’s not a surprise that this look has become fashionable with craft distilleries since many feel an affinity with the bootleggers who bucked the status quo. This trend spans the range from “home-spun” designs with hand-drawn type, to raw, almost “undesigned” packaging, to mysterious elicit speakeasy-inspired designs. This trend is optimized by:

A rough-hewn or hand-drawn style used in typography or across the entire label

Labels that have elements written in by hand or that use “typewriter” fonts

Labels that are printed on craft paper and feel bespoke

Black labels that are mysterious and evocative

Labels that leverage old Americana imagery

This trend is extremely popular with both US and Canadian craft spirit producers and has been largely successful in the market to express:

>> >> >>

The lore of bootlegging during prohibition in the US Small-batch, handcrafted quality The resurrection of family recipes into new products/brands

The market is full of brands that leverage this design sensibility. It may appear that there’s no end in sight for this style, but unless brands have a more direct tie to this design trend through their personal story, it could feel a bit expected — or worse, contrived — to a potential consumer.

COPPER Many craft distilleries main investment is their still, so it should come as no surprise that they have taken this as inspiration for their packaging and, in many cases, their brand name as well. This trend is driven by the color copper on packaging and often the word “copper” in the brand name. This trend is optimized by: >> >> >>

In what I can only imagine is an effort to provide transparency — or worse, simply a bad design trend spurred by designers who thought it was cool — many craft distillers have opted to make the type of alcohol the largest and most legible part of their packaging. This trend is optimized by:

>> >> >>

Names that incorporate “copper” Copper as a color, especially copper foil Designs that take their inspiration from copper pot stills

This trend has become a go-to solution for many craft distillers inspired by their craft and further fueled by the success of Tito’s Handmade Vodka, one of the first craft distilleries, if not the very first, to leverage copper as their primary brand color. Designs using copper typically express:

>> >> >>

LARGE PRODUCT TYPE

An overly large expression of the alcohol type Nearly invisible expression of the brand name A stripped down, almost generic approach to the brand packaging

Driven by a design aesthetic that in most cases does not serve the distillery well, the brand becomes the product rather than the brand itself. While from a distance (such as on the back bar) it is very readable, it comes off as generic up close. The designs typically express:

Small-batch, handcrafted quality

>> >> >>

The importance of their copper still Hand-crafted quality

Copper has become a common color used by craft spirits brands and is so popular that it’s almost synonymous with craft distilling. While the color still has value, copper alone is not enough to carry a brand’s message.

Transparency of what the product is (I guess…) An overly simplistic expression of the product Type that’s clean and easy to read from a distance

I really can’t express how disturbing I find this design trend. It relegates the brand to a subordinate position and often expresses the product type as the brand which, of course, it can never be.

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It is the opposite of what craft distilleries should be standing for. Simply saying most loudly that you are a vodka or bourbon falls well short of the consumer’s expectation and misses an opportunity to communicate the brand’s essence.

MODERN & CLEAN

As craft distilleries have begun to expand what they stand for and how they define themselves, some brands have moved beyond the vernacular craft spirits design that relies on historical crutches. This shift is being driven by the market saturation of brands leveraging the above trends and a new frontier offering an opportunity to define what craft can, and will, stand for. Craft distilling does not have to tie itself to the past to be relevant. Many craft distilleries are on the cutting edge of technology and innovation. For this reason, the trend towards clean, more contemporary, even modern packaging has begun to emerge. This trend is optimized by:

>> >> >>

Clean, modern packaging Brighter, even vibrant colors Sleek and sophisticated designs

This trend is driven by several elements: distilleries that do not have a rich heritage or story to pull from, a desire to express their brand through a fresh and modern aesthetic that stands apart from the crowd of “historic brands” and a brand story or promise of

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modern distilling methods that produce exceptional product—a sort of modern craft, if you will. The designs typically express:

>> >> >>

A modern sophistication A more urban appeal A fashion-forward sensibility

The modern space may be the new fertile ground for many craft distilleries as they seek to express their brand through packaging that will stand apart from the competition. The critical part of executing this sort of design is to avoid the pitfall of looking commercial and instead strive for a more lifestyle, even fashiondriven, aesthetic. If done correctly, a modern and clean design can live in a very fruitful area of differentiation. Memorable packaging reinforces brand name, inspires trial, reinforces the consumer’s enjoyment of the product and assists recall for repurchase. Design trends will continue, and new ones will inevitably emerge. Ultimately, expressing a brand’s unique story and product through evocative packaging that stands out from the crowd will go a long way towards any distillery’s success. So, consider that the unbeaten path — whatever that may be now and into the future — may be the best path forward.

David Schuemann is the owner and creative director of CF Napa Brand Design. For more information, visit www.cfnapa.com or call (707) 265-1891.

WE FINALLY DID IT

AND WE STUCK THE LANDING WRITTEN BY JOHN MCKEE

rom a professional vulnerability perspective, this article is a simultaneous expression of pride and a desire for acceptance amongst our peers. When we opened Headframe almost seven years ago, we started by sourcing our bourbon product from MGP Ingredients. We were never duplicitous or secretive about it, but our goal was to not remain that way forever. Over the course of the last seven years, we transitioned by steadily increasing the ratio of our in-house spirit in the final blend until the start of this year. Now, we can finally say that our bourbon is 100% mashed, fermented, distilled, and aged in our distilleries in 53-gallon barrels and offered as a two-year-old straight product. This article is the story of why and how we did it. In order to set a tone, I’d like to recall a blog post by Chuck Cowdery from August of 2011 entitled “Micro-Distillers and the ‘Just Till We Get Going’ Trap.” Directly quoting from that article “After observing this pattern for the past half-dozen years or so, I have concluded that when new micro-distillers say that is their plan, they are in most cases either lying or naïve.” An indictment that said, if you start sourcing you’re not going to come out of it in the way you wish, one way or another. After seven years of effort, we’re happy to announce that we may have had to overcome some naiveté in our plan but we’ve finally stuck the landing. Back in 2012, we opened our distillery in a market with only roughly 300-400 distilleries in the nation. We believed we couldn’t build a sustainable business plan that included the following common-at-the-time assumptions for a new distillery:

»» Waiting for brown spirits to mature while we made cash flow from clear spirits

»» Age bourbon in barrels smaller than 53 gallons »» Release bourbon at ages under two years With that in mind, we made the decision to launch our Neversweat Bourbon line with sourced whiskey from MGP. In 2012 we were getting seven-year-old barrels for under $500 and the juice was great. Simultaneously, we started making bourbon in-house and laying that down into full-sized new cooperage from Independent Stave Company (ISC). For a couple of years, this worked pretty well, allowing us to start blending our stocks of mashed/fermented/distilled two-year WWW.ARTISANSPIRITMAG.COM

bourbon into the sourced material from MGP. Along the way, we also learned about the difficulties of selling and marketing a product that properly announced itself as “Blended and Bottled by” and stating that some of the contents were “Distilled in Indiana.” We were always honest, our sales and production teams were proud to announce how much of the blend was Headframe’s make and how long it would be until we’d distill 100% of our own product. But we also knew that some sales were lost because we couldn’t say we made all of it. Sometimes I reread Chuck’s blog wondering again if we were naïve, which I was still willing to accept, sometimes doubting that we’d get to the final goal. However, the re-read always did accomplish one thing: it reminded me that although we might have missed something in our plan, we could always say that we sure as shit weren’t lying, to ourselves or to our customers. The process of transitioning between a fully sourced product to a fully in-house product while maintaining a consistent flavor profile was multi-fold:

BLEND-RATIO GOALS: Every year after we had two-year stocks of in-house, we attempted to meet an ever-increasing blend-ratio of in-house to MGP in the released blends. The goal was a 25% increase each year until we were 100% in-house. Our intent with this strategy was to allow for our in-house stocks to age appropriately, have the cash flow to simultaneously maintain both sourcing costs and increased in-house production costs, and to allow for the flavor transitions to occur over annual timeframes. COOPERAGE: The barrels from MGP were a mix of providers and we felt we couldn’t maintain the logistical shenanigans needed to match the flavor resultant from that kind of mixture of oak. So, we aligned with ISC for our in-house product and as the blend-ratio increased, we knew that the consistency of the product would change to be more fully represented by our inhouse/ISC influenced Bourbon. SCIENCE: We did GC work on MGP and did our best to understand the differences and similarities to our in-house spirit. Some things we could account for in production and aging, and others were mysteries that we just had to allow to remain so. 33

DEAL WITH CHANGE: During the first one to two years, we were able to get seven-year-old MGP product. Then, as demand for aged bourbon grew, we found we were only able to source two-year stocks from MGP, which of course had different flavors than their seven-year. We just had to adapt and work with our customers to explain why the flavor had changed and occasionally had to address dissatisfied customers, unhappy with the younger sourced stock. By this point, we were about 50% in-house on the blend-ratio, so it had far less effect than if it had happened earlier in the development cycle, but it still had an effect and we just had to ride it out.

»» During those 2012-2015 years, we saw the cost of a barrel of MGP increase from about $300 to sometimes over $1000. It made cash flow difficult and, of course, shrank margins significantly. I’m sure there are bottles we sold into the world whose COGS outran their revenue, meaning we had the further challenge of investing an increasingly shrinking profit into an increasingly expanding inventory of in-house barreled goods.

»» We also transitioned between production managers and therefore recipe consistency and production quality were concerns.

»» Cooperage costs themselves increased, again throwing cash flow and COGS into chaos

However, when Courtney and I opened a barrel of Headframe’s in-house in January of 2019, distilled in October of 2016 by our distillery and team, it was the culmination of understanding we could:

1. Overcome our naiveté with patience, persistence, science, and stubborn pursuit of our goals

2. Know for certainty and with finality that we stuck the damn landing Cheers to our peers for allowing us to share what we did, how we did it, and why we did it, as well as for understanding that we all pursue our business practices in different ways. And cheers to Chuck Cowdery for the challenge. Chuck was right: there was a lot of naiveté in what we set out to do in transitioning Neversweat from sourced to 100% in-house production. It’s difficult to match up to a 3rd party producer. It’s hard to ensure cash flow and it’s hard to make a damn fine bourbon that deserves a place among its peers.

John and Courtney McKee are the owners/founders of Headframe Spirits and Headframe Spirits Manufacturing in Butte, MT. John will sure as shit be on the rivers of the Mountain West all spring and summer, 2019 and beyond. Reach out and join him.

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Recognizing good taste.

2nd Annual

HONEY SPIRITS COMPETITION

The National Honey Board is searching for the best honey spirits for its 2nd annual competition. Last year, more than 90 spirits competed for medals in categories that included sweetened with honey spirits and spirits distilled from honey. Submit your honey spirits and register by August 30, 2019. • Competition is free to enter • Each entry will receive judge’s notes • 9 categories plus a design award

Enter your spirits today and check out the 2018 winners at honeyspiritscompetition.com.

ECONOMIC OUTLOOK WRITTEN BY JAMES W. VERMILLION III

appy 2019! Well, that was fun, wasn’t it? The fourth quarter of 2018 brought volatility to the financial markets in a way we haven’t seen in some time, and as always, volatility creates angst for many, fear among others, and uncertainty for most. While I’ve yet to find anyone who can consistently and accurately predict short-term movements in the stock market, I do think it’s worth looking at the broader economy and trends that could have an impact in the coming year. Before we look ahead, let’s quickly review 2018:

EQUITIES: The stock market reached new highs in 2018, but a disastrous December (the worst since the Great Depression) left the market down for the year and investors wondering if we were staring in the face of a recession. The S&P ended 2018 down 6.2%, its worst annual performance since 2008.

BONDS: Demand for bonds early in the year was unimpressive, but as volatility picked up, the

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yield on long-term bonds began to fall as demand drove prices higher. At the close of the year, the yield on the 10-year Treasury was 2.68%, up from 2017’s closing yield of 2.41%.

OIL: 2018 was a trend-buster for oil, posting its first annual decline since 2015. Oil began the year trading around $60 per barrel and spiked to $76 per barrel in October before seeing prices plummet to just over $45 per barrel to close the year.

The U.S. economic expansion is now entering its tenth year, making it the second longest on record. Gross Domestic Product (GDP) rose throughout 2018, advancing at an annual rate of 3.4 percent during the third quarter after posting a robust 4.2 percent expansion in Q2. Most economists expect the impact from the tax law changes to fade, leading to slightly lower but still rosy 2.5 to 3 percent growth in 2019. That said, there are quite a few factors that could put a damper on those expectations. First, the U.S. continues to negotiate

on trade with China, the European Union, and others, and while it’s little more than a trade skirmish at this point, the longer these talks continue without an equitable deal, the worse it may become. However, it’s important not to let the noise obstruct reality. According to the World Trade Organization, the United States has the lowest average tariff rate when compared to its 10 largest trading partners, with some of the discrepancies being quite large. This leads me to believe that our trading partners have room to lower tariffs for future trade deals, which would be a positive outcome for American producers and consumers alike. On trade, I prefer to not get entangled in the rhetoric but pay close attention to the actions and reactions. Whatever the outcome, it’s sure to play a role in 2019 and beyond. Perhaps the second most discussed economic topic of 2018 was the Federal Reserve and its interest rate hikes. The previous year saw the Central Bank raise interest rates four times, each of which saw the Federal Funds rate increase by 0.25%. What about 2019? Most expect two more hikes in 2019, although many are now predicting just one.

the political landscape into my investment strategy, I look to Warren Buffett, who has often said that if you’re mixing politics and investing, “You’re making a big mistake.” While it’s true that political rhetoric, policy decisions, and outcomes in the Beltway influence the stock market, it’s unwise to make rash decisions based on political trends or events. Throughout our history we have encountered many tense political times that may have stopped potential investors from investing in their future, thus damaging their opportunities to build wealth. So, what to do? A good start would be to review your investment portfolio and ensure your asset allocation is appropriate when considering your objectives, time horizon, and risk tolerance. For those who have plenty of time to invest and are continuing to inject funds into their portfolios, there may be little to do at the moment. For others, perhaps those who are nearing the end of their earning days and will soon be relying on investment

funds in retirement, more action may be appropriate. As rates increase, fixedincome investments will become more attractive, so a shift from growth to fixed income could be a possibility. The New Year is a good time to provide updates to your financial team, so if you haven’t reviewed your situation with your financial advisor recently, go ahead and initiate that conversation. If you don’t have a financial advisor, perhaps 2019 would be a good time to form that relationship.

James W. Vermillion III is a wealth advisor for Hilliard Lyons in Lexington, KY. Call (859) 255-9681 or visit jvermillion.hilliard. com for more info. Securities and Investment advisory services are offered by J.J.B. Hilliard, W.L. Lyons, LLC (Hilliard Lyons), a Registered Broker Dealer and Investment Advisor, Member NYSE/FINRA/SIPC. Trust Services are offered through our affiliate, Hilliard Lyons Trust Company, LLC. Visit Hilliard.com for states James W. Vermillion III is registered in. For additional disclosures, please visit disclosures.hilliard.com.

What does this mean? On the surface, it means that borrowing money will likely continue to become more expensive. Lowinterest rates have been in place since 2007 when they were rapidly reduced as a part of the post-recession recovery effort. When interest rates are low it encourages consumers and businesses to spend, but if they stay too low for too long, it can lead to mal-investment and ultimately a busted bubble. On the plus side, when rates rise, savers earn more money on their cash and cash equivalents, and fixed-income products become more attractive. Much of the interest rate anxiety stems from the fear that the Central Bank could over-tighten, essentially pumping the brakes on the economy. However, based on recent comments from the Fed, they are likely to be patient in 2019, taking care not to raise rates too high, too quickly. Another current hot topic is the government shutdown, which became the longest shutdown in U.S. history. When determining how to incorporate

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thinking

SMALLER

for success WRITTEN BY COLIN BLAKE WRITTEN BY COLIN BLAKE

ver the years I have heard nearly a thousand people tell me their plans for opening a distillery. After you throw out the extreme outliers, like the gentleman who wanted to distill in the back of a roving semi-truck, or the team that was going to beat Jack Daniels in case volume sales in their first five years (needing nearly a space half the size of Rhode Island for all their facilities), you keep coming back to the same models time and time again. And while each one has its own unique spin and story, really when you look at all the business plans, they’re one of three kinds of models.

MEDIUM-SIZED DISTILLERY The most popular business model that I see is the medium sized distillery, which is also generally sized for growth. It’s like the “common cards” when opening a pack of baseball cards. While there are many of them, they’re still worth saving and checking out because they are cards of people who are getting paid to play baseball. So, don’t write these distilleries off as the hoi polloi; they’re often making amazing product and worth checking out. The medium-sized distillery is one that generally uses pot stills, but as large as possible before you would have to switch to a column still. They produce one to five barrels a day and are looking at being in five to ten markets at the end of their first year, with the hopes of being in 25 or more within the first five years. This is the area in which we’ve seen the most success since the beginning of the craft distillation boom. As long as the company doesn’t underestimate the capital needed to pull off such an endeavor, there has proven to be plenty of opportunity for this size distillery (so far). While there is still room for more distilleries this size to enter the market, it’s going to get harder and harder as distilleries in the US start to number 4,000-5,000. There are only so many brands a distributor can take on, and there is only so much shelf space at retail stores. It will always be easy to get your foot in the door in your local region, but the further away you get from your home state the harder it gets unless you’re winning all double golds, getting acclaim from every spirits writer, and have packaging that makes St. Germain look like a half-finished. We’re seeing people needing more and more money to enter the market with this size distillery because it’s becoming increasingly competitive as more brands hit the market and these brands need more money for marketing, sales, and promotion in order to stand out and get noticed.

LARGE DISTILLERY The next business model we see is the large distillery that can produce far more than they need to support their own brands. Occasionally we have someone come through who is going to buy, rehab, or build a large distillery where they are going to run a column still and can produce 3-20 barrels an hour. The strategy behind this model is that they have plenty of capacity should their brands take off but are opening with the initial WWW.ART ISANSP IRITMAG.COM

plan to sell that extra capacity for contract distillation. We’re seeing more and more of these distilleries open, which is proving to be great for the nonproducing brands on the market. As more of these large distilleries are opening, we’re seeing a sizable amount of available capacity out on the market, which is going to drive the price a distillery can charge per barrel down, and make it hard to sell off all their capacity in the first place. Death’s Door is a perfect example of how it can be detrimental to the company if that extra capacity isn’t sold.

SMALL-TO-MEDIUM DISTILLERY And finally, the small- to-medium-sized distillery. These are distilleries that are looking to do most of their sales at their facility by being a destination, experience, or existing in the midst of a popular tourist area. We’ve seen people who have done this model achieve great success.

While the cost per square foot might be a huge upfront cost, these distilleries are getting by with very little equipment, in some cases even sourcing their spirits elsewhere (depending on the individual state regulations), and dedicating the majority of their space to a tasting room, bar, and retail. That’s why we are seeing some great potential for future distilleries to be on the smaller side — not only the ones looking to do a lot of sales because they are in a high foot-traffic area but also those looking to take advantage of the ability to serve drinks. Even though it is a bit more work, you can maximize how much you make off a bottle if you can sell it by the drink. You and Yours Distilling Company was one of the highest rated bars in San Diego, and that was even before the distillery was fully operational. We’re seeing so many of the small distilleries do well because they’re thinking beyond the still and the markets they want to be in. Keeping in mind that small producers must still maintain cash flow and meet production demands with

the smaller footprint. They’re succeeding in one market, and it’s generally bound by a property line.

— As the distilling landscape continues to expand, it’s going to change and become a far more competitive place. The capital required to enter the industry successfully is going to keep going up if you’re looking at the medium to large size operation. Which makes the small operations more and more feasible. As local and state laws continue to change we’re going to see it become easier and easier for a small distillery to open up with a unique position. Be it through an amazing tasting room for tourists, a craft cocktail bar, or a pubstillery, there are so many ways to be successful in the distilling world.

Colin Blake is the Director of Spirits Education. For more information visit www.moonshineuniversity.com or call (502)-301-8130.

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HEALTH & WELLNESS in the SPIRITS INDUSTRY WRITTEN BY DR. JORDAN LEASURE

hen mentioning wellness or health to anyone in the spirits industry you’ll typically receive a knowing nod and the discussion will delve immediately to excessive alcohol consumption. While alcoholism is a legitimate concern in the industry it needs to be viewed as a symptom as opposed to the impetus of the problem. We’re currently scratching the surface of a much larger obstacle in the spirits industry, but all problems create opportunities. I was in attendance at Chicago's 2018 Indie Spirits Expo at the annual industry roundtable where the topic of health in the industry came up. It was wonderful to see so many panelists recognizing what the industry has already attempted to provide (alcohol-free events, education and support) while stressing the urgency of addressing the issue in a more comprehensive manner. This year Artisan Spirit Magazine has decided to lead the pack with a fourpart series on Health and Wellness in the Spirits Industry. We will highlight challenges unique to distillers, sales reps and especially bartenders and servers that require knowledge, self-discipline, and tenacity to address and overcome. My personal experience with wellness in the industry stemmed from my grandfather, a representative for Hueblein/Diageo back in the 80s. He by no means had a healthy lifestyle — he ate whatever he wanted, smoked and did not exercise. However, he had one steadfast rule that he always adhered to which is converse to most in the industry today. He never

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While alcoholism is a legitimate concern in our industry it needs to be viewed as a symptom as opposed to the impetus of the problem.

drank with clients and he never drank on the job. He felt the products spoke for themselves, he entertained regularly and felt his role was to educate his retailers and didn’t want to diminish his skills in that area by imbibing and possibly not being at the top of his game. As is true with any industry, it is the responsibility of each individual to determine the role that health and wellness will play in their life both personally and professionally. The individuals that have the most success in this area are those that realize there is no separation of the two. The habits you engage in in your “personal” life will trickle over to your “professional” and vice versa. Joe Henry of J. Henry & Sons engages in workouts five times a week regardless of his working hours, events and travel schedule. Irregular schedules are a challenge he sees in this industry. Joe says, “Health can no longer be about ‘finding’ time for self-care but has become prioritizing yourself and may include workouts at 2am if you’re not going to the gym before a shift.” He feels it’s the responsibility of supervisors to make good and reasonable suggestions for staff and subordinates as well as setting a good example themselves. As a functional medicine physician, representing the behavior that I hope to see from

others is a policy that I follow for my staff, my patients and my family. A few welcoming thoughts: “It’s OK not to be OK.” You don’t have to be drowning to ask for help. Acknowledging there is a problem is the first step not only with alcohol consumption but maintaining a balanced, healthy lifestyle. If you’re not feeling as happy, healthy and energetic as you would like, as you deserve to, and now is the time to step up and implement some behavior modifications. Through this series, we’ll discuss how to integrate positive habits to help balance your lifestyle and improve your health. We will also explore the science behind tools such as a gratitude journal, proper biomechanics, and even adequate hydration. As a first step, I’d welcome you to begin your journey with a breathing exercise. Breathing is a necessary activity that most often occurs unconsciously — but with practice, we can voluntarily bring about a state of decreased stress, pain relief and even an improved mental state. Abdominal breathing in the act of using the diaphragm, a dome-shaped muscle under your lungs, to draw air in and out of the lungs themselves.

give this BREATHING EXERCISE a try: • Find a comfortable position — either lying down or seated

• Place one hand on your heart and one on your abdomen — feel for your breath

• Take a deep breath in for a count of four and concentrate on bringing the air into the belly as opposed to expanding your chest

• Hold the breath for a count of four • Slowly exhale through your nose for a count of four • Hold the exhale for a count of four before inhaling another deep breath into the belly and continuing the practice Practice the routine in five-minute intervals when your schedule allows. Ideally two times daily or more as needed. This is a fantastic exercise to implement during times of stress or anxiety. (Record that you completed your breathing exercises daily and see if you can complete twice daily for 7 days and then reflect and see how you feel.)

In this series, we will take our thoughts on wellness through the lifecycle of a spirit from distiller to brand rep to servers and bartenders. Stay tuned for the segment that applies to your circumstance, or read them all and share them with friends and coworkers you value. A few quick medical suggestions regardless of the role you play in the industry. Water consumption is key. Drink half your body weight daily in ounces of water. And please, not only monitor your alcohol intake but the effect the alcohol is having on your body.

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Be aware of your blood work and make sure your physician is running liver enzymes. You may have to ask your doctor to add that test to your CBC at your next physical, as running a CMP (Comprehensive Metabolic Panel) may not be standard for your physician. The chemicals you willingly ingest (food, drink, alcohol, medications), as well as those you’re exposed to in the process of distilling, are all metabolized by the liver. In addition, even if you are not doing the actual farming of the grains used in your products you may be routinely exposed to chemicals from the distillery itself. More than one in three US adults has liver disease — excluding those with traditional risk factors (obesity, alcoholism, viral hepatitis). One hundred and eleven chemical pollutants were found in at least 60% of the subjects. Several chemicals (Pb, Hg, PCBs & pesticides) were associated with a dose-dependent increased risk for abnormal liver enzymes (ALT).1 In English: Everyone is at risk for liver disease so please have your enzymes monitored regularly. Your chance of developing a problem of the liver is dependent on your

1 Matthew Cave, MD, University of Louisville, Division of Gastroenterology and Hepatology 2 Cave, Toxicologic Pathology, 41: 343-360, 2013 3 Rajdl D, Racek J, Trefil L, Stehlik P, Dobra J, Babuska V. Effect of Folic Acid, Betaine, Vitamin B6, and Vitamin B12 on Homocysteine and Dimethylglycine Levels in Middle-Aged Men Drinking White Wine. Nutrients. 2016; 8(1):34.

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body’s ability to detoxify, your genetic predisposition to disease as well as your intake of alcohol and other medications and/or supplements. An individual’s susceptibility to chemically-induced liver disease is determined by polymorphisms in the genes of xenobiotic metabolism, concomitant use of alcohol or prescription medications, nutritional factors, and obesity.2 Finally, if you’re looking to combat your alcohol intake, enzymes and B vitamins may be your answer but as always check with your physician before starting or adding to your supplement regimen. “Folate and betaine can attenuate the possible adverse effects of moderate alcohol consumption.”3 In part two of our four-part series we will examine the unique challenges facing distillers and distillery employees. From walking the distillery floor to hauling grain and hoisting barrels, this back-breaking work offers the opportunity to tailor your physical, mental, and nutritional wellbeing to help you produce your finest spirits. Cheers until next time!

Dr. Jordan Leasure is the Founding Physician of North Shore Pro-Active Health, a state of the art wellness clinic in the northern Chicago Suburbs. She is a Doctor of Chiropractic with a distinction in Functional Medicine. For more information on Dr. Leasure visit www.Healthy-Spirits.com. If you have personal experience with wellness or lack there of in the industry please email DrJordanLeasure@DrLeasure.com with the subject: Healthy-Spirits.

the “DISTILL-PUB” WRITTENBY BYSCOTT SCOTTSCHILLER SCHILLER WRITTEN

y grandfather had a very unique business. He essentially combined the two family talents of distillation and pizza making. Thanks to an early post-prohibition rectifier’s license, he was able to make small scale bottlings of spirits “concoctions” that were served in his establishment. Some people came for the booze, some the pizza, others because of my grandfather, but suffice it to say, he would likely not have been as well-known and lasted as long had all three not been in play. For nearly 50 years, Grandpa had a great little business that was one-of-a-kind. The idea of a hyper-local spirits company has surfaced a bit over the past few years. This model is usually the path to existence for many micro-breweries, but as I often preach, the economics and cost of trial/experimentation vary greatly from breweries and distilleries. Depending on your definition of long-term success, I believe there is an opportunity for a distillery to operate on a much smaller scale, and at a much lower capital raise, when it is properly coupled with a killer cocktail lounge supported with healthy bottle sales, and a very targeted and limited food component. The trick is having the proper skill sets for each aspect and a seamless yet unique experience for the consumer. Here are some key pointers to keep in mind when exploring this approach:

CAPITAL While you will likely not need as much capital to start a distillery pub the cost is still likely to be significant. You will still need proper equipment that is flexible enough to make a full variety of spirits. You also have kitchen and bar costs to consider and a much larger staff to support. Above all of this, you will need to allow for much higher rent, land, or real estate costs, as this style of establishment tends to require a central location, rather than a remote distillery.

POSITIONING “People can get a cheeseburger anywhere, ok? They come to Chotchkie's for the atmosphere and the attitude.” — OFFICE SPACE The same holds true for your operation. Your unique attribute is the fact that you are a distillery! Make sure that this is well known and that the spirits are the star of the show. The problem is, with Yelp and other forms of online reviews, someone is more likely to comment about your hostess or bathroom versus the quality of your spirits. Don’t let this be what you grade yourself or your staff on. WWW.ARTISANSPIRITMAG.COM

KNOW YOUR LANE Let The Cheesecake Factory hold their record for most worthless number of options. Keep the food menu very streamlined and aim for simple sophistication. My grandpa served amazing pizza in three options: cheese, sausage, or veggie. No crust options or sizes, just those three choices. He also offered pretzels with homemade bbq and mustard sauce while you imbibed. I still get calls to make that mustard for old patrons. The approach will keep your food costs and inventory low and requires minimal equipment and the skillsets to produce various options. But for goodness sake, make each one of these limited items count.

BE A GREAT NEIGHBOR

SYNCHRONIZATION Every ancillary component, cocktail, food, and even wearable merchandise needs to tie into your spirits brand. If you do make pizza, use the same farmer that grows your corn to grow your flour, or brush your veggies with a spirits glaze. Everything must point to and incorporate the spirits so that the consumer never loses focus on why they are really there.

TWO SEPARATE BUSINESSES Restaurants are entirely different businesses than distilleries. While they are both rooted in hospitality, the skills needed to effectively manage and operate them have minimal overlap. In the spirits business we often fight for dollars and quarters, but in the restaurant business, it’s nickels and dimes. Be sure to hire a manager who knows the restaurant business inside and out so that they can manage not only the food costs and quality but also manage the staff. How you hire and encourage a server is different than a distiller or compliance manager.

Remember that nearby establishments are not likely to welcome you with open arms. Not only are you taking potential customers from them, but you are operating at much higher margins when it comes to your drink costs. Try your best not to compete on food or promotional hours directly. If you can self-distribute, be sure to offer them your very best pricing, for using your goods not only promotes your business but puts dollars in their competitor’s pocket as well. Most importantly, I’d also encourage you to think hyper-focused versus hyper-local. Wrapping your branding around your city or state bird would significantly limit your ability to scale. As the number of new distillers coming to the market continues at a record pace, and distributors further consolidate, you always want to make sure that your brand could compete nationally. So while you may never leave your town, your brand should have the wings to travel, for someday you may want or need it to.

Scott Schiller is managing director of Thoroughbred Spirits Group. For more information visit www.tbspirits.com or call (312) 809-8202.

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THE ORIGINAL.

The American Distilling Institute …providing support & resources to craft distillers since 2003. ADI E-Newsletter Industry news weekly, every Wednesday. Over 10,000 subscribers. sign up with diane@distilling.com

ADI Forum Network, buy, sell, share information on technique, marketing, safety, equipment… adiforums.com Distiller ™

DIRECTORY

distiller the vo ice

of cra ft

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A publica tion of the

Distiller magazine The Voice of Craft Distilling Tri-annually: Summer, Fall, Winter distilling.com/publications/distiller-magazine/

n Distillin g Institut

America

Resource Directory 2019 Distillers ’

RCE DISTILLERS’ RESOU

Vol. 14 issue 3

Institute American Distilling

WINTER 2018 / 19

The Nature of Colorad o Distillers Todd Leopold’s Chambe r Still TTB Rules Changes Defining America n-Style Rum #What?: The Social Media Time Suck 22 Best Bars in the World

20 19

Craft Spirits Conference & Expo Annually, every April. distilling.com/events/annual-spirits-conference/

Judging of Craft Spirits Annually, every February distilling.com/events/judging/

Hands-On Workshops From first-time introductions to master classes in producing, packaging, and marketing craft-distilled spirits distilling.com/events/distilling-workshops/

Annual Distillers’ Resource Directory The most comprehensive compilation of DSP’s and resources in the industry. distilling.com/publications/adi-distillers-resource-directory/ Malting

Craft Floor Malting: A Practical Guide

A Practical Guide

The Nano Distillery: The Future of Distilling

Craft Floor As craft distilling and craft brewing become increasingly localized, producers are likewise looking for local materials - grain, hops, fruit, spices and other ingredients. Floor malting offers the small brewer or distiller an opportunity to source barley from farmers in their area and turn it into malt, the backbone of beer and malt whiskey. While floor malting was largely supplanted by industrial-scale drum malting in the 20th century, the older methods offer a handson opportunity to produce unique malt with less equipment. Craft Floor Malting: A Practical Guide offers an examination of the key stages of the floor-malting process, and a look at how craft floor maltsters approach the day-to-day necessities of malting at a small scale.

White Mule Press

If you’re considering starting a distillery begin here.

The information here is invaluable and reads much like a series of mini-workshops on distilling and the business of distilling.

Gabe Toth

This book is compiled by the American Distilling Institute, an organization dedicated to the growth of craft spirits.

The American Distilling Institute

Gabe Toth

The Nano Distillery is a compilation of how-to chapters and real-life experiences of distillers who successfully produce quality spirits on a small scale. Complete with formulas, spreadsheets, and firstperson accounts The Nano Distillery is intended to provide you with enough information to roll up your sleeves and get distilling. Chapters include the necessary considerations of operating a distillery and making spirits—legalities, equipment, record-keeping, recipes, trademarking and design. And finally, you’ll hear the voices of nano distillers themselves, who explain what’s worked for them and what hasn’t.

The Nano Distillery the future of distilling compiled by Bill owens Edited by Brad Plummer and Andrew Faulkner

Niche Books for Lovers of Spirits Thirty titles and growing. whitemulepress.com

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S E N I H S E T T RU A N O T H G I L A T A E R T H C T DU G M A N N IN B Y R IC H N E T IT R W D BY P R O V ID E P H O T O S E D IS T IL L E R Y RUTT

’m in a room on the 9th floor of the Line Hotel in Los Angeles, sitting in front of several bottles of spirits in various stages of emptiness. This doesn’t look like an educational setting, but I assure you it is one. The hotel’s ground zero for BevCon, an annual convention where people in the libations industry gather to attend seminars, hawk merch, and hobnob. Most of the action takes place on the first couple of floors, but I’m upstairs and ready to embark on a crash course in genever. My teacher is Myriam Hendrickx, Master Distiller for Rutte, a small-batch distillery from Dordrecht, Netherlands. Lord knows I need a muse. I came to this rendezvous knowing very little about genever. I wasn’t sure if it was officially pronounced GEN-e-

ver or gen-E-ver. Hell, I wasn’t even sure I was spelling it right — that bastion of internet truth known as Wikipedia insists it's spelled “jenever” despite what I read on other websites. (Editor's note: If you, like the author, want to know what the heck the deal is with this spelling and the history of the spirit, head over to page 85 and read Jenever and the Origins of Dutch Courage.) Fortunately, Hendrickx has more important things to do than mock my linguistic ignorance (for the record, it’s the latter pronunciation). She’s here to promote Rutte’s Old Simon Genever, but that’s only part of her mission. The other bottles are from different distilleries, and they speak to her broader quest to

put genever into the minds and onto the palates of the average American imbiber. “Consumers are surprised when they learn about genever,” Hendrickx says. “They may be familiar with Nordic spirits like aquavit, but the concept of a Dutch spirit is something that’s unknown. Thankfully, more and more bartenders have learned about genever and are willing to share that knowledge with their customers.” There’s a lot to share — enough to warrant a brief history lesson/indoctrination. Genever is a Dutch juniper-based spirit that occupies the space between gin and whiskey. It’s considered to be the forerunner to gin, and it’s been around since the early 1600s. It evolved from a

“Consumers are surprised when they learn about genever... Thankfully, more and more bartenders have learned about genever and are willing to share that knowledge with their customers.” MYRIAM HENDRICKX

MASTER DISTILLER FOR RUTTE

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simple beverage of juniper berry-infused malt wine to a spirit imbued with whatever exotic spices and botanicals were picked up from the New World spice routes forged by the Dutch East India Company. It’s a worldwide ingredient plunder that Rutte and other distilleries in the Netherlands still do today, according to Hendrickx. “We all search around the planet for the very best ingredients possible,” she says. “It’s a very Dutch thing to do.” You don’t need to know all of this to enjoy genever, of course. You do, however, need to know that it exists. This is what makes Rutte rather fascinating, if only because its presence inadvertently emphasizes just how off-the-radar genever has been in the United States. They’ve been making the spirit in Dordrecht since 1872, and they have multiple generations’ worth of recipes and family secrets stuffed in their stills. When Hendrickx took over as master distiller in 2003, she quickly learned how protective the Rutte family was of their craft. “They owned exactly one PC when I arrived,” she says. “A few of the old recipes were printed on DOS, but most of them were written on paper or tucked away in old recipe books that I found. The family stored things like this because they were nervous about others getting hold of how they made their spirits. They believed that they’d lose the soul of the spirit if they didn’t do it themselves. It’s why I felt so honored when they asked me to help

carry on [the] Rutte legacy,” She smiles in clear self-awareness. “I know that sounds like a marketing story made to move craft spirits, but in our case, it is absolutely true.” Today, Rutte’s a brand operating in two worlds. It was acquired by distribution giant DeKuyper in 2011, which has greatly helped increase the profile of Old Simon Genever as well as Rutte’s vodka and two gins. At the same time, Hendricxs positions herself as a fierce protector of the Rutte family’s desire to keep things craft, deliberately keeping strict production limits and only tinkering with recipes if they don’t disrupt the family’s integrity. “Our genevers have been tested for several generations,” Hendrickx explains. “I may experiment with some of the recipes’ botanicals along the way, but in those cases, they’ll always have a connection to the Rutte family’s traditions. It’s important that we stress this heritage because we feel it makes us different. Fortunately, we’ve been lucky with our partnership with DeKuyper. While we do a lot of marketing work with them, they let us function as an independent distillery.” On to the tasting. The genevers Hendrickx shares have names ranging from unassuming (Bobby’s) to, well, Dutch (Smeets). Bobby’s throws me another curve ball — they spell genever with a “j” in what may be proof that they’re in cahoots with Wikipedia. The range of

flavors is broad enough to add a sense of place and history, one that seems to connect to the Dutch East India Company’s spice route. Some tend to be light and floral, and others are dense and a touch smoky. The fluctuations are nuanced, certainly not strong enough to call them gin or whiskey. It’s a fascinating dichotomy that I can’t quite wrap my head around, and that’s perfectly fine. It only adds to its allure. Naturally, the tasting ends with Old Simon Genever. Its complexity is labyrinth-like: hints of cinnamon, citrus, and clove transition from nose to palate, underscored by nuanced nuttiness and spiced notes that aren’t too dissimilar to what you may find in a proper Caribbean rum. I learn it’s not the only genever made by Rutte — they also make an oat-distilled and an Old Tom version, as well as a few others — but Old Simon’s the lone label currently distributed to the United States. This will have to do for now, and that’s fine. It’s delicious. The sips of Old Simon also spark a conversation about what cocktails we could build with it as a base. It quickly turns into another history lesson. “Did you know that the Martinez was originally built around genever?” Hendrickx asks, referencing the cult pre-Prohibition martini precursor. I admit to thinking the base spirit was gin, and my confession demonstrates why she feels her mission to spread genever’s gospel is so important. “Discovering a spirit like genever can be so much more than finding something new,” she says. “It can open you up to learning about the history and culture surrounding its creation or its use. It can be like going on a big, rewarding adventure.” She does have a point. After all, learning about new spirits — and spirit categories — is one of the reasons this industry so much fun, isn’t it?

Rutte is located in Dordrecht, Netherlands. Visit www.rutte.com for more information. WWW.ART ISANSPI RI TMAG.CO M

PUSHING the LIMITS WRITTEN BY GEORGE B. CATALLO

npopular opinion: Bourbon is getting boring. With the regulations on what makes a bourbon a bourbon, there isn’t a perception of much room for originality these days. And with more and more bourbon hitting the market every day, there is less and less room to stand out. The big area of requirement says bourbon mashbills must be at minimum 51% corn. However, despite this limitation wiggle room can still be found in the mashbill itself. Which means that additional 49% has limitless potential for alternative grains or malting techniques and there can even be room to play with the corn itself.

WHERE THERE’S SMOKE, IT’S ON FIRE! From peated barley in Kings County Peated Bourbon, to cherrywood smoked barley in Woodford Reserve’s Master’s Collection 2017, you’re starting to see smoked grains used in bourbon. That is definitely a category with room to grow. The easiest way to experiment with smoked grains in your bourbon mash would be the barley. It’s usually the minority grain in the bill, so you are more able to keep any smoked character subtle and balanced. It is also possible to smoke your wheat, rye, or even your corn. WWW.ART ISANSP IRITMAG.COM

Some woods to use that play nicely with the character of bourbon are hickory, mesquite, cherry, and pecan. Corn husks, grapevines, and peat work wonderfully as well. Local tree types can also be viable depending on the region. If you have maple, apple, or birch trees around — they work nicely too, and keep your local flavors in your whiskey. Choosing the type of fuel for smoking can be difficult, but there are two ways to go about it. First, you can choose your fuel based on your existing recipe. If your bourbon is higher in rye content, it's usually best to avoid anything spicier or overly bold. You are very much constructing a food dish at this point. Think of a Reuben sandwich. The contents are very savory and, individually, fairly bland. The rye bread is the zing of the dish, which is very balanced for it. Could you imagine how out of balance a spicy chipotle chicken sandwich would be on rye bread? Which brings me to low-rye or wheated recipes. You can up the intensity on a low-rye mash without the flavor becoming overly aggressive. However, with the delicate nature of a wheated mash, you don’t want to overpower the flavors of the whiskey either. Make sure to find your zen. As is always true with any spirit, the objective is balance.

THERE ARE SOME A-MAIZE-ING CORN VARIETALS BEYOND YELLOW! While bourbon must contain at least 51% corn in the mash, there is nothing regulating the type (or types) of corn that can be used. Obviously, yellow corn reigns supreme, but there are some fairly notable exceptions. Woodford Reserve used white corn in a past release from their Master’s Collection, and Balcones Baby Blue uses blue corn. The acclaim and success of both of those products shows the marketplace is receptive to alternative types of corn for use in bourbon. But white and blue certainly aren’t the only options. There are over 200 varieties of heirloom corn in America alone, not to mention all of the central and south American options. Varietals like Bloody Butcher, Hickory King, Oaxacan Green, Black Incan, or the rainbow-colored Glass Gem are all great contenders for mixing up your mash. The thing to remember about heirloom corn is that not all corn is created equal. Each variety will have its own average levels of sugar and starch, making for very different theoretical alcohol yield. Work closely with your grain supplier to be hyper-aware of the specifics

of the grain you are buying and adjust your recipe, possibly even including enzymes and yeast, accordingly. If your focus at your distillery is all about local ingredients, it's highly likely that your area has some local corn varieties. Seek them out and experiment with them. Even if you only are able to use a small percentage of an heirloom variety along with your standard grains, it’s still something different that you are doing and pays homage to your area. With all these types of corn, it’s okay to be indecisive. Using multiple varietals in one recipe is a great way to fine-tune your flavor. Even if you’re still using a majority of your regular yellow corn and using heirlooms sparingly, the flavor will be impacted, it will be as marketable as using heirloom corn, and your cost will likely stay down.

ANCIENT GRAINS, MODERN FLAIR Ancient grains are exceedingly popular these days with hipsters all the way to health nuts. But don’t get narrow-minded here. Ancient grains are good for things well beyond $8 artisanal loaves of bread that seem to have the density of a neutron star; they can make great whiskey too. I’m going to reference Woodford Reserve’s Master’s collection a third time now, as I feel their large market presence and willingness to work outside the norm in that line is a good way to gauge market reception and demand on a larger scale. Their 2018 release utilized oats in the mash, showing that there is a demand in the market for alternative grains. And it was well received. While they are far from craft, Brown-Forman has the capital to invest in potentially riskier side projects

without major detriment. Most craft distilleries do not. Some of the ancient grains I would recommend tossing into the mash would be sorghum, millet, quinoa, buckwheat, and oats. As mentioned while talking about corn varieties, all of these grains have different makeups and you will need to adjust your process beyond just yeast and any possible additional enzymes, and also modify your mashing temperatures and grain addition timing.

IN CORN-CLUSION While there is always a place for a classically styled bourbon, we really need to keep pushing the boundaries. This is craft whiskey. We blaze trails, not follow in footsteps on well-worn paths. We have the power to redefine what bourbon is. So why wouldn’t we?

George B. Catallo is the “Whiskey Guy” and Floor/Social Media Manager at Parkway Wine and Liquor in Rochester, NY. He has been in the beverage industry since he turned twenty-one and has worked as the Bar Operations Manager of a wine bar, an Assistant Distiller and Supplier Rep for a craft distillery, and has even hosted a spirits review web series on YouTube under the moniker 'Just One Dram.'

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BOTANICAL SPIRITS writtenby byAaron AaronKnoll Knoll written

here actually doesn’t exist a classification for this product,” Jim Ruane, director of Vodka for Ketel One, told Forbes in spring 2018. He was talking about their hyped launch of a line of spirits that they called “Botanical Vodka.” Unlike much of what consumers usually think of when they imagine flavored vodka, Ketel One’s vodkas underwent a round of distillation in the presence of actual botanicals, similar to gin. Major International Spirits Retailer The Whisky Exchange quietly launched a Botanical Spirits section of their website last year. One look through and you might see some unusual products. Ncn’ean Botanical Spirit, distilled in Scotland, begins with an unaged barley base spirit which is then distilled with ten botanicals including myrtle, heather and thyme. The French spirit Escubac has fourteen botanicals including familiar names like caraway, cardamom, cinnamon and citrus. The Patagonian-distilled Träkál has a base spirit distilled from a mixture of apple and pear (Editor's note: Check out page 140 for a full spotlight on Träkál). Their distillation process utilizes vapor infusion to impart the taste of some of its botanicals. Distiller Sebastian Gomez Camorino, who designed the spirit in the mid 2010s, set sights on United States expansion shortly after developing the drink. However, one of the big barriers he experienced was with the regulatory authorities. What exactly was Träkál? It’s easy to imagine Gomez Camorino might have had an easier go of it had they just included juniper in the botanical blend and sold Träkál as Träkál gin. There were many potential benefits to that route: easy categorization by the TTB, a section of the liquor store to fit into, and satisfying a bartender’s checklist of spirits they need to have behind a bar. As an added plus, consumers would immediately recognize it. However, despite these four challenge areas, distillers and spirits producers are forging ahead into this new territory. Is the world ready for a new category/type of spirit? We spoke to some people in the industry to find out.

CONSUMERS READY FOR BOTANICAL SPIRITS? 1. ARE

“People are intrigued by [botanical spirits] and that’s partly borne off the gin trend. People are into botanicals and they know what they are,” Kristiane Sherry, editor at Master of Malt said. In a 2018 survey of gin drinkers conducted by the GIN is IN, 75% of respondents said that they were interested in the idea of botanical spirits. But when asked about specific brands on the market, awareness was below 5% across the board. Sherry thinks this is a problem. “Brand recognition is more important over categorization right now,” says Sherry. Her advice, “Talk about it on social, talk about it on the blog.” The theory being that consumers are not looking for botanical spirits, rather they’re coming there because they heard of a product and it just happens to be in that category. Lauren Patz, Head Distiller at Sebastopol, California-based Spirit Works Distillery, thinks distillers will find practical challenges being a first mover in a new category. “I think there’s a lot of education and outreach and proving that it has a place…. From a consumer’s point of view there’s not a lot of understanding of what a botanical spirit can be.” However, she notes a silver lining: “Consumers are very open to asking questions, eager to learn. [With] spirits I feel like people are still at this stage where they’re comfortable with not knowing necessarily, or not knowing all the answers.” For this approach to work, distillers and product creators need a venue where they can talk to and educate consumers. Since California changed its laws and began allowing distillers to have a tasting room and do direct-to-consumer sales, it’s allowed Spirit Works to experiment with “smaller, more innovative projects.” As to whether a distiller should try a botanical spirit as opposed to a gin, she continued, “I think 62

it would depend on what the business plan and philosophy of that distillery is. If they’re going to be focused on direct to consumer sales, I would say go for it. Because you have the opportunity for that interface, you have that opportunity for explanation, education. I really think you could make it work… If you’re planning on doing larger amounts of offpremise sales, you’re going to have a lot harder time with a spirit like that.”

BARS READY FOR BOTANICAL SPIRITS? 2. ARE

Ben Capdevielle, distiller and founder of BIG Gin, has thought himself about developing a botanical spirit. His experience bringing his gin to bartenders around the country has given some insight into what it might take. “I’d probably want to come at them with some cocktail ideas [to start], and then looking for them to help with cocktail ideas. Help me, help you, help me.” But he also sees another potential audience for botanical spirits, “I’d be talking with chefs too.” Träkál made quick inroads in Colorado after launching there in 2017. With a direct-to-bartender campaign, it was nearly ubiquitous in spring and summer cocktail programs, especially around the Denver area. 5280 Magazine wrote that “it has become a darling of Colorado’s creative mixologists.” Bartender Joshua Sevy told Liquor.com in December. The campaign focused on its similarities to another spirit — in this case gin — to get on to menus right away. Once it gained a foothold, it quickly evolved from Träkál Negronis to Träkál tiki drinks and other experimental, novel creations. While creative bartenders are an opportunity for distilleries in cities with established cocktail scenes, liquor stores post an altogether different challenge for products which don’t fit into an existing category. WWW.ARTISANSPIRITMAG.COM

THE OFF-PREMISES READY FOR BOTANICAL SPIRITS? 3. ARE

While the on-premise may drive interest and inspire awareness, offpremises are still a vital component of a profitable spirit. But it’s obviously a challenge when you’re starting with a product that doesn’t neatly fit into an existing section or aisle of the store. Ketel One’s Botanical Spirits often find a home on the vodka aisle or vodka-aisle adjacent because of the brand’s recognizability to that audience. Patz thinks this might be the path of least resistance, adding that “using words like ‘vodka’ help make it relatable.” However, the now-discontinued Art in the Age’s Sage may have suffered from findability problems. In the mid 2010’s you could find it on the gin shelf at one store, the flavored vodka shelf at another, and the liqueurs and miscellaneous shelf at another. Capdevielle thinks that this might not be a bad thing though, especially if you’re distilling in a state with independent liquor stores and teams that may be willing to partner with local distillers. “Liquor stores should start putting some in the flavored vodka section. Some in the gin section. Some in its very own section. If you’ve got an independent owner who’s willing to try it. And see where it moves.” Though technically speaking the flavored vodka category might seem like the most obvious candidate, the perception of the category both among consumers and distillers presents clear challenges. Capdevielle continues, “It’s a double edged sword… I think that flavored vodka does have a bad reputation but it’s still something that people know and so it’s giving you an opportunity to kind of have something familiar and relatable and redefine it as well.” It helps that vodka still accounted for one third of all spirits sales in the United States in 2017. Sherry thinks people might want to move to botanical from flavored vodka. “Flavored vodka has its connotations...which I don’t think you want to approach… You’re producing things differently.” Even Ketel One shied away from the category, citing the major difference in process. Perhaps this is the first steps towards redefining a category that Patz has seen consumers distance themselves from in the past few years. ““I mostly think of flavored vodkas and how they’re moving in that direction that seems to be a trend away from highly sweet, highly synthetic... with that whole going back to traceability of ingredients… It’s not as marketable to have something that came from a lab.” The key question about off-premise sales comes back to expectations. Is it easier to re-define what consumers expect from a flavored vodka? Or to create a new category altogether?

ARE REGULATORY AGENCIES READY FOR BOTANICAL SPIRITS?

“There’s a challenge there, first thing I’d do — I’d call my specialist,” Capdevielle said when contemplating TTB approval. He joked he might have to try submitting multiple labels to figure out what was going to work, echoing some of the challenges distillers experienced early on with releasing barrel-rested gins. Träkál has made the fact that it’s difficult to categorize part of its marketing efforts, even using it to differentiate itself from the competition. Founder Ben Long has been saying in interviews throughout 2018 that the TTB granted the drink its own classification. But it seems that the TTB might be less of a hurdle than a distiller might expect. Since 2013, spirits like Art in the Age’s Sage, Waterpocket Distillery’s Eau de Mélisse and other distilled spirits that add botanicals through distillation and are bottled unsweetened at at least 40% ABV have reliably been classified under “Other Specialties & Proprietaries.” Others, such as Escubac, have avoided much of the confusion by opting for a lower ABV and readily identifying themselves as a liqueur on the label. Though marketed as “a modern, juniper-free botanical spirit,” Escubac finds a place on an existing shelf offpremises by dialing the ABV just below 40%. Ketel One’s range shows there might be a place for distilling spirits in the presence of botanicals and diluting even further to 30% ABV. Given the dramatic changes dilution can have on the aromatic profile of a spirit, this might open up a new avenue for creativity with unsweetened spirits at this proof point. Patz thinks that if distillers are fretful about regulatory hurdles, they should open their minds to other categories. “[I] think of vermouth, amaro and digestifs... if I was to do something without juniper, or without caraway or dill, I would probably lean into those because there’s slightly less restriction there. And those are categories where you can really exercise some intense creativity.”

Spirit Name

Class Type, Code

ABV

Date

Sweetened

Art in the Age, Sage*

VODKA SPECIALTIES

40%

3/5/2013

Art in the Age, Sage*

OTHER SPECIALTIES & PROPRIETARIES

40%

8/8/2013

Escubac

OTHER HERB & SEED CORDIALS/LIQUEURS

34%

8/5/2015

Yes

Träkál

OTHER SPECIALTIES & PROPRIETARIES

42%

9/16/2016

Ketel One Botanical, Grapefruit and Rose

VODKA SPECIALTIES

30%

1/3/2018

Ketel One Botanical, Peach and Orange Blossom

VODKA SPECIALTIES

30%

1/4/2018

Waterpocket Distillery Eau de Mélisse

OTHER SPECIALTIES & PROPRIETARIES

44%

7/24/2018

* Art in the Age's Sage was re-submitted under a different class time late 2013

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IS THE GIN COMMUNITY READY FOR BOTANICAL SPIRITS?

“Gin is the godfather of botanical spirits,” Long says, noting that a rising tide raises all boats. “I’m not [worried]. Gin is not going anywhere, this is the golden age of gin. Quality is increasing at a tremendous rate. Anytime people can learn more about botanical spirits, whether gin, aquavit, or whatever — they’re more likely to try something else in that category.” The two worlds aren’t mutually exclusive. “Anyone trying to get into the botanical spirit world should have a good understanding of what’s going on gin.“ Sherry sees excitement at the moment and opportunity for distillers brought about by the gin renaissance and consumer interest in botanicals, local character and cocktails. “There’s literally nothing stopping a gin producer from making a botanical spirit... You’ve got the kit right there.” Patz takes a more practical and circumspect approach, “I don’t know how far you would get at this stage.” But Capdevielle thinks that’s not a reason to give up. “I think it’s going to grow...because people are going to see opportunity, people are noticing that the gin world is getting pretty full.”

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WHAT’S NEXT? Sherry believes that the future of botanical spirits is in the craft distiller’s court. “Craft brands are going to show there’s potential there, and then someone big will come in and release one...“If someone like Hendrick’s or any of the big gin brands decide to release a sibling product — a botanical spirit — that would see the category explode.” Patz adds, “It takes celebrity, it needs a certain amount of ‘in front of your face.’” Though there are hurdles and challenges to any distiller looking to take on a new type of drink, it seems that more so than ever the market is ripe for experimentation. Sherry adds that two years ago, she doesn’t think her consumers on the Master of Malt would have been ready for it, but she sees “people with a certain amount of drinks interest” still turning up and trying new things and “not being afraid to experiment.” Perhaps more assuring for distillers who might pioneer the new space is the reception of some of the new spirits. Art in the Age’s Sage may have been ahead of its time in this regard, but Träkál and Escubac have shown that botanical narratives are still compelling, juniper or not. Aaron Knoll is a noted gin historian, critic and consultant. He authored 2015's “Gin: The Art and Craft of the Artisan Revival,” which has since been translated into three languages, and additionally co-authored 2013's “The Craft of Gin.” He also founded leading gin website TheGinisIn.com in 2009.

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WILDERNESS TRAIL DISTILLERY W R I TT E N BY M A R GA R E TT WAT E R B U RY / / / P H O T O G R A P H E D BY A M A N DA J OY C H R I S T E N S E N

ilderness Trail Distillery co-founders Shane Baker and Pat Heist didn’t set out to become distillers, but looking back, it seems predestined. The two met through a mutual friend, and their bond was cemented while playing together in a band in the 1990s. But there’s something a little bit rock-and-roll about whiskey, so it’s no big surprise that their thoughts eventually turned to what life might look like after they unplugged their amplifiers for the last time. “I’m an engineer, and Pat’s a microbiologist,” says Shane. “We were looking at how we could combine those sciences and still continue to do cool things, and that led us right into the whiskey business. Plus,” he adds, “We were enjoying a lot of whiskey in the band.” Shane’s family history — his grandmother Doris Ballard worked in the bourbon industry for 50 years, including a stint at Stitzel-Weller — also played a role. But instead of opening their own distillery, Shane and Pat had other ideas. With their scientific background and adventurous nature, they decided that consulting rather than brand-building was the right path for them. So in 2005, they founded Ferm Solutions, a full-service consultancy to the spirits industry specializing in fermentation, yeast products, yeast metabolism, and process design. Ferm Solutions is kind of like the Ghostbusters of fermentation: they get called in when things go awry. Over the past 15 years, the two have traveled around the world and visited nearly a thousand producers, including breweries, distilleries, wineries, and nonalcoholic beverage producers, to help clients solve fermentation problems, from low yields and stuck ferments to off-flavors and bacterial infections. “When we visit a distillery, they usually aren’t calling to say hey, we just tapped into a honey barrel,” says Shane. “They’re saying ‘Oh my god, you gotta get here, the place is burning down. We’ve seen all kinds of stuff — raccoons stuck in recirculation lines, cell phones in the piping, a hard hat in the exchanges.” Pat and Shane loved the work, and Ferm Solutions thrived. Soon, they started a training program, purchasing a still to use in the classroom for demonstrating distillation techniques and the impact of various fermentation parameters on flavor. Eventually, they realized those test batches they were making were actually tasty. “We looked at each other and said, ‘Wait a minute, we’re actually making good alcohol,’” says Seth. “We should take this to the bottle.”

GLOBAL INSIGHTS UNDER ONE ROOF So in 2012, Shane and Pat launched Wilderness Trail Distillery in Danville, Kentucky. Fittingly for its bourbon-soaked surroundings, American whiskey is the name of the game here, with Kentucky straight bourbon (one mashbill with rye, another with wheat) and Kentucky straight rye dominating production. They also make Blüe Heron Vodka, a vodka made from a wheated

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bourbon mash bill, and Harvest Rum, a spirit distilled from sorghum molasses. The distillery also offers contract production, creating custom-formulated whiskeys for clients around the world. By capacity, Wilderness Trail is the 14th largest producer of bourbon in the nation, and the production floor is a virtual showcase for the insights Pat and Shane gleaned from all those years on the road. “During our careers, we’ve learned best practices around the world,” says Shane. “So we kind of created a melting pot, combining all these little bits and pieces that aren’t found in any one place other than Wilderness Trail.” That translates to a technical approach that elevates scientific rigor and energy efficiency alongside traditional techniques. That dedication to doing things a little differently starts at the very beginning. Wilderness Trail uses exclusively Kentucky-grown grains sourced from nearby Caverndale Farms. Uniquely, it’s a seed farm, not just a commodity producer, which means Caverndale is able to provide extremely high-quality grain on a very consistent basis. “That means our whiskey is very consistent batch to batch,” explains Shane. “Grain out of an elevator could be a mix of dozens of farms. We’re using the same grain grown on the same bit of ground that we were using five years ago.” Once those grains arrive at the distillery, they’re treated with extra care. Shane and Pat use an infusion mashing process borrowed from the world of beer. “We don’t like putting excessive heat on our grains because that will degrade them,” says Shane. Instead of boiling their mash, Wilderness Trail starts with water at exactly 191˚ F, then adds their grains to begin the infusion. Water chillers successively step the mash down to lower temperatures, ensuring saccharification without the chemical changes that can accompany Maillard reactions. Only at the end of the process does the glycol chiller kick on, resulting in significant energy savings. Rather than a traditional sour mash technique, Wilderness Trail uses a sweet mash, giving the distillers more control over the bacterial content of the ferment. “The story about sour mash is that distillers use it to keep contaminating bacteria in check so ultimately they might have a more consistent product,” explains Shane. “But in reality, what we find is the only thing consistent is inconsistency, batch to batch, within a sour mash operation.” Again, they looked to the beer world for inspiration, installing a steam sanitizer that allows them to sanitize everywhere that contacts mash — vessels, lines, and pumps — to guard against inadvertent bacterial contamination. That’s not to say bacteria have no place in a distillery. “There’s a lot to be said about how contaminants produce flavor, in a lot of cases really good flavor,” explains Pat. “But it’s a poorly understood thing. Most distilleries have no idea what type of bacterial counts they have and how that’s affecting flavor and yield.” In an effort to capture the rich flavors and textures that bacterial contaminants can create, Wilderness Trail makes a kind of aftermarket sour mash inoculant, combining lactobacillus delbrueckii, a lactic acid bacteria found in yogurt that’s often used for lowering pH, with other microbes chosen for their aroma and flavor contributions, then dosing their sweet mash with the concoction. Shane says their

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approach ensures true consistency and guards against potential offflavors that can develop in uncontrolled ferments. Yeast is another major focus for Wilderness Trail. “Picking the right yeast strain can improve your yield, flavor, and ferment time,” says Shane. Yet they caution there’s no one-size-fits-all approach when it comes to saccharomyces. “Matching the yeast with what you’re making, not just in terms of flavor but also efficiency, play into the success and revenue of a distillery,” says Pat. That means Wilderness Trail uses different yeasts depending on the products it’s making and the flavor profiles it seeks. “For example,” says Shane, “Furfural is a chemical that’s very important in maturation.” Ordinarily, furfural, which gives whiskey a characteristic biscuit, grainy, almond-like flavor synonymous with oak aging, is described as coming from the cask. “Well,” says Shane. “We actually have a particular yeast strain that produces a measurable amount of furfural in addition to the distillate.”

WILDERNESS TRAIL WHISKEY A data-driven mindset is great, but sometimes, you have to look to the past for inspiration. Following the lead of pre-Prohibition distillers, Pat and Shane opted for a very low barrel entry proof for Wilderness Trail’s bourbon and rye. They say it makes for a more delicious final product, and they appreciate how it allows them to release cask-strength whiskeys that aren’t bruisingly strong. “I love cask strength whiskeys, but sometimes, when you get one that’s 130 proof, it just melts you,” says Shane. “You can’t really appreciate what you’ve just tasted.” Instead, Shane prefers whiskeys around 100 proof — the standard for bottled-in-bond — for drinking neat. So they lowered their barrel entry proof accordingly in pursuit of a near-bottled-in-bond cask strength result. Bourbon is filled into the cask at 110 proof, and rye enters the barrel at just 100 proof, perhaps the lowest barrel entry proof in Kentucky. Wilderness Trail Distillery continues to grow. The company is in the process of building its fourth 20,500-barrel warehouse, and the duo is delighted with how their whiskeys continue to evolve. The team waited a full four years to release their first bourbon, and current releases are now around five years old. “I’m elated to see where our whiskeys are at, and where they’re going,” says Shane. “Our goal is six to eight years.” Distribution is growing, too, expanding from six states in the Midwest and mid-Atlantic to 17 across the country. “Our plan has always been to be local, then regional, then national, and then, if we’re still alive, maybe global,” says Shane. Plus, Ferm Solutions isn’t going anywhere. “We had our best year ever last year,” says Pat. “We’re going really strong in terms of products and services, and we still do a lot of training for distilleries, east coast to west.” Shane laughs. “We’re always turning dirt over here. But we’re growing, and we’re having a great time.”

Wilderness Trail Distillery is located in Danville, Kentucky. For more info visit www.wildernesstraildistillery.com or call (859) 402-8707. WWW.ARTISANSPIRITMAG.COM

THE YEAST MONOLOGUES W R I T T E N B Y L U I S AYA L A

east1 are at the core of the alcohol industry — without their ability to transform sugars into alcohol we would not have the fermented or distilled beverages we enjoy so much. Yet yeast are often abandoned and left unattended to do their job as if their magical transformation powers were under contractual obligation. Our failure to monitor and support yeast often results in reduced profit margins, even losses and/or altered quality levels for the resulting alcohol. Most of my long-term consulting clients have heard me say that I find it easier to understand yeast than people. This understanding of yeast is construed by some people as having the ability to tell yeast what to do or how to do it, but in reality, it is entirely based on attentively listening to its monologues and reacting to the information yeast is able to share with us.

THE EVOLUTION OF YEAST As surprising as it may sound, scientists still do not agree on why yeast evolved the ability to ferment sugar into alcohol. Sugar is, after all, a great source of energy for all life forms and most of them

use this energy to grow and reproduce, so why would an organism forego the opportunity for biomass generation? The most accepted answer is that alcohol production through fermentation evolved in certain strains of yeast as a defense mechanism. By evolving a tolerance against alcohol (which is needed to produce it), these strains were able to create sanitary environments where other microorganisms would die, paving the way for yeast colony growth and survival once the resources were protected from other yeast, fungi or bacteria. Let’s take a closer look at one of the most popular yeast strains and perhaps the most studied eukaryotic organism besides human beings. When people first read or hear about someone using Saccharomyces cerevisiae to ferment, their initial reaction may be: isn’t that bakers’ yeast? Bakers’ yeast is, after all, better at producing CO2 (to help the dough rise) than at producing alcohol. The answer is that there are over a thousand different isolates of S. cerevisiae, each one with their own specific traits2. Some yeast are better at producing just ethanol (aka “vodka” yeast) while others are prized for their production of

different types of congeners, in different concentrations. Which yeast you should use for your fermentation will depend on many things, including environmental conditions, raw material properties and desired ABV and congener yields. I recommend reaching out to yeast suppliers and relying on their expertise to select the best candidate(s) and then conducting small-scale fermentation trials to validate those decisions. If you selected more than one yeast (because you like the combined congeners produced by them), resist the temptation to pitch them all in the same fermenter, at the same time. Instead, ferment separate batches, each with its own yeast and then distill and combine the alcohols. Having more than one yeast variety in the same fermenter will trigger their “territorial” response and the production of additional biological responses to the perceived threats. Remember that yeast are very protective of their environmental resources and will not be happy to share them with other organisms. Let’s now focus our attention on the messages we may be able to decipher by listening attentively to yeast.

1 The noun yeast is used throughout this article as both singular and plural. 2 Genome evolution across 1,011 Saccharomyces cerevisiae isolates (2018 Macmillan Publishers Limited)

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COMMON YEAST MONOLOGUES: “I am not talking to you… ’cause I’m dead.” What can be crazier than trying to listen to yeast? Trying to listen to dead yeast! But how can you know if the yeast are dead? Jump to the end of the article for one procedure to determine its population and viability. If your yeast are dead, then adding more yeast to the fermenter is likely to condemn them to the same fate as their predecessors. Try instead to look at the environmental conditions that led to their demise. Here are a few common ones: • USING CHLORINATED WATER

TO PREPARE THE WASH . Chlorine is in our potable water to kill microorganisms, right? And yeast are microorganisms, get it? • COPPER CONTAINER AS

FERMENTING TANK . Imagine a clever new distiller who wants to make production more efficient, by preparing the wash in the copper still. This way there is no need to transfer the wash to the still when ready, right? Wrong! The acidity of the wash will corrode the still very fast, plus copper kills a wide range of microorganisms, including yeast. • WATER IS TOO HOT . There

is a fine line between making yeast broth and preparing a wash suitable for fermentation.

“I am ignoring you!” There are few things in life more frustrating than being ignored. Yeast have evolved the ability to ferment, so when they ignore their nature, you need to stop whatever else you are doing and pay attention to it. Perhaps you are trying to get a starter culture going, or perhaps you pitched the starter already and nothing is happening, so what should

you do? If you want to get a yeast starter going, you need to introduce aeration, either by stirring, shaking or through an air pump with a diffuser.

“I am feeling squeezed!” Osmotic pressure is the force that develops between two solutes of different concentrations when they are separated by a semipermeable membrane. In the case of yeast, the difference between the internal pressure within its cell walls and the pressure exerted from outside by the wash can decrease its growth, ability to ferment and ultimately its viability. If the osmotic pressure of the wash is too high, you will need to reduce it by adding more water.

“Someone ate my lunch! (Yeast have no fermentable sugars to work on, even though there are sugars in the wash)

Molasses3 and cane juice fermentations are very susceptible to infections by the Leuconostoc Mesenteroides bacteria, which has genetically evolved the ability to convert fermentable sugars into nonfermentable dextran. When your wash is playing host to L. Mesenteroides, your fermentation activity will stop before you reach the expected ABV and the final brix will also be higher than expected. No matter how much more yeast you add, nothing will happen, until you kill the invaders and then introduce enzymes (such as amylase) that will convert the non-fermentable dextran back into fermentable sugars.

“I am going into a tailspin!” (Yeast produce less heart and more tails)

Nitrogen is a necessary element for healthy cell and metabolic functions. When a wash lacks the requisite amount of Nitrogen, yeast will break down their

internal amino acids in order to release it from there. This stresses the yeast, reducing its production of ethanol (heart) and increasing the production of higher alcohols/fusel oil (tails). So make sure you understand the Nitrogen needs of your yeast, based on the wash you are preparing. Consult with your particular yeast supplier for additional information.

“I hate this place!” (Yeast are vandalizing the fermentation tank)

There is misinformation floating around the internet suggesting that slow fermentations are always better than longer ones. Some distillers take this to the extreme, leaving completed fermentations to rot and putrefy, sometimes for weeks. When they finally distill the wash, often times people near the still start to cry or cough and an intense harshness fills the air. The cause behind the fumes is the high acid blend which was allowed to be created, including lactic and extreme levels of acetic acid (vinegar). If the goal is a high-congener rum, for example, one would seek the appropriate yeast and would avoid over-distilling the alcohol into a neutral spirit. Rum producers seeking to emulate high-esters rums need to understand the intricacies of fermenting with well-made dunder 4.

“I feel so lonely!” (Not enough yeast to complete the fermentation on time)

Completing a fermentation on time requires the right concentration of yeast cells, and a good starter is essential for this. If you are not using a yeast starter, your fermentation time will be longer than needed, resulting in less efficient use of your fermentation tanks and increasing the possibility of your wash being infected by airborne bacteria.

3 While many of the examples in this article refer to molasses and/or rum, the operating principles of yeast remain the same for other substrates and distillates. 4 Suggested reading: “Report on the experimental work. Jamaica. Sugar Experiment Station” WWW.ART ISANSP IRITMAG.COM

EASY TROUBLESHOOTING OPTIONS: CORRECT THE ENVIRONMENTAL DEFICIENCIES . If the pH or the temperature is off, adjust them. If there are missing nutrients, add them. If there is chlorine in the water, remove it or use a different water source. CORRECT THE MICROBIOLOGICAL INFECTIONS . To solve the immediate problem, you can either use your pot still to pasteurize the wash or you can treat it with antibiotics. Once the wash is aseptic, pitch your yeast and measure the results. Long term you will want to find the source of the microbiological infections, which may require changing suppliers and/or introducing better cleaning procedures.

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STOICHIOMETRY IS THE MEASURING STICK FOR YEAST HAPPINESS Comparing your alcohol yield to the one that should be obtained under ideal conditions (the stoichiometric yield) is a good way for you to gauge how far your conditions are from ideal. Refer to my previous article, The Efficient Rum Distiller Part I, for a deeper explanation of this topic (Artisan Spirit Magazine, Summer 2018).

CONCLUSIONS Fermenting yeast are genetically-driven to produce alcohol, given the right conditions. When problems arise, put on your thinking cap, develop a working hypothesis and then validate it through observation and experimentation. Problematic or failed fermentations are your best teachers. Flushing them down the drain and starting fresh should be avoided at all cost, as doing so teaches us nothing and paves the way for the same mistakes to be made again in the future.

Procedure: How to determine yeast population and viability The easiest and cheapest way is to use a microscope with a 40x objective and a hemocytometer, which is a specialized slide with counting chambers of a pre-defined volume. You can color the wash with methylene blue, which will stain all the yeast cells. The live cells then metabolize the stain and return to their normal color, while the dead cells remain colored blue. Check with local brewers near you before you undertake this procedure on your own. If they have the equipment and are familiar with it, they may be able to lend you a helping hand. If you don’t have any brewers near you, research the topic online, for instructions on how to count and calculate the viable yeast population.

Luis Ayala is an international rum consultant and broker of specialty aged rums. He is the Founder of The Rum University, Cellar Master of Rum Central and Publisher of “Got Rum?” magazine. Contact Luis@gotrum.com for more info. 74

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HOW TO LEAD A TASTING 303:

TASTING SCRIPTING & THE STORYBOOK TASTING WRITTEN BY TIM KNITTEL

YOUR SPIRITS HAVE A STORY TO TELL. CONTEXT TASTES BETTER Scientists (and chefs) have known for a long time that context — location, atmosphere, color, light, sound and music, plating, glassware, course pacing, dining companions and especially mood and attention level of the consumer — has the capacity to drastically alter the experienced flavor of food and drink. This is the foundation of the “vacation effect” in wine where the same bottle delightfully enjoyed while gazing at the setting sun over the Mediterranean Sea is startlingly

s I stated in How to Lead a Tasting 101 and 202, a sampling is handing out shots but a tasting is a performance with greater potential for return on the investment of your time and product. The ultimate in a performance is to tell a story and the most impactful tasting will follow a story structure.

disappointing back at home. Deliberately setting context can enhance the consumption experience. “No matter how good the stuff’s coming out of the kitchen is, if you don’t know what’s going on in the mind of the diner, if you don’t set the expectations right, they will not enjoy the experience as much as they otherwise should.” — Professor Charles Spence, head of the Crossmodal Research Laboratory, Department of Experimental Psychology at Oxford University in his TEDxHull 2015 talk, What Defines The Perfect Meal?

The physical elements of context may or may not be under your control. In your distillery you can certainly control every aspect, but out in a liquor store or at an expo it may be quite the opposite. Regardless of how much you can influence, the more deliberate you are with the contextual elements, the better your tasting may potentially be received. Price is another element of context, and expensive tastes better. Recent studies in the Journal of Marketing Research1 and Scientific Reports2 have confirmed a bias of perceived value increasing experiential

1 Hilke Plassmann & Bernd Weber. (2015). Individual Differences in Marketing Placebo Effects: Evidence from Brain Imaging and Behavioral Experiments. Journal of Marketing Research. https://moneydotcomvip.files.wordpress.com/2015/05/plassman_jmr_13_0613.pdf 2 Liane Schmidt, Vasilisa Skvortsova, Claus Kullen, Bernd Weber & Hilke Plassmann. (2017). How context alters value: The brain’s valuation and affective regulation system link price cues to experienced taste pleasantness. Scientific Reports, volume 7, Article number: 8098 (2017). https://www.nature.com/articles/s41598-017-08080-0 WWW.ARTISANSPIRITMAG.COM

quality. A product’s value is a social construct consisting of price, rarity and exclusivity among other factors. So one obvious approach to increasing perceived quality is to raise price or present a limited edition or restricted availability product. As some examples, a small release ‘uncut, unfiltered’ whiskey only available at the distillery or a vintage fall harvest 2018 gin will be perceived as higher quality than products without those qualifiers — but only if the consumer is aware of the socially constructed value. Communicating that to the consumer is your job. However, remember that high price can be a barrier to many consumers but it’s very possible to play in both worlds with entry-level standard products and higher-priced limited offerings that imbue a cachet onto the entire brand line.

STORIES ARE CLARIFIED SOCIAL CONTEXT The final element of context is the story of your product, and that is always entirely under your control. A “good story, well told” enhances the perceived quality, desirability and memorability of your product and brand. (I’ll quote Robert McKee from his seminal book Story: Style, Structure, Substance, and the Principles of Screenwriting repeatedly in this section because he does such an amazing job isolating and communicating the fundamentals of storytelling.) “‘Good story’ means something worth telling that the world wants to hear. ... But the love of a good story, of terrific characters and a world driven by your passion, courage, and creative gifts is still not enough. Your goal must be a good story well told.” — Robert McKee, Story

THE STORY OF YOUR SPIRITS “The first step toward a welltold story is to create a small, knowable world.” — Robert McKee, Story

Your distillery, your brand and your products exist to solve a problem with the world; this is your fundamental story. Consumers can most powerfully connect to your brand through the meaning expressed in this story you tell of why your brand and your products exist. “There is no such thing as a portable story. An honest story is at home in one, and only one, place and time.” Contrasted against a selection of facts (or worse, contrasted against a vacuum of information) stories are easier to engage with, easier to bond to, easier to remember and easier to share. A “good story, well told” requires the elements of story to be artfully constructed and the mechanism of communication to be engaging.

DEFINING STORY “Stories are the creative conversion of life itself into a more powerful, clearer, more meaningful experience. They are the currency of human contact.” — Robert McKee, Story

Most people think they know what a story is and how to tell one. But that’s like making the leap from “I drink a lot of booze and I know what I like” to “I could probably make great booze.” Applying a story structure to your brand message via a tasting requires an understanding of the principles of storytelling including scripting and communication plus the effort to define and clarify your unique brand story. There are many definitions for story. A simple one we can use here is: A story is the specific actions of a hero which are taken against risk to correct an imbalance in the world.

— Robert McKee, Story

Your story must be specific to you, your distillery and your place in space and time. The mark of a quality brand story is that it cannot be ported (or stolen) onto another brand. Here’s a real-world example of a clear brand story from a craft distillery in Kentucky: “We are the first licensed distillery in Bourbon County since Prohibition forced the closure of the distilling industry in 1919. It's odd to think that out of all the Bourbon currently produced in the world, none of it has been produced in Bourbon County — until now. In a very large sense, we gave the world it's first Bourbon, or any spirit for that matter, from Bourbon County, Kentucky in almost a century. Ninety five years without a distillery inside of Bourbon County has come to an end with the founding of Hartfield & Co.” This distillery both corrects an imbalance in the world and solves a problem for consumers of lack of availability of authentically Bourbon County-made Bourbon whiskey. A formula for your story might be:

Story = Company + History + People + Location + Production + Spirits WWW.ARTISANSPIRITMAG.COM

Some story components might include regional history, country/patriotism, family lineage, in-group/out-group definitions, exploration and experimentation, etc. Your brand as a whole should have an overarching story and each product should have it’s own sub-story expressed as a specific solution to the imbalance referenced in that overarching story.

THE STORY TASTING STRUCTURE, OR HOW TO SCRIPT A TASTING The collection of ideas, themes and facts that make up your identity become a story when scripted. Scripting means determining the structure of those elements as they relate to each other and how they are communicated across time.

HOOK Every story starts with a hook. The hook gets your audience’s attention and focus. A hook is almost a necessity for informal tastings — with all the other activities going on — but is also valuable in controlled environments to refocus your audience after they have settled into their seats. The hook isn’t the flavor message. It’s a single, short phrase used to both grab attention and express the uniqueness of your brand message. It needs to make the audience want to try your spirit and learn more about it; a good hook is a setup for explaining your product message and will often include the imbalance your distillery exists to correct. From the Uncle Nearest video “The Why:”

CONTENT: MEMORABLE ELEMENTS The content of your tasting story is the rising and falling action of bringing the spirit into existence and the social context value of it. This should explicitly include the imbalance in the state of the world prior to its existence and the resolution as a result of its introduction. At this point, the content of your story merges with the tasting (flavor) experience. Ideally, the sensory experience of your spirit provides a vicarious yet visceral gateway into your story. From Wood Buffalo Brewing Co.’s website: “May 3rd 2016 will be remembered as a day that altered the history of Fort McMurray...as an untamed wildfire titled The Beast quickly surrounded its border...Among the smoke was a single delivery of peated malt sitting outside of Wood Buffalo Brewing Co. waiting to be turned into the next batch of single malt whisky. Caught in the havoc, these grains unwittingly absorbed the smoke...Together with Canada Malting and AP Capital, Wood Buffalo Brewing Co. ensured the malt’s quality and is proud to produce this rare offering... Layed in new oak barrels, a limited volume of the ‘double smoked’, 100% peated, Canadian malt whisky will be resting quietly as the community rebuilds in the upcoming years.” And the description, as told by head brewer Spike Baker to the Edmonton Journal:

“We have to make amends and pay respect. We’re honoring the greatest whiskey maker that the world never knew...Uncle Nearest is the godfather of Tennessee whiskey and the world needs to know it.”

“It was already heavily peated malt destined for whisky, but it absorbed this extra flavour. You can taste the malt, but it also has this smoky campfire taste to it. This is definitely going to be a one-off whisky because these conditions are never going to be repeatable.”

A video like “The Why” must be scripted to be filmed and therefore forces that step. A tasting can be wheeling and free-form (and many so often are) but applying a script to your tasting focuses it and enhances its impact.

That might be an extreme example but it highlights bonding flavor to story. This technique can be done with any spirit as long as both the story and flavor elements are clarified as expressions of each other. The content answers the question: How

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did you bring your spirit into existence and correct the imbalance? This answer can include any and all of the ideas, themes and facts of your brand story seen through the lens of production. Memorable anecdotes, myths, legends and comedy all enhance the content and are worth the time spent writing them. Remember that because most people are not adept at isolating flavor profiles and nuance elements, it’s valuable to be explicit with how your product tastes and why those flavors are present.

CLOSE Concluding a storybook tasting reinforces the messages and brings the consumer into the accomplishment of making the world a better place. This is the most significant moment and the most memorable for your guests. “A revered Hollywood axiom warns: ‘Movies are about their last twenty minutes.’ In other words, for a film to have a chance in the world, the last act and its climax must be the most satisfying experience of all.” — Robert McKee, Story

Your guests have given you their time and attention and they ask in return an experience that changes them. The best way to deliver that is to gift them with a story plus sensory experience that they can remember and share with others. From “The Why” video again, here is the closing tagline: “Uncle Nearest: It’s more than whiskey.”

THE STORYBOOK FLIGHT Most tasting flights are built on the themes of low-to-high proof or youngestto-oldest, or perhaps by price (a ‘vertical’). A flight crossing spirit categories usually runs from clear to barrel aged and least intense to most intense (e.g., vodka to gin to rum to whiskey). While these are all useful paths, none carries a story. Designing a flight as ‘chapters’ of your brand story enhances engagement and memorability. Your narrative arc may unfold chronologically, as a build-

up of complexity of flavor or perhaps as a function of price; but regardless, each product represents its own moment of correcting an imbalance. Ultimately, the narrative arc of the products completes the story of your brand.

SCRIPTING THE SHORT TASTING Even a “walk by” tasting at a trade show or in a liquor room can have a scripted story structure. The hook grabs attention, a brief content provides context of your brand’s identity and the reason for your product and then finally your close integrates the spirit with the message and provides resolution of the imbalance. For most other industries, this would be the 15-second elevator pitch but with a consumable product you have the advantage of a sensory experience to manifest your message. Tightening your story takes time that is well spent.

POTENTIAL STORY PITFALLS Some stories resonate with an audience better than others and some stories within the craft spirit industry have become common unto cliché. Spirits consumers are also becoming progressively more wise to sleight-of-hand and misdirection.

STORIES TO AVOID Right now, the market is flooded with “local, artisan, hand-crafted” spirits. While those are valuable elements of a story, they cannot be the story itself — you must have differentiating elements in order to stand out and be remembered. The market is also reaching saturation on “We searched for unique and special barrels.” If that’s a part of your story, build on it with something unique to you and/or the barrels. Don’t make your unique selling proposition “Guess how old my whiskey/ rum is?” or “You won’t believe how young this is!” In addition to being a potential affront to your customer’s palate, there’s

an implied devaluation to your spirit versus other, longer-aged ones.

NAMING RIGHTS It’s not enough to name your spirit after a historical figure or event. “Honoring,” “legacy” and “inspired by” are becoming ubiquitous — which is the opposite of unique! How is your spirit’s namesake more significant than all of the other spirit namesakes out there? Back to Uncle Nearest, he’s the forgotten “godfather of Tennessee whiskey” and definitely not just another moonshiner/bootlegger/rum runner. And what is your personal connection to the namesake? Why did you personally need to bring this memory back to the world? There’s a potential specificity there that can differentiate your brand from the rest of the pack.

DON’T BULLSH*T If your product is sourced, don’t pretend you made it. If you’re using hybridized yellow dent that’s double column distilled, don’t pretend you’re re-creating your great-great-grand-pappy’s secret family recipe — you might be honoring his legacy, but that’s different than re-creating his product. It’s okay not to be “hand-crafted, local, artisan and historic.” Some of the bestknown and most successful craft brands — think High West, Compass Box, Barrell Bourbon — are quite transparent about how they produce their spirits. Their brand stories, and subsequently their product messages, are still unique without using those defaults. Your story must be honest and authentic to you and your spirit. Consumers despise being sold a bill of good. Additionally, if you don’t know the answer to a question, admit that you don’t know and move on. Stress this with anyone you hire to lead a tasting of your products. “I’m sorry, I don’t know the answer to that but I can find out for you” is much better than something made-up that makes its way onto social media.

HANDLING PRICE The greatest level of consumer appreciation of a consumable is a ratio of low rendered cost versus high social context value. Positioning your spirit as “It should/ could be more expensive” or creating a scenario where the consumer can obtain it for less than a normal marketplace price inspires desire. This can create the enhanced experience of high price without the actual limiting high price tag. But also remember that you are competing not just with other craft spirit makers but with quality yet cheap spirits from the big producers. If you’re going to sit above the bottom shelf, your brand story is where you justify your position. Bottom line: Your spirit must be a great value for the price and it’s your job to make the consumer understand that fact.

ADVANCED TECHNIQUES Beyond the primary elements of a story script there are techniques that can heighten the experience for your guests and therefore enhance their receptiveness and potential bond to your brand.

CONFLICT “Nothing moves forward in a story except through conflict.” — Robert McKee, Story

Conflict is the combination of a world unyielding to your change and the risk you take to overcome it. The more resistance and struggle to bring your spirit into the world the better. Near failures, surprise problems and unexpected opposition are engaging and memorable. Find those elements and incorporate them into your story.

AUDIENCE Over time, you’ll find yourself telling your story to many different audiences. From LDA to category novices to enthusiasts to industry professionals to media, each time you tell your story ideally it will be tailored

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to their education and palate levels. If you’re promoting a high-proof whiskey to novice whiskey drinkers, the most likely takeaway will be ‘hot’ (or possibly ‘HOT!’). A negative impression isn’t valuable for your business. For those folks, offer ice or water and incorporate into your story why it’s okay to enjoy your whiskey that way. Novices also need more general information while educated audiences will demand specificity. Remember that industry professionals — think liquor store employees, bartenders — have been through hundreds or more tastings. The tighter your story the better your hold on their attention and the greater the likelihood of brand adoption. If you’re spending an evening in a bar, for an example, you might start with an in-depth formal tasting with many brand elements in your story for the staff before the bar opens followed by shallow informal tastings with a short but memorable hook/ content/close storybook tasting for patrons throughout the evening.

THE SECOND PERSON Being told a story is fun, but living it is life-changing. The most advanced technique is to make your customer the hero of your story — and there are a few ways to do so. EXPRESSIONS OF IDENTITY: There are ample spirits out in the marketplace for

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consumers to pick from. As much as price and flavor (one element of perceived value) do matter, consumers lean toward brands whose identities match their own, an identity they want to project or a matching value set. Jim Beam’s recent “Raised Right” campaign exemplifies all of these in just two words. Implied here are family values, community, fellowship and multi-generational thoughtfulness. Who wouldn’t want to be associated with that? INVITATION TO A GROUP: By extending an invitation to join your brand in its quest to change the world, you offer a new ingroup identity for your customers. Again, back to Uncle Nearest: “His name has always been and will always be Nathan “Nearest” Green — or to those who knew him best, Uncle Nearest. Now, it’s up to each of us to share his story and to make sure he’s given his due respect. Will you join us? Cheers!” “IT’S FOR YOU”: Another method is to position your product as a tool for your customer to solve a problem or overcome a challenge. This goes beyond participation and into conceiving of your customer as the center of the story. Some ideas might be to have limited edition products developed as gifts for specific occasions or for exploration in a journey to share with others. Here, the customer becomes the hero.

Notice how this article is in second person? It’s all about you!

NEXT UP: TASTINGS BY TYPE, USE CASES, MARKETING AND GENERATING MAXIMUM VALUE Because story-driven tastings are more engaging, informative and memorable, they’re naturally better at achieving return on investment for your business. But ROI isn’t automatic. The final part in this series will focus on strategies for developing, marketing and analyzing tastings to ensure the best possible return.

Tim Knittel is a Bourbon educator, writer and event specialist in Lexington, Kentucky. He formerly managed the culinary and VIP hospitality programs for the Woodford Reserve Distillery and is currently the Bourbon Steward-in-Residence and operations support manager for The Kentucky Castle. He runs Distilled Living which provides private Bourbon education, brand representation and distillery consulting services. He holds the titles of Executive Bourbon Steward through the Stave & Thief Society and Adjunct Professor of Tourism, Event Management and Bourbon Studies at Midway University.

RESERVOIR DISTILLERY

WRITTEN BY DEVON TREVATHAN /// PHOTOGRAPHY BY AMANDA JOY CHRISTENSEN

o not go to Reservoir Distillery in Richmond, Virginia with any preconceived notions about what whiskey should and should not be. Co-founders Jay Carpenter and Dave Cuttino didn’t get into this business to follow the well-trodden path of other distillers who came before them, they came to do something different. They wanted to engineer their own custom stripping still, so they did. They wanted to age bourbon in quarter casks, so they did. And they wanted to make single-grain mashbill whiskeys their core lineup, so they did. It was just crazy enough to work. Times weren’t always easy. As any producer can tell you, the best-laid plans truly go awry when distilled spirits are involved, but the old pals were not to be deterred. “We grew up in Virginia which has a really deep culture of making liquor on your own, so if we ever ran into a problem we always reminded ourselves that there is some guy who doesn’t have teeth in southwest Virginia with far lesser equipment making really good stuff,” Cuttino points out. Prior to launching Reservoir, neither Carpenter nor Cuttino had any experience working in the industry, but both shared a fondness of distilled spirits. At some point, Cuttino had realized that he was ready to move on from his engineering job and get out of New York City, where he lived with young children, but wasn’t sure how to pivot professionally should he move back home. “I’d always kind of been a bourbon-phile,” he says. After reading an article detailing how China could deplete the US bourbon reserve if they were able to tap into it, Cuttino saw an opportunity. He met up with Carpenter at a Virginia Tech game. The two have been friends since elementary school WWW.ARTISANSPIRITMAG.COM

when Carpenter unwittingly invited the wrong Dave to his birthday party. “I meant to give the invitation to Dave Salzberg, but I ended up handing it to Dave Cuttino. I don’t really remember the bowling alley, but I remember handing out the invitations, and I remember receiving a wide-wing Star Wars fighter in the parking lot from Dave. We’ve been stuck with each other ever since.” At the game, Cuttino broached the subject of opening their own distillery. They headed to an ABC store to do a bit of research, loading up their cart with a slew of fine whiskeys and bourbons. After a tipple or three, they decided that they could make this stuff; heck, they may even be able to make it better than the big guys. “Unlike most drunken conversations, this one really kind of stuck,” Cuttino says. He reached out to one of the only other small producers of bourbon outside of Kentucky at that time, Tuthilltown Distillery in Gardiner, New York. It was a stroke of luck; they agreed to let him come and work with them for the better part of a year, learning the ins and outs of distillation and the functional reality of running your own place. It would still be a couple of years until they saw their business blossom. Cuttino and Carpenter are forthcoming about the fact that they have never sourced; cash flow has always come from products made in-house, and they never wanted to release unaged spirits as a stop-gap. They were fortunate to get a speedy approval by the ABC board, a fact Carpenter credits to the style of spirit they were making. “We were lucky enough to put a bourbon in front of them — if we’d put vodka in front of them we probably wouldn’t have gotten in.” Their first bottles hit the

shelves in November of 2010. Reservoir started with — and for the most part, still uses — quarter casks to age their spirit. Some may look down on the use of small barrels, but for Cuttino and Carpenter, the choice was not without a significant amount of thought. “There are two components to aging, there’s the barrel, and anytime you’re putting a solvent into a barrel, it’s extracting at a certain rate,” says Cuttino. “But there’s another aspect to the aging process, that’s the oxidation.” He goes on to explain their production process, which is engineered to fit with the barrel size they favor. Cuttino starts by grinding down all their grain, which is cooked in custom equipment he manufactured. Reservoir only uses Virginia-grown grain from farms within 20-30 miles of the distillery, and you can bet that they know each of their farmers personally. This is just one example of Reservoir’s approach to provenance, a pillar of their business philosophy. The wash is then resettled into open-top fermenters where it will bubble anywhere from six to 11 days. It’s then transferred to their custom still to do a standard stripping run before being rectified in a one-of-a-kind Armagnac still, or, as Cuttino informs me, “really a Cognac still that happened to be done in Armagnac.” At this point, they are ready to make their cuts. Cuttino explains that, “We do our cuts in a manner that we gravitated towards that is actually more similar to the Scotch industry, and we sacrifice a lot of output yield, significantly more than they do at, say, Woodford Reserve.” These cuts — and all the steps taken prior to filling their barrels — are essential to ensuring the right liquid for the size. They aren’t making the kind of column-distilled spirit that benefits from years in a 53-gallon barrel; theirs is a labor of love, reminiscent of how distilling was done in the old days. After the new-make is finished, they pump it into the barrels that will be home to the spirit for an indeterminate amount of time. These could be quarter casks, or any size really; Reservoir uses barrels of various sizes and even wood types — including some locally grown oak — to age their spirits. Their approach to making whiskey isn’t formulaic. Carpenter and Cuttino realize that a number of factors affect the final flavor of a particular barrel, so they defer to the oldest way of testing a product’s maturity: “We’ve got four people here that all taste it, and if anybody dissents it doesn’t get dumped.” Early on, Reservoir made its name on single grains. “Nobody was doing the single-grain mashbills back then, we thought it was very unique,” Carpenter remarks, but the reception from the establishment was not always warm. “It’s one of those things with craft spirits,” Cuttino explains. “When you’re trying to play in an arena that’s

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been dominated by these multi-billion dollar companies that have been doing the same thing for a number of years, they kind of become the gold standard, so anything that’s innovative and new sometimes traditionalists will push back on.” The risk paid off when it came time to enter their product into competitions. In 2012, Reservoir picked up its first double-gold at the San Francisco World Spirit Competition for their 100% rye whiskey. Shortly thereafter, the wheat and bourbon also won double gold, the latter of which emerging victorious despite being mistakenly flighted in the 11+ year category. At the time, the spirit was only two and a half years old. The only other whiskeys to win double gold that year? Pappy Van Winkle and George T. Stagg. As Carpenter puts it, the moment was “kind of like beating your champion.” Receiving critical acclaim from the experts was an important milestone and gave them an added level of reassurance, but ultimately it’s the consumer’s opinion that matters most at Reservoir. “At the end of the day, if it doesn’t taste good nobody’s going to drink it,” Carpenter says. “So that’s our motto: does it taste good, would you like another?” For the people of Richmond and a passionate following beyond, the answer to that question is a resounding “Yes!” Reservoir has developed a bit of a cult following, especially with regard to their limited-release whiskeys, which tend to sell out in a matter of minutes. This includes their Ghost series, which is at the higher end of their product lineup. The original Holland’s Ghost started as a collaboration with McCormack’s Big Whiskey, a local whiskey bar, after owner William “Mac” McCormack lamented that he would not be able to replace a vintage whiskey that he was really enjoying once he had finished it. Cuttino invited him to bring in the bottle, which they tasted and went about reverse-engineering at the distillery. The resultant product was sold out in less than an hour. While not everyone is going to be an ardent fan of Reservoir’s spirits, few can come away from an experience at “the world’s most dangerous bar” with anything but a positive opinion of the place. Speaking with Cuttino and Carpenter, you just get the sense that they enjoy what they’re doing, that above all else they are having fun with their business, and that is a refreshing takeaway. They put it upon themselves to make that personal connection, especially with regard to their customers. If you try a Reservoir product that doesn’t suit you, they want to know. “I hand out my business card to strangers with my personal number on it, like ‘look, if you ever have a question about [our whiskey], you ever have an issue with it, call me. We’ll try to fix whatever it is,’” Cuttino says. It’s that added level of care, that exceptional quality, that has me believing Reservoir Distillery will continue to make waves for years to come.

Reservoir Distillery is located in Richmond, Virginia. For more info visit www.reservoirdistillery.com or call (804) 912-2621. 84

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Jenever

and the Origins of Dutch Courage Written by Paul Hughes, Ph.D. Illustration from Liber de arte distillandi de simplicibus oder das Buch de rechten Kunst zu Distillerien die eintzegen Dinge by Hieronymus Brunschwijgk , 1500

n the late 1970s, a decree was passed by the European Economic Community that allowed the French liqueur “Cassis de Dijon” to be sold in the former West Germany. This was despite the fact that the French liqueur was only 20% ABV, instead of the West German defined minimum of 25% ABV. This spread alarm amongst distilling companies in Europe, who feared a decline in quality. Pressure from the industry, especially Scotch and French brandy, resulted in Council Regulation (EEC) no. 1576/89 in 1989, prescribing rules on the definition, description and presentation of spirits. This was eventually superseded by EC Regulation no. 110/2008, which provides further details on what does or does not constitute a given spirit drink. The establishment of these regulations caused some difficulties for jenever producers as there was no complete consensus as to what jenever is. For instance, Dutch jenever at 35% ABV was stronger than Belgian jenever at 30% ABV. The 2008 regulation circumvents this issue by categorizing jenevers as a juniper-flavored spirit drinks, which must be at least 30% ABV. So, jenever is a juniper-flavored spirit of at least 30% ABV, but what are its origins? It seems that the development of jenever came about by the confluence of two factors: the belief in the therapeutic effects of juniper and the spread of distillation for alcohol production from China and the Middle East. Juniper was commonly seen to be a panacea for many ills and was

pressed into service as a desperate measure to act as a preventative and cure for the Black Death, a bubonic plague epidemic that swept Europe in the mid-14th century. Breathing through a mask containing juniper berries proved to be useless against the flea-borne bacterium Yersinia pestis. Sometime around the end of the 16th century distilled anise, gin or fennel waters were noted as being sold as alcoholic drinks and by 1606 became the subject of taxation, moving these products from the realm of medical to recreational use. The faith in the restorative powers of juniper can be traced back to writings from the 14th and 15th centuries, particularly in Germany. Earlier, Jacob van Maerlant (1235-1300) wrote of juniper-based drinks in his work Der Naturen Bloeme (“The Flower of Nature”). He also wrote of “a rich medicine” that could be prepared from juniper wood. These observations perhaps explain why gin was the largest volume of sales of the distilled waters during that period. Various recipes for gin water have survived, which include boiling juniper berries in wine, soaking (macerating) juniper berries in alcohol, and indeed distilling an alcoholic juniper infusion. There is some confusion in the terminology here, with brandy1 and aqua vitae seeming to be used interchangeably, but may reflect a situation where the source of alcohol is either from grapes via wine, or from grain fermentation. Around 1540, and also from about 1590, grape vines suffered in the Low Lands due to the “Little Ice Age” that occurred

in Northern Europe following the Medieval Warm Period. The wealthy could still afford to drink brandy from Southern Europe, but the poorer classes tended to consume spirits made from beer and honey. By the late 16th century double- or triple-distilled grain spirits were common. The production of malt spirits was inadvertently boosted when the Northern and Southern Low Countries separated in 1588, and the south subsequently prohibited the sale and consumption of “brandy” made from commodities such as grains, apples or pears, a prohibition that would last more than a century. In the north, the production of malt spirit boomed, especially in ports such as Schiedam2 where grain was readily available. However the flavor was not appreciated by the more discerning consumer and efforts were made to aromatize the spirit, with juniper being a popular option. Here it might be considered that, for the first time, distinct core businesses of malt spirit production and of spirit aromatization came into being. At that time, in an early example of sustainable thinking, the spent grains from alcohol production were used to feed local cattle and pigs, with the manure produced then used on the fields, which in turn increased grain yield. However, the vagaries of taxation at the time meant that there were various unscrupulous practices commonly employed, such as distilling spirit from very thick mashes, resulting in burnt flavors, as well as poor separations of heads and tails. The distillation technology used for jenever production was typical for the

1 The word brandy derives from the Dutch terms brandewijn and gebrande wijn, literally meaning burned wine. 2 Schiedam is in the south of modern-day Netherlands and also boasts the Dutch National Jenevermuseum.

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times. Thus simple alembics commonly used for a range of distillation duties were the technology of choice during the medieval period. By the beginning of the 16th century, books on the production of distilled spirits were being published frequently, one of the most notable being “Liber de arte distillandi de simplicibus oder das Buch de rechten Kunst zu Distillerien die eintzegen Dinge” (A book about the art of simple distillation), written by Hieronymus Brunschwijgk and published in 1500. This text described distilling equipment, options for heating, how to distill various botanicals, and the medical properties of distillates. Beyond this, there does not seem to have been any determined effort to develop a jenever-specific still. The basic elements of heating, vaporization and cooling common to all spirits presumably sufficed. The development of gin from jenever presumably came about by the exposure of the English public to the Lowlands products. In particular, English forces fighting the protracted series of AngloDutch wars (1652-1674) are likely to have tried it and found it to their taste. It is from here that the term “Dutch courage” is thought to originate. The accession of a Dutch king, William III, to the English throne in 1689 no doubt helped to fuel gin popularity, at least amongst the anti-French, antiCatholic population in England. A grandson of the English King Charles I, the Dutch Prince William of Orange, was married to his first cousin, Mary, who was daughter to the Catholic King James II. William shrewdly expected that his marriage put him in a strong position to claim the English throne, with Parliament preferring a protestant over a Catholic. He was encouraged

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JENEVER , GENEVER, OR GIN? Jenever is the Dutch spelling of the anglicized genever. The English shortened genever to gin. by the English to invade and he did so in late 1688. Support for James II rapidly dwindled and, at the insistence of both William and his wife, they ruled jointly from 1689. In terms of gin the rest, as they say, is history, with London quickly becoming the gin (and inebriation) capital of the world from around 1700 - 1750. Today jenever is still grain-based but not to the point of only using neutral spirit, so there is a clear malty flavor to the drink. There are two broad styles of jenever: oude (“old” style) and jonge (“young” style). This does not refer to age, but rather refers to the distinction in the composition of the two styles. Oude jenever is made with a malt winerich base with relatively low levels of neutral spirit, whilst jonge has far more neutral in the base and is arguably a lighter and more approachable spirit. The oldest style of jenever, korenwijn, is intense and tasty with the majority of the spirit being malt-wine-based. These spirits can also be matured in oak. The production of the malt wine base is similar to that of malt whiskey, requiring malting, mashing and fermentation to create the alcohol base for distillation. The beer base is then double-distilled, the first distillation acting to strip alcohol and the second to produce the refined high alcohol base. This is then used, either as is or with neutral spirit, to macerate juniper berries before redistillation and optional maturation. At least

some jenever producers do not recycle the heads and tails from the second distillation. Although this can seem to be a profligate waste of alcohol, the motivation is to keep the spirit clean. When sampling jenever it is worthwhile to think about how juniper flavor balances with that from the malt. An analogy might be beer where the hop botanical counteracts the sweet, malty flavor of the base beer. If you are drinking jenever in a bar, especially in Belgium or the Netherlands, bear in mind that it is drunk neat, either ice cold or at room temperature. It will also typically be presented in a brimful glass, and it is acceptable in a social setting to bring your mouth to the glass, rather than the other way around, to avoid spilling a single drop! POST-SCRIPT: I would like to acknowledge the friendship and early input of the late Professor Eric Van Schoonenberghe, an expert on all aspects of jenever, and Davy Jacobs, director of the Jenevermuseum in Hasselt, Belgium. A train-ride east from Brussels (or Brussels airport) will take you to Hasselt, where the thirsty visitor can enjoy a huge range of jenevers, and maybe even take part in jenever/praline pairing, a pleasant way to spend an afternoon…

Paul Hughes, Ph.D. is assistant professor of food science and technology at Oregon State University in Corvallis, OR. For more info visit www.oregonstate.edu or call (541) 737-4595.

SHERRY WRITTEN BY ANDY GARRISON

he Macallan. Dalmore. Glenfarclas. Three Grand Cru producers of Scottish single malt whisky, each with a few hundred years of history and collectively responsible for some of the most expensive (and in this writers humble opinion, delicious) whiskies ever made. What else do they have in common? They all extensively employ sherry casks in the production of their whisky. These casks provide an irreplaceably rich, savory, complex aspect to the spirits they house, and American distillers are starting to unlock their potential.

SHERRY – A TALE OF TWO BUTTS A detailed description of how sherry is made is beyond the scope of this article, but if the following teaser leads you to further research, Talia Baiocchi’s Sherry provides a good introductory overview. Going deeper, Sherry — The Noble Wine by Manuel M. Gonzalez Gordon is a great history of sherry, the Jerez region, and related fields like cooperage. Sherry is a fortified wine, or a wine to which highproof brandy has been added to increase its strength and stability. Sherry is made in a small region of Spain centered around Jerez called the “Sherry Triangle.” Here, wines are typically aged for extended times in soleras, a series of casks which are never completely emptied and can be in use for many decades. Sherry is made in a number of styles ranging from saline,

bone-dry Fino to rich and nutty Oloroso to syrupy sweet Pedro Ximenez (PX). Some, like Oloroso, are aged with a great deal of oxygen exposure (unusual for wine), which promotes the development of deeply savory and nutty flavors. Others, like fino, are aged under a bacterial culture called flor that inhibits oxidation. These wines have a long history and have been an item of robust trade and export since at least the 15th century, according to Gonzales Gordon. That history of trade is how sherry snakes its way into the world of whisky, and it’s really a tale of two different casks: the solera casks used to mature the wine and the transport casks used to get that mature wine to market. Solera casks are typically 600 liters botas gordas (“large butts”) made of American oak, which is preferred by the sherry industry as it’s easier to cooper and leaks less. These casks are static, sitting in the same place while wine flows in and out of them for many decades. Unlike many red wine producers who might retire a barrel after a season or three, these casks are rarely retired, as the goal is a neutral vessel rather than one that will impart oak flavors. These precious, ancient barrels would almost never make it to a distillery, as the bodega would use them until they were beyond repair. Transport casks, on the other hand, are very different. Since it’s relatively high in alcohol (typically 15-19% ABV) and already oxidized, sherry survives transport much better than many other styles of wine, particularly in a

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pre-refrigeration, pre-sterile bottling age. This combined with the globe-faring nature of Spain in the 15th-19th centuries led to the shipment of sherry all over the world, initially to Spanish colonies like Mexico and Peru but most vigorously traded with the British. Wine destined for foreign shores was shipped in 500-liter casks called botas de embarque (sometimes called a shipping or transport butt), basically the IBC Polytote of the day. The transport butts were first seasoned with fermenting grape musts or neutralized with ammonia to remove excessive oak tannin which might taint the mature sherry they would be trusted with. The mature wine would be bottled at the destination, or consumed straight from the barrel, eventually resulting in an empty, sherry-soaked barrel which wasn’t cost effective to ship back. I’m sure it didn’t take long for merchants and brokers to repurpose them for whisky, who eventually came to prize them for the effect they imparted.

THE BIG CHANGE In the 1980s this beautiful symbiosis fell apart. A change in regulation required sherry to be bottled within the sherry triangle, which effectively stopped the transport cask business. What was a Scotch industry that had become reliant on the flavor contributions of sherry casks to do? Develop their own supply chain of “sherry” casks! These casks are built at the behest of Scotch producers and seasoned with sherry for six months to two years, after which the sherry is dumped and used to season more casks, distilled into brandy, or turned to vinegar. The seasoning wine is not the same mature wine which transport casks originally held, but can still deliver a potent hit of flavor. Additionally, sherry consumption has been on a precipitous decline for the last two decades, leading to consolidation in the industry, the closure of bodegas, and the end of some venerable soleras. This has caused some solera botas to be occasionally available to whiskey producers, however, the unsustainability of this model is obvious. Having been used to hold maturing wines for perhaps 30 to 60 years, these casks can be quite different than the modern transport casks.

USING SHERRY CASKS With the history lesson over, we can get into the real stuff: using sherry casks in the distillery. Like most projects, the best place to start is at a bar. “I tell a lot of customers [to] find a tapas bar and drink some flights of sherry, make sure it is what you think it is,” says Skyler Weekes, CEO and Founder of Rocky Mountain Barrel Company (RMBC) in Colorado. Weekes is a barrel broker who sources small lots of unique casks for clients, including PX and Oloroso sherry butts. Some customers conflate sherry with port, and are shocked at the lean, dry, savory character of Oloroso. The intensely sweet, grape and pancake syrup aspect of PX can also be a flavor bully, so having that profile in mind when designing your maturation program can help avoid unintentional power clashing. In addition to the type of sherry, it’s important to envision how the barrel will fit into your program. Westland Distillery in Seattle has been employing sherry casks since 2011 and features them in unique bottlings as well as their Sherry Wood expression, a year-round standard. “We don’t just have one way to use these casks,” notes Matt Hoffman, Westland’s master distiller. Matt says they employ a combination of Oloroso and PX butts and hogsheads for both fullterm maturation of whiskey and finishing. This gives them a wide pool of casks to draw from, which helps when trying to blend Sherry Wood to a consistent flavor profile. Hoffman loves how sherry casks complement their complex, chocolatey mashbill but warns they can be very assertive, so they work nonsherried whiskeys into the blend as well to keep the sherry flavor nuanced. Rob Dietrich, master distiller at Stranahan’s Distillery in Denver, uses sherry casks to finish mature whiskey for their Sherry Cask single malt expression. The whiskey initially ages in 53 gallon #3 char new American oak barrels for four years and then spends one year in 40+ year old 500 liter Oloroso casks. This finishing transforms Stranahan’s flagship spirit into a “dessert whiskey, giving it rich notes and a buttery mouthfeel,” according to Dietrich.

Some customers conflate sherry with port, and are shocked at the lean, dry, savory character of Oloroso. WWW.ARTISANSPIRITMAG.COM

SOURCING BUTTS ABROAD Once you know what type of cask you want and how you’ll use it, finding them is the next challenge. While new “transport” style casks are available from several cooperages, Westland and Stranahan’s are both sourcing old solera casks which were used in bodegas for many decades. “They can be elusive, and it’s not something that’s always available,” says Annette Barret of Premium Wine Casks, the U.S. agent for Cognac-based barrel broker New Alternative Oak (NAO). She says timing and communication are critical, advising customers reach out to their source at least a quarter or more before you need the barrels. Demand is high for these solera casks and the supply is uncertain, so it takes time to find them. Barret doesn’t stock sherry casks to prevent them for spoiling or drying out in a warehouse, so they are only imported by request. For many smaller operations, a broker like NAO or RMBC is the easiest solution, but for Westland, who knew from day one that sherry would be an important component of their program, building a direct relationship with a supplier in Spain was critical. Developing an exclusive arrangement with a supplier there has given them reliable access to great barrels, as both partners understand the timing and volume required. Although sherry is quite a bit more durable than typical wine, the empty casks are still susceptible to spoilage and drying out. Standard practice for shipping empty wine casks is to gas them with

sulfur dioxide (SO2) to control bacteria and prevent spoilage. However, SO2 will impart a taint to spirits so it is critical that the shipper does not gas the barrels. Most suppliers who deal with distilleries are aware of this, but it is worth specifying to them. Without SO2, the cask will be more prone to spoilage during transit so it’s advisable to schedule the shipment during a mild time of year. Westland times their shipment to arrive in December or

fragile than a new cask. Everyone I spoke with recommended having some basic leak repair skills before bringing in sherry barrels, as they are easily damaged and prone to leaks. Expect to tighten the hoops, and be able to seal leaks around the croze. The casks should also be filled promptly, as the large 500-liter butts can be difficult to rehydrate and may have structural integrity issues if allowed to get too dry. Using older sherry casks is more chal-

Artfully used sherry casks have the potential to elevate a maturing spirit in a way few other cooperage types can match. January to avoid hot weather which might dry out the barrel. Most casks are shipped intact, although they might have been rebuilt from the staves of different casks at the cooperage to repair any damage. The barrels are leak tested and receive ~5-10 liters of ‘maintenance liquid’ prior to shipping to prevent them from drying out during transit. Upon receipt of the casks, Dietrich gives the barrels a hot water rinse to remove excess shipping liquid and then fills them immediately. Weekes of RMBC says while some customers are concerned about “rinsing” away the flavor, only about 4% of the sherry is on the surface of the stave, with the rest impregnated in the wood. Gonzales Gordon estimated a well-used solera butt might absorb 25 kilograms of wine. Leak testing these older barrels is important, as they are inherently more

lenging and significantly more expensive than using new barrels. Artfully used, however, sherry casks have the potential to elevate a maturing spirit in a way few other cooperage types can match. There are doubts about the sustainability of sourcing these old casks, and the final impact of a shrinking sherry industry is uncertain. For now, though, these old barrels are a link to centuries of history in the wine and distilling industries and offer a flavor and story which consumers love.

Andy Garrison is Head Distiller at Stone Barn Brandyworks, where he’s worked since 2012, and has distilled at a few other Portland-area distilleries including New Deal Distillery and House Spirits Distillery. He likes PX Sherry and thinks you should too. For more information, email Andy.w.garrison@gmail.com.

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UNDERSTANDING

DISTILLERY CO-PRODUCTS & EFFLUENT FOR

WASTE MANAGEMENT WRITTEN BY CHRIS DREYER

ost likely, the best thing we can imagine coming out of a distillery would be the malt whiskeys, the grain whiskeys, the rums, the brandies, the vodkas, and gins. What we tend to pay the least attention to are the co-products and effluent streams that are as much a part of the distilling process as the spirits produced. These would include spent grains, stillage, carbon dioxide (CO2), fusel oil, and wastewater from cleaning, rinsing and facility utility systems. Factors that affect how these co-products and effluent streams are managed include the type of spirit produced, production volumes, coproduct and effluent quantities, whether the distillery is located in an urban or rural environment, local jurisdictions, and discharge limitations. To begin, itâ&#x20AC;&#x2122;s important to identify all the co-products and effluent types and quantities, understand constraints or limitations on the management approach, and then put a plan in place to develop the right solutions for a successful distillery operation.

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TAKING ACCOUNT OF YOUR CO-PRODUCTS AND WASTE STREAMS The items listed below will be well known by the distiller and are listed for the benefit of the folks on the business (and drinking!) side of the distillery.

SPENT GRAINS Spent grains are a byproduct of malt whiskey and grain whiskey production. These are the grains stripped of starch converted to sugars, collected off mash and lauter tuns for the malt whiskey production, better known as draff. There are also grain residues produced from the grain whiskey process, recovered from the stillage collected from the distillation process (see stillage listing below). These grains are a valuable source of fiber, protein, vegetable oils and yeast residue.

STILLAGE Pot ale is the fluid remaining after pot distillation of wash to strip out the ethanol. This byproduct contains yeast debris and non-fermentable solids and is high in Biochemical Oxygen Demand (BOD) and Chemical Oxygen Demand (COD), suspended and dissolved solids, and as much as 0.2% residual ethanol. Spent lees is the spirit pot residue remaining after low wines distillation. This liquid is considerably less strong in BOD, COD, and insoluble content relative to pot ale; its contribution to the overall facility BOD and COD needs to be considered.

Continuous grain-in distillation process yields stillage as a byproduct that contains grain and yeast residues, and as mentioned above with spent grains, is an enriched fiber and protein source without the starch and sugars. This stillage is high in solids content, as well as BOD and COD. For a rum production process, the stillage is significantly higher in BOD and can be very dark in color.

CARBON DIOXIDE (CO 2 ) Carbon dioxide is a byproduct of fermentation that is commonly vented to atmosphere. For large scale ethanol production, favorable economics drive producers to recover the CO2 by capturing, cleaning, compressing, liquefying, and storing the CO2 for resale. But, the high capital cost of recovering and processing the CO2, along with high energy costs for doing so, often prohibits recovery, and venting to atmosphere becomes the norm.

FUSEL OIL Fusel oil is a byproduct from grain whiskey continuous distillation and is collected as a side stream off a rectification column. Fusel oil is predominantly iso-amyl alcohol, with components of water, ethanol, butanol, and propanol. The collected fusel oil can undergo further distillation to remove the excess water and ethanol or be decanted by dilution with water, then sold to chemical producers for production of organic chemicals, e.g. perfume. Alternatively, fusel oil may also be considered a supplemental fuel source for oil-fired boilers.

CLEANING AND GENERAL RINSING WASTEWATER In distillery operations, the cleaning solutions commonly used include dilute caustic solutions at 1-4% and dilute citric acid solutions at 1-2%, followed by a water rinse. Hot water and steam cleaning may be employed for sterilization purposes. General washdown of work areas on walls and floors will also contribute to the total process wastewater volume.

WASTE PRODUCTS NOT ACCOUNTED FOR Certain distillery byproducts and/or waste streams not specifically addressed in this discussion would include the following: > > Grain handling and processing waste (dirt/debris, grain dust)

STRATEGIES FOR SOLIDS MANAGEMENT The strategy for managing solid co-products and waste is driven by the total quantity produced, the residual moisture content of the solids, and whether the distillery is in an urban or rural area. Smaller quantities of spent grains may be more easily managed in an urban setting where space may be a constraint for storage or dewatering equipment, as well as pick-up and transport frequency of the spent grains. A rural setting may be more amenable for storage, plus better transport means, and the ability to utilize land (farm or animal ranch properties) for disposal of the grains. Seasonal variations may play a part in pick up and transportation schedules, especially for hard winter weather that could reduce reliable daily pickups and seasonal demands in livestock or crop production that might benefit from grain waste usage. The following options, alone or in combination, may offer the right strategy for solids management:

ANIMAL FEED Wet grains are highly suitable for animal feed given the levels of protein and fiber content, and can be considered a traditional means for disposal of the grains. The key for this approach is to secure a reliable local source for frequent pick up from season to season, regardless of weather or animal feeding schedules. The advantage of wet grains is no additional processing; the disadvantage is higher transport costs, higher storage costs and higher susceptibility to spoilage. Distillerâ&#x20AC;&#x2122;s dried grains and solubles (DDGS), the product of continuous distillation stillage processing by separation, evaporation, mixing and drying, is another good co-product suitable for animal feed. This process would apply to large-scale distilleries, demanding a high capital cost but with good return on the end-product. The advantage of DDGS is lower transportation costs, access to expanded markets, and less susceptible to spoilage. These benefits come at the expense of the higher capital costs for processing.

COMPOSTING

> > Malting waste (culms, steeping waters, CO2) for those distillers who produce their own malt

Spent grains are highly suitable as compost material, limited only by the cost of transportation. In a rural or farm setting, composting into fertilizer is a sustainable use of spent grains.

> > Copper as a constituent in pot ale, spent lees, and washing waters

REPROCESSING FOR FOOD

> > Pomace from grape processing > > Methanol as a distillation by-product collected for offsite disposal > > Boiler blowdown, combined with process wastewater > > Cooling tower blowdown, combined with process wastewater

92â&#x20AC;

Most recently spent grains, both in breweries and distilleries, are being considered as an alternative food source. Being high in fiber and protein, and low in starch (sugars), spent grains may be reprocessed into useable flours or supplements to conventional flours. In this scenario, the additional costs of transportation, drying and milling would be shifted to the end-user.

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BIOFUEL FEEDSTOCK

SECONDARY BIOLOGICAL TREATMENT

Separating and drying the wet grains may be done by several methods, producing a biomass to be used directly as boiler feed. The liquid component of the separation process is treated by secondary waste treatment, such as anaerobic digestion to produce methane biogas and would be considered as a renewable energy source.

Secondary biological treatment consists of anaerobic and aerobic biological treatment, or a combination of both. Secondary treatment is used when pretreatment with direct discharge to a municipal sewer or offsite disposal are not viable options, and solids and BOD/COD reduction to acceptable discharge levels is required. Anaerobic treatment is a process occurring in the absence of oxygen, where bio-organisms digest the organic materials (starch, proteins, lipids) and convert these materials into biogas consisting of methane, carbon dioxide, and hydrogen gases. Only a limited amount of biomass remains. The biogas can be recovered as a fuel source, and the biomass disposed of as solids. This process requires a certified wastewater operator, dedicated area and capital investment for the facility and equipment. Aerobic treatment is a process in the presence of oxygen where the wastewater progresses through screening, aeration, and sedimentation process. During the process the wastewater contacts a biologically-activated sludge that absorbs the organic material creating additional sludge and carbon dioxide. The sludge can be dewatered and is disposed as solids. This process requires a dedicated area and capital for the facility and equipment.

OFFSITE HAULING TO LANDFILL Solids within an allowable moisture content (determined with local facilities) may be suitable for landfill. Quantity and location may be the additional limiting factors for this strategy. The cost will be attributed to transportation and landfill tipping fees or charges.

STRATEGIES FOR LIQUID WASTE MANAGEMENT The strategies for managing liquid waste products, like solids in large part, are influenced by the quantity, the location of the distillery, and local regulations and limitations on acceptable discharge. What is suitable for a rural location may be completely different for an urban setting just miles away. Sewer discharge limitations will vary from city-to-city, county-to-county, and state-to-state, depending upon the local Publicly Owned Treatment Works (POTW) and their facility. In rural areas, the limitations may be minimal as compared to developed areas. The key parameters that must be considered include flow, pH, temperature, BOD, COD and Total Suspended Solids (TSS). Wastewater streams from the distillery would ideally flow into a large holding tank, or equalization tank, that takes advantage of in situ neutralization of caustic and acidic streams, and offer some level of dilution before discharge into the POTW.

DISCHARGE TO MUNICIPAL SEWER In some locations it may be entirely feasible for a distillery with a relatively low production rate to discharge their wastewater streams directly into the municipal sewer. This could include malt distillation residues (pot ale, spent lees) and grain distillation stillage with high BOD, COD, and TSS levels. This would depend on the capacity of the POTW to handle higher concentrations at the discharge flowrate and could be coupled with a surcharge assessed on each quantity exceeding discharge limitations. At the very minimum, solids removal and pH adjustment of the wastewater would be required prior to discharge.

SCREENING/SETTLING FOR SOLIDS SEPARATION Screening or gravity settling in tanks or inclined plate clarifier to remove solids may be a cost effective and simple way to manage high solids content in the wastewater volume. Once the solids are separated, the solid waste is disposed of in a landfill and the liquid stream can be further treated by anaerobic/aerobic treatment for ultimate reduction in BOD.

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LAGOONS/EVAPORATION PONDS In a rural setting with suitable soils and acreage, constructing a lagoon or evaporation pond is a good option. This strategy is contingent on the specific State regulations regarding open lagoons and ponds for wastewater management. Stringent design, construction, and maintenance guidelines will dictate the incorporation of lagoons and ponds.

CONCLUSION After reading this material it becomes obvious that there is not a “one size fits all” strategy for a distillery. The distillery process, location, production rate and local regulations will drive certain strategies for solids and liquid waste management. Taking into account all of your co-products and effluent streams and understanding your constraints and limitations will be the key to help focus your plan of action and to develop the right strategies to make your distillery a success.

Christopher Dreyer is a Senior Process Engineer at The Haskell Company where he has been a member of the Process Engineering Group for four years. Through the Institute of Brewing and Distilling, Christopher earned a Certificate in Distilling, and remains an active contributor in all Haskell distillery projects, large and small. He earned his Bachelor of Science Degree in Chemical Engineering from San Jose State University, and is a registered Professional Engineer in the states of Florida, Utah, and New Mexico.

VACUUM DISTILLING WRITTEN BY HARRY HALLER /// ILLUSTRATED BY FRANCESCA COSANTI

hysics states there are two ways to distill — using heat, or using cold. That’s because alcohol and water react differently to different temperatures. When heated, alcohol boils and evaporates at 78.37 C˚/173 F˚, while water boils at 100˚ C/212 F˚. When cooled, water becomes a solid at 0 C˚/32F˚, while alcohol becomes a solid at -114 C˚/-173.2F˚. In short, the way to distill, AKA fortify the ABV of a liquid,

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is to separate the alcohol from the water by heat or cold. That's basically it. Strict science says you have one of two choices. And yet, within these two limitations, there is one bastard son of heat distilling. He goes by the name of atmospheric pressure. If you Scuba dive, you've heard of this. If you fly, you have too. As we get closer to the edge of our atmosphere, the rules of evaporation change. With regards to the latter, when we go up, things "boil" at temperatures where they aren't actually boiling. They are evaporating, but not boiling. In fact, the first CIA operative to die in the line of duty found the hardest thing to do as he trekked across Asia was to cook a meal in the Himalayas. He found that evaporation and boiling are not the same thing. A cup of coffee was simply impossible to make. Cook beans? Forget about it. Which brings us to one of the most underappreciated forms of distilling: using a vacuum. Many master distillers have mentioned the "bruising" their low wines/low beers go through when distilling. The process of boiling, evaporating, condensing, re-boiling, and re-evaporating is simply violent. Just look through the glass and watch as alcohol and temperature battle it out.

It's ugly. Liquid becomes steam, rises, then reverts to a liquid, falls down, gets cooked again, rises, cools, becomes a liquid. It's as if Sisyphus and the Phoenix had a child. Vacuum distilling approaches things with kid gloves. Primarily used in laboratories to do the opposite of what a distiller wants — remove impurities to get to the purest source — when put in the hands of a distiller, a vacuum system (known mostly as a roto-vap) enables that distiller to purify at room temperature. The fermented feedstock evaporates without the bubbling, gurgling, vicious process of boiling. As with most anything, there is a catch. To do this on a masslevel is almost quixotic. It’s not impossible (there are a number of operations that utilize vacuum stills at scale in the US), but the process of getting a still's inner atmospheric temperature down to even close to zero millibars (millibars being the measurement of atmospheric pressure) is righteously difficult. People have tried. Some have found success (like using a vacuum process to infuse botanicals into a gin). But don't let that stop you. People will eventually need booze in space. Then it'll be easy.

Harry Haller is an independent consultant focused on working with sugarcane-based distilleries. Reach him at 00harryhaller@gmail.com. Francesca Cosanti is a talented illustrator available for commissions. Email info@francescacosanti.com for more information. WWW.ARTISANSPIRITMAG.COM

BRITISH HEART, AMERICAN SPIRIT

Distillery inspired by the traditions of Great Britain opens in Minneapolis.

WRITTEN BY JEFF CIOLETTI PHOTOGRAPHS PROVIDED BY ROYAL FOUNDRY CRAFT SPIRITS

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hen Andy McLain and his partners were planning to open a new distillery in Minneapolis, there really was little question about what country would be the source of its creative inspiration. “My mom and dad are from England — both of them came here for work and had the family,” recalls McLain, who cofounded Royal Foundry Craft Spirits with his wife and chief marketing officer Nikki McLain and CEO Kelly Everhart. “We moved back to England two years after I was born and ultimately work brought us to Belgium. I spent my summers in England, being immersed in that British upbringing.” He developed a fondness for British pub culture, beer and single malt whisky, as one tends to do in the U.K. “You get pulled into it at a very early age, more so than you do in the U.S.,” says McLain, who’s also Royal Foundry’s chief distiller. “As a family, you’re exposed to that kind of life.” That planted the seed for what eventually would become Royal Foundry WWW.ARTISANSPIRITMAG.COM

Craft Spirits, which bills itself as “a Minneapolis distillery with British Spirit.” The idea of a British-inspired distillery opening in the region generated a great deal of media buzz in and around the Twin Cities last year, well before its soft opening in December. “I wanted to always have some way that I could bring my British experiences to life through some establishment,” says McLain, who, in a previous life, designed and built houses. “I have a design background, but this was always in the back of my mind.” Of course, bringing the flavor of Great Britain to a U.S. distillery can mean a lot of things, drawing on centuries of disparate distilling traditions across the many cultures that make up the United Kingdom. “There were a lot of tentacles, a lot of directions you can go in with a British focus, spirits-wise,” McLain points out. “We started looking around the local industry, the national industry, and really wanted to have a focused direction with what we were doing — something that was

authentic and felt right for me.” It was about a three-year path from idea to opening for Royal Foundry.ts initial focus has been a traditional London-style gin and a Navy rum. The distillery plans to release a single malt whisky in the near future, as well as a series of Britishinfluenced liqueurs. Initially, the distillery’s gin had a GNS base, but in January Royal Foundry did its first in-house mash run for the product. “The plan is to have our gin be a grainto-glass product,” McLain says. “In this industry, it’s not necessary, but it is something I want to strive to do.” He settled on seven conventional botanicals for the gin — a number which, McLain feels, is the sweet spot. “Some go with a whole lot more, others with a whole lot less,” he explains. “I was going with ‘less is more.’ There are certain gins I’ve had where you don’t even know that the botanicals are even there. And then there are other gins where it seems like there’s just too much of a botanical bill.” McLain does plan to experiment a bit

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within the space, but he plans to limit the available gin SKUs to four or five. Expect some seasonal releases, as well as some one-offs. “What I don’t want to do is have so many things on the shelf where people can’t discern, ‘Okay, what is their gin that they’re actually known for,’” he says. And though Royal Foundry is making a Navy Rum, it’s not necessarily navy strength. It’s more about the Navy-inspired flavor. McLain’s team finishes some in bourbon barrels and some in port barrels and then blends those together, resulting in the right level of spice and aroma. Royal Foundry is operating two main stills, one whose capacity is listed as 240 gallons, but has a true working capacity of 300 gallons. The stillhouse also features a smaller, 60-gallon pot still with a four-plate column on top. There’s also a 600-gallonplus mash tun. But beyond the production facility, Royal Foundry also boasts what’s been called the largest cocktail space in the Twin Cities, taking up a substantial chunk of the distillery’s 15,000 square feet. The high-ceiling, industrial-chic space is open seven days a week and features a sprawling bar that seats more than 20, as well as more than a dozen communal tables. “The cocktail room is what is going to afford us the time, ultimately, so we’re not rushing out the product to the shelves,” McLain says. “The idea is through that [cocktail room] portal, we can do some really cool cocktail stuff and then roll out our distribution products when it makes sense. And that especially makes sense from the single malt side.” For the single malt, Royal Foundry is adhering to Scottish 9:16 AMlaw by not bottling any of it before it’s spent at least three years in the barrels. “If things are going well with the rest of our business, well probably push some to four,” McLain says. “There will be some excitement if we did [a] push out at three [years], but I really want to make sure it’s tasting good at that point in time.” He says he’s leaning toward a sherry finish on much of the whiskey. This summer, the distillery plans to open a 70-meter bicycle track outside the building to host cycling competitions in the spirit of the English sport Cycle Speedway. “We’re a big cycle community and I wanted to bring a cycle sport that has British ties, not just some random sport,” McLain explains. “And we wanted to have some entertainment value outside the space. It’s between [Minneapolis] and Portland, battling it out to see who’s number one in cycling.” With distilleries like Royal Foundry popping up at an accelerating rate, Minneapolis could soon give the Pacific Northwest craft beverage mecca a run for its money.

Royal Foundry Craft Spirits is located in Minneapolis, Minnesota. For more information visit www.royalfoundrycraftspirits.com or call (612) 208-1042. 98

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ACROLEIN BRINGING TEARS TO YOUR EYES!

This paper reveals insights into a potent and unpleasant flavor note that both brings tears to the eyes and an unpleasant spirits experience for distiller and consumer alike. WRITTEN BY GARY SPEDDING, PH.D.

had heard about this mysterious and potent compound, acrolein, many years ago, and when I found the adjacent lab had a stock solution, I went to sniff it out — literally! As a chemist I knew better, but without thinking, I zealously twisted off the cap or pulled the stopper, took a whiff, and the world went black and cold. I had a millisecond-or-so blackout — that eerie, cold and total blank feeling of being immersed into infinite darkness. As I gripped the edge of the fume hood and regained consciousness, my sense of reality, and realized my stupidity, I heard a voice quietly from a corner of the lab say, “When I did that, I woke up in the hospital.” The fellow in the flavor lab had, at some point, done the same thing as I — took too deep a sniff of this compound, which is regarded as toxic today by most authorities, and is a potent lachrymator, meaning it makes tears come to your eyes. Since then I have either sniffed this compound in several distilled spirits samples delivered to our lab (without being rendered senseless, thankfully), and/or have been fooled by instead sensing either a strong ethanol pungency or sulfur compound or two that can also be present in a distilled spirit and that, with their full-force volatilities, burn the nose and hit the eyes stingingly-so. However, I think I can now determine the tell-tale aroma of this compound — acrolein — that some early distillers called “peppery spirit.” Today it is most commonly found in brandies, and more specifically in fruit — generally apple-based brandies, but has been found in rums, ryes and whiskies, tequila and sugar cane spirits and more. So, what is this undesirable compound, how does it arise and how can you avoid its production and marring presence in your spirits? Let’s delve in, learn some history, how to avoid its production and how to detect it via its characteristic odor and pungency, but not sniff it too strongly for all our sakes. WWW.ARTISANSPIRITMAG.COM

ACROLEIN:

augmented with acetaldehyde and acetals. Some samples have been noted, by the author, to convey a green/pungent and old tomato skin/ stem-like aroma but, according to discussions with other chemists, that flavor profile might be attributable to other sulfur-containing compounds — certain tertiary thiols! It is also possible that the peppery note is more associated with the precursor to acrolein (discussed below and as seen in Figure 1). Another sensory factor is that acrolein is a potent lachrymator — “unbearable to human mucous membranes or eyes,” causes stinging and tearing and, as such, was also once given the moniker “red eye” as applicable to acrolein-tainted whiskies (6). In reactions with polyphenols acrolein is also responsible for bitterness in wines (8). In France the acrolein issue has been referred to as “Amertume” (translation: Bitterness) and, with respect to ciders, as “piqûre acroléique” (acroleic sting) (29).

A FEW WORDS ABOUT ITS CHEMISTRY, DESCRIPTORS AND ANGRY PROPERTIES (1) Acrolein has a small, low molecular weight (56.06 g/mol) and, therefore, is a highly volatile organic compound of boiling point 52.7 °C. It is known by many other names — acraldehyde, acrylic aldehyde, allyl aldehyde and acrylaldehyde to name a few — the chemical name being prop-2-enal or, more commonly, 2-propenal. The “al” indicates that it is of the class of compounds known as the aldehydes. It can be formed during distillation and via bacterial contamination of mashes, as discussed further below (2). It is also present in cigarette smoke and is emitted from cooking oil which has reached its “smoke point.” It is regarded as a carcinogen and of major concern to many regulatory authorities (3-5). While likely not an issue in most cases, from a health aspect, it has been found in spirits above regulatory limits on occasion, but more often will be offensive to the consumer and be the cause of a loss of faith in a brand. It will also be expensive to fix such tainted spirit. From a sensory aspect, the compound is known for its acridity, pungency and pepperiness. It is also described by the terms peppery (“peppery” smell associated with some whiskies”), horseradish (like that of a stearin candle and burnt sweet), and pungent (3-6, 35). Compounds such as acrolein can also present a plastic characteristic in distillates (6, ref. 1 discusses its polymerization reactions and potential plastic aromatic compound notes). The overall green aroma associated with spirits tainted with HOH2C-CHOH-CH2OH acrolein is likely

GLYCEROL

GLYCEROL DEHYDRATASE (DEHYDRATION RXN) ENZYME

H2O

HOH2C-CH2-CHO 3-HYDROXYPROPIONALDEHYDE (3-HPA)

Acidic conditions

Acrolein (2-propenal) — CH2=CH-CHO — can be formed during distillation by dehydration of glycerol in the presence of acids on hot metallic surfaces (1, 9). Another possibility of its formation is the metabolic activity of certain microorganisms such as heterofermentative Lactobacilli and Enterobacteria (8 and see below). Its bacterial-associated formation is discussed within the history and final sections of this article and summarized in Figure 1. Glycerol is produced by yeast during fermentation, and the metabolic activities of the bacteria, via the enzyme glycerol dehydratase, then lead to the compound 3-hydroxypropionaldehyde (3-HPA). This is the precursor to other compounds shown in figure 1. Of note is the spontaneous conversion, via dehydration — removal of water — of the 3-HPA into acrolein. Note that this is not an enzymatically driven conversion. The reaction is enhanced by low pH and/or heat (9-11). As Pungent, acrid, detailed below acrolein can be converted to horseradish, peppery the acetal, 1,1,3-triethoxypropane (Figure 1). This conversion arguably reduces the negative sensory qualities associated with H2C=CH-CHO acrolein. How this is achieved will be ACROLEIN seen in further detail below. (2-PROPENAL) (AN ALDEHYDE)

Slow spontaneous dehydration

H2O NADH + H+

1,3-PROPANEDIOL DEHYDROGENASE

Oxidation reduction system

(REDUCTION REACTION)

NADH

ENZYME

HOH2C-CH2-CH2OH 1,3-PROPANEDIOL

ACROLEIN: ITS FORMATION AND OCCURRENCE – SOME MORE CHEMISTRY AND BIOCHEMISTRY

Loss of the acrolein taint through conversion to an acetal via reaction with ethanol under acidic conditions

ACROLEIN:

A HISTORY

As a worldwide problem, and one with a long history, a summary discussion of some early studies, published in English, French and German journals, can inform us much about this compound, how it has been dealt with and how to tackle the issue today. We first head to the 1950s and start with the C2H5OCH2CH2CH(OC2H5)2 Americans. We will tread back through 1,1,3-TRIETHOXYPROPANE over 125 years of investigation in (AKA. 3-ETHOXYPROPANAL DIETHYL ACETAL) all. Hold tight!

figure 1: Lactic acid bacteria are known to be involved in the production of acrolein. One species, L. collinoides, is noted as being involved (see the text). Glycerol is produced by yeast during fermentation and then the metabolic activities of the bacteria, via the enzyme glycerol dehydratase, lead to the compound 3-hydroxypropionaldehyde (3-HPA). This is the precursor to other compounds shown in the figure. Of note is the spontaneous conversion (not enzymatically driven) via dehydration — removal of water — of the 3-HPA into acrolein. The reaction is enhanced by low pH and/or heat. As discussed in the text this compound can then be converted to the acetal, 1,1,3-triethoxypropane. [Adapted in part from ref. 11.] 100

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AMERICAN ACROLEIN RESEARCH We can consider four papers from the mid-1940s through the late 50s to represent developments from two major distillery groups then in power: Hiram Walker and Sons, and the National Products Corporation (6, 12-14). The first paper (12), which we gloss over quickly, references some early works on the topic (dating back to 1905), and was important in that it provided details of a colorimetric micromethod for the determination of acrolein. It pointed out the undesirability of the compound in fruit brandy and wine and paved the way to look for acrolein as an occasional problematic “peppery” agent in American whiskies. Active and competitive research between the two groups then led to two back to back papers from the Hiram Walker (HW) and National Distillers Products Corporation (NDPC) in 1954 (6, 13). Appearing in these 1950s papers were notes stating that, “on occasion the distillation, from a grain mash, led to a pungent odor and was mildly lachrymatory.” The term “peppery” was applied to such distillates and the term, noted above, “red eye” ascribed to whiskies so “tainted.” And it was known that the peppery character was due to acrolein. A similar phenomenon was known to occur in the manufacture of brandy, and it was noted that bacteria were responsible during yeast fermentation in the brandy scenarios. In fact, as certain species of rod-shaped Bacillus bacteria were known or suspected to be involved in acrolein production in wines since about 1910, the microbiological research began in earnest and led the scientists, working for these two distillery giants, to define some of the conditions that led to the production of acrolein in rye, bourbon and other spirits mashes. Such factors (driving bacterial growth activity) included the pH of the substrate (mash), oxygen tension, agitation, presence of yeast cells and/or mash residues, fermentable sugar content, glycerol levels and length and temperature of fermentation (13). Based on the method of detecting acrolein (12), peppery spirits were found to contain from a trace to over 100 ppm of the compound and it was observed that as little as 10 ppm in low proof whisky distillate was readily detectable organoleptically. Lactobacillus species were missed by the NDPC but found by the HW team, and the groups learned that if tainted product was redistilled to high proof to concentrate the acrolein it could be removed with the aldehyde fraction of the distillate; though of course this was noted as a costly

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option. A better option was to identify and eradicate the microorganisms responsible, which leads us to the final paper to consider in this section (14). The paper by Sobolov and Smiley (14) summarized what was then known, indicated which bacteria were likely involved and started to propose the biochemical pathways involved in glycerol metabolism by an “acrolein-forming lactobacillus.” Their conclusions were that “acrolein is neither an end product nor an intermediate product of glycerol metabolism by this organism” strain 208-A). (Lactobacillus “Acrolein, when found, apparently arises from the dehydration of β-hydroxypropionaldehyde. The dehydration is accelerated by acidic conditions or heat.” See Figure 1 for how this plays out in the pathways known now to lead to acrolein. Interesting aside: with changes taking place in the industry during the 1960s and beyond it is likely that this research largely moved into the private domain and was held in distillery libraries rather than being published in a more openly accessible form. We see, from here on out, that the papers published on this topic were drawn upon research conducted in more academic-type laboratories. Historians might be interested to look at the changes in the industry during this time period and see if that final speculation is true. Nevertheless, the modern (craft) distiller needs to be aware that research results are out there that address some of their issues arising today and to understand how such issues arose and were solved, so that history does not repeat itself and the wheels are not reinvented!

GERMAN & FRENCH ACROLEIN RESEARCH The Germans. Not surprisingly — with brandies being a staple of France and fruit brandies and other fruit-based or flavored spirits popular in Germany, some early and important research also took place there — again in the 1950s. It was a time when Europe was in recovery mode from World War II, and coincidentally a time when war time research had focused on glycerol as a source of important munitions and fuel chemicals and opened up the field to subsequent research. The German research groups uncovered many spirits of various kinds and origins which contained acrolein and, like their American counterparts, worked out some of the details of its origins and formation. They did note it was not a function of normal yeast metabolism and, like the Americans, started to uncover clues as to the species of bacteria involved (15-18). Rosenthaler and Vegezzi (15) looked at fruit brandies extensively but also many other different

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styles/types of brandies in these extensive research studies. The authors Wilharm, Wood and Holz wrote a series of three papers on the topic (16-18). In summary, these three seminal papers inform us again on the flavor/odor of acrolein — the term horseradish being familiar to the Germans — pungency! The papers also discussed works of E. Voisenet (with a prolific set of papers in French to his credit from the early 1910s) who isolated certain Bacillus bacteria which could “dehydrate glycerol.” Pomace brandies (apple and pear wines and derived spirits) were some of the first noted beverages with the acrolein issue. Attention to cleaning raw materials and sanitation were discussed, as well as how best to measure acrolein content in tainted spirits. It was suggested that the problem was so drastic that “the pungent smell of burning was so strong that it compelled the worker to leave the premises.” The prevalence of the issue led to the extensive investigations, noted in the three papers, and to uncover the methods to eliminate or reduce its formation. Some of the methods for curing the ailment likely worsened the condition — metallic mercury and ammoniacal silver included! Though, once again, an understanding of the fermentation, sanitation and oxidation of spirits, and other parameters and variables of spirits production, were important results. While this set of papers was published a few years before the ones cited from the Americans (12-14), it seems all this research was conducted independent of an understanding of the advances made on both sides of the ocean. Nevertheless, whiskies and brandies were prone to the same malady! Due to its high volatility it was clear, as noted in these early works, that elimination of the already formed acrolein was evident from the musts as they rested or settled prior to distillation. However, the researchers and distillers noted that the problem recurred after distillation, presumably from precursor conversion during the heat of the distilling operations. It is thus also clear that many advances in understanding distillation of spirits were made through these studies. There was even a hint of the use of carbon to clean up the spirit — historically relevant to American whiskies of course! The second of the three papers from the Wilharm group (17) considerably advanced the understanding of the pH conditions of the microbial production of acrolein and issues concerning fermentation. This aided in the isolation and subsequent identification of bacteria present. The authors then confirmed the definite involvement of rodlike Bacillus bacteria in the production, though one wonders today if they were misidentifying Lactobacillus? The third paper in the Wilharm set (18) showed a method to test spirits rapidly for acrolein content and allowed studies of methods for its removal. As will be seen below, its removal and prevention are possible by care and attention to quality of raw materials, to sanitation and microbial control, to efficient clean fermentation and to correct distillation practices for spirit rectification. The parallels between the American and European approaches and findings are remarkable. While scientific papers tend to cluster similar research — referencing similar works together — which saves space, it seems to be of value to have separated the material into two groups — the Americans studying whiskies in the main, and the Europeans to brandies. Both improved our understanding of this important topic. The tensions between the US and Germany as well as language differences might have prevented the ready sharing of information at the time, but we were all on common ground.

Along came the French and adding rum into the picture. Several papers published by French research groups appear in searches of the literature; it is likely that French scientists did most of the

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seminal research into all of this. Some of the papers are not easy to obtain, but their data have been summarized in more recent publications and we have a good grasp on the topic through those other works and reviews. It should be of no surprise though that the bastion of brandies should have undertaken considerable research into this spirit. However, it is to rum that we turn our attention — at least briefly — mon Dieu! In the 1970s, Dubois, Parfait and Dekimpe (19) discovered the presence of acrolein derivatives in a “Rum of Abnormal Taste” via Gas Chromatography and Mass Spectrometer (GC-MS) work and noted the identification of 1,1,3-triethoxy propane (19 and see Figure 1). Commentary was also made here on “peppered” whiskies and hints at the chemistries involved in the production of acrolein and its derivatives. Of interest was a note to the fact that Pasteur had reported in 1886 that acrolein was formed during fermentation of wines at the expense of glycerol — again showing the long history of investigation of this noxious compound and the French influence on alcohol beverage and fermentation research. The remaining sections of this article will hopefully bring us up to speed on developments since the 1950s-70s and summarize what we now think we know about acrolein, where it still poses problems and how to eliminate it or prevent its appearance in the first place.

SUMMARY OF THE CHEMISTRY AND BIOLOGY RELATED TO ACROLEIN

As seen from the review of the historical literature above, it has been known for some time that some species of Lactobacilli convert glycerol, excreted by yeast, into β — (or 3)-hydroxypropionaldehyde and that this is converted to acrolein (2-propenal) by the heat of distillation (also summarized in 2, 20). “Some acrolein is always formed from glycerol at pot still distillation” (2). The distiller must, therefore, be aware of the danger of lactic acid bacteria in fermentation. In whiskey production it has been noted that acrolein is rarely present at nosing levels in the spirit but may be noticeable in the filling house due to its lachrymatory properties. The acrolein has been reported to disappear, along with its peppery odor over a 2-3-year aging period, by forming the less potent odor note of 1,1,3-triethoxypropane, see Figure 1 (21, 22). This compound, also known as 3-ethoxypropionaldehyde diethyl acetal is a member of an interesting class of flavor molecules — the acetals formed via the reaction of aldehydes with ethanol (and other alcohols). Acetals, according to Scottish whisky research, are said to give delicate top notes (a delicacy) to whiskies (spirits) and leading to a lessening of the pungencies and green-solventy ethereal and “harsher” characteristics reminiscent of the raw whisky spirit aldehydes — including the piqûre acroléique (acroleic sting)!

SUMMARY OF THE MICROBIOLOGY The research and discovery of the microorganisms which can produce acrolein gets a bit convoluted. There are indeed many genera and species of bacteria that can be implicated in its formation, but we can consider strains of Lactobacillus to be both necessary and sufficient in the distillery for acrolein formation in alcoholic beverages (8, 23-29). Lactobacillus collinoides is an important player here from among the lactic acid bacteria and with L. hilgardii and L. diolivorans also noted criminal suspects. These organisms have the appropriate enzymatic capabilities and have been shown to produce acrolein through the pathways shown in Figure 1; such WWW.ARTISANSPIRITMAG.COM

strains are often present in wines distilled to make brandy and the acrolein is produced during heating. This is noted here as it is indeed in brandies where the issues of acrolein pungency are mostly seen to occur today — especially with craft-distilled fruit brandies.

HAS COPPER A ROLE TO PLAY IN ACROLEIN FORMATION? It is interesting to note that copper ions may be involved in promoting acrolein production from glycerol and its later clearance. Hints to metal ion involvement in chemical and biochemical reactions were made in the papers back in the 1950s. A paper seemingly off-topic (30), plus some samples recently tested in our laboratory might provide additional insight here. Two almost identical samples exhibited the tell-tale signs of acrolein, one with a potentially higher copper-level than the other tested with a higher concentration of acrolein. The paper by Pudi, et al (30) discussed the conversion of glycerol to propanediol over reactive copper/ magnesia catalysts. Copper stills are used by most distillers with copper known to be important in manipulating and controlling levels of pungent sulfur aromas in finished spirit. Thus, this topic might be worthy of further investigation for providing a better understanding of the potential impact of copper on acrolein formation, breakdown and conversion.

DETECTION AND TYPICAL LEVELS

OF ACROLEIN FOUND IN TODAY’S DISTILLED SPIRITS There are still concerns today that we lack reliable methods to determine acrolein — the technical reasons for this covered elsewhere (31). That said, Kächele, et al (31) developed a method to seek out acrolein down to a detection limit of 14 parts per billion (ppb). So, what are typical levels in distilled spirits? The Kächele group looked at 117 alcoholic beverages with 64 testing positive for acrolein (55%). The highest incidences occurred in grape marc spirits and whiskey (at 252 ppb or 0.25 ppm — mean value), fruit spirits (591 ppb), tequila (404 ppb), and Asian spirits (54 ppb). Beer, vodka and absinthe were devoid of acrolein at the limits of detection in the study, as was bottled water (31). Significantly, six of the fruit and WWW.ARTISANSPIRITMAG.COM

grape marc spirits tested showed up on acrolein levels above the World Health Organization’s provisional tolerable concentration of 1.5 ppm (1500 ppb!). An investigation of acrolein content in beverages made from apples — freshly distilled Calvados and cider — also revealed interesting results (32). Acrolein content was found between 0.7 and 5.2 ppm (700-5200 ppb!) in samples of freshly distilled Calvados, whereas it was found to be between 0.007 - 0.015 ppm (7-15 ppb) in samples of cider — down to lower limits of detection than reported possible by Kächele, et al (31). Its behavior during a distillation of the cider was also investigated showing that despite its high volatility it could also be found in the last fractions of distillation but “after ageing it should not be detected anymore” (32). According to Kächele, et al (31) and other groups, a careful reevaluation of detection methods for acrolein and related compounds might be called for, and a reevaluation of spirits made to better define typical, normal and abnormal concentrations. This should likely be related to organoleptic evaluations to determine sensory limits of acceptance of products and for safely training distillery taste panels. Finally, we look at sugarcane spirits. A study from 2012 (33), which involved sugarcane spirits obtained from small- and mediumsized still operations in Brazil, showed that nearly 10% of samples tested showed above legally accepted levels of acrolein and is considered a serious issue by Brazilian health authority dictates. As noted in the previous paragraph, we all need to be on the same page with respect to safe limits, detectable limits and consumer acceptance. So, we have seen that acrolein has plagued whiskey, rum and brandy distillers and producers and recently with respect to sugarcane spirits. In addition to Brazilian mandates, acrolein is also highly regulated in the US based on its production in cooking, smoking and possibly via imbibing of certain alcoholic beverages. Data in the literature suggest that the odor threshold for acrolein is as low as 0.02 ppm [20 ppb] (https://hazmap.nlm.nih.gov/categorydetails?table=copytblagents&id=95) with another source claiming the threshold of acrolein in air is on the order of 0.16-0.21 ppm [160210 ppb] (https://www.atsdr.cdc.gov/toxprofiles/tp124-c4.pdf).

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Hi Gary, for Artisan Spirit. It's the acrolein article you wrote of ase rele ly ear an ed ard I was forw ld have saved me around 4 or 5 years ago it wou n bee had it like ing eth som great work, if research findings confirmed t was going on! A lot of your a lot of agony figuring out wha t was going on. shed some extra light on wha and nce erie exp tal cdo ane my k for wineries and our contract distillation wor ugh thro and d tlan Por in r I'm a distille first time was with acrolein over the years. The h wit s nce erie exp few a cideries have had d VA. “The pungent smell l ferment) which had elevate some french style cider (natura ve the premises” is totally it compelled the worker to lea t tha ng stro so was g nin of bur e to distill the rest lding and could only manag bui the te cua eva to had we to accurate, rs. It was initially very hard and opening all the bay doo the but of it by rigging up box fans SO of ess 2 with an exc d a lot like distilling a wine than SO2 diagnose, on paper it sounde nse inte re mo lot a was ion itionally the sensat cider had received no SO2. Add tion later fractions of the distilla and was also present in the rences you did and that found some of the same refe Eventually our German owner nced it with a red wine that n as a cause. We next experie helped us narrow in on acrolei d VA, and brett taint. e can have, oxidation, elevate win a m ble pro ry eve lly ica had bas olein and the winery t of what we thought to be acr oun am e em extr an had te r The distilla year with little change. Afte red it in stainless steel for a ent rec a n didn't want it back so we sto Upo rs. ut 2.5 yea rel and forgot about it for abo that we moved it to an oak bar burning aroma) had largely g, gin stin (eye watering, nose ion sat sen n olei acr the g samplin iety of reasons. rit was still terrible for a var dissipated although the spi of all contract lots before now do a lab-scale distillation The moral of the story is we acrolein. accepting them to check for Cheers, Andy Garrison

Head Distiller, Stone Barn

Brandyworks

REFERENCES 1. Smith C.W. (1962). ACROLEIN. John Wiley & Sons, Inc. 2. Piggott, J.R., Sharpe, R. and Duncan, R.E.B. (Editors) (1989). The Science and Technology of Whiskies. Longman Scientific & Technical Pearson Education. 3. Bougas, N. V. (2009). Evaluating the effect of pot still design on the resultant distillate. Thesis presented in partial fulfilment of the requirements for the degree of Master of Agricultural Science at Stellenbosch University, Department of Viticulture and Oenology, Faculty of AgriSciences. 4. Berger, R. G. (Editor). (2010). Flavours and Fragrances: Chemistry, Bioprocessing and Sustainability. Springer-Verlag. 5. Roth, K. (2019 – last accessed). Chemistry of the Christmas candle. (A translated paper from German to English – a neat discussion of the stearin candle.) https://www. chemistryviews.org/details/ezine/1369631/ Chemistry_of_the_Christmas_Candle__ Part_1.html

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6. Mills, D. E., Baugh, W.D. and Conner, H.A. (1954). Studies on the Formation of Acrolein in Distillery Mashes. Appl. Microbiol. 2 (1); 9-13. 7. Kahn, J.H., E.G. Laroe. and H.A. Conner. (1968). Whisky composition: Identification of components by singlepass gas chromatography-mass spectrometry. J. Food. Sci. 33; 395-400. 8. Lea, A.G.H. (2014). Cidermaking. In: The Oxford Handbook of Food Fermentations. Charles W. Bamforth and Robert E. Ward (Editors) Oxford University Press. pp. 148-195. 9. Bauer-Christoph, C., Christoph, N., Rupp, M. and Schafer, N. (2009). Spirituosenanalytik: Stichworte und Methoden von A-Z. Behr’s Verlag. 10. Bauer, R., Cowan, D.A. and Crouch, A. (2010). Acrolein in Wine: Importance of 3-Hydroxypropionaldehyde and Derivatives in Production and Detection. J. Agric. Food Chem. 58; 3243-3250. 11. Lonvaud-Funel, A. (2010). Effects of malolactic fermentation on wine quality. In:

For those involved in regulatory control activities in the distillery, two additional references might be consulted for more on threshold levels and safety information (34, 35). On to sniffing out the details and significance of the above noted values — we move to sensory evaluations and seeing how we can breathe more easily.

HUMANS & SENSORY –

CONCENTRATIONS & THRESHOLDS Human subjects show considerable variability in detection of most of the compounds they may ever inhale. However, the above noted concentrations of acrolein found in spirits, and the threshold values listed above, should show that levels well below the regulatory tolerances for maximum exposure will likely cause sensory irritation in a majority of consumers and potential objection to and rejection of the spirit — to the detriment of the brand and reputation of the distillery. The acrolein issue is, thus, not to be sneezed at by a consumer but should be sniffed out early by the distiller! Sensory evaluation thus becomes a very important quality control tool — especially for those distillers without a well-equipped analytical laboratory.

SO, CONTROL THE SITUATION –

QUALITY ASSURANCE AND QUALITY CONTROL Distillers should always be cognizant of the quality issues of all raw materials and cleanliness of all contact points in process from start to finish. A clear understanding of microbiology and the parameters needed for efficient fermentation should also be in place. This applies to production of any potable distilled spirit. For fruit brandies, acrolein originates from bacterial spoilage during the storage of wine for distilling

Managing Wine Quality: Vol 2: Oenology and wine quality. A.G. Reynolds (Editor). Woodhead publishing. pp. 60-92. 12. Circle, S. J., Stone, L. and Boruff, C.S. (1945). Acrolein Determination by Means of Tryptophane. Ind. Eng. Chem. 17 (4); 259-262.

mash and musts. 2: Message: Isolation of acrolein-forming microorganisms and production of acrolein by the pure cultures obtained. (Translated) Archiv für Mikrobiologie, Bd. 15, S.: 403-413.

13. Serjak, W.C., Day, W.H., Van Lanen, J.M. and Boruff, C.S. (1954). Acrolein Production by Bacteria Found in Distillery Grain Mashes. Appl. Microbiol. 2 (1); 14-20.

18. Wilharm, G. and Holz, G. (1951). Contribution to the knowledge of acrolein in fruit brandy, mash and musts. III: Message: A method for the quantitative determination of acrolein. (Translated). Z. Lebensm. Unters. Forsch. 92 (2): 96-99.

14. Sobolov, M. and Smiley, K.L. (1960). Metabolism of Glycerol by an AcroleinForming Lactobacillus. J. Bacteriol. 79; 261266.

19. Dubois, P. Parfait, A. and Dekimpe, J. (1973) Presence of Acrolein Derivatives in a Rum of Abnormal Taste (Translated). Ann. Technol. agric. 22 (2): 131-135.

15. Rosenthaler, L. and Vegezzi, G. (1955). Acrolein in Spirituosen (Spirits). Z. Lebensm. Unters Forsch. 102 (2); 117-123.

20. Bauer, R., du Toit, M. and Kossmann, J. (2010). Influence of Environmental Parameters on Production of the Acrolein Precursor 3-hyroxypropionaldehyde by Lactobacillus reuteri DSMZ 20016 and its accumulation by Wine Lactobacilli. Int J Food Microbiol. 137 (1); 28-31.

16. Holz, G. and Wilharm, G. (1950). Contribution to the knowledge of acrolein in fruit brandy, mash and musts. I: Notification: Behavior and suggestions for its elimination. (Translated). Z. Lebensm. Unters. Forsch. 91 (4): 256-260. 17. Wilharm, G. and Wood, G. (1951). Contribution to the knowledge of acrolein in fruit brandy,

21. Kahn, J. H., Shipley, P.A., LaRoe, E.G. and Conner, H.A (1969). Whiskey Composition: Identification of Additional Components by

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(36) and sitting on lees too long may be problematic, especially for apple-based brandies. Key references discuss brandy and other beverages from both processing and sensory profile viewpoints and should be viewed by distillers moving into new territory (for example see refs. 37-39 for fruit-based brandies etc.). Noting again that acrolein and the peppery characteristic in rum, whisky and brandies arises as a result of the thermal degradation of glycerol and is also produced via bacterial action on fermented beverages, we can re-address and summarize control aspects. The engineering principles of still designs — shapes, sizes, materials of construction, etc. — along with the careful operation of the stills are key to getting the desirable volatile flavor profiles of any spirit ready for bottling or maturation. As seen from the 1950s US literature, and from a case presented to us a few years ago, further rectification of acrolein tainted spirit, while expensive, may be entertained to clean up the issue. Indeed, double distillation has been shown to increase the concentrations of acetaldehyde, acetals and, interestingly, 1,1,3-triethoxypropane based on rectification capacities and distillation times. The point here is that experience is needed in all aspects of raw materials selection and storage, fermentation and distillation to deal effectively with all desired and undesirable components of the final spirit. This involves both analytical and sensory approaches from start to finish — features somewhat lacking in many smaller craft operations. Further rectification of acrolein-tainted spirits might be the best remedy — albeit expensive, as waiting 2-3 years for product to

Gas Chromatography-Mass Spectrometry. J. Food Science. 34; 587-591. 22. Nykänen, L. and Nykänen. I. (1991). Distilled Beverages. In: Volatile Compounds in Foods and Beverages. Henk Maarse (Ed.) Marcel Dekker. 23. Claisse, O. and Lonvaud-Funel, A. (2000). Assimilation of glycerol by a strain of Lactobacillus collinoides isolated from cider. Food Microbiology. 17 (5); 513-519. 24. Claisse, O. and Lonvaud Funel, A. (2001). Detection of lactic acid bacteria producing 3-hydroxypropionaldehyde (acrolein precursor) from glycerol by molecular tests. Lait (or Int. J. Dairy Science). 173-18. 25. Garai-Ibabe, G., Ibarburu, I., Berregi, I., Claisse, O., Lonvaud-Funel, A., Irastorza, A. and Duenas, M.T. (2008). Glycerol metabolism and bitterness producing lactic acid bacteria in cidermaking. Int. J. Food Microbiology. 121 (3); 253-261. 26. Claisse, O. and Lonvaud-Funel, A. (2001). Primers and a Specific DNA Probe for Detecting Lactic Acid Bacteria Producing

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3-Hydroxypropionaldehyde from Glycerol in Spoiled Ciders. J. Food Protection. 64 (6); 833-837. 27. Du Plessis, H.W., Dicks, L.M., Pretorius, I.S., Lambrechts, M.G. and duToit, M. (2004). Identification of lactic acid bacteria isolated from South African brandy base wines. Int. J. Food Microbiol. 91 (1); 19-29. 28. Pasteris, S. E. and Strasser de Saad, A. M. (2009). Sugar-Glycerol Cofermentations by Lactobacillus hilgardii Isolated from Wine. J. Agric. Food Chem. 57; 3853-3858. 29. Sauvageot, N., Gouffi, K. Laplace, J-M, and Auffray, Y. (2000). Glycerol metabolism in Lactobacillus collinoides: production of 3-hydroxypropionaldehyde, a precursor of acrolein. Int. J. Food Microbiology. 55; 167170. 30. Pudi, S.M., Zoeb, A., Biswas, P. and Kumar, S. (2015). Liquid phase conversion of Glycerol to Propanediol over highly active Copper/ Magnesia catalysts. J. Chem. Sci. 127 (5); 833-842. 31. Kächele, M. Monakhova, Y.B., Kuballa, T., and

undergo maturation is a long time to see if the acrolein levels do in fact decrease, and perhaps to be sure that acrolein was/is indeed the problem!* Some distillers have taken tainted whisky distillate etc. and made vodka or made a blended spirit with it rather than maturing the pungent distillate (private communications with distillers). Best to avoid tears in the first place and produce clean spirit from the outset.

*Finally, it is to be noted that pungency can arise from ethanol, sulfur compounds and aldehydes, including acrolein, so the issue with respect to resolution and flavor profile is, sensorially and perhaps preferentially, quite complex here (40). If the trained panel or the consumer reject a batch of a spirit though it will be time for action.

SUMMARY It is hoped that this paper has given some insight into a problem rarely seen today in larger distiller operations, but which has shown up a few times in the last few years with US craft distillers. As more and more distillers enter the fold and start to release a wider portfolio of products to the beverage market, especially sugarcanebased and fruit-based spirits, it is possible we may be seeing more potential for acrolein production and consumer rejection of certain craft beverages. Then again, maybe with lessons learned, there will be no more tears.

Gary Spedding, Ph.D. is a brewing and distilling analytical chemist with special interest in the origins and development of beverage flavor and in the sensory evaluation of beer and distilled spirits. He owns and operates Brewing and Distilling Analytical Services, LLC and the new division — Brewing and Distilling Educational Services in Lexington, KY.

Lachenmeier, D.W. (2014). NMR investigation of acrolein stability in hydroalcoholic solution as a foundation for the valid HS-SPEM/GC-MS quantification of the unsaturated aldehyde in beverages. Anal. Chim. Acta. 82; 112-118. 32. Ledauphin, J., Lefrancois, A. Marquet, N., Beljean-Leymarie, M. and Barillier, D. (2006). Development of an accurate and sensitive gas chromatographic method for the determination of acrolein content in Calvados and cider. LWT – Food Science and Technology. 39 (9); 1045-1052. 33. Masson, J., Cardoso, M.G., Zacaroni, L.M., dos Anjos, J.P., Sackz, A.A., Machado, A.M. and Nelson, D.L. (2012). Determination of acrolein, ethanol, volatile acidity, and copper in different samples of sugarcane spirits. Cienc. Technol. Aliment Campinas. 32 (3); 568-572. 34. Ernstgård, L., Dwivedi, A., Lundström, J. N. and Johanson, G. (2017). Measures of odor and lateralization thresholds of acrolein, crotonaldehyde, and hexanal using a novel vapor delivery technique. PLoS ONE 12 (9); e0185479.

35. Leonardos, G., Kendall, D., and Barnard, N. (1969). Odor Threshold Determinants of 53 Odorant Chemicals. Journal of the Air Pollution Control Association. 19 (2): 91-95. 36. Buglass, A.J. (Editor) (2011). Handbook of Alcoholic Beverages: Technical, Analytical and Nutritional Aspects (Vols 1 & 2). Wiley. 37. Varnam, A.H. and Sutherland, J.P. (1994). Beverages: technology, chemistry and microbiology. Springer Science+Business Media. 38. Postel, W. and Adam. L. (1989). Fruit distillate flavours. In: Distilled Beverage Flavour: Recent Developments. R.J. Piggott and A. Paterson (Editors). Ellis Horwood. pp. 133147. 39. Madrera, R.R., Gomis, D. and Alonso, J.J.M. (2003). Influence of Distillation System, Oak Wood Type, and Aging Time on Volatile Compounds in Cider Brandy. J. Agric. Food Chem. 51; 5709-5714. 40. Spedding, G. and Jeffery, J. (2015). Smelling Roses, Fruit, Stinky Feet and Much More in My Glass. Artisan Spirit. 12; 53-58.

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Growing Smart

WRITTEN BY KRIS BOHM

t all started with the idea of a grain-to-glass craft distillery, one with big dreams of amazing aged spirits. Through endless hard work and long days and nights of distilling, your aged spirits have matured and the time has arrived. Your craft distillery is no longer in its infancy; your spirits have been embraced by the public and sales growth is strong. After bottling and a highly successful release of your first aged spirits the truth becomes apparent. You do not have nearly enough aged product to keep up with demand. To make matters worse your equipment is nearly maxed out. With no immediate way to keep up with demand, the time has arrived for the distillery to look for alternative answers. There are many ways to sustain growth and keep up with demand. Some options are simple and inexpensive, while others are costly and complex. To help prepare you for the future lets break down production growth options with pros and cons of each option to help you find the optimal path to grow your business.

OPTION #1

OPTION #2

Source some juice

Add equipment to increase capacity

There are vendors who produce aged spirits that are finished and ready to go in your bottles. Sourcing is the most direct path to an abundance of aged spirits. A supply of aged spirits can be obtained almost immediately, if you are willing to pay the price, and is the quick route to continue to meet your growing demand.

PROS: >> Barrel aged spirits, such as whiskey, bourbon, rye and brandy, are available in a variety of ages and flavors >> The cost of sourced spirits is often competitive compared with the cost of distilling and aging spirits that your distillery has produced >> Sourcing is the least expensive growth option requiring almost no additional outlay of money on equipment

CONS: >> Sourcing will require a change in the label to disclose the source of the spirits

If there is room to grow, but the budget is limited, the addition of a new still and fermenters may be the best choice for you. The addition of a stripping still or a second still to your distillery, along with more fermenters, can double or even triple your output. This decision to add equipment is often the first step a distillery will take to increase output. To grow in this way a distillery must have additional capacity to add this equipment. This means having enough heat to run more equipment and more cooling capacity to support the newly added equipment.

PROS: >> Adding equipment to increase output allows you to continue producing your product grain to glass, and maintains existing flavor profiles and processes to produce the spirits you want >> An additional still and fermenters can be relatively affordable as long as the boiler and chiller have the capacity for an additional load

CONS:

>> Spirits from another distillery are unlikely to have an identical flavor profile to spirits distilled by your distillery

>> Will require an increase in labor expenditure to run equipment

>> Sourced spirits are not always received well by an increasingly aware consumer

>> Will increase output but may not be a big enough increase to meet demand in the coming years

>> May require changes to your marketing story to match the sourced spirits

>> Will likely take a few months to procure equipment and get it running

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OPTION #3

Jump into the big leagues If your distillery is on the kind of growth track that many distilleries are currently seeing, then the addition of another batch still may not meet your forecasted long term growth. Virtually all of the medium to large distilleries in the world utilize continuous column stills to produce their spirits. A small continuous column still has a proof gallon output level that far exceeds the daily output of even the largest batch stills. There are many unique challenges created by continuous column still, but if your distillery needs big production to keep up with fast-growing sales, and needs to stay grain-to-glass, then a continuous column should be considered.

PROS: >> EFFICIENCY A continuous column requires far less labor cost per proof gallon produced

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>> BETTER YIELD A continuous column still can produce more proof gallons per pound of grain than a batch still >> CONSISTENCY A well run continuous column can produce spirits of comparable quality and specification as a batch still and is less prone to human error

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>> CAPACITY Most distilleries running a continuous column have excess capacity and can use that capacity to contract distill and create additional revenue streams

CONS: >> COST Manufacture, build out, and installation of a continuous column still is a much more expensive project than the addition of a batch still >> OPERATING CAPITAL Producing large quantities of distilled spirits requires large amounts of raw materials and an abundance of operating capital to keep the still running efficiently

YOU PUT YOUR HEART AND SOUL INTO THE BOTTLE ...DRESS IT ACCORDINGLY

>> STORAGE When running a continuous column and producing at capacity, the need to store those barrels becomes a new challenge necessitating large barrel storage areas or a rickhouse There are plenty of options and paths available as your distillery grows. Long term strategic planning must be employed if the next stage of growth is going to support your business. Plan well and dream big.

Kris Bohm is Head Distiller for Grand Canyon Distillery and also owns Distillery Now, a craft spirits consulting group. WWW.ARTISANSPIRITMAG.COM

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SDISTILLING O U T HCOMPANY ERN Pete and Vienna Barger embody the true American spirit by embracing innovation while honoring tradition W R I T T E N B Y D E V O N T R E VAT H A N / / / P H O T O S B Y A M A N D A J O Y C H R I S T E N S E N

he standard distillery narrative often starts with wild, often blind, passion for distilling, and a frantic search for the business model sometime later. This is one of those rare cases when business sense and savvy leads the way, and passion gets picked up as the journey continues. When Pete and Vienna Barger began planning their distillery in 2013, they decided they would not restrict themselves for the sake of historical continuity. Beyond the legal obligations laid upon the shoulders of any bourbon producer, the Bargers were only going to adopt methods that they felt added objectively to the value and flavor of Southern Distilling Company. “Doing it because it’s always been done that way is not necessarily the best way to move forward,” says Vienna. “Whenever we had the opportunity to innovate and to make changes to evolve and be technology-forward, we grasped that as much as possible.” The Bargers got their start in the industry after deciding to make use of a large farm they owned in Statesville, North Carolina. They were interested in turning the property into an agro-business of some kind and initially entertained the idea of a winery. After a year of research, they decided against the vineyard model, though they were still intent on the beverage-alcohol sector. “We had kind of watched — we were students on the west coast — craft brewing starting to take a bite out of the industry in the mid-90s,” Pete notes. “So even though wine wasn’t the right segment and craft brewing by this point five years ago was getting pretty crowded, we saw a lot of opportunity in distilled spirits.” Pete and Vienna began spending a lot of time in Kentucky, speaking with the pros, soaking up knowledge. Contrary to the typical craft distillery model, they were keen on a twopart business. They would distill under their own label, Southern Distilling Company, but they would also offer contract services for other brand owners. As it turns out, their location had a history of distillation. North Carolina is still largely overlooked as a destination for distilled spirits, but over a century ago the culture was thriving and distillation was a very important component of the local economy, especially in Statesville. “At one point in time prior to 1903, Statesville was the liquor capital of the world. That sounds like a brag but the history is there; it’s well documented,” explains Pete. Statesville had three important attributes that made it ideal for distilled spirits production at that time: good access to water and grains, transportation via railroads and overland trading routes, including two important railways that converged in the town; and an influx of people originally from the Northeast who saw an opportunity down South and pounced on it, relocating their vast rectification houses and liquor know-how.” Pete continues, “Those three things together converged WWW.ARTISANSPIRITMAG.COM

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to create a system that at one point was drawing from 450 different distilleries, farm distilleries, into these rectification houses where the materials were rectified, packaged, and then transported out by rail north, south, east, and west. In excess of 30,000 gallons a day were being shipped by rail out of Statesville.” A booming economic force was eventually cut short by none other than the Noble Experiment, with North Carolina being one of a handful of states to adopt Prohibition early. The result of that was a migration of skilled producers going west into places like the Smokies, and even further into states like Tennessee and Kentucky. It’s been nearly 120 years, and North Carolina has still not regained the same prestige that it once had in connection to distilled spirits, but Vienna and Pete are hoping to do their part to change that. The facility they’ve built, however, is far from the rectification houses of yore. Modernization and technological fluency is par for the course at Southern Distilling Company — case in point, the decision to use jacketed cooling systems in lieu of internal cooling coils. “By going with jacketed cooling we are able to maintain much higher levels of sanitation, which obviously impacts our product quality and consistency,” says Pete. The Bargers’ concern for consistency extends beyond their own product; the vast majority of the spirit they make is sold under other labels as part of their contract business. To successfully offer bulk product for other brand owners to use, one has to almost guarantee nearperfect consistency, so it is crucial to employ the most effective and up-to-date technology available. For the Bargers, “There’s something to be said for tradition; there’s also something to be said for honoring tradition while embracing innovation.” When most people think of contract distilling, one place comes to mind: Midwestern Grain Products (MGP) located in Lawrenceburg, Indiana. However, the Bargers always intended to satisfy a different kind of demand. Their aim was never to topple the giant but to offer an alternative business model, one that allowed for creative control and access to brand owners looking to purchase bulk spirits. “That is an aspect really of our business model that’s kind of revolutionary,” notes Vienna. “People can have something made that’s specific to their mashbill on a large scale if they need large-scale production or on a relatively small scale to get them started, and have it be truly theirs.” Based on market interest and requests from past brand-owners, Southern will be expanding its inventory of aged spirits for potential clients to choose from moving forward, in addition to new-make. “Instead of it coming from a mega distillery, it’s a true grain-to-glass, craftmade product,” says Pete.

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While Vienna, Pete, and the rest of their team are consistently making changes to improve their facility, they continue to struggle with one aspect of the business: offering their services at a competitive rate. Southern’s spirits ultimately cost more to produce than it does at a larger plant. Due to this distinction, the two owners have to work a bit harder to figure out how to keep costs reasonable. “One of the ways we have controlled our cost of goods is by growing and producing most of our own grains,” Pete says. They have pledged to offer a price that is at or below the market price point for their products. This may ding their revenues in the short term, but it’s all part of a plan to take advantage of the equipment they’re running on. “The system is designed to run 24/7. We’ve gotten super aggressive on our price point just to sell out the production so that we can run 24/7.” Adaptability is another core tenant of their business model. “We designed our system, we engineered it, to be very, very flexible,” explains Pete. They are able to produce any kind of domestic whiskey, including rye, single malt, and bourbon, as well as rum, gin, liqueurs, and flavored whiskeys, but they stop short at making neutral grain spirits. The plant is capable of importing international spirits to be blended into a unique offering. In addition to the skills and talent of chemical engineer Susan Sigman, distillery operations manager at Southern Distilling Company, Vienna says that they have “a couple of experts in the field relative to blending that have worked with us on our own internal brands and also are available to work with client projects.” The advent of a good blender cannot be overstated. It is a time-honed skill that requires a lot of experience. The ability to take from a number of different barrels and create a consistent product is as close to magic as anyone is going to get in this business. “There are very few people in the industry that can do that effectively,” Pete notes. “We’ve got great working relationships with the ones that can and we are always going to bring them in and engage them in that process.” For now, the Bargers are committed to keeping their facility up-to-date, building relationships throughout the business, and watching as their product circulates throughout the country. “It’s actually been a really delightful, surprising part of running this business, that we get to be part of other people’s dreams in addition to running our own,” says Vienna. “Just to be a part of that energy, that entrepreneurial energy that all of these brand owners and distilleries bring to what they’re making.”

Southern Distilling Company is located in Statesville, North Carolina. For more info visit www.southerndistillingcompany.com or call (704) 978-7175. WWW.ARTISANSPIRITMAG.COM

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QUICK THINGS (MOST) SPIRITS ENTREPRENEURS CAN DO TO GET BETTER SLEEP WRITTEN BY BRIAN B. DEFOE

TALK TO A TAX ADVISOR Talking about taxes may very well be one of things that puts you to sleep. But that’s not what I mean when I say talking to a tax advisor can help you get better sleep. What I mean is that having a conversation (even a brief one) with a tax professional about your business’ tax situation can help ensure the vision you have for your business entity and the growth you desire are aligned with the practical tax and business considerations needed to get there. To many spirits entrepreneurs, the concept of choosing a structure for their business entity was/is nerve-wracking. There are valuable reasons (tax and otherwise) in selecting each entity type. With that said, the entity type that suited your needs as a startup distillery years ago may not be the most advantageous entity for your business needs as they stand today. Spending time with a tax professional to discuss whether your

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current entity structure fits the long-term goals of your business could go a long way for the development of your business. I briefly discussed in my Artisan Spirit Magazine Spring 2018 article [Render Unto Caesar: Impacts of Federal Tax Reform on the Distilling Community] the developments of H.R. 1, the tax reform law (colloquially, and, incorrectly, referred to as the Tax Cuts and Jobs Act) that changed the tax landscape for individuals and businesses of all sizes. If you formed your entity prior to January 1, 2018 — even if you sought advice from a tax professional at the time — chances are that because the tax landscape has changed so much, another sit-down conversation is in order. Tax considerations come into play at all stages of the business life cycle, but they are especially important if you anticipate engaging in a significant transaction in the next few years. Whether a transaction is definitively on the horizon or more of a distant mirage, talking with a tax professional could help to ensure your business is on the correct path for your vision to be become a reality.

REVIEW AND REFRESH THE BUSINESS PLAN The best business plan is not one that is simply completed and then stuck on a shelf. Instead, the best business plan is a living document that grows and changes over time — just like your business. Chances are very good that your business has changed since you last revised your business plan, and taking a quick peek to see what requires updating may be just the thing needed to spur your business’ growth. A refresh to your business plan doesn’t mean you need to rewrite the plan in its entirety or completely change direction if you hit a rough patch. A refresh can be as simple as reviewing how your internal organization structure, sales strategy, fundraising efforts, market analysis, etc., have changed since your last business plan edit. Ensuring your business plan is up to date with those changes can help keep your business focused and ahead of the curve in WWW.ARTISANSPIRITMAG.COM

terms of reacting to consumer demands. A scheduled bi-annual or annual review of your business plan is a solid start. In addition to scheduled reviews of the plan, there are also several triggering events which could prompt a more frequent review and potential refresh. Maybe a nearby business opened up and is offering competition with your product. Perhaps you plan to sign a massive distribution agreement next month and you are going to be expanding significantly more than you previously anticipated. Maybe you hit a lull in sales, incurred an unexpected expense, had a key employee leave, or are just ready to take your business to the next level and need to raise additional capital. Any of these scenarios are likely to provide high levels of anxiety for any spirits entrepreneur, but that is especially true for one who has an outdated business plan and no real documented sense of direction for his or her company. Tying back to one of my earlier points — performing a corporate audit — by having up-to-date information on the internal operations of your business, the act of performing a refresh to your business plan can be relatively quick and painless. Being able to take new or challenging events in stride could be critical in determining the profitability and overall success of your business.

USE A WEBSITE AGE-GATE Search any major alcohol brand on the Internet and before accessing the company website you typically run into a pop-up screen requiring you to enter your date of birth or check a box certifying you are of legal age. These so-called “age-gates” are everywhere and while the law doesn’t mandate them — and candidly, requiring a user to self-identify their age prior to accessing the site may seem a bit stupid — an overwhelming majority of the large players in the alcohol industry has bought into this particular aspect of self-regulation. WWW.ARTISANSPIRITMAG.COM

Reports from the Federal Trade Commission (FTC) provide extensive analysis of online advertising and other online aspects related to alcohol sale and consumption. The FTC has explicitly stated that companies should use age-gating technologies and require consumers to enter their date of birth before accessing online alcohol-related material. The less our youth know about or are exposed to alcohol-related topics, the better off our youth will be — or so the rationale goes. So if your company does not already use an age-gate, perhaps a quick revamp to your website wouldn’t hurt. Is it silly to blindly follow the industry trend without any substantive legal requirements backing the decision? Maybe so. But at least you are demonstrating to your potential consumerbase that you are aware of and in line with the industry trend and you are trying to be responsible. At this point, it’s simply good form. But more importantly, using an age gate is consistent with what I like to call the wildebeest theory of risk mitigation: if you stay within the middle of the pack you’re less likely to get eaten by lions.

ASSESS YOUR INTELLECTUAL PROPERTY RIGHTS You may think that you’re in the business of making spirits. But unless you’re exclusively contract distilling, your business is actually broader than that. You’ve branded your company and your spirits. You’ve designed your labels and marketing collateral. You’ve probably got a website that describes your company, your spirits and what your company stands for. All of this means that you’ve got intellectual property (IP). That IP has value and should be protected. But whether and to what lengths you go to protect it will depend on a number of factors, including the nature of the IP itself, where you’re currently doing business, your expectation for the business’ future, and your budget.

Protecting your IP can run the gamut from simply keeping things confidential all the way to filing patent applications in multiple countries — with multiple inflection points in between. You wouldn’t allow your new make to simply pour out all over the floor. But when you fail to consider and appropriately protect your intellectual property rights you may be suffering just as real a loss. You owe it to your business to spend some time thinking about your IP portfolio and deciding how best to protect it.

DO A CORPORATE AUDIT Similar to talking to a tax professional, performing a detailed corporate audit may be the last thing a devoted spirits entrepreneur wants to think about before catching a few much-needed Z’s (I use the term “corporate audit” to refer to the internal company audit of any entity type, corporation, LLC or otherwise). However, the issues which we would prefer to leave on the back burner as long as possible, (the “out of sight, out of mind” thoughts) such as equity ownership, board meeting requirements, shareholder meeting requirements, etc., are sometimes the same issues that can keep us up at night. Being able to answer a few simple questions about the internal operations of your business can go a long way in reducing stress. Questions like, do I have good records of all board, shareholder or similar company actions? Do I have good records of all sales of equity in my business? Are my tax and general accounting records up to date? Particular emphasis should be placed on the fact that having business records and having good business records are two separate concepts. Even if your records consist of a few binders or several file folders saved to your computer, having company information in an organized and accessible location is a solid start to maintaining good business records. Inevitably, in the

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midst of a busy stretch some tasks will fall to the wayside. This can be especially true for smaller operations. Nevertheless, conducting a corporate audit to ensure your business has good records of up-todate and readily accessible information is a great way to reduce uncertainty and fall asleep knowing you are in a good spot regardless of the size of your operation.

UPDATE YOUR EMPLOYEE HANDBOOK (OR CREATE ONE IF IT DOESN'T YET EXIST) Nobody likes worrying about compliance. And if you’re in the spirits industry, you’re already very busy thinking about compliance with state and federal laws relating to alcohol. But unfortunately your compliance headaches don’t stop there. If you have employees (and hopefully you do — otherwise you’re probably overworked and quite lonely), you need to also think about the care and feeding of your workforce. Having a handbook is almost essential to ensuring compliance with the myriad of federal, state and local employment laws. Crafting or updating a handbook will force you to examine your practices with regard to virtually every aspect of the employment relationship (e.g., hiring, attendance, conduct policies, confidentiality, leave). Worse yet, these laws are routinely being amended, and new laws are being passed, particularly in certain parts of the country (California — I’m looking at you). Having a handbook and updating it regularly forces you to examine these new or amended laws and either remain or become compliant with them. Of course, full compliance requires that the company follow its policies. Relatedly, certain laws actually require that employees be advised in writing of the existence of a law and an employer’s policy relative thereto. As such, not having certain policies “on the books” and distributed to employees can, in and of itself, be a violation of the law. The bigger your operation in terms of number of employees, the more

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vulnerable you become to employment claims, and “big” for employment purposes is really not that big at all. Entrepreneurs and small companies often want to resist the “formality” of a handbook, but it is a mistake to do so.

GET INVOLVED IN THE COMMUNITY There is an old proverb — the Internet suggests it is Chinese in origin — that states that a man without a smiling face must never open a shop. If you’re in the spirits world, this obviously applies to your tasting room, but it doesn’t stop there. If you’re trying to build your spirits brand, it is usually a good idea to win first in your own backyard. That means that you need as many local brand evangelists as you can get. Some of that comes from making amazing hooch. But, truth be known, a good number of consumers don’t actually know what makes one dram “better” than another — they just know what they like. And a big part of whether they like your product will depend on whether they like you, your company, your branding and what you stand for in the marketplace. Faced with that reality, you need as many touchpoints with your consumer as possible. The more your consumer sees your smiling face and comes to associate that face with things they like (e.g., your booze), the more likely they are to buy a second bottle and to tell their friends about it.

BECOME A MENTOR I know what you’re probably thinking. You’re likely thinking that you need to have a mentor of your own, and you’re probably right. But as a practical matter, research demonstrates that there are also tremendous benefits to serving as a mentor

to someone else. First of all, it just feels good to give back. The psychological boost that may be obtained by providing someone else with a helping hand can go a long way in helping to mitigate the extraordinary stresses that accompany entrepreneurism. The benefits of mentorship don’t stop there. In many cases, serving as a mentor to someone else within your industry can help you better understand the challenges you face and the untapped opportunities that may exist, within your own business. Much like refreshing your business plan, the energy you spend helping someone else navigate your industry is likely to pay unexpected dividends. Finally, there’s that whole brand evangelist aspect again. By mentoring others within your industry or community, you’re helping to create an army of folks who will think fondly of you and your product. Isn’t that what you’re trying to achieve?

JOIN A STATE GUILD Perhaps the biggest impediment to success in the spirits industry is the need to comply with onerous regulations and other legal obligations. Many of those arise as a result of federal law, but a tremendous number of the day-to-day challenges of making and selling hooch flow from state and local obligations. And that’s where participation in a state guild can be really helpful. Just as the American Craft Spirits Association and the American Distilling Institute can drive helpful regulatory change at the federal level, state guilds can be extremely helpful in driving regulatory change at the state and local levels. However, the benefits of a guild really only result if the guild has sufficient buy-in by its various constituents. That means attending meetings and making your voice heard, but it also means paying the member dues that are necessary to keep the guild running and fund its efforts.

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When you’re not yet paying yourself for your labors, forking over those dues can feel like a burden. In most cases, this is money well spent and a very good investment. By participating in your guild you may be able to help the organization reduce restrictions on tasting room sales, decrease the impact of state taxes, fund “drink local” campaigns or any number of other things that can meaningfully benefit your business and improve your likelihood of success.

MAKE FRIENDS WITH A LAWYER Believe it or not, lawyers are people too. Sports, music, the arts or enjoying a well-made cocktail are among the hobbies of lawyers just as much as they are for members of any other profession. The point being, engaging with a lawyer even initially for non-legal purposes may not be all that painful, and it could pay huge dividends when times are tough or you have questions about how to move forward and grow your business. To help you focus on what you do best, it is good to have someone in mind who you have developed a relationship with that you can tap when something comes up outside of your sweet spot. If you are uncomfortable with the formal business/ legal hurdles necessary to operate your business, or even if you are comfortable, but you just don’t have the time focus on them, having a resource who is familiar with the legal landscape of the spirits industry could provide some much needed comfort. With the right relationship you can — for the cost of a cup of coffee or a taco-truck lunch — get personalized and pragmatic advice to help you understand what areas of risk are most pressing to your business today. Building a relationship with a lawyer at any stage of your company’s growth can provide comfort that at the end of the day you now have a number to call if you ever have a question or concern about how to move forward.

Brian B. DeFoe is a business lawyer at Lane Powell, where he focuses his practice on helping companies in the customerfacing food, beverage and hospitality industries. Brian can be reached at defoeb@lanepowell.com, via phone at (206) 2237948, on Twitter @BrianBDeFoe or Instagram @HoochLaw. Visit www.hoochlaw.com for more thoughts on spirits and the laws that govern them. Brian would like to thank Joe Cerne, an associate at Lane Powell, for his assistance with this article. This is intended to be a source of general information, not an opinion or legal advice on any specific situation, and does not create an attorney-client relationship with our readers.

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Q&A with STEVE GRASSE

30 Years of Quaker City Mercantile

PHOTO PROVIDED BY QUAKER CITY MERCANTILE

WRITTEN BY MARGARETT WATERBURY

ven if you you don’t know his name, you know his work. Steve Grasse is the branding mastermind between two of the biggest breakout successes in recent spirits memory, Hendrick’s Gin and Sailor Jerry Rum. His marketing company, Quaker City Mercantile, is likewise responsible for those recent home-run rebrands of heritage beverage brands like Guinness and Pilsner Urquell. But it’s not all big volume, high profile projects. Grasse is also the owner of the Tamworth Distillery in Tamworth, New Hampshire, in some ways the polar opposite of those global powerhouses. Instead of million case sales of crowd-pleasing favorites, Tamworth specializes in tiny-batch concoctions that pay homage to the wild abundance and independent spirit of northern New England. They also feature some of the most innovative ingredients in the beverage world. In honor of Quaker City Mercantile’s 30th anniversary, we caught up with Steve to learn more about the value of consistency, the importance of timing, and why it’s so critical for craft distillers to own their local markets first. 116

My core team of senior people has all been with me for over 20 years. My senior designer who did the Hendrick’s and Sailor Jerry bottles has been here for 29 years, and my senior strategy guy has been here for 27 years. I’m very proud that something’s working, and I think it might be that I’m not an asshole, because somehow, they stayed. I’ve always been a music freak, and I’ve always thought about brands like bands. If you think about the bands that have survived, like the Rolling Stones or U2, the key to their success is their longevity with a single lineup. When we start a new project, we’re literally like the Rolling Stones. We just know what to do. We don’t even talk to each other. We just size it up, look at it, and say “You have to adjust this nob over here.” After 30 years, you just know.

This marks Quaker City Mercantile’s 30th year in business. What are you most proud of during that time?

How did you get into the spirits business?

Quaker City Mercantile was an ad agency for 20 years. Our biggest client, RJ Reynolds, demanded that we have all these employees. At one point we had 150 employees and a lot of excess capacity. But we were pariahs for working with tobacco. We couldn’t enter work in awards shows because nobody wanted to know us. So we started making our own brands. We also made terrible movies. One called Bikini Bandits was actually quite successful; at one point I had an agent at United Talent in Hollywood. We also had a WWW.ARTISANSPIRITMAG.COM

pop-up convenience store called G Mart, which was a really fucked up 7-11, and we created a clothing company we called Sailor Jerry. Then one day William Grant came to me and said “We need a rum and a gin for our portfolio.” The gin became Hendrick’s. Then I decided to try to get them to take my clothing company name and put it on rum. So we made Sailor Jerry Rum, and Grants bought it, but I retained the IP. It became the fastest growing rum brand in the world. We sold it 10 years ago, and in a single transaction I made more money than I thought I ever would in my life. So I thought, fuck advertising, I want to make spirits full time.

Why do you think Sailor Jerry and Hendrick’s Gin ended up being so successful? What was it about those brands that helped them break through?

The key with Sailor Jerry, the reason it succeeded, was timing. The world was pre-Internet when it blew up. You could still get people’s attention. The other thing that was happening was Diageo was being formed. A lot of distributors that carried Captain Morgan suddenly lost it because Diageo consolidated and went with one distributor, as opposed to five different companies as before. Suddenly, all these distributors lost a major moneymaker, and along comes Sailor Jerry. They’re like, “You have a spiced rum? We’ll take it.” It was perfect timing. But it was also a great product. Captain Morgan was 80 proof, so for a buck more, you got 92 proof. It had a really differentiated, cool brand world too, with very authentic packaging. So not only was the timing right, but the brand was perfect. With Hendrick’s, a very similar thing happened, although we didn’t have the Captain Morgan distribution coincidence. What happened was we inadvertently created a gin for people who don’t like gin, and a lot of that is because, at the

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time, we really didn’t know anything about gin. With the idea of rose and cucumber, we came up with a liquid profile that wasn’t a London dry — it was different than anything else on the market. A lot, too, is the bottle and the brand. We’ve been adding this patina of weirdness to Hendrick’s for 20 years now. We had a client ask us once if we paid Google to somehow manipulate our image search results because it’s so consistent. We laugh. That’s what 20 years of consistency does, when you don’t have a new marketing manager coming in every three years wanting to make their mark and reinvent things. Our partner, William Grant and Sons, is a family owned company, and there’s a reason why historically spirits companies were all family owned, because it takes forever — the aging, and for a brand to catch on. Grant is a great company because they’re still family owned and they have the patience to make something work, and it’s amazing they let us do it. It took 10 years for both Sailor Jerry and Hendrick’s to really grow. But also, there weren’t 1,500 craft distillers at the time. Could Hendrick’s happen again now? I don’t know. There are literally 300 or 400 new gins a year in this country, and some are very good. Gin has become entirely regional.

Why start Tamworth?

First, we started the Art in the Age brand. The whole ethos was built on Walter Benjamin’s essay about how the more things are reproduced, the more they lose their aura, and we thought that was a good metaphor for modern society. That brand actually became very successful. Grant bought it six months after we started it, and then we actually bought it back from them. But we were still contract distilling it, and I was frustrated that we were not able to control how we made things entirely. So we decided to go on a quest. Walter Benjamin led me to the Transcendentalists — Thoreau, Whitman,

the whole Romantic Movement, all of them. They were really a reaction against industrialization in the beginning of the 1800s, and I said, I want to build our distillery in New England. That’s also where my ancestors are from going back to the mid 1600s. So we bought a farm up there. We also ended up buying the town general store, which we thought we’d put the distillery in. Then the fire marshal said, “You’re insane.” So then we bought the inn down the road, restored part of it, and built a distillery. The whole project was built on us wanting to experiment with where we could take spirits in terms of flavor, and in terms of sustainable and ethical production. A lot was also an experiment with bringing small towns back to life and getting young people to stay or lure them to move back. So it was a big experiment, the kind of experiment that a person who just got paid a lot of money for Sailor Jerry could do.

Tamworth makes some very quirky products, like Eau de Musc, a whiskey flavored with a beaver secretion called castoreum; or Blue Lion Chicorée Liqueur, a liqueur flavored with roasted chicory and dandelion roots. What benefits do you get by making such out-there spirits?

It sounds crass, but Tamworth is like Disney World. It’s a destination. Everyone who works at Tamworth is from Tamworth. It’s really in the sticks, their whole life is outdoors, and they have all these ideas and stories. So it’s not purely a publicity stunt. We want to be wilderness to bottle, and we want to see what’s possible and experiment with new ingredients. But once we have some interesting liquid, we have an entire team of 80 people down in Philly who are really good at weaving a story. Ultimately, you need to get people to go up there. That’s the goal. Craft distilling is not about getting in all 50 states on every shelf or in every bar. It’s about getting people to come to your place and pay a premium for the experience.

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With 30 years in the drinks industry, you’ve seen the shift from a landscape in which craft spirits didn’t exist, to today, when there are thousands of craft brands. Did that story arc surprise you?

No. It doesn’t surprise me, because it happened first with beer. What it says is it’s a very romantic business to be in. And it touches on people’s utopian ideas of what work is. I love the stories and culture of spirits. These ideas that are centuries old really spark the imagination. People are starting to talk about the shakeout, and I think there will be to a degree, but I also think you’ll find that the craft distilling business is an inherently different business than the global spirits business because it’s local. I think there’s nothing wrong with it being local. Tamworth is an entirely different business than the brands I consult on because the goals are completely different. We are the number one distillery in New Hampshire by far, and we have a very good business up there. Our goal is not to be in all 50 states. Our goal is to saturate and dominate our market and then extend somewhat regionally.

Over the next five years, what opportunities do you think will exist for small spirits brands? What threats are you most concerned about?

I think the one thing we did right with Tamworth was open with 14 different products, as opposed to laying down whiskey for two years and not selling anything. I think people underestimate how long it takes to get the whole thing going. When we opened with 14 products, we had a very robust onsite retail trade instantly. We also had 14 products that were very unique, as opposed to yet another bourbon or whiskey. We are making those things, but we also make beaver ball whiskey and something with black trumpet mushrooms. So you need to stand out and to make things that are unique. One mistake I see a lot of craft distillers make is expanding too quickly into other states. If you can’t service that market, don’t go there. If you can’t make a presence in that market, don’t go there. Become very well known in your neck of the woods, then expand across your state, then maybe extend. If you go to a control state like Pennsylvania and get listed and then they delist you, they will never look at your products again. One of the reasons we were eager to sell Art in the Age after six months was the product took off very quickly, and suddenly we were ordering tons of glass, we were filling tons of bottles, warehousing tons of product, and having all our cash outlaid until we got paid. And it kept growing and growing. We were at 200,000 cases when we sold. Imagine having to float that! With a lot of craft distillers, you need to think of your business model and make sure you’re self sustaining before you grow too much.

What’s the deal with nonalcoholic spirits? Are you going to make one?

I think it’s funny! They’re not spirits. Am I going to make fruit juice? I don’t know. Owning our own retail stores, we get to see in real time what works, and we’re monitoring non-alcoholic spirits. We do weekly cocktail classes in Philadelphia at our Art in the Age store, and we do a non-alcoholic cocktails class. We’ve had to add two or three encore classes for that class because demand was overwhelming. There’s definitely a market for it at this point. I get a lot of questions about cannabis too, with the idea that cannabis is something we should have an affinity for because of 20 years of tobacco. In some ways, I think it’s tobacco meets spirits. But I was working in tobacco when it went under FDA, and it changed, and it was no longer fun to be a part of anymore. And I feel like that’s got to happen with cannabis. There’s this euphoria now, but that stuff’s got to go under FDA. Spirits already went through Prohibition, so there’s some clarity there. But if anybody has a cannabis project they want us to look at, well, we might be interested.

Steve Grasse is founder of Quaker City Mercantile. For more information visit www.quakercitymercantile.com or call (215) 922-5220.

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d n a r Bierb

DDLESTON READE A. HU WRITTEN BY

erman distillers have always played second fiddle to German brewers. When most people think of drinking in Germany, the first thing that pops into their head is probably an Oktoberfest-like scene involving liter steins and lederhosen. What a majority don’t realize is that Germany also has an amazingly vibrant distilling culture as well. It seems like nearly every town has a compact distillery that produces all sorts of strange and inventive beverages. With such voracious appetites for distilling, it’s little wonder that German distillers would turn to beer as a plentiful source of alcohol. In doing so these distillers created one of German drinking culture’s best-kept secrets: Bierbrand. Bierbrand, or Eau de vie de biére, as the French call it, is a spirit that is made by distilling finished beer into a drinkable product, and it has been around for a very long time. At least, that’s what everyone I have ever spoken with has said about it, however, there is very little to back up this claim of an ancient heritage. Actually, there is very little written at all about Bierbrand or its production to corroborate this supposed pedigree. St. Hildegard von Bingen, the famous Saint who logged many ancient alcoholic drinks

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German distillers turned to finished beer as a plentiful source of alcohol. In doing so these distillers created one of German drinking culture’s best kept secrets:

Bierbrand such as Kräuterlikor, makes no mention of Bierbrand in her book Physica,¹ nor does almost any other ancient scholar that I surveyed. Indeed, the earliest mention of Bierbrand that I have been able to find is from a pamphlet dated 1703, and

even that is a bit dubious because of a dash between the words bier and brand (For those that don’t speak German the word Brand is the German for Brandy).2 Nevertheless, almost every producer and many imbibers insist that Bierbrand is one of the oldest distilled spirits. This stands to reason, given early alchemists’ penchant for throwing just about anything into an alembic still to see what would happen. Regardless of this odd historic oversight, modern-day Bierbrand is still regularly consumed by fans. Production is mostly handled by smaller distillers and the occasional monastery. The base beer that is used is not generally produced for the specific purpose of distilling and is typically bought from a local brewer that has excess.³ The majority of production is centered around Austria and Germany; however, Bierbrand is also produced and consumed in parts of Belgium, Switzerland, and France.3 Interestingly, it is important to note that there does not seem to be an analog to Bierbrand produced in Great Britain. Neither The London and Country Brewer nor A Treatise on all Sorts of Foods, which are two texts that extensively catalog

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alcoholic beverage production in the UK from the eighteenth century, mention distilling beer into a drinkable beverage.4,5 The reason for this is unknown, though it may be because hops were a relatively expensive commodity for many British brewers and therefore were reserved only for beer that would not be distilled. The modern-day EEC guidelines define Bierbrand simply as a “spirit drink obtained exclusively by direct distillation under normal pressure of fresh beer with an alcoholic strength by volume of less than 86 % such that the distillate obtained has organoleptic characteristics deriving from the beer.” The guidelines also mention that Bierbrand should not be bottled at less than 38% ABV and that the only additive allowed is caramel for coloring.6 This means that production of true-totype Bierbrand should be a relatively straight forward process. However, like any supposedly “straightforward” process, there are some factors and nuances that need to be contemplated in order to make the best possible product. The most important thing that needs to be considered is the selection of the type of beer that will be distilled. Base beer for a Bierbrand should have a number of things going for it. First, it should have a relatively high alcohol content.³ Anything below 5% ABV tends to yield too little useable alcohol. Some proponents even suggest adding glucoamylase to whichever beer you plan to distill, thus making sure that the maximum amount of fermentable sugars are available to the yeast. Second, a base beer should not be overly hoppy. Hops are an important part of the flavor of Bierbrand;³ however, many American breweries are currently obsessed with adding mass amounts of hops to almost every style of beer. Although this can create some enjoyable beer styles, it does not tend to aid in the production of Bierbrand. Bierbrands, like most distillates, are about balance and nuance. A highly-hopped beer tends to produce a distillate that smells and tastes only like a freshly picked hop-cone.

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There is an old brandy-makers adage that says “bad wine makes bad brandy.” The same is true for

Bierbrand Third, a good base beer should also have plenty of pleasant aromas, so as to produce an enjoyable aromatic distillate.³ This means that the beer should have had a healthy fermentation and been allowed to condition completely so as to remove all the diacetyl and other difficult-to-distillout chemicals. Beers using top-fermenting yeast tend to do the best job of producing desirable aromas when compared to bottom-fermented beers, though this is by no means a hard rule. Many German Bierbrand producers actually prefer to use Doppelbock as a base for their Bierbrand. This is because, even though Doppelbocks are fermented using a bottom-fermenting strain of yeast, their high alcohol content, deep malty aromas, and low hop profile make them an excellent base.7 Finally, there is one more note that must be made about selecting beer for distillation into Bierbrand. There is an old brandy-makers adage that says “bad wine makes bad brandy.” The same is true for Bierbrand. Although it can be very tempting to simply take your friend’s spoiled batch of beer and turn it into sellable Bierbrand, it is not a good idea to try and distill the problems away. That is not to say that all “bad” beer cannot be distilled

into Bierbrand. However, distillers must remember that, at its heart, distilling is simply the art of concentrating. Therefore, when analyzing any beer that you are considering turning into a Bierbrand, you must be able to determine if negative beer qualities will translate into positive distilled spirit qualities. After the type of beer to be made into Bierbrand has been selected, it is time to distill. There are many different approaches to distilling Bierbrand and many producers have their own unique methods. The most important thing is to make sure that the flavors from the original beer make it into the distillate. This means distilling at a lower proof than vodka or other neutral spirits and possibly cutting deeper into the tails. Ultimately, how a Bierbrand is distilled is up to the distiller and the setup of their still. Once the Bierbrand has been distilled, there is one more choice the distiller must make. To age their product or not? Although Bierbrands are mostly sold clear and unaged, there are a number of producers that choose to age their spirit.8 How long the Bierbrand ages is variable among producers. Some only rest for a couple months, while others mature for years. Any actual age statement is rarely ever printed on the label. This aging naturally mellows the product and tends to give the Bierbrand a darker color and flavor reminiscent of whiskey. At a minimum of only 38% ABV compared to the standard 40% ABV, Bierbrand has the ability to be slightly more aromatic and less spirituous than most American whiskeys.6 Although many Americans are unaware of the existence of Bierbrand as a defined category, distilling beer and selling it is not altogether unknown in the American market. A number of distillers throughout the United States, such as Charbay, have been distilling beer and marketing it as hopped whiskey.9 Chicago based distillery Koval, which released its Bierbrand in 2009, is perhaps one of the earliest American distillery to both produce and market a Bierbrand to the American

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public.10 However, they are now far from being the only ones in the Bierbrand game. J. Rieger and Co. from Kansas city has created a series of spirits called Left For Dead, which features unwanted beers from neighboring Boulevard Brewery.11 In my own current distillery, Deep Ellum, we have begun to experiment with distilling beers from our sister brewery, and we hope to have something to market soon. With so many local craft breweries and distilleries popping up, it’s no wonder collaborations have begun to occur. It may be only a matter of time until liquor stores around the United States start adding an aisle specifically for Bierbrand.

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Reade A. Huddleston is Head Distiller at Deep Ellum Distillery in Dallas, Texas. He received his Masters Degree in Brewing and Distilling Sciences from Heriot-Watt University, and is fascinated with all things drinkable. If you would like to contact him about Bierbrand, or any other strange and forgotten spirit, please email him at ReadeHuddleston@gmail.com.

References 1)

Throop, Priscilla, 1998. Hildegard Von Bingen’s Physica: The Complete English Translation of Her Classic Work on Health and Healing, Inner Traditions/Bear Publishing. Kirsch, Adam Friedrich, 1703. Curiöse Künstler. Available from < https://books.google.com/books?id =xTNAAAAAcAAJ&pg=PA568&dq=bierbrand&hl=en &sa=X&ved=0ahUKEwiD-ufut53gAhVIR6wKHd3MB_ o4FBDoAQg9MAM#v=onepage&q=bierbrand&f=false> [January 28, 2019]

Vecseri-Hegyes, B., et. al. 2005. Elaboration of the Technology for the Production of Bierbrand in a Pilot Plant. Journal of the Institute of Brewing and Distilling. 111(1). Pp 11-19

Ellis, Williams. 1737. The London and Country Brewer. J. & J. Fox. London.

Lemery, M.L., 1745. A Treaty of All Sorts of Foods, Drinkables. T. Osborne. London.

Council Regulation, 1989. Council Regulation (EEC) No. 1576/80. Available from < http://www.wipo.int/wipolex/en/text.jsp?file_ id=126926#JD_EU030_15> [April 16, 2018].

Rugenbräu, 2019. Fleur de biére d’Interlaken. Available from <https://www.rugenbraeu.ch/distillery/produkte/fleur-de-biere. php> [January 25, 2019]

Stifts Braurei-Schlägl. 2017. Doppel Bock Bierbrand. Available from < https://www.kloesterreich.at/fileadmin/Bilder/Schlaegl/ Artikelstammblatt_Doppel_Bock_Bierbrand_Holzfassgereift.pdf> [January 27, 2019]

Charbay Distillery, 2019. Whiskey. Available from < http://charbay. com/charbay-whiskey/> [January, 29, 2019]

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10) Koval Distillery, 2019. Bierbrand. Available from < http://www.

koval-distillery.com/newsite/de/spirits-d/bierbrand> [January 28, 2019]

11) J. Rieger & Co, 2019. Left for Dead. Availabe from < https://www.

jriegerco.com/our-spirits/left-for-dead> [February 1, 2019]

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GOD SAVE THE QUEEN

(OF RUM ROW) San Diego’s Malahat Distillery mixes experimentation and history. WRITTEN BY JEFF CIOLETTI /// PHOTOGRAPHY PROVIDED BY MALAHAT SPIRITS

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he name Malahat carries a great deal of significance within the booze community on the California coast. It was the moniker for what reportedly was the largest rum-running ship during the Noble Experiment, capable of carrying 60,000 cases of spirit. “It was known as the Queen of Rum Row,” says Ken Lee, who, with partners Tom Bleakley and Tony Grillo, co-founded the distillery whose name is an homage to that legendary vessel. “It used to feed the West Coast with booze during Prohibition, and that included San Diego where they used to hide booze. We really wanted to carry that whole vibe into the distillery.” And just as drinkers had to make an effort to find alcohol in the 1920s, visitors to the distillery that bears the notorious five-masted schooner’s name really have to work to get to the tasting room. Malahat Spirits sits in the middle of an unassuming business park in WWW.ARTISANSPIRITMAG.COM

northern San Diego’s Miramar neighborhood (though, to be fair, it’s in the same area as the likes of Ballast Point Brewing and Saint Archer Brewing). The building, which has housed the distillery since 2012, could just as likely be a branch office for Dunder Mifflin, and opening the front door doesn’t make things any more obvious. Visitors have to find their way through cavernous, dimly lit corridors adorned with century-old nautical artifacts — the genuine articles from the San Diego Maritime Museum — old ropes and props from the 2003 Russell Crowe flick Master and Commander: The Far Side of the World. “We’re in an industrial park and we really want people to reset their senses when they walk in,” Lee notes. “When you walk in it’s a bit of a speakeasy sort of feel — the whole entryway, right down to the burlap sacks full of straw. The Malahat used to drop the booze in burlap sacks of straw.” For Malahat, the theatrics aren’t a case of style over substance. The distillery definitely exhibits the bona fides of a world-class spirits producer. “Rum used to be the spirit of choice in the U.S. and we really wanted to bring that back,” Lee says. “We’re primarily about bringing that innovation to rum and also really creating something that you can sip if you wanted to. Rum has become something you mixed in fruity cocktails with a bunch of sweet and sour ingredients, but we wanted drinkers to have the ability to have something incredibly clean, smooth and delicious and bring that quality factor back to rum.” Malahat’s molasses-based spirits include White Rum, Spiced Rum, Ginger Rum, Black Tea Rum and Cabernet Barrel Aged Rum. The distillery also produces a bourbon, rye whiskey and vodka. The founders took about two years to develop the recipes before they were ready for barreling and bottling in 2014. “We have some products that are more oneoffs,” Lee says. “You’re limited by the shelf space out there, but you’re not limited with what you can give fans of the distillery.” The distillery uses real ginger, spices and tea leaves in its Ginger, Spiced and Black Tea Rums, but the truly unsung ingredients are the yeast strains. As essential as it is to the alcohol-making process, it’s surprising how little yeast figures into the spiritsmaking conversation. Producers tend to be much more keen to talk about barrel finishes and fermentable bases — be they molasses, grain or fruit — than they are the microbes doing all the fermentation. The microorganisms play a much more prominent role in craft brewers’ talking points. “We’re big fans of the craft beer movement and we were just thinking about what [brewers] have done with beer and all of the innovations that have come out of there,” Lee recalls. “And a lot of that came from the yeast. They’d make the same beer with a WWW.ARTISANSPIRITMAG.COM

different yeast and it’d be a completely different beer. And we thought, ‘how fun would it be to do some of the same kind of experimentation with distillation.’” When Malahat first started experimenting with different yeasts, many other spirits producers warned the San Diego distillery that yeast made little or no difference in the flavor profile. “We were told that the flavor gets stripped out during distillation, but that’s not true,” Lee reveals. The molasses of choice in Malahat’s rums ended up being a blend of two different types of molasses, and the distillers found that the yeast would only work well with the blend and not with each individual molasses. “There were a lot of distillers out there for whom the focus always seemed to be on yield and not the flavor profile,” Lee says, “and we wanted to go the other route.”

The distillery also typically uses a narrower cut of the hearts when crafting its final products, taking the middle 60 percent versus the 80 percent that many of its peers take. Malahat’s experimentation extends beyond yeast, as it’s been known to play around with different grains, barrel types and char levels. “Innovation is a big part of what we do and we like to put a different spin on things that already exist,” Lee says. “But really, I’d say our primary focus is the quality of the products. We distill every drop here. We bring the grains, the molasses, cook it and bottle it here. And we only use natural ingredients.”

Malahat Distillery is located in San Diego, California. For more information visit www.malahatspirits.com or call (858) 999-2326. 123

Testing Your Medal E

ach year, in distilleries and conference centers across the country, folks congregate to sit down and taste some alcohol. Perhaps “some” is not an appropriate descriptor; a sample size ranging between 200-2,500 different products might be more suitable to convey the scope of this challenge. Not unlike spirits themselves, the judging opportunities for craft beverages are much more nuanced and distinguished than a casual onlooker might first assume. Each competition has its distinctions; no two are exactly alike. There is a lot to get done in a relatively short amount of time, including the organization of each flight as well as the actual tasting of the distilled spirits. It’s no wonder that the mood, while enjoyable, is often radiating a slight tension.

We wanted to look into some of these competitions to gain a greater understanding of how they operate. Sadly, we weren’t able to investigate them all; as the number of craft producers continues to climb, so too do the organizations willing to judge them. We narrowed down our sample size by way of which competitions we knew to be run by esteemed individuals or organizers. This isn’t a complete summary of spirits judging across the US, it’s merely a taste.

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WRITTEN BY DEVON TREVATHAN

American Distilling Institute’s Annual Competition SUBMISSION DEADLINE: Past (mid-December 2018) JUDGING DATES: Mid-January 2019 PRODUCTS JUDGED: Spirits REGIONS COVERED: International

The longest running of all craft-centric judging events, the American Distilling Institute’s (ADI) competition is an undeniable force in the industry. Taking place each year in the spring, they gather a veritable who’s who of the distilling community to sit and taste over a period of several days. According to Andrew Faulkner, managing editor of Distiller Magazine and organizer of the competition, ADI accepts “all classes of spirits, nationally and internationally, that are produced by distilleries that fit our definition of craft.” As per ADI’s website, “Craft spirits are the products of an independently-owned distillery with maximum annual sales of 52,000 cases where the product is PHYSICALLY distilled and bottled on-site.” If a product fits this definition, it can be certified craft by ADI. Their judging protocol sired many of the standard practices of tasting spirits for a craft competition. “The spirits are evaluated by panels of four judges,” says Faulkner. “At each table, there is at least one distiller who can analyze the process — and a distiller in that particular spirit, so, you know, we don’t throw a whiskey guy on the gin table.” Panels will always include at least one bartender, retailer, or wholesaler, as well as a journalist or blogger, and then a wildcard. This wildcard could be a person generally known in the industry, or an additional bartender, retailer, or journalist. Rarely is it a second distiller due to the fact that they often enter their own spirits into the competition, and competition organizers then have to go through the process of recusing the producer when their spirit comes through. “Our philosophy has always been that we only want to reward achievement,” Faulkner informs me regarding the number of medals they award each year. “There’s an idea that we kind of float, that I cannot take credit for, I think Dave Pickerell might have first coined it for us, but it goes something like this: if you would be happy to receive it as a gift, then it would be at least a bronze medal. If you would gladly give it as a gift to someone, then it would be a silver medal — and these are all spirits professionals who receive lots and lots of free bottles each year. Now, if you would spend your own money on it, then it would be a gold medal. The last criterion being, if it is beyond gold, if it’s just a perfect, flawless spirit that’s spectacular, then it’s a double gold.” Winners are announced during their annual convention, which will take place in Denver of 2019.

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American Craft Spirits Association Annual Competition

New York International Spirits Competition

SUBMISSION DEADLINE: Past (October 2018)

SUBMISSION DEADLINE: April 12th, 2019

JUDGING DATES: November 2018 PRODUCTS JUDGED: Spirits

JUDGING DATES: April 14th, 2019 PRODUCTS JUDGED: Spirits

REGIONS COVERED: International

DISCLOSURE: Artisan Spirit Magazine is a sponsor and committee member of the ACSA Annual Craft Spirits Competition.

The New York International Spirits Competition (NYISC) is just one of a number of competitions put on by the same organizers. These different events are held all over the world: Berlin, Melbourne, and Hong Kong each host their own, with separate events for beer, wine, and spirits.

The American Craft Spirits Association (ACSA) is the only registered nonprofit trade group for craft spirits producers, governed by democraticallyelected representatives. The ACSA promises in their Code of Ethics to operate in “an honest, transparent and non-deceptive fashion,” and that pledge extends to the way they organize their competition. “Since we are a not for profit for-distillers-by-distillers organization we definitely have a focus on getting detailed and meaningful feedback to our producers-entrants as that is what we have heard from our membership is most valuable,” says Maggie Campbell, Judging Director of the competition. “Many of our small producers can't afford big market research tastings and this is a way to let them know how their spirits are perceived out in the wider world by an expert panel that includes journalists, other distillers, influential retail buyers, and tastemaker bartenders.” Their competition could be considered more industry-leaning as they do have a number of distillers involved in the background of the event, including Campbell, who is the President of Privateer Rum, but as Margie Lehrman, executive director of the organization, puts it, “unless the products appeal to the consumer, why bother?” The set up during ACSA’s judging is similar to that of ADI’s. Panels of four to five judges gather to analyze a category of spirit. Entries can receive a bronze, silver, or gold medal, and each category chooses a “Best of ” spirit. Near the end of the competition, all Best of Category winners are flighted and tasted by the entire judging team to select a single Best of Show spirit. The quantity of medals awarded has decreased over the years in a concerted effort to imbue them with more value, and Lehrman says she has received positive feedback from the shift. “I’ve actually had entrants call me after the spirits competition last year to say ‘I didn’t medal at all. Every one of my friends and family said this is the greatest thing ever, I’m so glad I got some honest feedback. I’ll be back with a product that I hope will be that much better.’” ACSA has operated in a dynamic and evolving manner since their inception. Last year, they introduced a new award during judging that was meant to recognize spirits that excelled in ingenuity, called the Innovation Award. One of the most important changes made to the competition protocol has been incorporating the palate calibration class, which “has improved the judges' consistency and approach to our feedback and scoring sheets,” according to Campbell. Following her appointment to Judging Director, Campbell took efforts to develop the form used by judges in a way that encourages meaningful commentary, a desire expressed by members of the association. All entrants receive the notes from judges who tasted and analyzed their spirit after winners are announced during the convention.

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What distinguishes NYISC from other spirit competitions is their focus on price and the representation of trade buyers. There are some similarities to other judging processes, but where ADI and ACSA tap journalists and distillers, NYISC selects only qualified trade buyers to judge the spirits. According to Adam Levy, founder of the NYISC, “people have a valuation process there, and trade buyers really know what consumers want at what price.” Levy says that he started the competition in part because of a troubling statistic that he came across in an article. In the piece, which explored the reasons why results from Whisky Advocate's (then Malt Advocate) own tastings differed from large international spirits competitions, author Lew Bryson reported that 80% of the entrants to the San Francisco World Spirits Competition and International Wine and Spirits Competition won medals. Levy felt that was too generous, so he decided to start his own competition. But how would it differ from the others already in operation? Simple, he would shine a spotlight on an aspect of the business he felt had been largely ignored until then: price. Levy himself organizes all of the panels. Certain whiskey-buying experts handle whiskey exclusively since the category remains so large, but for the other tables, judges have spirits sent to them in a sequence: vodka, gin, rum, tequila, mezcal, and so on. This way, everyone gets to try a bit of everything, and, as Levy puts it, “no one panel does 100 vodkas — they’re going to cry over that.” Levy also designs the sequences by price, starting with the least expensive products and moving up. This is an important part of NYISC’s judging philosophy. “[They’re] doing this for a buying experience,” Levy says about his judges. “It’s not to sit there and give loquacious notes about the mouthfeel or something, are you going to buy this or not?” And while receiving tasting notes from qualified personnel can appeal to distillers, ultimately the feedback they want most is that of purchase potential.

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San Francisco World Spirits Competition SUBMISSION DEADLINE: Past (March 1st, 2019) JUDGING DATES: March 22nd-24th, 2019 PRODUCTS JUDGED: Spirits REGIONS COVERED: International

The San Francisco World Spirits Competition (SFWSC) has publicized some very big names in the spirits industry. Founded in 2000, SFWSC is one of the oldest spirits competitions and prides itself on helping producers of all sizes make a lasting impression in the industry, “particularly in categories where there’s not a lot of differentiation in the consumer’s mind, like vodka for example,” says Anthony Dias Blue, founder of the competition. “If a vodka wins a gold medal at San Francisco, it immediately jumps ahead of the field.” Such was the case for Tito’s, which subsequently launched to household notoriety. Tony Abu-Ganim, the director of judging, is a top mixologist in the country and only one in a long list of impressive names that SFWSC has curated to judge their competition, including distinguished journalists, distillers, and top buyers. “There’s a definite Rorschach test for judges because if they do not live up to their advance billing, then they’re not invited back,” Dias Blue says, and for good reason: Judging for SFWSC is a rigorous process involving thousands of spirits. It is not for the faint of heart, or palate, though Dias Blue opts to give judges a sequence of spirits to taste as a way to stave off palate fatigue as much as possible. SFWSC is one of a handful of competitions to use Neat glassware almost exclusively now. For a long time, the industry standard has been Glencairn Whisky glasses, but recently the Neat glass has been muscling its way into the arena. As Dias Blue tells it, the Neat glass reduces the amount of ethanol that judges interact with when sniffing a spirit, leading to “much less palate fatigue and much more perception in terms of what they see and what they smell.” Considering the sheer amount of spirits that need to be tasted by upwards of 19 panels this year, it’s a wonder that judges are able to reach a consensus at all, but Dias Blue says that they do agree most of the time and, more often than not, it results in a medal for an entrant. He’s found that SFWSC has a higher medal-to-entrant ratio, and that’s because distillers, unlike winemakers, have “total control [over their spirit] and for that reason, and because of the tremendous cost of introducing a new spirit to the market, they really work at it, and the products are really excellent, in most cases.” SFWSC continues to develop as a competition, even in their 19th year. Beyond the marketing tool kit offered to all medal-winners so that they can easily promote their products, the organizers will be experimenting this year with providing tasting notes to producers as well. As has been the case for a while now, this year’s competition will also see the Design Awards, given out to highlight the thought and effort put into designing a label.

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Great American International Spirit Competition SUBMISSION DEADLINE: April 20th, 2019 JUDGING DATES: May 4th & 5th, 2019 PRODUCTS JUDGED: Spirits REGIONS COVERED: International

The Great American International Spirit Competition (GAISC) is, as it says, an international spirits competition taking place in America, but it’s also a truly charitable operation. Organized by the Raise a Glass foundation, bottles from the competition are collected and used in charity auctions to raise money for adults and children in need. The GAISC is one of five competitions put on by the Raise a Glass foundation this year. It takes place in upstate New York and gathers an assortment of respected members of the industry, consisting of journalists, buyers, distillers, and bartenders, to taste through hundreds of spirits. Judges are assigned to a panel, with each panel tasting a different category of spirit. GAISC does not provide tasting notes to producers. “In a competitive environment, when you’re trying to get through 300 spirits in two days, it doesn’t really allow for that level of detailed analysis, so you have to be a little bit more hedonistic in your approach,” says Ronald Dougherty, manager of the competition. The team behind Raise a Glass have a long history involved in wine competitions; they developed and grew the Finger Lakes International Wine Competition for 16 years before launching GAISC. For Dougherty, this means that he is always interested in receiving feedback from participants and prides himself on constantly making changes to improve the quality of the competition, “even little things like changing a different kind of breadstick because it’s easier on the palate and it doesn’t have as many off flavors that would interfere with the spirits.” Everyone involved in the competition, from the judges down to the assistants, are volunteering their time. For this reason, the GAISC takes place over two days and goes above and beyond to take special care of its judges. “We have three volunteers for every judge,” notes Dougherty. “We pamper our judges because we know they have a lot of hard work to do, so we take basically everything else off their plate.” Make no mistake: it is hard work. Some could look at tasting 30 bourbons in a row as a bit of fun, but the judges involved and the people who manage them, like Dougherty, realize there is a lot to do in a short amount of time. Fighting palate fatigue is at the forefront of everyone’s mind during the competition. Dougherty makes sure that judges have regular breaks throughout the day where they are not only encouraged to get up from the table but get out of the room. This is to give them a chance to relieve the sensory overload they’ve experienced and prepare to dive nosefirst into a new flight of spirits.

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San Diego Spirits Festival SUBMISSION DEADLINE: July 31st, 2019 JUDGING DATES: August 10th, 2019 PRODUCTS JUDGED: Spirits REGIONS COVERED: International

The San Diego Spirits Festival (SDSF) is now in its 11th year, and as always, it continues to direct attention at the cocktail community and culture. Similar to ADI and ACSA, SDSF’s competition culminates in a festival that is open to industry personnel and takes place two weeks after the spirits are judged. It’s there that attendees have the chance to try awardwinning spirits and meet the producers responsible for making them. The competition accepts distilled spirits from all over the world, and Liz Edwards, the founder of SDSF, has seen an increase in international entrants in recent years. She’s found that “some of those [international participants] are actually coming into the festival and using the platform to launch themselves to gauge interest in the California market.” Having the opportunity to share your spirit with a collection of top journalists, bartenders, buyers, and other industry folk can be a huge advantage, made even more compelling if that spirit has just won an award in a blind tasting. When considering the kinds of judges that she wants to bring into the competition, Edwards says that diversity is very important and so is a judge’s background. She prefers to stack her panels with specialists from different categories, such as tequila and whiskey experts. “We’ve got some very well-known and respected judges on the panel, so that lends a lot of credibility to the competition,” says Edwards. Each year, Edwards is able to see the shifting attitudes of the industry reflected in the spirits entered. “Last year it was the agaves,” she says, noting that there were a lot more mezcals and tequilas entered than any year prior. To account for the uptick in agaves, Edwards made sure to bring in a couple of notable authorities on the subject, including Mario Marquez, an esteemed catador or tequila taster. “We wanted to make sure that at least two of the tables had strong judges who understood the palate of the different mezcals and the different tequilas.” SDSF is another organization that has expanded its competition to include a Design Award in the last couple of years. They have also changed the scheduling of the events, moving the competition date to two weeks prior to the festival. This allows all participants, including judges, to enjoy the festival fully. Another change witnessed from the perspective of a competition organizer? The quality of the spirits themselves. “We have seen a general quality increase in a lot of the spirits that are being entered, and it’s really great to see the amount of work and love that goes into the distilling process with a lot of the brands.” No matter how the competition continues to change, however, Edwards remains firm on the pricing structure. She wants to make sure that SDSF continues to be affordable to all entrants and says she is willing to offer discounts to those who enter multiple products.

Competitions are a viable and active part of the distilling ecosystem. They offer producers the opportunity to receive honest feedback from qualified and diverse palates, promotional material to be shared with consumers on their communication channels, and awards that reinforce their feelings of pride in the spirits that they make. For Dave Weglarz, owner and head distiller of StilL 630, winning ACSA’s Best Craft Whiskey in the Country for two of the last three years, it was a dream come true. “I started learning this from nothing, I had no experience or background in it, I just thought it would be amazing to be a distiller, so I started a small business. And then to claw my way to make some great stuff all through sweat and hard work is an incredible validation.”

Devon Trevathan is a spirits, wine, and cocktail writer based in Nashville, Tennessee. Her interests primarily concern the indelible history and culture of the beverage industry. You can follow her @devontrevathan on Instagram and Twitter, or find her at a bar with a Negroni in hand.

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Kentucky Peerless Distilling Co. Revives a Lost Piece of Bourbon History WRITTEN BY MARGARETT WATERBURY PHOTOGRAPHY BY AMANDA JOY CHRISTENSEN

Retirement just doesn’t suit some people. “About 10 years ago, I tried to retire in Sarasota, Florida. Relax, walk on the beach, that kind of thing” says Corky Taylor, Founder and CEO of Kentucky Peerless Distilling. “And I was the most depressed I’ve ever been in my life. I just had to get back to work.” But after 25 years, returning to his previous career in the financial services sector didn’t hold a lot of romance. So, in his quest to start a new chapter, Corky looked to the past for ideas. And fortunately for him, his family’s history held a cask strength dose of inspiration.

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KENTUCKY PEERLESS’ HISTORIC ROOTS

“There’s a lot of history behind my family in the distilling business,” says Corky. He’s not embellishing. His great grandfather, Henry Kraver, owned one of the largest producers of Kentucky bourbon in the nation, the Kentucky Peerless WWW.ART ISANSPI RI TMAG.CO M

Distilling Company. In 1889, Kraver purchased an existing distillery in Henderson, Kentucky, called the Worsham Distilling Company, and rebranded it as the Kentucky Peerless Distilling Company. Investments in new equipment quickly ramped up production, and before long, the distillery was cranking out 200 barrels a day. In 1917, as World War I raged and the winds of Prohibition began to pick up speed, Kraver sold his equipment to a Canadian distiller. He continued to sell Peerless whiskey during Prohibition under a medical license, acting as one of the major suppliers to a little Chicago pharmacy chain called Walgreens, but once his stock of 63,000 barrels was gone, the Kraver family and the whiskey business seemed to have parted ways forever. But today, almost exactly a century later, that legacy is alive and well once again thanks to Corky and his son, Carson Taylor. In 2014, the two officially revived the Kentucky Peerless brand by founding the Kentucky Peerless Distilling Co. in Louisville, Kentucky, one of a growing number of serious new entrants to the Bluegrass State’s bourbonsoaked whiskey landscape.

TRANSLATING HISTORY TO NOW

When Corky and Carson decided to revive the Kentucky Peerless brand, they wanted their venture to retain strong ties to the historic brand. They kept the name, of course, in homage to their ancestors’ peerless legacy. When registering the business with the relevant authorities, they were able to secure the rights to use the Peerless name, as well as get the distillery’s originally DSP

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number, KY-50, creating a living link to history. But the Taylors’ dedication to historical accuracy isn’t compulsive. For instance, instead of building the distillery in rural Henderson, they chose downtown Louisville. “Louisville is booming,” says Corky. “It just made sense that we would be here, not only for the retail and the chance to get people to walk through the door to take tours, but to be part of the mix of restaurants, hotels, and bars.” After a two-year renovation of a 133-year-old, 42,000 square foot building that was once a tobacco warehouse, Kentucky Peerless opened its doors for the very first time in June of 2015. Production had begun just a few months prior, and maturing barrels of bourbon and rye soon began to line the racks at the refurbished warehouse. With no records of specific recipes or mash bills from the old Kentucky Peerless Distillery, the Taylors and their team were free to put their own unique spin on the production side. Led by master distiller Caleb Kilburn, the team developed a distinctive technique designed to create flavorful, easydrinking whiskeys. Instead of the more common sour mashing technique, which uses backset from previous distillations to manage pH in fermenting mashes, Kentucky Peerless uses a sweet mashing technique, which Corky says is a major contributor to the clean, fruity flavor profile. “We’re a military family, so the joke around here is things have got to be battleship clean,” laughs Corky. Automated controls are the key to this process. Kilburn designed much of the operating software for their automated system himself, enabling consistent temperature

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ranges and, therefore, consistent yield and flavor, from batch to batch. Kentucky Peerless also uses a very low barrel entry strength of 107 proof. Corky says records indicate his great grandfather used a barrel entry proof of around 110, so the choice was a conscious reflection of heritage. It also enables Kentucky Peerless to release all of its whiskeys without chill filtration and at cask strength, because the proof isn’t overly high after maturation. “We knew proof was going to go up over time, but we wanted to keep our releases under 110,” says Corky. ‘So we put it in the barrel at 107 proof, and in the bottle at 108 or 109 proof. My theory is if you want to add water to your whiskey, add it yourself.”

PREMIUM VALUE, PREMIUM PRICING

When Kentucky Peerless released its two-year-old Peerless Rye in 2017, it got oodles of media attention for its rich, flavorful character as well as its high-end price, around $125 for a 750ml bottle. How did Kentucky Peerless arrive at that ambitious price point? “We don’t make a lot of product, around 1,200 barrels a year,” explains Corky. “And it’s an expensive process.” That sweet mashing technique is more labor intensive and, thus, more costly. The low barrel entry proof means Kentucky Peerless uses up to 20% more barrels than other distilleries of similar output, adding to cooperage as well as warehousing costs. Beyond a simple calculus based on the cost of goods sold, Kentucky Peerless Rye can get away with its pricing because the whiskey itself is, well, delicious. “When people saw it, they commented on the high price, but it’s probably the best product on the market,” Corky says. “We proved that when Whisky Advo-

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cate ranked us as the 15th best whiskey overall in the world, the only rye whiskey mentioned. It’s not for everybody, I’ll say that, but we’re proud of it and I think it’ll do well for us.” The bottle shape also underscores and supports premium value proposition, while also maintaining a clear visual link to the historic Peerless packaging. “We spent about a year designing the bottle, cap, and label to get it right,” says Corky. With a diagonal badge and all-caps typography, the labels echo the original Peerless design. A thick bottom and distinctive barrellike shape help it stand out on the shelf. After extensive searching, the Taylors settled on a manufacturing partner in Georgia that specializes in perfume glass that was able to make the bottles to their exacting specifications.

NEXT UP: BOURBON

For Kentucky Peerless, rye is just the beginning. On June 22nd, 2019, the distillery will finally release its hotly anticipated bourbon. It’s aged four years, double the age statement of the rye. “Rye will always mature twice as fast as bourbon,” says Corky. “To put out a two or three-year-old bourbon wasn’t in our best interest. We wanted to wait until it was Kentucky straight bourbon whiskey.” The release date is special — it was Corky’s father’s birthday — and so is the whiskey, since it marks the full return of Kentucky Peerless bourbon. Yet Corky’s modest about his accomplishments. “Kentucky has a lot of great distilleries, a lot of great bourbons,” he says. “We’re satisfied with what we’re accomplishing with the rye, and we just hope the bourbon is going to be good too.”

Kentucky Peerless Distilling Co. is located in Louisville, Kentucky. For more info visit www.kentuckypeerless.com or call (502) 566-4999. WWW.ARTISANSPIRITMAG.COM

Through the Lender’s Lens

PREPARING YOUR DISTILLERY FOR FINANCING WRITTEN BY TRACY SHEPPARD

ecuring financing to expand your distillery can be frustrating. Most banks don’t understand your unique business model and the challenges you face with spirits inventory and its sales cycles. However, with proper preparations and perspective you can navigate an easier path to getting the financing you need. Here’s how — by looking through the lens of the lender. Credit analysis is at the core of any loan process, and to ensure credit is strong, a lender must determine the risk associated with making the loan and the likelihood that the loan would be repaid. In business financing, it is not just a matter of evaluating the business, you also have to assess the borrower’s credit history and business operations. To do this, lenders look at five categories to evaluate the risk of a loan: character, capital, conditions, collateral and cash flow. Documents such as personal tax returns, personal financial statement (PFS), resume, business tax returns, interim profit and loss statements, balance sheets on business, and business plan help paint the picture of a borrower’s credit standing. Here’s what those categories mean and why you should pay attention before you seek financing for your distillery.

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Terminology REVENUE: The amount of

money generated from business sales and activity. Also referred to as income, sales, or “the topline.”

COST OF GOODS SOLD (COGS): Cost of the materials

to perform the services you deliver, and goods sold. This is the primary variable or direct expense for the business because it varies directly with sales volume. GROSS PROFIT: Money

sale. Also known as overhead costs or indirect expenses. NET INCOME: The resultant dollar amount after all other expenses have been subtracted from gross profit. NET OPERATING INCOME (NOI): A simplistic measure

of the company’s cash flow available. Calculated by add-backs to net income.

available for the company to meet its overhead and other general expenses.

MARGIN: Ratios created to translate dollar amounts into percentages to express efficiency.

OPERATING EXPENSES: General expenses of the business not directly associated with a

DEBT SERVICE: Total dollar

amount owed for principal and interest payments on debt.

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CHARACTER: Can we trust you? Your traits define your character, and a bank wants to know what kind of trust they can place in you. The lender needs to be confident that a borrower’s background, education, industry knowledge, and experience aligns to operate the business successfully. This all amasses to answer the question, “Can we trust that you will be able to run this business successfully and pay back the loan?” Business owners have a personal financial history that can help paint a picture of their future behavior. There are many factors that influence loan approvals, and personal finances and credit can have a significant impact on your ability to

Cash Flow 101 $ REVENUES – $ COST OF GOODS SOLD (COGS) = $ GROSS PROFIT – $ OPERATING EXPENSES = $ NET INCOME

. . .

$ NET INCOME + $ ADD-BACKS = $ NET OPERATING INCOME . . . $ NET OPERATING INCOME – ( $ DEBT + $ OWNER SALARY) = $ EXCESS CASH FLOW

Certain metrics can be tracked to measure the business's performance, these are known as key performance indicators (KPI's). For example, to do this calculate COGS as a percentage of revenue and compare to industry benchmarks. $ COGS $ REVENUE

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X 100 = COGS %

borrow money for business purposes. A lender will examine personal credit reports and PFS of borrowers and guarantors associated with the loan. Your credit report is your track record of prior debt repayment. Your credit report compiles your debt story in one place and tells a reader how successful you are at paying that debt back. Balances, credit limits, and payment history are reported from your credit cards, student loans, mortgages, car loans or other lines of credit. Payment history is one of the largest factors in your credit score. It is wise to check your reports before talking to a lender. Scores are based primarily on the following: payment history, revolving credit availability, age of accounts, collections, personal bankruptcies, and liens and judgments. If there are any delinquencies, be prepared to explain why.

CAPITAL: How do you handle money? When asking to borrow money from a lender, it is only natural that they will ask what personal investment, or capital, you plan to make or have already made in the business. Contributing personal assets demonstrates that you are willing to take a personal risk for the sake of your business. It shows that you are betting on the business to succeed. The amount needed varies depending on the size, use, and type of loan you are requesting. In addition, the lender will assess your personal financial position by looking at your PFS. This is simply a summary of your assets, things of value you own, liabilities, debts or obligations. By calculating assets minus liabilities, the lender calculates your net worth. Depending on the lender and the type of loan, a positive net worth may not be a

Common Add-Backs >> COMPENSATION OF

CURRENT OWNER(S)

>> INTEREST >> DEPRECIATION >> AMORTIZATION >> ONE-TIME EXPENSES AND/OR LABOR NORMALIZATION

>> RENT (if purchasing the business’s real estate)

requirement to qualify for the loan. Your PFS is also another indicator of your financial responsibility. The types of assets and liabilities you accumulate show long-term planning behaviors or shortterm spending behaviors. For instance, accumulating small amounts of credit card debt can appear as a less favorable type of spending behavior than larger student debt balances used to invest in your education or a reasonable mortgage for a house. Savings are important as well. Money set aside shows you are living within your means. So, consider the picture your PFS may paint. A positive picture is one where your PFS aligns with your past and current job positions and reflects a history of responsibility when it comes to managing your money.

CONDITIONS: What do you need to succeed? Lenders use their lens to look both internally and externally. An examination of conditions for both the current state of the business and expected industry trajectory, gives a lender perspective on what the loan will be used for, what will be taking place, the status of the business, and the status of the profession and marketplace economy. Lenders like to see positive trends and strong business plans with a thoughtful projections for growth and continuity.

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For example, common reasons for craft distillery expansion financing include: construction, renovations, acquisitions, equipment purchases, working capital and refinancing. A lender would look at these factors to ensure the money being borrowed is appropriate and that market conditions are strong enough for the business to make enough money to cover costs and pay back the loan.

COLLATERAL: What if you don’t pay it back? A lender is not just interested in what happens if everything goes well, they also have to consider the worst-case scenario — a defaulted loan. Collateral helps solve this problem by acting as a secondary source of repayment. A lender will consider the value of the business assets as well as personal assets of the guarantors as potential collateral. Collateral also acts as a psychological motivator, as people tend to get more resourceful when they have something to lose. Collateral is an important consideration, but its significance varies depending on the type of loan. A lender will be able to explain the types of collateral needed for your loan.

CASH FLOW: How will you pay it back? Ultimately to approve the loan, the lender wants to get comfortable with how your distillery will be able to successfully repay the loan. In business financing, there is a different paradigm in evaluating repayment ability than in consumer financing. With business loans, repayment ability comes from the business’s cash flow. This is the amount of cash available after ordinary business expenses have been paid. The business should have sufficient income to support its business expenses and debts comfortably, including principals’ salaries that support personal expenses and debts. Cash flow management is an imperative skill for any small business owner.

FINAL THOUGHTS Remember, these five components — character, capital, conditions, collateral and cash flow — are the pillars of a typical credit analysis. These five areas help the lender evaluate the distillery owner and the business to better understand the risk of making the loan and the likelihood that the loan will be successfully repaid. Hopefully, you now have a better understanding of what is needed and how to prepare for the loan application process.

Tracy Sheppard is a Senior Loan Officer for Live Oak Bank’s Wine and Craft Beverage Lending Division. For more info visit www.liveoakbank.com/wine-and-craft-beverage-loans or call (707) 486-4911. WWW.ARTISANSPIRITMAG.COM

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SEEDING SUCCESS

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APPLES ARE AT THE CORE OF NEVERSINK SPIRITS’S GIN AND BRANDY WR ITTEN B Y JEFF CI OLETTI PH O TO S PROVI DED BY N EVER SI NK SPI RI TS

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in and brandy have been trending as the next big categories in American spirits for some time, which could prove advantageous for a New York State distillery that is combining the best of both worlds in a single product. Neversink Spirits of Port Chester, New York, recently moved from a 50 percent grain-50 percent apple base to a 100 percent apple brandy base for its namesake gin. The distillery sources its apples from a single orchard in New York State. “It’s pretty unusual in the world of gin,” says Yoni Rabino, co-founder of Neversink Spirits, which officially opened in 2015. “We make it with a botanical recipe that kind of highlights those apples.” The resulting distillate is macerated with juniper for 24 hours and then re-distilled with 11 different botanicals, including another round of juniper, coriander, cardamom, star anise, cinnamon, orris root, angelica root and elderflower, as well as fresh orange, lemon and grapefruit peel. Rabino points to the apple distillate’s weightier body and mouthfeel as a key differentiating factor for its gin. Consumers not in the mood for all of those botanicals can sample the apple base in the form of Neversink Apple Brandy. “[Co-founder] Noah Braunstein and I grew up together not far from the distillery in Westchester County [New York] and we had a real interest in European fruit spirits from very early on,” says Rabino. “We were just really interested in how they reflected a sense of place in this beautiful way—like how a pear eau de vie from France is going to taste different than one in Germany with different types of fruit in different growing conditions.” Neversink is one-third of a collective called The Food Cycle, which also includes Kent Falls Brewing Co. and Camps Road Farms, both located across the state line in Kent, Connecticut. “When we started out we did a lot of WWW.ART ISANSP IRITMAG.COM

reflecting on what it means to be a craft distillery, a local distillery,” Rabino recalls. “And, again, it all comes back to a sense of place and working with great local farms and showcasing the wonderful things they’re growing. And [we] very quickly realized that apples would be the focus for us.” “For certain stirred cocktails, it’s a cool alternative,” he says. “It also has some real fresh fruit quality to it and the botanicals we selected play with that and accent that.” Neversink uses more than 15 varieties of apples, all sought-after heritage varietals

that are well suited for cider and brandymaking. In 2012 the Neversink team was part of a grassroot effort among volunteer friends to plant more than 350 apple trees on Camps Road Farms. They will one day be among those bearing spirit-friendly fruit. A distillery really has to be passionate about using an all-apple base for a gin when a grain base is much less expensive and much less of a hassle—sourcing GNS even less so. The weight of fruit used to make a single barrel of brandy can be upwards of 10 times that of the grain to make a similar volume of spirit. Upstate New York is known for its

apples and there are plenty of orchards throughout the garden state, but that doesn’t necessarily make it easier or any more economical for Neversink. Apples are a hyper-seasonal fruit and some years’ crops are better than others. “That doesn’t change our quality,” Rabino says, “it just makes it a little more difficult to make.” As the distillery has grown, it’s started contract-producing some apple-based spirit with a grower-partner with an on-site still. Shipping spirit rather than truckloads of apples at a time helps lower costs and Neversink’s carbon footprint. “It’s kind of a win-win, as he’s able to grow, process and distill the fruit right on site,” Rabino says. Aviation, Bees Knees, Last Word and a dry martini are among the mixed drinks in which Neversink Gin works well. For the Apple Brandy, the distillery recommends its riff on the classic Mule, called the Neversink Mule; the Frutta e Verdura, which combines the brandy with Cynar, Vermouth Rossa and Angostura bitters and the Apple of Eden, a simple combination of the brandy, Cynar and Manzanilla sherry. A 750-ml bottle of Neversink Gin retails for about $45, which is on the higher end for gin, throughout the New York-New Jersey-Connecticut Tri-State area. It also recently started selling its spirits in Chicago, Washington, D.C. and Minnesota, and exports a small volume of it to Japan. “Price is obviously a very unsexy topic, but price is a major factor—it’s significantly more expensive than making grain spirit,” Rabino says. “We’re not able to compete at that price point with some of the big-name London dry gins, but we offer something unique and fun. It really offers a completely different experience to the drinker than a grain-based gin.”

Neversink Spirits is located in Port Chester, New York. For more information visit www. neversinkspirits.com or call (914) 352-1953. 135

CHOOSING THE RIGHT STILL FOR THE JOB W R I T T E N & P H O T O G R A P H E D B Y M AT T S T R I C K L A N D

WHAT DO YOU WANT TO MAKE?

hen folks ask me what still they should purchase, my first question is, “what do you want to make?” Forget price (we’ll get to that). Forget lead times (we’ll get to those too). Forget what the distiller in the next town is using (who cares?). What kind of products are you trying to make? The reason that I ask this is that despite what many manufacturers out there will claim (and boy am I going to take some #$@% for what I’m about to say), most stills are not great at making everything. That’s not to say that there are only whisky stills, and gin stills, and brandy stills, and so on. But I’ve noticed a lot of companies making the claim that you can make excellent gin, vodka, whisky, rum, shochu, and whatever else on their still. It’s the one-size-fits-all tactic, and it sounds great to unsuspecting start-ups just trying to get their first bottles on the shelves. Sorry to say, it just doesn’t work like that. I get it. Technically you can make brandy, gin, and whisky all on the same still, but that doesn’t mean that you’re going to get the best results. The primary issue at hand is style. A German-made still with loads of plates and reflux points is great for Austrian-style brandies and some lighter style rums, but it may not be the best at producing high congener spirits like some American whiskey styles or French-type brandies. Are there ways to push those stills into making a multitude of spirits? Sure, but it requires some clever thinking and technical know-how. Therefore it’s not necessarily the best way to start a distilling program. Ideally if you want to make a ton of products then you’ll need more than one still to do them correctly — kind of like having several different wrenches in the same tool box. For folks just beginning to get their operations on-line,

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purchasing a still can be a nerve-shattering task. There are so many factors to consider, and it can make even the coolest of cucumbers feel like they’re in a pickle. Let’s go down a byno-means-exhaustive list of some important questions to ask yourself before purchasing a still. You may or may not think all of these are important, but everyone will find something in this list that causes them to think hard about their choice of distillation equipment.

> > Should I purchase

> > How much space

a continuous, pot, or hybrid system?

is this system going to take up?

> > What size of still

> > How much is the still

should I get?

going to cost me?

> > What still geometry do I need? (What does that even mean?!)

> > Should I use a shellin-tube or wormtub condenser?

> > Should the whole thing be made of copper or can I use steel?

> > Do I need trays/plates and if so, how many?

> > How should I heat my still?

> > Is copper thickness

> > How long is the lead time from order to delivery?

> > How easy is it to use? > > How are cuts done? > > Should I get a wash still AND spirit still in one?

> > Is it purrrty? > > Where is the still made?

> > Does the company provide technical support?

important? Holy list fatigue, Batman! That’s a lot to consider, and that’s just what I came up with Hemingway-ing (read: drinking and writing…I ain’t no Hemingway) through a dram of Scotch. And WWW.ARTISANSPIRITMAG.COM

while many of these considerations are connected to each other, it behooves the purchase-hungry distiller to consider all of them on their own. Your still will likely be the most expensive piece of equipment you purchase so it’s worth the time and effort to ask yourself these things. A book could probably be written about the subject, but for the sake of brevity and lowering my risk of carpal tunnel, let’s break down some of the more important issues. In this installment we’ll cover the first two: Continuous, pot, and hybrid systems and system size.

BATCH STILLS

CONTINUOUS STILLS

These come in two types: standard pot and hybrid. Hybrid stills offer high amounts of reflux for clean tasting white spirits. Traditional pot stills are easier to coax higher congeners into the spirit.

These stills come in a wide array of set-ups and configurations. Though often expensive, they are efficient and can produce a lot of product volume per unit footprint in the distillery.

CONTINUOUS VS BATCH VS HYBRID For most folks in the craft industry, the “norm” (if there is such a thing) is batch distillation. There are a number of reasons for this, with cost and size being serious factors. Plus batch distillation carries a sexier marketing advantage in the minds of a lot of distillers. I’m not going to get into that debate, but I will say that continuous systems sometimes get an unfair rap. Yes a continuous distillation column is 2-3 times more expensive to purchase and set up than a pot still. And yes, you typically do need a sizable operation to make them worth your while. On top of all that, most of them are uglier than the pimple you got the day of prom. However, they do confer certain advantages to the distillery. One: they’re very energy efficient. In this day and age every

little bit of environmental mindfulness helps and despite what unpopular Presidents will tell you, the environment is generally considered a good thing. Unless you live in New Jersey. The reason for their energy efficiency lies in the design of the incoming wash piping. The wash enters the column through piping in a counter-flow to the exiting low wines or spirit near the condenser. The distillate is partially cooled by the counterflow of the incoming wash pipe, and the wash is partially heated by the fresh distillate entering the condenser. Some systems actually use the incoming wash as the sole cooling factor in the condenser, reducing water usage even more, and giving the environment another win. Second: it is possible to design a system that allows you to distill once as opposed to multiple times. That’s an efficient use of your time. And without getting into the minutia of how continuous columns work, your cut points are taken care of for you. Once you’ve set your spirit pull-off plate, you’re off to the races and there’s no need to stand around trying to figure out the perfect cut to hearts and tails. Continuous stills have some drawbacks, and I’ve already mentioned a few. The suckers are expensive. Even if they do save you on utility costs in the long run, up-front you better be prepared to get your wallet some new outfits, because it’s going to be getting a lot skinnier. Then there’s all the engineering and pipework involved, and the strange perception that they are somehow not “craft” enough. It’s enough to make you want to just purchase a pot still and be done with it. Speaking of which…

BEER STRIPPING COLUMN STILL, SEVERAL STORIES HIGH, WILLET DISTILLERY, BARDSTOWN, KY WWW.ARTISANSPIRITMAG.COM

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POT STILLS

PHOTO BY AMANDA JOY CHRISTENSEN

There's something romantic about the notion of a pot still. A big copper tub in the center of the distillery connected to an elegant swan neck flowing out to gracefully descending lyne arm and condenser. It’s an Instagram-able notion, to be sure. Traditional pot stills are most well known in circles that work with aged spirits. We’re talking whiskey, brandy, and rum. Due to their geometry (more on that next time) these stills allow more congeners to seep into the hearts fraction of the run, producing a very flavorful spirit that ages well. This isn’t really the type of still that I would use to approach white spirit production (heavy congener rums, may be an exception). Their simple design just doesn’t provide enough reflux points in the still. Vapors distill off the liquid in the pot and travel through the system relatively unimpeded. There is a little bit of reflux at certain points, but nothing close to that of a column with dozens of trays. Which leads us to…

POT STILL WILLET DISTILLERY, BARDSTOWN, KY 138

HYBRID STILL COLUMN WITH DISABLED PLATES RUNNING GIN DISTRICT DISTILLING CO., WASHINGTON, DC

HYBRID STILLS Hybrid stills, where a pot distillation system is combined with a column filled with various types of trays/plates, are all the rage in some circles. If an equipment sales rep is going to make the claim that their still can make anything, this is the type they’re likely hocking. That sales pitch has an allure, I won’t lie. Here’s the problem: the plates and trays provide a lot of surface area for reflux, which for some styles of spirits (ones containing high levels of congeners) may not be the best thing to use. Some folks are screaming at the page saying, “I won quadruple platinum medals for my bourbon using a hybrid still. You just aren’t using it correctly!” Quiet down. No one likes a shouter. And you’re right. It’s completely reasonable to produce high-end, high congener spirits on these suckers, but a standard pot still makes it easier. Even if you “disable” the plates that cause reflux in the still to happen, the fact is that they still exist. Meaning, the vapors usually still have to flow past them to reach the condenser. All those extra surfaces provide added temperature differentials and metal contact for vapors to condense on. Disabling plates in a hybrid still drastically lessons the amount of internal reflux but no so much that it will equate to a standard pot still. (There are ways to cheat this system, but that’s beyond the scope of this article.) What I really like hybrid stills for is gin, eau de vie, and light rum production. Depending on the still and plate design, you’re afforded a lot of options to make these spirits. They drop out just enough fusel oils from the system to produce high quality white spirits that retain a sense of character with their ingredients. WWW.ARTISANSPIRITMAG.COM

SIZE First off, let’s put this argument to rest right now: size does matter. The size of your still has a number of effects on your distillery and product quality. First is that the size of your still is a major determinant of how much output you can produce. You’re not going to be distilling 100,000 9 L cases a year on a 100 gallon still. Second, and arguably just as important, the size of your still determines if you have a balanced system. What is a balanced system, you ask? A balanced system is when you have a whole number ratio of wash to spirit distillations. Let me explain. If we start out with 3000 L of wash (yeah, I use metric — what of it?) then ideally I would have a wash still that was sized for 3000 L. That 3000 L will distil to a bit more than 1000 L of low wines. This means that we need a spirit still of about 1000 L capacity so that for every one wash distillation we do one spirit distillation. This gives us a system balance ratio of 1:1. A ratio of 2:1 is also balanced as it would take 2 wash distillations to make enough low wines for one spirit distillation. A ratio of 1:2, however, is not balanced. Here you’re talking about one wash distillation yielding two spirit distillations. Why is this important? Well in the latter case of having more spirit distillations, this creates a potential bottleneck in the distillery production process which isn’t something that we want. The only

rooks Grain B

bottleneck you want is that of the glass variety, preferably one containing a tasty beverage with your label on it. Size determines a few other things as well. Obviously the larger the still, the more space it will take up in the distillery. Coming from working in DC at an urban distillery downtown, I can attest to the pain that is a large still in a tiny space. It can destroy your workflow and subsequently your overall productivity. If you are only purchasing one still and using that still for wash and low wines distillation then your sizing should be based on your fermenter size. For instance, let’s say you have a 3000 L fermenter. You still size should be a working volume of 3000 L. That’s a sizable still for a craft distiller and not everyone is going to be able fit one of those guys in their distillery. So another option would be (though we’re slowing our overall plant efficiency by doing it) to cut the size down into even fractions of 3000 L, preferably into thirds. As described above, (depending on your techniques and recipes) you’ll likely wind up with a little over 1000 L of low wines from the stripping of 3000 L of 8% abv wash. Splitting the stripping distillation up into three parts makes life easier. You could purchase a 1500 L still and do two stripping runs but you’ll still only wind up with around 1000 L of low wines for your second distillation, meaning that 500 L of still space is not being used — not the end of the world, but not ideal either.

NEXT TIME ON STILLS IN OUR LIVES… For this round I’ve discussed two simple questions you have to ask yourself when purchasing a still: should your still be batch or continuous and what size should it be? Due to space and time, there’s no way to get into all the finer details required to fully understand the consequences of all these things. However, I hope this has provided the reader with some nourishing food for thought when they are considering their next still purchase. Talk to as many distillery equipment companies and manufacturers as you can. Too much information never hurt anyone, except for that time when your parents told you about how you were conceived. In the next installment, I’m going to dive into the bizarre world of still geometry, talk a bit about worm tubs, and why copper does much more than give your still a pretty face.

Matt Strickland is the Master Distiller (I hate that title) for Distillerie Cote des Saints in Quebec where he focuses on single malt production. He has a Master's in Oeonology and Viticulture from Oregon State, is a faculty member at Moonshine University, and is the only American to sit on the Board of Examiners for the Institute of Brewing and Distilling in the UK. His spirit spirit is Peruvian pisco and he does not believe that listening to Journey has to be done ironically.

Combining 50 years of experience with a true passion for perfecting taste.

Together with Consolidated Grain and Barge Co., Brooks Grain is proud to announce the opening of their state-of-the art milling and bagging facility. This new operation allows Brooks to serve the growing craft spirits industry with milled or whole grain products in bags or totes, custom processed to meet your needs and taste preferences. Website: brooksgrain.com | Email: info@brooksgrain.com | Phone: (812) 280-6658 WWW.ARTISANSPIRITMAG.COM

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TRÄKÁL

THE SPIRIT OF PATAGONIA COMES TO NORTH AMERICA

A LOVE OF LAND AND A LITTLE ADVICE FROM MOM MAKES FOR A UNIQUE BOOZE WRITTEN BY CARRIE DOW /// PHOTOS BY ELLIOT CLARKE

bartender in Denver, Colorado, recently introduced me to the South American spirit of Träkál. Alexis Osborne, Bar Manager at Smök, said this imported liquor is her new favorite for making mélanges. “It’s really fun to play with,” she said showing me the bottle’s silhouette of Chile in the label. “It’s so diverse. It’s fruity, but herbaceous.” When I spoke with her last year, she also mentioned Denver was the only place in North America you could drink Träkál, which meant I was sampling a flavor few others had tried. Curious, Osborne put me in touch with one of Träkál’s owners, Ben Long, who lives in Denver. Long said the spirit was developed as an ode to Patagonia, a place he fell in love with as a backpacker. Much like the North American west, Patagonia conjures up images of vast open spaces, majestic mountains, and untamed wilderness. Long and his partners wanted to put that vision into a bottle and create a spirit as unique as the land it comes from. Long introduced me to Head Distiller and Owner Sebastian Gomez Camorino, who he calls “the mad scientist at the end of the world.” I phoned Camorino in Chile to wrap my head around this intriguing spirit. “I was trying to answer a question,” Camorino said philosophically when asked about Träkál. “Why doesn’t this part of the world, where I’m so happy, have its own kind of booze?” His idea first took shape in 2013 when Camorino’s father, who was also his business partner, announced his retirement from their financial consulting business. “I sold everything I had and went down to Patagonia to start making booze,” he said emphatically. “It was all my risk. I wasn’t going to take anyone’s money until I knew what the hell I was doing.” Argentinian by birth, Camorino has both a British accent and citizenship and has lived in several countries during his finance career. Having traveled around the world, settling in Patagonia was the easy choice for him. Making booze proved more challenging. Träkál makes its home in the Chilean side of Patagonia, specifically Osorno, just north of Puerto Varas, the northern entry point for travelers to Patagonia. Camorino makes Träkál using all locally sourced ingredients, most within 75 miles of the distillery. However, before building recipes Camorino took a deep dive into Chile’s agriculture and indigenous communities. “I read a lot of history about booze making and how the different categories of spirits evolved. There’s no grains [in Chile] so I made it fruit based. What’s the most common fruit? Apples, pears. What makes Patagonian different to other parts of the world? Obviously water. And berries. You come here and try all these jams and marmalades and they don’t taste like anything else. And then the herbs. The wood types here are unique. You go through a temperate forest and smell the tepa, the laurels. I just had to figure out a way to put those things inside a bottle.” The ingredients came from the local Mapuche culture including leaves from tepa and canelo shrubs, and the maqui berry. Even the name Träkál is local, coming from the Huilliche people meaning ‘first warrior into battle.’ While Camorino knew what flavors he was after, putting everything together posed a few problems. “I was making the alcohol from the apples and pears and using concentrate from the berries, but I was struggling with the fresh herbs. I struggled for two reasons. One was because the herbs are not available year around. I couldn’t use all of them at the same time. Two, they’re pretty inconsistent. I wasn’t getting the flavors I wanted.” Before becoming a business partner, his friend Long played the role of taste tester.

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“Back in the early days,” said Long, “the spirit was never consistent. Wild herbs taste different every day that you pick them. There was also a scalability problem.” It was Camorino’s mother who suggested making essential oils from the herbs to capture and preserve the flavors at their peak. Solving one problem then created another. “The great thing about doing [essential oils],” said Camorino, “was I got the flavor profiles I wanted, but the bad thing was I realized why no one in the booze business uses essential oils. It’s too expensive. It takes a lot of time. I had to design and build my own pots. They have an agitator in them, basically a big spoon that spins around at 50 rpm, and the column design has very few plates in it, but it’s very wide and very tall and has the same volume inside the column as it has inside the pot above the waterline.” Finally distilling the flavors Camorino wanted, he admitted he doesn’t know why it works. “My theory is that [the still design] makes the distillation super slow. Because it’s super slow and spinning, it creates a vortex and all the flavors get mixed up. The berries, which contain a lot of glycerin, have a density similar to the essential oils. They work together to permeate the alcohol as the alcohol passes through the column. I don’t know if that’s true or just bullshit, but that’s the theory in my head,” he said laughing. “It took about three years of me beating metal to get that right.” When Long, Camorino, and a third partner, Matthew O’Brien, sought entry in the US market, they purposely entered slowly. “We launched exclusively in Colorado and Chile last August (2017),” said Long, who is responsible for sales and development. “The TTB recognized us as an entirely new category of spirits. We thought they were going to call us a brandy because we are fruit based, but they went with a descriptor instead. Whenever they come across, from what I researched, a new type of spirit, they typically use a descriptor to give the consumer an idea of what’s in it. So just like Chartreuse is Chartreuse or Fernet is Fernet, we say Träkál is Träkál, both a brand and a category.” The company chose Colorado because of its similarities to Patagonia. “We call Denver ‘Patagonia North’,” laughed Long, a West Virginia native. “Colorado made a lot of sense because of the outdoor industry and the growing cocktail market.” With enthusiastic mixologists like Osborne on board, the distillery is prepared for growth. For 2019, they are expanding distribution to other states, beginning with Arizona, California, Georgia, and Nevada, and British Columbia in Canada with parts of Europe to follow. Long and Camorino want the world to experience Patagonia through a bottle of Träkál. “All we’re trying to do is be honest,” said Camorino. “Patagonia is the outdoors; it’s the majesty of the place; it’s the frontier spirit. It’s the fact that nature basically tells you what to do every day.”

Träkál is located in Osorno, Chile. Visit www.trakal.com for more information. 142

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“What do you mean I can’t name my artisanal gin after my dog?” It’s not that simple: Do’s and don’ts for trademarking your craft beer, spirit or wine

WRITTEN BY C ANDACE LYNN BELL WWW.ART ISANSP IRITMAG.COM

ou’ve worked for a long time tweaking recipes and formulas, taste-tested untold gallons of your amazing craft alcohol, and now you’re ready to name it and sell it. This should be the fun part, right? Maybe yes, maybe no. As a maker of craft alcohol, whether you produce beer, spirits or wine, you may well be aware of the differences in the federal licensing and labeling requirements for malt beverages, distilled beverages and wines in the United States. You might also be familiar with the specific regulations regarding use of your brand name as it appears on your label under the Alcohol and Tobacco Tax and Trade Bureau (TTB) regulations. What you may not be aware of is that your brand, the brand on which you have based your business, your marketing campaign, and your social media presence, may not be yours to use or register under United States federal trademark law.

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A Certificate of Label Approval isnâ&#x20AC;&#x2122;t a greenlight to use your brand. The ability to use your brand (your trademark) and the ability to federally register your trademark are critical issues to craft alcohol producers, since their trademark, in its essence, distinguishes them as the source of their product and symbolizes the goodwill of their business. Your trademark is one of the most valuable assets of your business. It is most likely how your customers ask for your product; it may be the word your customers call your business; it is most likely part of the domain name for your website, and it is probably integral to your social media accounts. Just because a craft alcohol producer has received their Certificate of Label Approval (COLA) does not necessarily mean they are able to use and/or register their trademark. Whether or not the maker of craft alcohol can use and register their trademark are questions answered by looking to United States federal trademark law, not the laws regarding the production, distribution and sale of alcohol. In the United States, the Lanham Act, the regulations set forth under the Act, and the court decisions interpreting the Act, determine what a trademark is, who can use a trademark, when a person acquires ownership rights in a trademark, where you can file an application for federal registration of a trademark and how the application process works. Whether or not you can use a trademark and whether you have ownership rights in a trademark are questions determined under federal law as interpreted by the various federal courts across the United States. Whether or not you can register your trademark is determined by the United States Patent and Trademark Office (USPTO), the federal agency that grants trademark registrations.

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So how do I know if I can use the quirky, cool brand name I really want to use? Both the federal courts and the USPTO use similar standards to determine if you have rights in a trademark; that is can you use your trademark, and if so, can you register your trademark? To make this determination, the question asked is whether your trademark is likely to cause confusion with an already existing or registered trademark of another person. The federal courts and the USPTO look at several factors to determine whether there is a likelihood of confusion. The two most important factors are: == How similar are the trademarks in overall sight, sound and commercial impression or appearance == How closely related are the goods and/or services with which the trademark is used

Alcohol has lots of relatives, including sometimes restaurant services and even cigars. Considering the regulatory system for alcohol which draws distinctions between malt beverages, distilled beverages and wines, it may surprise a craft alcohol producer which goods and services are closely related. For purposes of registration at the USPTO, generally, all types of alcohol will be considered closely related goods. There is no difference between beer and wine or wine and distilled spirits. In addition, sometimes various foods are considered closely related to different types of alcohol. Sometimes various services, such as restaurant services, are considered closely related. In a recent case, even cigars were considered closely related to wine. So, for example, in the last several years, the following trademarks have been denied registration for the listed goods based on the cited already registered trademark for its respective goods: == BEER CREEK DISTILLERY for liqueurs and distilled spirits refused registration based on the likelihood of confusion with BEER CREEK for wines; == MASTERMIND for beer refused registration based on the likelihood of confusion with MASTERMIND VODKA for vodka; == COCOMO for tequila and tequila-based prepared cocktails refused registration based on the likelihood of confusion with KOKOMO for wine; == ALEC BRADLEY STAR INSIGNIA for cigars, tobacco, cigar boxes, cigar cutters and cigar tubes had the registration canceled based on the likelihood of confusion with the famous mark INSIGNIA for wines; == THE CANNIBAL for beer refused registration based on the likelihood of confusion with THE CANNIBAL for restaurant services and restaurant services, namely, providing food and beverages for consumption on or off the premises. WWW.ARTISANSPIRITMAG.COM

You’re told you can’t register your trademark — it’s too confusing. Now what? What does it mean if you are denied a trademark registration based on a likelihood of confusion with another already registered trademark? It means you do not obtain the benefits of a federal registration to help you protect your trademark across the United States. Perhaps more significantly, it may mean the company who owns the registration which blocked your application, may be able to stop you from using your brand on your product. Of course, if you have to stop using your trademark, rebranding your business, or even just your product, will cost a significant amount of time and money. In addition to the unquantifiable loss of goodwill and purchaser recognition. You will also have to obtain a new Certificate of Label Approval since you have to change your trademark. In a recent case, however, the USPTO stated you must have a COLA before you can obtain a trademark registration since it is only with a COLA that you can legally sell your craft alcohol and use your trademark. So, if your COLA does not give you the right to register and use your trademark and you cannot get a trademark

registration without your COLA, here’s a quick checklist of what a craft alcohol maker can do to obtain the legal right to use their trademark for their business or their product: == Run an internet search for the trademark you are thinking about using and see what shows up. == Hire a trademark attorney to run a trademark clearance search run to help determine whether your chosen trademark is likely to cause confusion with another trademark already registered or in use in the marketplace without a federal registration. == If there appears to be no bar to use or registration of your proposed trademark, have your trademark attorney file an application for federal trademark registration of your trademark for your goods. The filing can be made before you begin using your trademark. To understand the steps and timing of the application process, the USPTO website has some helpful information at www.uspto.gov/trademarks-gettingstarted/trademark-process.

== Wait till you reach the point in the application process when you will know your application is not being refused registration because of another already registered or used trademark. == At that point, finalize your label design and coordinate the filing for your COLA. You can also consider starting to promote your trademark in advertising. == Make any required filings to keep your trademark application pending until you have your licensing requirements in place and your COLA issues but watch the clock because you can only keep an application pending for a certain period of time. == Once your licensing requirements are in place and your COLA issues, begin selling your product and using your trademark. == Finally, take the required steps to notify the USPTO you are using your trademark on your product and obtain your Certificate of Registration of your trademark.

The good news? With some homework and planning you should be fine. With some investigation and planning, a craft alcohol maker can obtain the necessary licenses and approvals related to the production, distribution, and sale of their brand of craft alcohol and the rights to use and register their brand as their trademark. You worked so hard to brew your beer, craft your spirit or create your wine. Shouldn’t your brand which symbolizes these efforts be given the same careful time and attention? Your customers will thank you, and your business partners will too.

Candace Lynn Bell is an intellectual property attorney with Eckert Seamans Cherin & Mellott, LLC Buffalo, New York office. If you have any questions, please contact author Candace Lynn Bell at cbell@eckertseamans.com. This information is intended to keep readers current on developments in intellectual property law and is not intended as legal advice.

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ADVERTISER index AGAVE RESOURCES

DESIGN, BRANDING & MERCHANDISING

Iced 8 Distilling

CF Napa Brand Design Flowdesign

BARRELS The Barrel Mill Independent Stave Co.

30 5&7

GNS & BULK SPIRITS SUPPLIERS

2&6 44

DISTILLING EQUIPMENT ARCHON Industries, Inc. Bavarian Breweries & Distilleries

115

CIE

MGP Ingredients

8 & 15

Rum Central

Southern Distilling Company

Ultra Pure

Cage & Sons Distilling Systems

Boelter

Rudolph Research Analytical

Specific Mechanical Systems

Cereal Byproducts

Vendome Copper & Brass Works

Grain Processing Corporation

Distillery Products Sterling Cut Glass

115

Thousand Oaks Barrel Co.

6 & 21

GRAINS

BARWARE

107

139

BEVERAGE ATTORNEYS

American Distilling Institute 142

Moonshine University

8 & 22

Still Talking Podcast

142

American Craft Spirits Assoc.

Loggerhead Deco

BSG Distilling

133

ENGINEERING Haskell

LABELS 65 56

133

Fort Dearborn

ENZYMES & YEAST AB Biotek Ferm Solutions

40 118

Imperial Packaging

Fermentis

O. Berk Kols Containers

Lallemand

7&9

O-I Phoenix Packaging Saverglass

8 & 19

White Star Yeast by Winemakeri Inc.

133

12 148

COMPLIANCE & BACK OFFICE MANAGEMENT American Spirits Exchange Ltd.

EQUIPMENT LEASING North Star Leasing

121

FILLING EQUIPMENT InLine Filling Systems, LLC

CONSULTANTS Spirits Consulting Group Thoroughbred Spirits Group

142

FINANCING

Live Oak Bank

CORKS & CLOSURES NimbleJack Partners

Supercap

Tapi USA

8 & 147

FLAVORINGS National Honey Board

GLASSWARE Distillery Products

CREAM LIQUEURS Creamy Creation

24 6 & 17

7 & 11

BOTTLE MANUFACTURERS & SUPPLIERS

Gamer Packaging

INGREDIENTS Briess Malt & Ingredients Co.

Brad-Pak Enterprises

GUILD ORGANIZATIONS

BOTTLE & GLASS DECORATING

Berlin Packaging

EDUCATION Lehrman Beverage Law

Brooks Grain

7 & 23

Multicolor Corp Global Solutions Niagara Label

55 107

Wright Global Graphics

MANAGEMENT SOFTWARE Active Club Solutions

PACKAGING Liquor Bottle Packaging

PUMPS & HOSES McFinn Technologies

121

REFRIGERATION & CHILLERS G&D Chillers

7 & 27

RETAILER Total Wine & More

SPIRITS COMPETITIONS Great American Intl. Spirits Competition

TOTES & TANKS Spokane Industries

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