VOL. 2, ISSUE 2 | APRIL 2020
CRAFT SPIRITS THE ART, SCIENCE AND BUSINESS OF DISTILLING
NAVIGATING A PANDEMIC DISTILLERIES ADAPT IN A TIME OF CRISIS
A PUBLICATION OF THE AMERICAN CR AF T SPIRITS ASSOCIATION
Where Science Meets Art Yeast, Nutrients, Enzymes and Bacteria
Our single source philosophy provides the highest quality ingredients, tailored technical service and education, and industry leading experience to support your needs. Your spirits are our passion, your needs are our motivation. Contact us to learn more today. www.lallemandcraftdistilling.com Š 2020
CONTENTS
APRIL 2020
34
FEATURES 34
Pivoting in a Pandemic COVID-19 fundamentally changes the craft spirits business for the foreseeable future.
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Bottled for Good
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Distilleries take creative approaches to charitable programs. BY KATE BERNOT
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The Kids Are Alright In states where it is legal, family-friendly distilleries are becoming commonplace. BY JON PAGE
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MEMBER SPOTLIGHT A Class Act New Deal Distillery teaches some of the tricks of the trade. BY JEFF CIOLETTI
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ON THE COVER:
Becky Harris of Catoctin Creek Distilling Co.
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DEPARTMENTS 52
8
Editor’s Note
12
Contributors
NEW SPIRITS 14
Recent releases from West Fork Whiskey Co., Old Dominick Distillery and more
IMBIBER’S BOOKSHELF 16 The Definitive Guide to Canadian Distilleries
INDUSTRY UPDATE 18
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MGP Acquires New Columbia Distillers
LEW’S BOTTOM SHELF 24
Why Aren’t You Making Aquavit? BY LEW BRYSON
WHAT’S STIRRING 26
Flavorful concoctions from Cedar Ridge Winery & Distillery, Marble Distilling and New Deal Distillery
ACSA AFFAIRS 28
ACSA Postpones Distillers’ Convention and Trade Show
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TTB Issues Final Rule on Modernization of Labeling and Advertising
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ACSA Announces Awards
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DISTILLING DESTINATIONS 52 In High Spirits
BUSINESS SENSE 70
Succession Planning
Craft distillers in Colorado benefit from altitude, friendly legislation and more.
Investing in people boosts morale and helps build a promising future for craft spirits businesses.
BY JON PAGE
BY GREG LEHMAN
RAW MATERIALS 56
SALES & MARKETING 72
Experiments with heirloom rye could reinvent local agriculture.
Selling distillery merchandise can boost profits and generate more brand awareness.
Repatriating Rye
BY JEFF CIOLETTI
Off the Rack
BY JON PAGE
RETAIL: ON-PREMISE 58
Creating a Cocktail Dinner Distilleries are teaming up with restaurants to create memorable dining experiences for the everyday meal and special nights out.
DISTRIBUTION & LOGISTICS 74
Finding a Path to Distribution Experts from the three-tier system offer advice.
BY JOHN HOLL
BY JOHN HOLL
RETAIL: OFF-PREMISE 60
TECHNICALLY SPEAKING 76
Chain Game
Understanding the intricacies of working with national retail chains BY CLARE GOGGIN SIVITS
A Blueprint for Growth
As demand for craft spirits continues to rise, distillers are learning valuable lessons about building new facilities. BY ANDREW KAPLAN
LEGAL CORNER 62
Common Legal Questions from Craft Distillers A lawyer addresses compliance issues that regularly face alcohol beverage attorneys. BY ART DECELLE
PACKAGING 66
Glass Breakthroughs Craft spirits companies are moving beyond traditional designs for their glass bottles. BY ANDREW KAPLAN
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distiller driven software DISTILLERY MANAGEMENT SOFTWARE
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CLOSING TIME 80
From Value to Ultra Spirits Dollar Growth by Price Tier
CONTACT US FOR A QUICK DEMO! Randall Buxbaum National Sales Manager 301-471-8022 | 833-TALK2WS randall@whiskeysystems.com www.whiskeysystems.com
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CRAFT SPIRITS MAGAZINE C EO, A M E R I C A N C R A F T S P I R I T S A S S O C I AT I O N | Margie A.S. Lehrman, margie@americancraftspirits.org E D I TO R I N C H I E F | Jeff Cioletti, jeff@americancraftspirits.org S E N I O R E D I TO R | Jon Page, jon@americancraftspirits.org S A L E S & D E V E LO P M E N T D I R EC TO R | Kate Farrington, kate@americancraftspirits.org A RT D I R EC TO R | Michelle Villas CO N T R I B U TO R S | Kate Bernot, Lew Bryson, Art DeCelle, Clare Goggin Sivits, John Holl, Andrew Kaplan, Greg Lehman AMERICAN CRAFT SPIRITS ASSOCIATION O P E R AT I O N S A D M I N I S T R ATO R | Teresa McDaniel, teresa@americancraftspirits.org E D U C AT I O N CO O R D I N ATO R | Kirstin Brooks, kirstin@americancraftspirits.org M E M BE R S E RV I C E S A N D S O C I A L M E D I A CO O R D I N ATO R | Carason Lehmann, carason@americancraftspirits.org ACSA ADVISORS M E E T I N G S A N D LO G I S T I C S | Stephanie Sadri, HelmsBriscoe S T R AT EG I C CO M M U N I C AT I O N S | Alexandra S. Clough, GATHER PR L EG A L | Ryan Malkin, Malkin Law, P.A. P U B L I C P O L I C Y | Jim Hyland, The Pennsylvania Avenue Group ACSA BOARD OF DIRECTORS, 2019-2020 P R E S I D E N T | Chris Montana, Du Nord Craft Spirits (MN) V I C E P R E S I D E N T | Maggie Campbell, Privateer Rum (MA) S EC R E TA RY/ T R E A S U R E R | Colin Keegan, Santa Fe Spirits (NM) EAST Maggie Campbell, Privateer Rum (MA) Ryan Christiansen, Caledonia Spirits (VT) James Montero, Dogfish Head Distilling (DE) Becky Harris, Catoctin Creek (VA)
CENTRAL & MOUNTAIN Colin Keegan, Santa Fe Spirits (NM) Courtney McKee, Headframe Spirits (MT) Chris Montana, Du Nord Craft Spirits (MN) P.T. Wood, Wood’s High Mountain Distillery (CO) Amber Pollock, Backwards Distilling Company (WY) Colton Weinstein, Corsair Artisan Distillery (TN) Thomas Mote, Balcones Distillery (TX)
PACIFIC Jeff Kanof, Copperworks Distilling Company (WA) Molly Troupe, Freeland Spirits (OR) Dan Farber, Osocalis Distillery (CA) Jake Holshue, Old Trestle Distillery (CA)
EX OFFICIO Thomas Jensen, New Liberty Distillery (PA) ACSA PAC Stephen Johnson, Vermont Spirits (VT) ACSA PAST PRESIDENTS 2 0 1 7-2 0 1 8 | Mark Shilling, Treaty Oak Brewing and Distilling Co. 2 0 1 6 -2 0 1 7 | Paul Hletko, FEW Spirits 2 0 1 4 -2 0 1 6 | Tom Mooney, House Spirits CRAFT SPIRITS MAGAZINE EDITORIAL BOARD Eli Aguilera, Lew Bryson, Alexandra Clough, Sly Cosmopoulos, Dan Gasper, Dr. Dawn Maskell For advertising inquiries, please contact Kate Farrington: kate@americancraftspirits.org. For editorial inquiries or to send a news release, e-mail news@americancraftspirits.org P.O. Box 701414, Louisville, KY 40270 • 502.807.4249 © 2020 Craft Spirits Magazine is a publication of the American Craft Spirits Association.
Editor’s Note
UNPRECEDENTED This isn’t the Editor’s Note you’re supposed to be reading. We were in the final stages of putting this issue to bed, when the you-know-what really hit the fan. In the original version, I was touting the findings of the Craft Spirits Data Project and how effective they’d be as talking points to carry the industry through the year. But if this moment has taught us anything, it’s that events truly can turn on a dime in this world. Talking points matter very little these days. COVID-19 is talking much more loudly. But I refuse to be doom-and-gloom about it. It’s times like these that reveal our true character and I couldn’t be prouder of what I’ve been seeing throughout this industry. In mid-March, senior editor Jon Page and I were going through our regular routine of scouring the online communications channels for news relevant to the small distiller community to feature in Craft Spirits Weekly. Our search typically starts with one search term: “distillery.” This time— and I am not exaggerating in the slightest—literally every item that came up on the first page of results was something related to yet another craft spirits producer that was shifting its focus to making hand sanitizer or disinfecting surface cleaners. It was amazing to me that, in what seemed like just a matter of hours, producing potentially life-saving, germ-killing liquid became a veritable industry-within-an-industry. I was planning to give a shoutout to some of the producers doing this, but the list just kept getting longer and longer and they wouldn’t all fit on this page (or even if this spilled over into a second page). ASCA has been constantly updating the list of sanitizer-making distillers, which can be found by clicking the link at the end of this Editor’s Note. Also, since the government rules and regulations are continually evolving on this matter, I invite you to check out the latest guidance on the ACSA website. The Association has assembled a work group that meets frequently to address all of the craft distilling community’s needs and questions as we navigate the challenging months ahead. And then, all over social media, I’ve been heartened by the efforts of ACSA members to maintain some semblance of normalcy in these incredibly abnormal times. With tasting
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rooms closing across the country, it’s exceedingly difficult for craft spirits producers to remain connected with their consumers. But this industry is defined by nimble creativity and that has been especially apparent these days. Backwards Distilling Co. in Casper, Wyoming, has been a great example of that. Folks could no longer go to the Backwards tasting room, so co-owner (and ACSA Board Member and Education Committee Co-chair) Amber Pollock and her team brought the tasting room to them (virtually) by posting video tutorials on mixing cocktails with the distillery’s spirits. ACSA vice president and Privateer Rum president and distiller Maggie Campbell has been hosting a series of athome happy hours on Instagram Live, where the community can Ask Maggie Anything. And we, at ACSA, have been working around the clock, stepping up our industry outreach and education efforts—we’re presenting a free webinar series related to this pandemic as we speak. Please don’t hesitate to let us know what we can do for you. And most of all, stay safe and healthy out there.
Jeff Cioletti Editor in Chief
To see a running list of distilleries that are making hand sanitizer, visit craftspiritsmag.com.
C R AF T S PI R I T S MAG .CO M
Thank You, Sponsors! Arglass
In an industry largely focused on products that require long production runs, we offer the glass container market a superior alternative based on our three principles: flexibility, efficiency and sustainability. Arglass will transform the glass container market in the United States by creating a network of next-generation manufacturing plants that will be at the same time flexible, efficient and sustainable. arglass.us
Fisher & Company
Fisher & Company is the leading investment bank adviser to artisan spirits, beer and wine brands. Fisher has advised on some of the most important merger, acquisition and strategic investments partnerships among American Craft Spirits Association members in recent years. linkedin.com/in/johnafisher/
ISTS
Since 2001, ISTS has offered costeffective, solid expertise in safety training, consulting and management services. We make workplaces safer, employees ready and compliance uncomplicated. ISTS has extensive experience working with the spirits industry, so our safety programs are totally customized to address the specific challenges for your site. istsky.com
The Barrel Mill
Malkin Law
Berlin Packaging
Briess Malt & Ingredients Co.
FIVE x 5 Solutions
Glencairn Crystal
Berlin Packaging is the only Hybrid Packaging Supplier® of plastic, glass and metal containers and closures. We supply billions of items annually along with package design, financing, consulting, warehousing and logistics services for customers across all industries. Berlin Packaging brings together the best of manufacturing, distribution and incomeadding service providers. berlinpackaging.com
FIVE x 5 Solutions believes that software should scale with you. We’re more than a service provider: we’re a committed partner in your distillery’s success, and take pride in providing the most complete solution for your growing operation. We take your business as seriously as you do. Fx5solutions.com
Malkin Law focuses on serving the needs of the alcohol beverage industry. We regularly assist with licensing, review of industry specific agreements, trade practices and navigating state laws. Malkin Law is also honored to be Legal Counsel for ACSA. malkin.law
The Barrel Mill is one of the most respected cooperages in the industry, with a history in lumber dating back over a century. By combining old-world craftsmanship with state-of-the art equipment and technology, we deliver the best wine and spirit barrels for many of the leading craft brands. whiskeybarrel.com
Since 1876, we’ve been supplying the brewing community with the highest quality malts in the industry. And for the past four decades we’ve distinguished ourselves by developing the most extensive line of specialty malts produced by any malting company in the world. We provide everything from a full line of malts to pure malt extracts, brewers flakes and filtering aids. briess.com
Glencairn Crystal is a leading manufacturer of bespoke crystal and glass. For over three decades, this family business, based in Scotland, has gained an international reputation for fine crystal and glassware. Best known for the creation of the Glencairn Glass, the official glass for whisky. glencairn.co.uk
Midwest Custom Bottling
Founded in 2008, Midwest Custom Bottling seeks to serve small customers and provide them with custom bottling solutions that fit their needs. We can find a solution to bottle your exclusive product, whether that entails a uniquely shaped bottle design or a low volume specialty test run. bottlingllc.com
Thousand Oaks Barrel Co.
Thousand Oak Barrel Co. manufactures barrels to age and serve your spirits. All products offer a variety of options for customizing and branding with your personalized design. 1000oaksbarrel.com
Moonshine University
Moonshine University is the nation’s premier educational distillery, bringing together specialists from every facet of the industry to provide education, training and professional services to start-ups and existing companies. Moonshine University is housed next door to sister company Flavorman, an international custom beverage development company. moonshineuniversity.com
Top Shelf Logistics
Top Shelf Logistics is a best in class freight provider focused solely on the spirits industry, providing clients industry proven sustainable domestic transportation capacity, service and value. Utilizing our singular multi-modal platform we collaboratively develop, implement and manage logistics solutions for craft and heritage distilleries, distributors, producers and upstream vendors. topshelflogistics.com
The American Craft Spirits Association would like to thank all of our annual sponsors and our key supporters of education. We are grateful for all of your support throughout the year. Cheers!
Brooks Grain
Brooks Grain has supplied distilling grains to the industry for over 50 years. The family owned and operated business proudly offers the highest quality bulk and bagged grain as well as all the expertise you need to make your distillery a success! brooksgrain.com
BSG Distilling
CIE
Haskell
Independent Stave Co.
As the craft distilling industry grows, BSG Distilling has been focused on supplying distillers with the best ingredients from around the world. Today, the craft distilling market trusts BSG Distilling to deliver the finest ingredients at competitive prices, without sacrificing customer service. bsgdistilling.com
Private, passionate and dedicated to superior premium grain neutral spirits, CIE’s 70-plus member family is redefining the concept of craftsmanship in spirits. Through its partnership with local farmers, global food safety standards and meticulous attention to organoleptics, look no further then CIE for unrivaled, world class quality in bulk or packaged form. cie.us
eGRANDSTAND.COM
Grandstand
Grandstand is a leading printing and branding company that provides custom decorated glassware, apparel, promotional items and creative services. For more than 30 years, we’ve helped businesses large and small simplify their efforts, conserve time and differentiate their brand. egrandstand.com
Park Street
Park Street delivers productivityenhancing and cost-saving back-office solutions, advisory services, working capital, compliance management, export solution, integrated accounting and human resources management solutions to more than 14,000 alcoholic beverage brands from the U.S. and around the world. parkstreet.com
Saverglass
We are a global network of experts providing integrated design, engineering, construction and professional services to clients and communities. We bring a history of innovation and thoughtful expertise to craft the optimal solution for every project or program, regardless of size or market. haskell.com
Saverglass provides for premium and super-premium spirits, still & sparkling wines and craft beers. Recognized for its innovation, its glass-making expertise and the quality of its glass, products and designs, Saverglass is the partner of choice for brand creators, craft makers and the largest wine and spirits groups worldwide. saverglass.com
Supercap
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. Iscbarrels.com
Supercap has been producing closures for spirits since 1999. We are present in the United States with a great sales network with partners and agents, thus being able to help and advise you in the choice of the best stopper for your spirits. supercap.it
Tapì
Tapì is an international group specializing in the design and production of miniature packaging design masterpieces. Our closures are based on cutting-edge functionality and technology, with an exclusive style that elegantly showcases each product. tapigroup.com
DISTILLERY MANAGEMENT SOFTWARE Ultra Pure
Signature Spirits, a division of Ultra Pure, is the leading independent supplier of bulk spirits in the U.S. and has the largest selection of alcohols stocked across its nine warehouses. We supply approximately 1,000 distilleries and brand owners with virtually every type of alcohol from all over the world. ultrapure-usa.com
Wine & Spirits Wholesalers of America The Wine & Spirits Wholesalers of America (WSWA) is the national trade association representing the wholesale tier of the wine and spirits industry. It is dedicated to advancing the interests and independence of wholesale distributors and brokers of wine and spirits. wswa.org
Whiskey Systems
Whiskey Systems Distillery Management software is a complete production tracking, cost accounting, inventory management and audit-ready compliance reporting system that’s tailored to the unique needs of distillers. Making, blending or bottling, Whiskey Systems handles any process and any spirit type. Unlimited users, affordable options and best in class support. whiskeysystems.com
Contributors
Lew Bryson has been writing about beer and spirits full-time since 1995. He was the managing editor of Whisky Advocate from 1996 through 2015, where he also wrote the American Spirits column, and reviewed whiskeys. He is currently a senior drinks writer for the Daily Beast, and also writes for WhiskeyWash.com, American Whiskey and Bourbon+. He is the author of “Tasting Whiskey” (Storey Publishing, 2014) and the just-released “Whiskey Master Class.” He’s also written four regional brewery guidebooks.
Andrew Kaplan is a freelance writer based in New York City. He was managing editor of Beverage World magazine for 14 years and has worked for a variety of other food and beverage-related publications, and also newspapers. Follow him on Twitter @andrewkap.
Clare Goggin Sivits has been writing about beer, wine and spirits for over a decade, appearing in publications such as Serious Eats and The Daily Meal. By day, she’s a humble marketing manager but by night, she’s scouring the streets for the best beverages she can find. She ran away from New York several years ago to join the beer and spirits industry in Portland, Oregon. Follow her @beergoggins on Twitter and Instagram.
Greg Lehman is the founder and CEO of Watershed Distillery, an independent distillery based in Columbus, Ohio, entering its 11th year in business. He also oversees the operation of the distillery’s restaurant, Watershed Kitchen & Bar, added in 2017. In addition, he is the co-founder and president of the Ohio Distiller’s Guild. He is passionate about both entrepreneurship and mentorship and has been an influential voice and advocate for craft distillers in Ohio for over a decade.
Kate Bernot is a reporter covering beer, food and spirits. She was formerly an editor at The Takeout and DRAFT Magazine; she now regularly writes for Good Beer Hunting, Craft Beer & Brewing and other publications. She is a certified beer judge and lives in Missoula, Montana, with three backyard chickens and a well-stocked bar cart.
John Holl is a journalist covering the beer industry. He’s the author of several books including “Drink Beer, Think Beer: Getting to the Bottom of Every Pint” and “The American Craft Beer Cookbook.” He is the co-host of Steal This Beer, a podcast and his work has appeared in The New York Times, The Washington Post, Wine Enthusiast and more. John has lectured on the culture and history of beer and judged beer competitions around the world.
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Michelle Villas is an art director with more than 20 years experience in publication design. After spending 16 years working on magazines in New York for a variety of titles, incuding Beverage World, Michelle headed out to California where she now calls the South Bay home. She is the creative director on a range of lifestyle publications for The Golden State Company. A true typophile, she carries her obsession with fonts into every project.
Art DeCelle is senior counsel at Lehrman Beverage Law, where he focuses on alcohol regulatory and distribution issues. Art drafts commercial agreements for breweries, wineries, distilleries and brand owners. He also assists clients in distribution strategies and compliance with laws governing industry trade practices, advertising and excise taxes. Art previously served as counsel at a large international law firm, executive vice president and general counsel of the Beer Institute, and in senior staff positions in the U.S. House of Representatives.
C R AF TSPIR ITSMAG.COM
The Art, Science and Business of Distilling
Visit us online at craftspiritsmag.com APR I L 20 20
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new spirits
Watershed Distillery of Columbus, Ohio, recently announced the limited release of its 100th batch of bourbon in honor of its 10-year anniversary. Batch 100 is a single barrel bourbon selected in part by community members who voted on their favorite of four barrels (hand-picked by Watershed’s distillers), at a bourbon dinner held by Watershed Kitchen + Bar in January. Though the packaging looks largely the same as previous batches, this limited release will be marked with an insignia indicating the milestone.
Sugarlands Distilling Co. of Gatlinburg, Tennessee, has released edition No. 9 of its Roaming Man Tennessee Straight Rye Whiskey. This 123-proof cask-strength whiskey has received numerous awards since its first release in 2017, including two ACSA gold medals. Edition No. 9 was made available to customers through an online pre-sale.
Old Dominick Distillery of Memphis, Tennessee, recently released a permanent gin to the distillery’s growing portfolio of craft spirits. The 95-proof Old Dominick Gin is crafted from a blend of eight botanicals: juniper, coriander, angelica root, licorice root, grapefruit peel, chamomile, orris root and ginger root. Juniper dominates the nose, balanced by whispers of citrus that transition to sweet licorice on the palate. The sweet, smooth finish is rounded out by hints of black pepper. West Fork Whiskey Co. of Indianapolis released two new ready-to-drink, bourbon canned cocktails. The cocktail line will initially feature a bourbon ginger and a traditional bourbon highball. Dubbed Cold Hamers, they come in 4-packs and are each 7% ABV. The best part: the company uses only all-natural ingredients to flavor the cocktails.
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new spirits
Lonerider Spirits, sister craft distillery of award-winning Lonerider Brewing Co., released its second collaboration between the two companies—a liqueur named Choklat. This liqueur from the distillery in Holly Springs, North Carolina, is 60 proof and is distilled from Lonerider Brewery’s Great American Beer Festival and World Beer Cup medal-winning mash bill for Sweet Josie Brown Ale.
One of Wigle Whiskey‘s barrels of rye turned four years old on Feb. 29—Leap Year Day, of course—and to mark the occasion, the Pittsburgh-based distillery released a limited number of bottles of it as its next Deep Cut offering. The bottled-in-bond Leap Year Deep Cut Single Barrel Rye features a mash bill of 64% regional organic rye and 36% organic malted barley. Signature notes include dark cherry, pepper up front and brown sugar on the finish.
C R AF TSPIR ITSMAG.COM
Tattersall Distilling of Minneapolis announced the release of a new, limited-edition spirit. The 40-proof Tattersall Darkness Bierschnapps was made in collaboration with Surly Brewing Co.’s elusive Darkness Russian Imperial Stout. Roughly two bottles of Darkness are distilled in each bottle of Bierschnapps. Consumers can expect undeniable notes of chocolate, coffee and toffee designed for easy sipping.
Copper & Kings American Brandy Co. and Kentucky Peerless Distilling Co. of Louisville, Kentucky, recently announced two barrel-finished, limited release collaborations: Copper & Kings, Peerless Rye Whiskey Barrel Finished American Brandy, and Kentucky Peerless Rye Whiskey, Copper & Kings Absinthe Barrel Finish. The American Brandy is a blend of grape brandies—60% Copper & Kings “Alliance” blend of Muscat de Alexandrie, Chenin Blanc and French Colombard grapes distilled in Butchertown and almost 6 years old at 70 months, and 40% brandies aged from 9 to 18 years. All were aged in bourbon barrels before being finished for 14 months in rye whiskey barrels.
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Imbiber’s Bookshelf
The Definitive Guide to Canadian Distilleries: The Portable Expert to Over 200 Distilleries and the Spirits they Make Authors: Davin de Kergommeaux and Blair Phillips Publisher: Appetite by Random House Release Date: March 31 From award-winning author of “Canadian Whisky,” Davin de Kergommeaux, and Blair Phillips comes an up-to-the minute and definitive guide to more than 200 distilleries across Canada and the array of spirits they make. “The Definitive Guide to Canadian Distilleries” is an indispensable guide to the past, present and future of Canada’s distilleries. This book covers more than 200 of the most exciting and cutting-edge distilleries, large and small, who are shaping the industry today. Using a trademark (and witty) blend of narrative, tasting notes, inventive cocktail recipes and vibrant photos, de Kergommeaux and Phillips share the unique genesis of each of these distillers who are pushing the boundaries and flavors of spirits of all kinds.
Author Spotlight: Davin de Kergommeaux and Blair Phillips Davin de Kergommeaux, whose previous book, “Canadian Whisky: New Portable Edition” has been regarded as the go-to resource on whisky north of the border, collaborated with another noted Canadian spirits writer Blair Phillips on the new book, “The Definitive Guide to Canadian Distilleries. Both offered their insights on what’s happening on the stills of our northern neighbor. What was your primary motivation for doing the book? deKergommeaux: Blair and I had been traveling around Canada, writing a Canadian whisky adventure series for Whisky Magazine. We got to experience the distilling scene in Canada just as it was taking off and that there were a lot of exciting stories to tell—inspiring people, places and most of all spirits—that most people had never heard of. As well, the distillers were so welcoming and keen to tell their stories. What would you say is the number one misconception about Canadian distilling? deKergommeaux: There is a broadly shared misconception that Canada’s spirits regulations are wide open. One writer even called them lackadaisical, which is completely not the case. I think the confusion arises from the fact that our whisky rules are very concise, whereas American regulations go on for pages. What were some of the biggest surprises for you while researching the book? Phillips: The vast range of spirits that Canadian distillers are making well. Diversity is a vogue concept in Canada right now and we were astounded by the tremendous range of spirits we tasted. As well, there is not a typical distiller. Each person seems to get into the industry for a different reason and operate by their own game plan. If there was a regional surprise, it was Quebec. We have long held that Quebec is a best-kept secret and hidden treasure in the spectrum of Canadian food and drink, and this certainly holds true for distilling. Most people think whisky when they think Canadian spirits. Could you detail some of the non-whisky spirits being made and
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anyone that’s doing a particularly good job? deKergommeaux: Oh boy! Surprising as it sounds, let’s start with the vodka. At the urging of Canada’s microdistillers, the government has changed our regulations to allow vodka to be distilled from any agricultural product. As well, under Canadian law, vodka may retain some traces of the flavors of the base feedstock. Suddenly vodka is no longer a stop-gap product until the whisky is ready, but a lively spirit on its own. So, along with the creamy potato vodkas from Pemberton Distillery or Roots and Wings, or the corn and wheat vodkas from Stealth Distillery, we have Wayward’s floral vodka made from honey, Dairy Distilleries soft creamy vodka made from milk, blueberry vodkas from Distillerie Beemer deep in the Saguenay region of Quebec, apple vodkas from Gagetown Distillery in New Brunswick, maple sap vodkas from Distillerie Shefford and all manner of grain vodkas each of which retains essences of the source. The glorious subtleties of these spirits have changed my mind about vodka. Entirely. And if people accept them with open minds, they could turn the entire world of vodka on its ear. As well, Quebec distillers have created an entirely new spirit with its own official geographic designation. It’s called Acerum because it is distilled from the sap of sugar maple trees—Acer saccharum. Acerum is made in both white and amber versions and evokes the terroir of old Québecois Quebec. How does the development of the Canadian craft spirits industry parallel or contrast with what’s going on in the U.S.? Phillips: As with everything, Canada is about 20 years behind the U.S. in the development of its craft distilling industry. This is a massive benefit because new distillers have learned from the mistakes and successes of our neighbors to the south. As well, the growth of distilling courses tailored to start-ups in the U.S. has allowed our distillers to learn quickly from others. They still make their own mistakes and learn from experience as well, of course, but there are resources available just south of the border when they get stuck. At the same time, many of the craft distillers have adopted American ideas of how various spirits are made. With whisky, for example, they seem blithely unaware of Canada’s long rye whisky tradition. They have adopted American ideas of 51% rye mash bills or the concept of 100% rye as “real” rye. It is a shame to watch our own Canadian distinctions slowly drifting away into ideas from elsewhere.
C R AF T S PI R I T S MAG .CO M
THE NINTH. A SYMPHONY IN ORANGE
THE HISTORY OF LOVERS
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Industry Update
WESTWARD WHISKEY CELEBRATES INTERNATIONAL WOMEN’S DAY WITH CHARITABLE INITIATIVE To celebrate International Women’s Day (March 8) and Women’s History Month (March), Westward Whiskey announced a charitable program to celebrate the women of Westward and the brand’s commitment to female leadership. Launched on March 8, the program benefits breast cancer research through a partnership with Speed Rack, an organization that has raised more than $1 million for this cause to date. The program includes a limited-edition single-barrel benefit release as well as charitable events in key cities including New York, Los Angeles and Portland, Oregon, all spearheaded and hosted by the women of Westward. Westward’s roster of equity partners includes as many women as men, and women outnumber men on the American Single Malt producer’s leadership team. These partners include Brooke Arthur, vice president, global education and advocacy; Erin Hayes, director of sales & trade advocacy; Kelly Woodcock, vice president, retail & hospitality; and Tamara Beers, vice president of finance. The Women of Westward Benefit Barrel was hand-selected by Westward distiller Claire Longyear and Portland-based equity partners Woodcock and Beers. Fittingly barreled on International Women’s Day in 2017, this 375-mL offering bottled at 90 proof is available for $64.95. The whiskey has an aroma of warming spices, toasted almond and vanilla sweetness backed by a balanced and slightly smoky flavor with a creamy and buttery taste, followed by a hint of spice and clean, smooth finish. For each bottle sold, Westward will donate 15% of proceeds to Speed Rack. In Portland, Westward will further its support of the cause during the month with a signature tasting room cocktail on tap, “Laughing Water,” created by Brooke Arthur.
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Claire Longyear
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Industry Update
MGP ACQUIRES NEW COLUMBIA DISTILLERS In early March, MGP Ingredients, Inc. announced the acquisition of Washington, D.C.based New Columbia Distillers LLC. Best known for its Green Hat Gin, New Columbia Distillers also operates a distillery with retail tasting room, bar and gin garden in Northeast Washington, D.C. The distillery and its retail operations will continue to operate with the current management team, and its range of Green Hat Gin styles will be phased into expanded distribution as a new addition to MGP’s portfolio of brands. Terms of the transaction were not disclosed. “We are thrilled to add New Columbia Distillers and Green Hat Gin to the MGP Brands portfolio,” MGP president and CEO Gus Griffin said in a press release. “As the largest producer of distilled gin in the U.S., we have a depth of expertise and commitment to the category that makes this a very exciting complement to our vodka, bourbon and rye whiskey range. We look forward to growing our brand strategy with gin, while also developing a direct-to-consumer experience in the vibrant Washington metropolitan market.”
As part of the team integration, New Columbia Distillers co-founders John Uselton will join MGP Brands as regional sales director, supporting Green Hat Gin in the Maryland and Washington, D.C. markets. Uselton will also focus on the continued growth of the MGP Brands portfolio in the region. The distillery and retail operations will remain in place, and co-founder Michael Lowe will serve in an advisory capacity. “We are honored to be a part of the MGP team and help them realize the full potential of Green Hat Gin,” said Lowe in a press release. “MGP shares our vision to celebrate authentic, quality-made spirits with the resources to support our existing customers while also expanding our reach to new markets. We look forward to working with them to ensure the success of this next chapter of our brand story.” The distillery was founded in 2011 in D.C.’s Ivy City neighborhood. Housed in an historic warehouse, New Columbia Distillers was the first distillery licensed in D.C. after Prohibition. Green Hat Gin is named for local bootleg-
ger, George Cassiday, who was known for his signature green fedora. During Prohibition, Cassiday operated an illicit distribution center out of the House and Senate Office Buildings, where he supplied bootleg spirits to senators, congressmen and their staffs. He became an outspoken critic of Prohibition until its repeal. MGP’s proprietary portfolio of brands includes TILL American Wheat Vodka, George Remus Straight Bourbon Whiskey, Remus Repeal Reserve Straight Bourbon Whiskey, Rossville Union Straight Rye Whiskey and Eight & Sand Blended Bourbon Whiskey. Products are available in Arizona, Colorado, Connecticut, Illinois, Indiana, Kansas, Kentucky, Maryland, Montana, Minnesota, Missouri, Nebraska, Ohio, Tennessee, Texas, Wisconsin and District of Columbia (DC).
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C R AF T S PI R I T S MAG .CO M
Industry Update
IRON HEART CANNING ACQUIRES MICHIGAN MOBILE CANNING The nation’s largest mobile cannery now offers contiguous coverage east of the Mississippi, thanks to its latest acquisition. Iron Heart Canning Co., a mobile beverage packager serving breweries, cideries, wineries, distilleries, co-packing facilities and nonalcoholic producers, recently announced that it has acquired Michigan Mobile Canning, a mobile canning business operating out of Kalamazoo, Michigan, and Indianapolis. “We are extremely excited about the opportunity to bring our industry-leading canning services and expertise into the Midwest,” said Tyler Wille, founder and CEO of Iron Heart Canning, in a press release. “Indiana, Michigan and the greater Chicago area are incredible markets in the craft industry, and we are eager to begin building new partnerships within the region.” Beginning with one canning line, Iron Heart Canning launched in 2013, just as the canned-beer craze was taking off. “We wanted to be a trailblazer, offering premium, cost-effective packaging solutions on a small scale, which has in turn helped craft producers knock down market barriers in an industry long dominated by large macro brands,” Wille said. With the acquisition of Michigan Mobile Canning, Iron Heart, which is based in Manchester, New Hampshire, now operates more than 50 canning lines across 24 locations, providing beverage packaging services throughout New England, the MidAtlantic, the Southeast and into the Midwest. “We are passionate about being the best at two things,” said Wille. “First and foremost is serving our customers and forging long-term partnerships. The second is our obsession with providing the highest quality canning possible. Through our guaranteed seams, dissolved oxygen testing, in-house lab capabilities, and dedicated internal resources for continually advancing our expertise, our goal is to offer a solution that’s more valuable than owning an in-house line.”
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Industry Update
MONTANYA DISTILLERS HIRES RNDC ALUM ROB RICHARDSON AS NATIONAL HEAD OF SALES Montanya Distillers, a craft rum distillery and Certified B Corporation based in Crested Butte, Colorado, named Rob Richardson as national head of sales for its rum portfolio. Rob joins Montanya with more than three decades of experience in the wholesale industry. For the past 22 years, he has worked at Republic National Distributing Company (RNDC), most recently serving as vice president of artisan spirits sales for Texas, and before that as vice president of spirits sales in Colorado. Prior to joining RNDC, Richardson served as the GM/VP of Sales at Breakthru Beverage Group/Beverage Distributor Company. “I have known Rob for more than 10 years, since the early days of Montanya Distillers,” said Karen Hoskin, Montanya Distillers’ founder and owner, in a press release. “He was one of the first industry insiders to take a chance on me. I have always been impressed by his quiet accomplishments, industry knowledge and character. I didn’t dare hope I could attract a candidate of Rob’s caliber, but I am known for aiming high and dreaming big. Rob reminds me of what is best about distributor partnerships when all the players are aligned toward the same goals.” Initially, Richardson will focus on sales and distribution for Montanya’s home state of Colorado, as well as New York, New Jersey, Texas and California, and then he’ll help the company expand other key markets nationally. “I have always had a place in my heart for Montanya, especially loving its creativity and proven track record for excellent rums,” said Richardson. “Now I have a chance to be part of the family. I look forward to this new opportunity to help more people discover why I and so many others love Montanya rums. I can’t stop smiling, I just got the best job ever.” Richardson planned to stay with RNDC through the end of March to assist with the hiring and training of his replacement. He’ll relocate to Colorado, his home state, along with his husband Joe and dog Duke. The move will bring him closer to his two children and his 9 month-old grandson.
Rob Richardson
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C R AF T S PI R I T S MAG .CO M
Industry Update
CEDAR RIDGE, SLIPKNOT RECEIVE ‘BEST CELEBRITY WHISKEY’ NOD Slipknot No. 9 Reserve Iowa Whiskey was selected as the “Best Celebrity Whiskey of 2019” by author, Forbes contributor and American whiskey critic Fred Minnick. It received the award over other collaborations including Metallica’s Blackened with Dave Pickerell and Matthew McConaughey’s Longbranch by Wild Turkey. The whiskey was one of two releases from the Slipknot and Cedar Ridge Distillery collaboration in 2019, the other being the Slipknot No. 9 Iowa Whiskey. Made with corn from the Cedar Ridge farm in Winthrop, Iowa, these whiskeys celebrate the band’s Iowa roots. Both whiskeys saw success over the course of the year, with bottles becoming scarce throughout the country and the Reserve selling out. Both brands look to build off the success of 2019 with an even bigger 2020. The whiskey has already begun selling out overseas alongside Slipknot’s European headlining tour with even more bottle signings and pop-ups on the horizon.
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BLOOD X SWEAT X TEARS VODKA LAUNCHES PARTNERSHIP WITH BEST FRIENDS ANIMAL SOCIETY Blood x Sweat x Tears Vodka recently announced its partnership with Best Friends Animal Society, a leading national animal welfare organization dedicated to ending the killing of dogs and cats in America’s shelters. The partnership kicked off with a $20,000 cash donation from the brand, which is made by Wolf Spirit Distillery in Eugene, Oregon, and is expanding into an ongoing fundraising campaign that will help Best Friends towards its mission to make America no-kill by 2025. “Without my rescue pit bull, Mr. Pickles, Blood x Sweat x Tears wouldn’t exist,” said Blood x Sweat x Tears’ head distiller, Ben Green, in a press release. “He stood by me as I stumbled through my self-education in craft distilling, offering unconditional love and encouragement as I went through dozens of (occasionally awful) iterations until finally getting it right. Now that we’re a bonafide brand—we reached 7,000 9L cases in our first year of sales—we are delighted to give back. This cause is near and dear to us and we are just getting started.”
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lew's bottom shelf
WHY AREN’T YOU MAKING AQUAVIT? BY LEW BRYSON
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about it three years ago in a Massachusetts trade journal, wholesaler craft spirits specialist Kate Palmer (who’s now running Hearts + Tales Beverage Co. in California, and yeah, she’s marketing an aquavit) compared aquavit to craft gin. “We carry the Aalborg, the aged Linie, and the Krogstad Festlig and Gamle. We have over 600 points of distribution in [Massachusetts] with just those four SKUs. There are gins that dream of those kinds of numbers.” Now, granted, aquavit isn’t what you’d call an easy sell. As Evan Harrison, at Mamaleh’s Delicatessen in Cambridge, told me in that same piece, “I can’t imagine too many Americans walk into a bar and think, ‘Man, I really hope that they have a drink here that tastes like anise, dill AND caraway!’” But that’s also aquavit’s greatest strength. There are no preconceived ideas about it. Christian Krogstad, at House Spirits Distillery in Portland (who makes two aquavits), loves that blank slate aspect. “You make a gin, and they may say, ‘I only drink Tanqueray.’ You make a brandy, but they only drink Hennessy. But aquavit … even if you look at the traditions, they’re so varied.” The best non-traditional explanation I’ve heard for aquavit is “a savory gin.” That savory character makes it possibly the best spirit I know of for drinking neat with food. Cheese, almost anything smoked, almost anything pickled, rye bread (of course), raw vegetables and most savory foods from Scandinavia or central and eastern Europe sing with aquavit. It can make you crave pickled herring. Aquavit is as quick to produce as gin, without the need to slog uphill against the other gins. It’s as savory as whiskey, it makes a spectacular Bloody Mary with little effort, and it makes a great chilled shot on its own. Some rye crispbreads, cold seafood, pickles and olives on a platter will have tasting rooms crying for more aquavit thimble shots. All it takes is the courage to try it, and the sales savvy to slot it where it needs to be. People really do want something different. Give it to them.
Some rye crispbreads, cold seafood, pickles and olives on a platter will have tasting rooms crying for more aquavit thimble shots. Now … you do get that this isn’t really a plea for all of you to make an aquavit, right? Aquavit is outside most people’s experience. It’s not something everyone else is making. It doesn’t have built-in competition. What else can you make that fits that description? Why … lots of things. Eaux de vie are still waiting for the right salespeople; I had some great ones at Koval. I was just discussing distilled mead with a hobbyist tonight; does that even have a name? Nut liqueurs of varying sweetness, hot pepper spirits for the hot sauce crowd, vat-aged cranberry brandy, creamy advocaat booze pudding, genever, ginseng, flower spirits, dry plum brandy, ouzo, yuzu... Would any of those work? I don’t know, but what are the chances that another 400 bourbons or 200 single malts are going to? Figure it out. Blow up the boundaries. Make an aquavit, and sell pickled herring. ■
Lew Bryson has been writing about beer and spirits full-time since 1995. He is the author of “Tasting Whiskey” and “Whiskey Master Class.”
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PHOTOGRAPH: (OPPOSITE PAGE) COURTESY OF KROGSTAD AQUAVIT
One of the things I hector the craft brewing industry for all the time is a perceived lack of real innovation. If a brewery comes up with a new kind of IPA (and the fact that I’m using “new kind of IPA” as the example speaks to the root of the issue), and it does well, or gets the Geekerie excited, literally hundreds of “innovative” imitations will pop up within six months. There are more than 100 beer “styles” now recognized, but the huge number of drinkers are only interested in a few of them. The rest of them seem like a choice of how your particular brewery is going to go out of business. New distillers may think they’re in an even smaller box. If you want to make whiskey, you may feel that you have to make something people find at least somewhat relatable: bourbon, rye, corn or malt. You can go off on a tangent within that, but really breaking the walls carries substantial risk. If you’re making rum, you may be faced with even more “can you make that here” resistance than bourbon makers outside of Kentucky still face. If you’re making vodka … do I have to even tell you about those competitive headwinds? Making gin? You have to convince people that they can drink it outside of the Memorial Day/Labor Day summer prison. Yes, there are exceptions to these problems, and there are distillers who are finding success through great products matched with superior salespeople. But why put yourself in that box to begin with? Why aren’t you making aquavit? You’re a pretty sophisticated audience, but I don’t feel safe assuming every one of you knows what aquavit is … which is kind of the point. Aquavit is a white spirit (usually) flavored with caraway, and maybe dill, maybe anise, maybe citrus peel; and if you think those “maybes” mean that people argue about this, you get a gold star. It’s Scandinavian, and the biggest seller, Aalborg, is way under the radar in America, despite well-meaning attempts to raise awareness. This sounds like a disaster, right? No one drinks stuff like that. But when I wrote a piece
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WHAT’s Stirring
DRINKS TO SAVOR FROM ACSA MEMBERS
The Bluebeard The Bluebeard is the most popular cocktail on the menu at Cedar Ridge Winery & Distillery in Swisher, Iowa. Ingredients 2 ounces Cedar Ridge Malted Rye Whiskey 1 ounce cinnamon blueberry purée 3/4 ounce muscadine shrub Ginger beer Directions Shake it like you mean it, and strain. Top with ginger beer and fresh mint.
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The Hot Dude, aka The McConaughey This cocktail from Marble Distilling is a crowd pleaser on a cold night at the distillery in Carbondale, Colorado. Ingredients 2 ounces Marble Moonlight EXpresso (cold brew) coffee liqueur 1 mug of hot chocolate of your choice (with room to spare) Whipped cream Luxardo cherry juice Directions Pour Marble Moonlight EXpresso into the mug with hot chocolate and stir. Top with whipped cream and drizzle with cherry juice.
Shy Ruby Punch For your next gathering, New Deal Distilling of Portland, Oregon, guarantees that one cup of this punch is sure to make your shiest guest sparkle. Ingredients 1 bottle (750 mL) Portland Dry Gin 33 8 ounces Cascadia American Bitter Liqueur 12 ounces lemon juice 12 ounces simple syrup 8 ounces grapefruit juice 24 ounces The Jasmine Pearl Ruby Nectar Tea, cold-brewed 16 ounces sparkling wine Directions Combine all ingredients in a standard-sized punch bowl. Serve over ice in 4 to 6-ounce cups. Makes 30-plus servings. Cold-Brewed Ruby Nectar Tea Instructions: Combine 3 teaspoons The Jasmine Pearl Ruby Nectar loose-leaf tea with 24 ounces cool water. Place in the fridge overnight (10-14 hours). Strain off the liquid and add to a punch bowl or store in the fridge for up to three days.
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ACSA Affairs
ACSA POSTPONES CONVENTION UNTIL AUGUST One day after the World Health Organization officially announced that COVID-19 was a pandemic, ACSA postponed its 7th Annual Distillers’ Convention and Vendor Trade Show, which was originally scheduled to take place in late March in Portland, Oregon. The convention is now scheduled for Aug. 7-9 in Portland. If you were registered to attend, you have the option of rolling your registration fees to the convention in Portland or Louisville (Feb. 28-March 1, 2021). If you prefer, ACSA will refund your registration fees without penalty. If you have questions, contact ACSA Operations Administrator, Teresa McDaniel, at teresa@americancraftspirits.org. The postponement was announced in March soon after Oregon Gov. Kate Brown said that the state of Oregon would prohibit gatherings of more than 250 people through April 8. Less than a week later, Brown said the state would ban gatherings of more than 25
people for a least a month, while also urging Oregonians to avoid being around more than 10 people. Since early February, ACSA’s Board of Directors was monitoring, evaluating and deliberating over what action to take regarding its hallmark event in light of the coronavirus. We heard from attendees on both sides of the fence: some urged us to hold a steady course and press ahead while others shared their concerns about holding a large meeting where the virus could be spread. No one on the ACSA team took the matter lightly—we all struggled with doing what is right for our community of craft spirits. We recognize many of you, like our ACSA team, had been preparing for over a year to visit Portland in March, and we shared your disappointment about postponing. Your health and safety, however, is our paramount concern. We cannot thank you enough for
TTB ISSUES FINAL RULE ON MODERNIZATION OF LABELING AND ADVERTISING In early April, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published a final rule to address certain proposals included in Notice 176, Modernization of the Labeling and Advertising Regulation. Last year ACSA spearheaded a sixmonth effort to gather members’ comments on the proposed rulemaking related to modernizing labeling and advertising requirements for beverage alcohol, and ultimately submitted recommendations based on those comments on June 26, 2019. ACSA’s member-submitted recommendations directly influenced the rule changes. The final rule provides resolution to a number of issues that: • do not require any current labels or advertisements to be changed • were generally widely supported by commenters and stakeholders • can be implemented relatively quickly, and • will either give more flexibility to industry members or help industry members understand existing requirements. The rule finalizes, among other things, the following liberalizing changes that were proposed in Notice No. 176 and directly related to distilled spirits: • an expanded alcohol content tolerance for distilled spirits • brand label placement flexibility for distilled spirits • allowing age statements for most types of distilled spirits. In 2019, ACSA solicited feedback on the proposed rules, held a town hall, webinar and individual meetings where discussion was entertained, and continuously reached out to remind members and the guilds that their feedback was essential to this process. Ultimately, the ACSA Board of Directors both analyzed and signed off on the ACSA response, which presents our industry’s diverse input as a single, unified voice. We’d like to extend special thanks to Mark Shilling, ACSA Government Affairs Committee Chair, and Nicole Austin for leading the Association’s comprehensive outreach effort to gather members’ feedback.
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your understanding, support, and well wishes during a difficult time for all. We extend our heartfelt wishes that you and your families remain in good health.
COVID-19 ADVOCACY The COVID-19 pandemic is rapidly changing the spirits industry. ACSA has been working closely with industry leaders and partners to assemble information to help distillers respond during this unprecedented time. Our website has a growing list of resources, including: • Federal guidance for production of hand sanitizer and sprays • Links to complimentary ACSA webinars • Letters to Capitol Hill conveying the need for support for the craft distilling industry • Tips for timely processing of TTB approvals and requests To see all of the resources, visit americancraftspirits. org/covid-19.
ACSA, DISCUS TO HOST PUBLIC POLICY CONFERENCE In partnership with the Distilled Spirits Council of the United States (DISCUS), ACSA will host a Public Policy Conference in Washington, D.C., Sept. 14-16. The focus of the conference will be to rally support in Congress for legislation in support of craft distilleries across the nation. Please save the date and look for more details coming soon.
C R AF T S PI R I T S MAG .CO M
THERE IS
STRENGTH IN MEMBERS
The American Craft Spirits Association (ACSA) is the only national association of craft distillers created and governed by craft distillers. Our mission is to elevate and advocate for the community of craft spirits producers.
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Build long-term relationships and enhance industry connections
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Engage in the battle to make permanent the reduction in the Federal Excise Tax
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Increase market access
TAKE ADVANTAGE OF MEMBERSHIP ONLY OPPORTUNITIES BY
JOINING TODAY! A: P.O. Box 701414, Louisville, KY 40270 P: (502) 807-4249 E: membership@americancraftspirits.org
ACSA Affairs
ACSA ANNOUNCES AWARDS; CHAINBRIDGE DISTILLERY WILLIAMS PEAR BRANDY TAKES BEST IN SHOW On March 30, ACSA announced the medalists of its Seventh Annual Judging of Craft Spirits, which were honored during a livestream ceremony. Medalists were handselected among a pool of nearly 500 entrants. Though it was originally scheduled to take place during ACSA’s annual Distillers Convention and Vendor Trade Show, which was postponed due to COVID-19 and has been rescheduled for Aug. 7-9 in Portland, Oregon, ACSA’s Board of Directors unequivocally agreed that the ceremony should go on as scheduled, with a pivot to stream the show online. During the event, ACSA proudly bestowed the evening’s ultimate honor, the Best of Show Award, to ChainBridge Distillery of Oakland Park, Florida, for its Williams Pear Brandy. Dan Garrison, an ACSA Member from Garrison Brothers Distillery in Hye, Texas, served as the evening’s emcee, providing remarks to the online audience. The stream also featured welcome remarks from Margie A.S. Lehrman, ACSA’s CEO, who provided a brief behindthe-scenes update on the organization’s COVID-19 relief efforts and advocacy work on behalf of the country’s 2,000 craft spirits producers, and an optimistic toast to the future of the industry. This year, entries were submitted from 42 states across the country in seven main categories: Whiskey, Gin, Rum, Vodka & Grain Spirits, Brandy, Specialty Spirits, and Ready to Drink (RTD), a new category added this year. Back again for a second year, ACSA also awarded a series of Innovation Awards, which aim to recognize remarkable spirits whose flavor profiles may stray from their category’s signature notes. In addition to a Best of Show and the Best of Class Distinctions, the judging panel awarded 23 Gold, 81 Silver, and 173 Bronze medals. The 2020 Best in Class distinctions, the highest honor in each of the seven judging categories, were awarded to a mix of both established, award-winning distilleries and younger newcomers. These honorees will be presented with hand-carved barrelheads courtesy of Thousand Oaks Barrel Co, and all medal recipients will receive custom medals generously
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provided by Apholos. ACSA would like to thank its competition sponsors, which include Five x 5 Solutions, Glencairn, and Top Shelf Logistics. Best In Class Honorees in each category included: Whiskey: Triple Eight Distillery, The Notch Nantucket Island Single Malt Whisky 12 Years (Nantucket, Massachusetts) Gin: Three Floyds Distilling Co., Wight VVitch Midwestern Gin (Munster, Indiana) Rum: Proof and Wood Ventures, The Funk (New Canaan, Connecticut) Vodka & Grain Spirits: Boot Hill Distillery, Boot Hill Distillery Vodka (Dodge City, Kansas) Brandy: ChainBridge Distillery, Williams Pear Brandy (Oakland Park, Florida) Distilled Specialty Spirits: Pittsburgh Distilling Company, Wigle Saffron Amaro (Pittsburgh) RTD: Salt Flats Spirits, Salt Flats Kentucky Mule (Salt Lake City) Innovation Awards included: Whiskey: Kings County Distillery, Peated Rye (Brooklyn, New York) Gin: Highside Distilling, Highside Distilling Gin (Bainbridge Island, Washington) Vodka: Caledonia Spirits, Barr Hill Vodka (Montpelier, Vermont) Distilled Spirits Specialty: Tattersall Distilling, Bitter Orange Liqueur (Minneapolis) RTD: 1220 Artisan Spirits, Cucumber Hibiscus (St. Louis) The complete list of award recipients is available on the ACSA website. Look for profiles on the top medalists in the next issue of Craft Spirits magazine. The virtual awards ceremony was hosted by Maggie Campbell, Chair of Judging Competition (Privateer Rum), and Dan Garrison (Garrison Brothers Distillery). Judging took place in October at Cardinal Sprits in Bloomington, Indiana. We are grateful to Campbell (ACSA’s Vice President), Colton Weinstein (Corsair Distillery), Jeff Wuslich (Cardinal Spirits) and all the volunteers and judges who ensured a professionally run competition.
Judging at Cardinal Spirits
Click here to see a list of all the medalists.
C R AF T S PI R I T S MAG .CO M
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7TH ANNUAL ACSA DISTILLERS’ CONVENTION & VENDOR TRADE SHOW
AUGUST 7-9, 2020 PORTLAND, OREGON
THIS IS THE ONLY TRADE SHOW CREATED BY AND FOR CRAFT DISTILLERS
Journey to Craftlandia with us August 7-9 at the Oregon Convention Center. • Network with fellow craft spirits producers, leading suppliers, and industry experts. • Accelerate growth with insights drawn from 30+ hours of education sessions. • Kick-start a new business concept by learning from peer best practices. • Participate and taste our industry’s best spirits at the Annual Spirits Awards dinner and tasting.
Walk away energized and inspired as we celebrate the craft spirits community. Stroll away with new knowledge on market access! Sprint away confident on how to grow your business!
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Craft distilleries nationwide sprung to action to produce hand sanitizer, including Cedar Ridge Winery & Distillery (inset and bottom, second from right), Rogue Ales & Spirits (bottom left) and Catoctin Creek Distilling Co. (bottom, second from left and far right).
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C R AF T S PI R I T S MAG .CO M
Pivoting in a Pandemic
We never would have imagined that we’d be publishing this issue for a completely different industry—and a completely different world—than the one for which we published the last edition. The COVID-19 pandemic has fundamentally changed the craft spirits business as we know it for the foreseeable future. We explore this new normal—if there even is such as a thing as “normal” anymore—in this special report on how the coronavirus has significantly impacted our industry and how producers are tossing out the conventional playbook to continue to operate in this dramatically altered landscape.
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2_2 Pandemic Cover Story Section [Note to Michelle: We’re envisioning an opening spread to this section with either a big photo or multiple photos, and an overarching headline and deck, something in the vein of what we did with 2020 Vision. There are two mini features here, along with several vignettes at the bottom that we’re assuming can be sprinkled throughout the stories. One of those vignettes (Cedar Ridge) needs to go with the hand sanitizer story, but the others can go just about anywhere that makes sense. We’re guessing this could go 6-8 pages, but it’s up to you.]
Sanitary Solutions Amid a short supply during a pandemic, craft distillers rally to produce sanitizing products. BY JON PAGE
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Cedar Ridge Winery & Distillery started making hand sanitizer in March.
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oon after the World Health Organization (WHO) officially declared the novel coronavirus (COVID-19) a pandemic on March 11, ordinary business as distillers knew it dramatically shifted. Governors and mayors declared states of emergency and ordered citizens to shelter in place. Normal social activities grounded to a halt, forcing tasting rooms across the nation to close indefinitely. And supplies once seen as commonplace—including toilet paper, flour and hand sanitizer—flew off shelves amid increasing demand. In this time of crisis, hundreds of American craft distilleries helped fill the void by producing hand sanitizer and surface sanitizers. For many, it was akin to a higher calling. “This is a war effort,” says Sonat Birnecker Hart, president of Chicago’s KOVAL Distillery. In those early days of the shortage, Hart’s inbox was flooded with urgent pleas from nurses, ambulance companies and nursing homes. “Whatever you can do to get it out to them, you need to do it. They are literally on the front lines and the battle is not the usual, conventional battle that we know from our grandparents’ war, this is a very different one. And if we’re in a position to make something that can protect people, we need to do it.”
KOVAL was among a wave of hundreds of craft distilleries that were collecting supplies in the event that the Alcohol and Tobacco Tax and Trade Bureau (TTB) would streamline the regulatory process to make sanitizer. That arrived on March 18, when TTB announced it would waive provisions of internal revenue law and provide “certain exemptions and authorizations to distilled spirits permittees who wish to produce ethanol-based hand sanitizers to address the demand for such products during this emergency.” In the days and weeks to come, additional guidance followed from TTB and the Food and Drug Administration (FDA). The American Craft Spirits Association (ACSA) formed a COVID-19 working group to help navigate the pandemic. Along with ACSA staff, the group launched a new page on the ACSA website to help distilleries respond to the pandemic, and coordinated a series of complimentary webinars. Translating the guidance was no easy task, given the conflicting information from various federal agencies. “There’s a whole bunch of stuff that doesn’t come together in a nice, neat little step-by-step package,” says Mark Shilling, former ACSA president and ACSA Government Affairs Committee Chair, and a member of ACSA’s COVID-19 working group. “It’s really been a
Montanya Distillers produced a surface sanitizer.
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Cedar Ridge Shifts Gears Cedar Ridge Winery & Distillery’s response to the COVID-19 pandemic has become the norm for craft spirits producers across America. “On Thursday, March 19, we decided to get into the hand sanitizer business,” says Jeff Quint, founder and owner of Cedar Ridge in Swisher, Iowa. “By the 23rd we were shipping product.” The fact that 60% of its revenue normally comes from its bar and event space—the latter of which, in normal times, hosts at least 40 weddings a year—made its temporary new business model an imperative. “We have a kitchen and an event center and we used the kitchen and event space to build a fan base—we’d get 100,000 visitors a year, with, probably, 30 [staff members] dedicated to that” Quint says. “We saw that go to zero. Then you’re watching all these bars and restaurants lay off essentially 100% of their staff and, being faced with that, it made the decision to get into the hand sanitizer business pretty easy.” It’s worked out so well for Cedar Ridge so far that the distillery hasn’t had to lay off any staff—including the bar, restaurant and event staff. They’ve all been reassigned, for the time being, to hand sanitizer duty. “From that standpoint, we’ve been quite fortunate,” Quint says. “We certainly don’t want to be in the hand sanitizer business [permanently] and we look forward to getting out of it,” Quint says. —Jeff Cioletti
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Garrison Brothers Turns Special Release into COVID-19 Fundraiser Until recently, Dan Garrison had average plans for the upcoming release of the oldest bourbon Garrison Brothers Distillery has ever made. The distillery, based in Hye, Texas, would release Laguna Madre—an 8-year-old bourbon aged for four years in new white American oak barrels and aged for an additional four years in Limousin oak from France—later this summer through regular retail channels. But after the spread of COVID-19, Garrison had another idea. In April, the distillery launched a fundraiser called Operation Crush COVID-19. Launched in partnership with Good Bourbon for a Good Cause, the distillery’s 501(c)3 public charity, the campaign aims to raise more than $2 million dollars for veteran-led disaster response organization Team Rubicon, which is currently serving in communities across the country, leading efforts to combat the coronavirus pandemic. Laguna Madre is only available to people who donate $1,000 to the campaign. In its first few days, the distillery had already raised $250,000. Garrison has been overwhelmed by messages left when people donate. “Tears just stream down my cheeks every night when I read these messages,” says Garrison. “People are stressed; people are scared. We need some relief; we need some comic relief and we need to do something fun. Nothing is better for your heart than giving back.”—Jon Page
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challenge, especially as some of the guidance continues to change, and it probably will continue to change before this is all over.” Previous careers benefitted ACSA board member Becky Harris and Scott Harris of Catoctin Creek Distilling Co. in Purcellville, Virginia. After registering their sanitizer with the FDA, Scott and Becky hosted a complimentary webinar on the topic. “Scott had a background in government contracting, which prepared him for a certain amount of it, and then I’m a chemical engineer,” says Becky. “So we’re pulling that together and I’m thinking, without those kinds of sets of knowledge, people could really be at sea. … The truth of the matter is that you’ve suddenly shifted from beverage alcohol to manufacturing an over-the-counter drug.” Due to concerns over regulations, adverse effects and more, many distilleries opted to make surface sanitizers. In North Carolina, Durham Distillery initially produced a sanitizing spray solution, but shifted to hand sanitizer at the request of the state’s emergency management department. At Few Spirits in Evanston, Illinois, founder and former ACSA president Paul Hletko was initially hesitant to make anything related to sanitizer, but the distillery eventually made an ethanol base and donated it to Chicagobased Meliora Cleaning Products, which in turn produced a hand sanitizer. In Colorado’s Gunnison County, which was one of the first counties in the state to enforce social distancing, Montanya Distillers founder Karen Hoskin preferred to avoid a sanitizer intended for skin. The pandemic hit close to home at the distillery in Crested Butte. “One of our full-time distillers was one of the first people on our staff to go down with coronavirus. … Then our other full-time distiller went down. I went down,” says Hoskin. “I didn’t get very sick, I got really lucky. Our second distiller did not get that sick. The first distiller was down for eight or nine days. We had people who were down for 20, 22 days of just laid-out with fevers and breathing issues.” Countless stories of distilleries donating sanitizer to first responders are flooding national and local media outlets. During this unprecedented time, Melissa Katrincic of Durham Distillery has taken comfort in watching the distilling industry rally behind their communities. She recalls the famous words from Fred Rogers about looking for the helpers when there are scary things in the news. “Across the country distillers are often seen
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“... if we’re in a position to make something that can protect people, we need to do it.”
—Sonat Birnecker Hart of KOVAL Distillery
as this rag-tag kind of mutt lot,” says Katrincic. “You’ve got a combination of business entrepreneurs who came out of business school, all the way down to people who started as, for lack of a better word, a hobby. “Right now what you see across the country are that the distillers are the helpers. They saw an opportunity to help their community, not take advantage of their community. That sort of goodwill is just invaluable to us as an industry.” ■
Private(er) Lessons Privateer Rum’s Maggie Campbell has always been a highly visible figure within the craft spirits community and that hasn’t changed, even while she’s been social distancing at home. With bar and restaurant business essentially grinding to a halt, on-premise staff have faced unprecedented job losses. In an effort to enhance servers’, bartenders’ and hosts’ marketable skill sets for when they are able to get back to work full-time, Campbell has been offering online tutorials on American Sign Language (ASL). “It was sort of, ‘hey, we have this downtime, this is a good resume-builder, this is a good skill,’” Campbell explains. “It makes you a better host if you can host people hard of hearing or deaf … and a skill that bartenders have told me that they’ve wanted to learn. It was always a matter of when am I ever going to have the time to teach, but now, this has been a really good time, to support people for when they go back to work and have more skills, more qualifications.” Campbell also has been offering other insights through her “Ask Maggie Anything” sessions on Instagram Live every Wednesday and Friday. “It gets really geeky and technical,” she reveals. “Lots of distillers ask really good questions, a lot of good bartenders ask questions and we even get journalists and students asking questions.”—Jeff Cioletti Maggie Campbell
A Brewskey for a Cause
To see a running list of distilleries that are making hand sanitizer, visit craftspiritsmag.com.
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Amidst the collateral damage in the sudden shutdown of most of the on-premise sector has been all of the full or partially full kegs of beer already in or on their way to the market that will go undrunk—brewery inventory that will go to waste. But Copper & Kings American Brandy Co. in Louisville, Kentucky, is offering a solution. “We’ve been talking to our brewery friends,” says Copper & Kings co-founder and owner Joe Heron, “and saying, ‘hey, don’t throw that down the drain. For one thing, you might be throwing it into an already stressed effluent environment. We’ll distill it and we’ll sell it as charity.’” The distillery is calling the product Brewskey—a hybrid of beer and whiskey, alembicdistilled from anything from a light lager to an IPA. “[TTB] doesn’t want us to call it a whiskey—it’s that they don’t know where to fit it in because it’s not a classical whiskey—so we trademarked Brewskey,” Heron says. The distillery is donating the proceeds of Brewskey to the struggling bar and restaurant industry. Copper & Kings has had to lay off its own hospitality staff from Alex&nder, its full-service restaurant bar on the top floor of its Louisville headquarters. The company also has lost substantial business from its large event space. “We’ve always liked distilling beer,” Heron says, “and in this environment, we’re able to take beer off of people’s hands so it doesn’t go into the sewer system and generate some funds for the hospitality industry.”—Jeff Cioletti
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States of Grace Many states are being flexible with some of their regulations during the pandemic. But others aren’t doing enough. BY JEFF CIOLETTI
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t’d be a massive understatement to say the COVID-19 pandemic has been a shock to the system for the craft spirits industry, forcing distillers and their trading partners to pivot overnight to entirely new and unfamiliar business models and operating procedures. But what the industry is even allowed to do in these incredibly challenging times largely depends on how nimble and flexible state and local governments are willing to be to ensure that craft spirits producers and retailers can maintain some semblance of active commerce. Many states have acted quickly to offer some regulatory relief for the beverage alcohol industry. Initially, before businesses started temporarily shuttering en masse, large group events were being canceled, prompting a number of states to make exceptions to their no-returns policy, specific to gatherings canceled because of COVID-19. Then, as the number of state-based stay-at-home recommendations grew and onpremise establishments were forced to close, it became clear that the industry required a more substantial lifeline from the states.
For many states, that has meant temporarily relaxing restrictions on spirits to-go, be that in the form of curbside pick-up, delivery or both. (Visit CraftSpiritsMag.com for a complete, updated list of what the governments of all 50 states are allowing.) Most of the states that are allowing such sales during the pandemic are requiring the beverages to be in sealed containers. In some cases, however, sales by onpremise establishments for consumption offpremise is restricted to beer and wine, leaving spirits out in the cold. Massachusetts is one such state. “Restaurants were just given the ability to sell closed bottles of beer and wine for people to buy with their takeout orders,” says Maggie Campbell, head distiller and president of Boston-based Privateer Rum and ACSA vice president. “I think the Puritan roots run deep here.” The Massachusetts Distillers Alliance—the commonwealth’s guild—has been circulating a petition asking Gov. Charlie Baker, Lt. Gov. Karen Polito, Treasurer Deb Goldberg and the legislature for three things: excise tax
relief for alcohol used in the formulation of hand sanitizer produced for hospitals, first responders and local communities; the ability to sell online and ship direct to Massachusetts consumers; and the ability to serve takeout cocktails with to-go food orders. “That’s really important for us, just being able to [sell to-go cocktails],” adds Campbell. “Boutique brands often are championed by bartenders so it was definitely the largest share of our Massachusetts business. And it would help them to monetize their stock that they’re carrying right now.” The farm distillery license available to small producers in Massachusetts enables distillers to sell bottles from their tasting rooms. But, of course, that means consumers actually have to visit the distillery during a pandemic. “If we could ship to our consumers rather than have them come to our tasting room—which is really hazardous for a lot of people—that would be huge,” Campbell says. It’s certainly been a significant boost for Virginia distilleries. On April 6, the Virginia Alcoholic Beverage Control Authority (ABC) announced that it had extended temporary in-
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state direct-to-consumer shipping privileges for distilleries that have existing agreements with ABC to manufacture and sell products as agents of ABC at their distillery sites. More than 45 distilleries in the commonwealth have such agreements. Among those is Catoctin Creek Distilling Co. in Purcellville, which recently got its online store up-and-running to fulfill such orders. “The response was enormous,” says Becky Harris, Catoctin Creek’s founder and chief distiller. “In the past three days I think we’ve had the equivalent of 10 good Saturdays of sales at our distillery store.” Michigan distillers, like those in Massachusetts, would love to get that sort of special dispensation from their state government during the pandemic. “We’ve been in communication with liquor control and the governor as an association, asking on multiple occasions to be able to ship, as well as for distiller tasting rooms to be able to deliver to customers’ doors,” reports Jon O’Connor, co-founder/co-owner of Grand Rapids-based Long Road Distillers and president of the Michigan Craft Distillers Association. There’s a movement to get the government to allow to-go cocktails during the COVID-19 crisis. Bars and hospitality groups around the state have petitioned Michigan Gov. Gretchen Whitmer and the Michigan Liquor Control Board to enable them to temporarily offer takeout drinks. “Obviously, we’re supportive of that endeavor—anything that puts our product to use and gets it out there,” says O’Connor. In Pennsylvania, the plight of on-premise establishments is only part of the problem. The Pennsylvania Liquor Control Board (PLCB) in March announced the indefinite shuttering of all state-owned Fine Wine & Good Spirits off-premise retail stores and is only offering limited online orders on its website. And it’s difficult to get on the site, as PLCB has been restricting traffic. When consumers visit the site, they’re likely to be greeted by this message: “Thank you for being a valued customer. We’re currently unable to take your order. A limited number of orders may be placed each day. We’ve randomized access to enable us to fulfill orders quickly and efficiently. The daily number of orders are [sic] limited to expedite processing. Please try again in the next few hours or coming days. We appreciate your patience and understanding.” Pennsylvania resident and whiskey expert Lew Bryson, author of “Tasting Whiskey” and the recently released “Whiskey Master
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Backwards Distilling Moves Forward with Cocktail Videos Soon after closing its tasting room due to the coronavirus, Backwards Distilling Co. of Casper, Wyoming, launched a video series to share cocktail recipes. In the first video from her home, Backwards co-founder and ACSA Board Member Amber Pollock demonstrated how to make a cocktail featuring the distillery’s Contortionist Gin. But most of the videos (there are now more than 20) feature Backwards bartenders. “When people come to the tasting room they come for the drinks, but they also come for the staff,” says Pollock. “I hear that from our customers all the time. How much they love our staff, how connected they are to them.” The videos are equally educational and entertaining. In the most-viewed video, a Backwards bartender explains how to make a cocktail while impersonating Joe Exotic, the zoo owner made famous in the recent Netflix series “Tiger King.” Through a Venmo account, Backwards fans and customers can tip the bartenders, and Pollock says people are “going out of their way to make sure that they are tipping how they would normally tip their bartender in that setting if they were across the bar.”—Jon Page
A scene from a cocktail video by Backwards Distilling Co.
Class,” has been a vocal critic of the PLCB’s actions. “The state’s online ordering system is a joke: less than 1% of attempts (no exaggeration) to get on the site go through,” Bryson says, “and once you do, you can order a maximum of six bottles a day from a relatively limited selection.” The PLCB noted, in an April 16 press release, that it’s been increasing the number of orders it’s been accepting by opening up additional fulfillment centers. At press time, Pennsylvania expected to have 121 fulfillment centers picking and packing e-commerce orders. PLCB chairman Tim Holden said in the press release that the body is able to accept 6,500 orders through the website, an 850% increase since April 1. As order fulfillment capacity increases, the PLCB hoped to soon be able to accept 10,000 or more orders daily. And at this point, there are very few
alternatives. “Look, leave the state stores closed and let the licensees—which include grocery stores—sell unlimited wine and spirits,” Bryson suggests. “They’re already open so [there are] no additional health risks and the Teamsters would be happy for the work delivering.” Bryson also thinks it’s highly unlikely that Pennsylvania will allow on-premise accounts to sell spirits to go. “They’ll open the state stores before they allow that, even though restaurants and bars are stuck sitting on millions [of dollars] in spirits inventory with no legal way to sell it,” he says. Bryson has started a Change.org petition asking Pennsylvania Go. Tom Wolf to allow all licensees to sell beer, wine and spirits to go. “But even with over 11,000 signatures, it’s getting no response from Harrisburg,” Bryson concedes. ■
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In the first year of its Community Donations Program, Caledonia Spirits raised more than $60,000 for staff-nominated area nonprofits, including The Nature Conservancy in Vermont.
Bottled for Good Distilleries take creative approaches to charitable programs. BY KATE BERNOT
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mall distilleries play several roles in their communities: employer, gathering space, even benefactor. Depending on the size, location and identity of each distillery, charitable giving can take many forms and give back to organizations in novel ways. Here’s how distilleries from coast to coast have made their charitable programs work for them and the people they serve.
PHOTOGRAPHS: (OPPOSITE PAGE) COURTESY OF CALEDONIA SPIRITS.; (THIS PAGE) COURTESY OF WHISTLING ANDY DISTILLERY AND WILDERNESS TRAIL DISTILLERY
Pick a Passion 10th Mountain Whiskey & Spirit Co.’s distillery sits a few miles west of Vail, Colorado, with a tasting room in Vail Village. The company is named for the fabled 10th Mountain Division, a light infantry division created specifically to fight in mountainous terrain. Most of its original members were skiers-turned-soldiers, and after World War II, they’d go on to construct ski mountains (including Vail), co-found Nike, and start the climbing gear company Petzl. Early on, the distillery decided serving veterans would be its primary charitable focus. 10th Mountain Whiskey partners with Vail Veterans Program, an organization that brings wounded veterans to Vail for rehabilitative sports and recreation activities, to bring some of those veterans to the distillery for a distillation run. Two years later, when the whiskey is ready, those same veterans return to 10th Mountain and receive a free bottle of that whiskey. The remaining 200 or so bottles go to Vail Veterans for use at fundraising events and auctions throughout the year.
A portion of proceeds from Whistling Andy Distillery’s The Spirit of Sperry benefit the Glacier National Park Conservancy. C R AF TSPIR ITSMAG.COM
“Work with nonprofits that align with your core values,” 10th Mountain founder Ryan Thompson advises. “We’re a military-centric brand, honoring one of the most historical military divisions around. It helps us to narrow down which nonprofits we support. We are very conscious of the fact that without military doing what they’re doing, we couldn’t do what we’re doing.” The distillery also sponsors a platoon within the 10th Mountain Division through the national AdoptaPlatoon program. This specific platoon of 25-30 soldiers is currently stationed in Afghanistan; the distillery ships them yoga mats, beef jerky, hats, cigars and other morale-boosting items requested by the platoon’s sergeant. “In the first email from the sergeant, she was telling us about the personalities of each soldier, their wants and needs,” Thompson says. “We hope to stay in contact with them to get back. I’d personally like to meet the sergeant if not every single soldier in that platoon.”
Make it Special Until summer of 2017, most of the charitable contributions Whistling Andy Distillery made were incremental: A dollar from each cocktail sold from the distillery’s tasting room in Bigfork, Montana, in the month of December benefited a local charity, for example. But when the Sperry Chalet in Glacier National Park burned down during the Sprague Fire that August, Whistling Andy wanted to do something bigger to help the rebuilding efforts. “We knew we had a number of other products that we could just relabel, but we wanted to do something special just for this,” says Whistling Andy head distiller Gabe Spencer. The distillery released a huckleberry vodka called The Spirit of Sperry, flavored with Douglas fir tips and shiso leaf, and donated 100% of profits for the first year—roughly $15 per bottle—to the Glacier National Park Conservancy’s Sperry Action Fund. “I never really wanted to flavor a vodka, honestly, but nothing shouts Montana more than huckleberries,” says Spencer. The vodka was such a hit at the tasting room, area liquor stores and farmer’s markets that Whistling Andy has decided to continue donating 5% of proceeds from its sale to the Conservancy to fund projects beyond the Sperry Chalet restoration. That first year alone, the distillery was able to donate 100% of the profits from sales of 3,000 bottles, totalling $45,000.
At a fundraiser held by Willett Distillery, Wilderness Trail Distillery purchased a barrel of 15-year-old bourbon. After an additional year of aging, Wilderness Traill released F-ck Cancer and donated proceeds of the $2,500 bottles to Bourbon Charity.
Think Outside the Box As Vermont-based Caledonia Spirits worked toward opening its new Montpelier distillery and cocktail bar, it took the opportunity to rethink almost all aspects of its operations. “Thinking differently about what the bar could be for our community feels very natural to us,” says Harrison Kahn, vice president of marketing for Caledonia. Following a model set by neighboring brewery Lawson’s Finest Liquids, Caledonia decided to pay its bar staff a living wage and eliminate tipping, instead donating any gratuities left to charitable organizations. That policy also helped the bar attract high-quality bartenders drawn to the idea of a predictable, liveable wage. “We’ll never change this policy,” Kahn says. “It’s a point of pride for everyone on the team.” In its first year, the Community Donations Program raised more than $60,000 for staffnominated area nonprofits, including The Montpelier Food Pantry, The Nature Conservancy in Vermont and The Center for an Agricultural Economy. Each month’s “tips” benefits a different organization, and the distillery selects those that have a tangible impact on local communities and that work in the area of environmental sustainability. Its donation to the Montpelier Food Pantry enabled the pantry to stock its shelves for half a year and buy a new freezer it desperately needed. Caledonia is also the founder of Bee’s Knees Week, an annual fundraiser that has since 2017 raised $63,700 for pollinator nonprofits. During a week in September, partici-
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Let What’s Personal Fuel You It’s rare that one of Wilderness Trail Distillery’s roughly 55 employees hasn’t been affected in some way by cancer, whether it’s a personal diagnosis or that of a family member. Coowner and master distiller Shane Baker lost his niece at age 23 to cancer; as this article moved toward publication, one of the distillery’s employees, Denise Young, died of cancer. But employees of the distillery in Danville, Kentucky, have channeled their grief into action. Last year, Baker and others from Wilderness Trail attended an event held by the organization Bourbon Crusaders to benefit the American Cancer Society. “We were emotional. The night was spectacular in terms of just the environment. Everyone was there for the right reasons,” says Baker. “The vibe in the room was, ‘Let’s make this night matter.’” At the event, Willett Distillery auctioned off the chance for another distillery to collaborate on a bourbon aged in one of its famed 15-year barrels. When bidding skyrocketed to $45,000, Willett master distiller Drew Kulsveen paused the bidding: “Would all four of the distilleries bidding take a barrel?” All four distilleries who’d bid had the chance to buy a barrel for $45,000; the night raised $380,000 in total.
“Work with nonprofits that align with your core values.” —Ryan Thompson of 10th Mountain Whiskey & Spirit Co. After a year of aging whiskey in that barrel, Wilderness Trail held a lottery for the right to purchase one of only 58 bottles of the “F-ck Cancer” edition Willett-Wilderness Trail bourbon. Each bottle sold for $2,500, with proceeds donated to Bourbon Charity. “We then made some special four-grain bourbon and dumped it into that barrel to finish aging it for another year, and we’ll auction them off for the same cause,” says Baker. “Then there’s a brewery, Country Boy Brewery, they’re going to age a beer in that barrel and donate the funds. Then we have a craftsman, a furniture maker, who will break that barrel down and make things to auction off. The goal is: How much money can one barrel make?”
Use People Power When Virginia Distillery Co. of Lovingston, Virginia, planned its second annual Charity Cask bottle release in 2018, it put the question to its employees and fans: Which charity should we donate the proceeds to? The first year’s recipient had been easy to choose; the
distillery donated net proceeds from that coffee cask whiskey release to Nelson County First Responder teams who’d helped put out a forest fire on a hill behind the distillery in 2016. But for its second release, the distillery polled its staff, then put the top three charities to a public vote. “The organizations themselves got involved and shared it with their contact lists,” says Jessica Bullard, marketing manager for the distillery. The public chose a local animal shelter called Almost Home. “They actually brought the animals out to meet people. Luckily they’re right down the road from us so it was an easy connection.” The distillery chose the runner-up charity, the local food pantry, as its 2019 Charity Cask recipient to keep the community involved. “I do think it’s given us a connection with some locals who wouldn’t have normally visited us or had interest in whiskey,” Bullard says. “We saw a number of people who came out to support it and buy a bottle even if they wouldn’t normally.” ■
Virginia Distillery Co. started an annual Charity Cask bottle release in 2017.
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PHOTOGRAPHS: (THIS PAGE) COURTESY OF VIRGINIA DISTILLERY CO.
pating bars and restaurants—this year saw more than 1,000 take part—donate $1 from the sale of their Bee’s Knees cocktails to the cause. Caledonia participates year-round.
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In states where it is legal, family-friendly distilleries are becoming commonplace. BY JON PAGE
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incoln Page was 16 days old the first time he visited a brewery. Long accustomed to seeing families gathering over pints, my wife and I didn’t think twice about ushering Lincoln to one of our favorite brewpubs weeks after he was born. But when it came to distilleries, Carie and I were hesitant to make the leap. We couldn’t recall seeing parents with young children in a distillery tasting room. Weren’t they all 21-and-
over establishments? Would we make it through the door? And even if we did, would we receive skeptical side eyes from bartenders and fellow drinkers? We clung to those fears for more than a year until we nervously carried Lincoln through the doors of Elkins Distilling Co. in Estes Park, Colorado. Even though online reviews said the distillery was kid friendly, and even though it was the middle of the
PHOTOGRAPHS: (THIS PAGE) JON PAGE; (OPPOSITE PAGE) COURTESY OF ELKINS DISTILLING CO. AND JON PAGE
The Kids Are Alright
1350 Distilling
afternoon, I braced for a swift eviction as we approached the bar. Instead, the bartenders greeted us with smiles (reserving the biggest grins for Lincoln) and casually took our order. Lincoln played on the edge of the tasting room while Carie and I took turns diverting his attention from a nearby display of Bloody Mary mix bottles, and a few customers enjoyed a distant game of peekaboo with Lincoln. Later, we noticed the distillery had a small collection of games and a pint-sized set of cornhole boards. Suddenly, a family outing to a distillery seemed perfectly natural. Elkins is far from alone. Across the nation, a growing number of craft distilleries are providing family-friendly experiences at their tasting rooms. For some distilleries, it’s as simple as allowing supervised kids to accompany parents on tours, while others go an extra step by offering board games, high chairs or a wealth of non-alcoholic beverages. “We have family in our name—it would be silly for us to turn away children,” says Derek Guilin, the general manager at The Family Jones Spirit House in Denver. “A lot of restaurants are way too pretentious and think they’re the coolest cats on the block. Our vibe is, bring everybody, as long as it’s legal.” 21 AND OVER In some states, of course, it is illegal. That’s the case in Indiana, where Cardinal Spirits co-founder Jeff Wuslich says the Bloomington distillery frequently must turn away families with children. “Unfortunately, it’s especially around holidays or graduation or big events in town where families want to come in and do a tour or a tasting or even come in for dinner,” says Wuslich. Although recent state legislation helped pave the way for distilleries to allow children, Wuslich says the permit is cost-prohibitive for small businesses. In South Carolina, state law also prohibits minors from entering distilleries. At Twelve 33 Distillery in Little River, owner and president Kevin Osborn says the distillery is forced to turn families away on a daily basis. Twelve 33 is located on the well-travelled U.S. Route 17, just a few miles away from North Myrtle Beach. “We’re in a touristy area at the beach and it’s mostly families coming in,” says Osborn. “It’s a huge hindrance on our ability to grow our business when we have to turn away so many people because they come to the beach as a family.” There is one saving grace for families hoping to visit Twelve 33: a combined BaskinRobbins and Dunkin’ Donuts is located next door. “Many times we get people that come in and grandma or grandpa take the kids over to
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An outdoor space (above) makes Elkins Distilling Co. an ideal destination for families, while bartenders prepare inventive cocktails inside.
“We’ve watched kids from across the middle of America grow up from year to year as they come in and visit with us.” — McShan Walker of Elkins Distilling Co.
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ALL ARE WELCOME StilL 630 in St. Louis is also not a kid-friendly space, admits owner and distiller David Weglarz, but the father of three children welcomes families. He regularly receives emails and calls from potential visitors wondering if they can bring their kids on a tour. “My response is always the same,” says Weglarz. “They’re welcome, as long as they don’t interfere or impact any of the other customers’ experience. As long as they’re well-behaved, they’re welcome in here.” Weglarz says he’s never had to ask a family to leave for unruly behavior, and neither have any of the other family-friendly distilleries mentioned in this story. At The Family Jones, founder Rob Masters urges families to carefully consider the timing of their visits. He says it is not ideal to bring kids to the Spirit House on weekend evenings, whereas early afternoons are better. Back at Elkins, co-owner McShan Walker says parents do a fine job of policing the time of day when they visit, in addition to minding their kids in general. “You don’t want to take it lightly in the scenario when there’s any blurry line between what’s actually going on. The main benefit that we’ve seen is that it’s usually very clear,” says Walker. “It’s older groups and people that have super young kids, and not a ton of [situations] where you’re worried about who’s of a legal age to be drinking.” Catering to families was not a priority when Elkins opened in 2016. According to Walker, “it was certainly not something we built into the business plan.” But he saw things differently when a local art group asked Elkins to host an event in which families would paint tiles for a public service project. Elkins had few customers in those early days, so the dis-
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tillery heavily promoted the event. “I come in about 30 minutes after it starts and we have 20 picnic tables inside and outside covered with children and their parents painting these tiles. It’s the first time that [the place] feels really alive since we’ve been open. I was like, this is not what I imagined at all, but maybe this is better.” While families have not elevated to Elkins’ target audience, they remain welcome at the distillery, which is a short drive from the entrance to Rocky Mountain National Park. “With the national park being such a destination, there are so many people that come here annually on a family trip,” says Walker. “We’ve watched kids from across the middle of America grow up from year to year as they come in and visit with us.” At Jeptha Creed Distillery in Shelbyville, Kentucky, children are not only welcome, but master distiller and co-owner Joyce Nethery says the distillery was founded with her own children in mind. “We built it for them for their future income and their careers if they choose,” says Nethery. “Being friendly to the family and being family oriented, that is a core value for us.” Distillers interviewed for this story were quick to say they would never serve a minor, but many of them agree that allowing children in their facilities provides an opportunity for adults to model the responsible consumption of alcohol. “I think it’s very important to demystify and destigmatize it and just say, ‘Hey, this is a part of life,’” says Weglarz. “Because when you don’t, you drive it underground in secret and that’s where you get binge drinking.” At Montanya Distillers in Crested Butte, Colorado, lead distiller Gilles Hügi believes craft breweries helped pave the way for a culture shift. “We all kind of grew up with the craft brewery scene,” says Hügi, “and now with the craft distillery scene we’re starting to see that if we can keep our kids mellow and we can go grab a pint or a cocktail, hey, why not? There weren’t as many craft breweries around when our parents had kids. It was more of bars, and yeah, obviously you couldn’t take kids into bars. I think breweries have laid out a different landscape with outdoor seating and fire pits and games.” Walker agrees. “It can be a fun family atmosphere and not just some place you go to escape at night,” he says. “What’s the difference between that and going out to Applebee’s and everybody gets a drink there?” Armed with a newfound sense of optimism, we recently took Lincoln to his second distillery. On a whim, we strolled into 1350 Distill-
Families are welcome at StilL 630 in St. Louis.
ing, which opened near our home in Colorado Springs in late 2019. “We love kids,” proclaimed co-owner Abbie Weien upon our arrival. Later, a group of Girl Scouts set up a table by the door to sell cookies and another group of kids started a game of Twister in a corner near the bar. Co-owner Jake Weien pointed to his teenage kids and friends, who were playing cards and drinking root beer in a side room. While I enjoyed an Old Fashioned, 18-month-old Lincoln took occasional sips of a lavender-infused lemonade and toddled around the far side of the tasting room, while Carie and I traded turns chasing him. It all seemed too good to be true, until Carie revealed one minor flaw on our way home. “That was so awesome! … But they didn’t have a diaper changing table in the women’s room.” How spoiled we’ve become. ■ Jon Page is the senior editor of Craft Spirits magazine.
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PHOTOGRAPHS: COURTESY OF STILL 630
have ice cream, and they wait for the parents to come in and have a tasting or a cocktail,” says Osborn. There are also many distillery owners who do not welcome children, even in states where it is legal. In a recent poll in the American Craft Spirits Association’s Monthly Mash newsletter, 41% of respondents said that kids should not be allowed in distilleries. Although Colorado allows children in tasting rooms, Meagan Miller of Talnua Distillery in Arvada says the distillery’s space is not conducive to welcoming families. “It’s all down to the business owner’s decision,” says Miller. “For us, we have such a small tasting room and really try to be more of an adult-centered tasting room. In my mind it really doesn’t make sense to have kids where the only thing we serve is alcohol.”
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A Class Act New Deal Distillery teaches some of the tricks of the trade. BY JEFF CIOLETTI
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rab a pen (and a glass) because, for much of the year, class is in session at New Deal Distillery in Portland, Oregon. New Deal has always been about knowledge sharing, as it runs one class that teaches enthusiasts (and those new to the spirits industry) the fundamentals of distilling, and another that explores how to mix with the end products. The distillery presents its popular Handson Whiskey Making Classes throughout the year, giving participants an introduction to fermentation, distillation and barrel aging of small-batch whiskey. “[The class] came about because it’s kind of a fun way to help finance a couple of whiskey barrels,” says Tom Burkleaux, head distiller and owner. “People are just fascinated by it
and honestly I think giving classes makes me a better distiller because I have to explain why you do things. It’s fun, people want it and it makes money for us, so what’s not to love about it?” New Deal limits each five-hour Sunday class to 15 students, who learn all aspects of the production process. Attendees assist with creating a whiskey mash, evaluating distillation cuts and assessing samples at various stages of the aging process. Grain choice, enzyme and yeast usage, distillation technique and an understanding of how barrel aging affects the final whiskey product are among the skills participants gain from the session. “We do, sort of, the mash in, they get to work on that,” explains Burkleaux. “[They learn] the differences between making beer and making wash.”
That last point is usually pretty eye-opening for any homebrewers who take the class because many incorrectly assume that the processes are identical. A sizable portion of attendees are “super spirit geeks,” he says, though a fair number of industry people sign up, as well as a few individuals just looking for a diverting way to spend a Sunday. During the evaluation process, students begin by tasting white dogs made from various grains to illustrate the sorts of flavors and aromas derived from the grains themselves. Then they get into aging, where things get a bit more complicated—even philosophical. “[We say] ‘this is something that’s been on chips for two years, does this feel like aging, can you cheat time?” Burkleaux says. “We do intermediate barrel ages and then we finish
New Deal’s classic lineup
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with the good stuff.” There’s also a bit of a history lesson, as Burkleaux discusses the various whiskeymaking traditions and laws. Classes run 10 a.m. to 3 p.m. one Sunday per month during most months at a cost of $250 per person, which covers the class, morning coffee, mini cocktails, whiskey tastings and lunch. The April 5 and May 3 classes already have sold out, with the next available classes scheduled for July 19 and Aug. 16. For a lower price and smaller time commitment, consumers can take advantage of New Deal’s two-hour cocktail classes, which cover balance basics, as well as the proper techniques and equipment necessary to up their mixing game. Melaney Schmidt of beverage catering company Public Provisions instructs the class, which is limited to 18 participants and costs $50. The classes take place 6:30 to 8:30 p.m. every Thursday in April. If there’s ever been a Portland distillery that’s been able to offer the public such a holistic spirits education from grain to glass, it’s New Deal. The distillery was a pioneer of craft spirits production in the city when it opened in 2004—the first since Clear Creek opened in 1985. “We were definitely [at the beginning] of the new wave of the craft explosion of the 2000s because there was about a 20-year gap there after Clear Creek,” Burkleaux says. “I’ve seen a lot of distilleries go out of business.” Despite those struggles, Burkleaux has been considerably more optimistic of late, as the tide has turned within Portland toward craft spirits. “I actually feel like this is ‘year one’ of
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the business because when I first started, craft cocktails hadn’t hit,” Burkleaux reveals. “It finally hit in the mid-2000s and got the bartenders aware that there are locally made spirits. Then a fair number of consumers [caught on] and we only started to get vendors trying to sell to distillers in, maybe, 2011. Vendors actually know we exist, instead of us having to go to brewery and winery suppliers.” Additionally, out-of-state distributors are far more adept at handling small brands than they used to be. “Even four years ago, we’d go to a different state and it’d be hard to find a distributor who even knew what to do with a small-volume brand,” he recalls. “A lot of the pieces are finally in place. We were like a pioneer in the wilderness and we’ve seen the industry grow up around us.” New Deal’s portfolio runs the gamut of the major spirits categories, including a range of vodkas that include its original grain-to-grass, 80-proof offering, as well as the 90-proof Portland 90 Vodka and some flavored offerings. Its gins include Portland Dry Gin 33 and the savory Gin No. 1 and its liqueurs range from Cascadia American Bitter to Ginger and Coffee. And given the fruit spirits tradition in the Pacific Northwest, New Deal naturally produces a Pear Brandy. It releases its whiskeys when they’re ready and those have included straight bourbons, ryes and wheats. Its limited-release Distiller’s Workshop series has included not only whiskey, but rum, brandy and an Old Tom gin as well. “We’re experimental,” Burkleaux says. “I’ve even made a shochu for Japan. We’ve done a little bit of everything.” ■
Melaney Schmidt of Public Provisions
Click here to read more about distilleries in Portland.
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distilling destinations
IN HIGH SPIRITS Craft distillers in Colorado benefit from altitude, friendly legislation and more. BY JON PAGE
In a state with more than 100 craft distilleries, Colorado distillers can raise nearly as many reasons why the Centennial State is perfectly suited for producing craft spirits. They praise the purity of their water, originating from snow high in the Rocky Mountains. They tout educated consumers and a friendly regulatory system. They benefit from close access to grains and a climate and altitude conducive to barrel aging. And then there’s the cool factor. “Outside of the state, people think Colorado is cool,” says Rob Masters, the head distiller at The Family Jones, which has locations in Denver and Loveland. “Selling a bottle of Colorado whiskey in New York City is going to be a lot easier than selling a bottle [from some states]. There’s a good chance those people in New York City have been to Colorado to go skiing or hiking, or want to go because they’ve seen beautiful pictures or heard good stories.” Most craft distillers in Colorado agree that the early success of the craft brewing industry helped lead the way for craft distilleries to thrive. “We’re kind of riding in the wake of craft beer in the sense that they’ve paved the
way to consumer acceptance,” says Lee Wood of Wood’s High Mountain Distillery in Salida. “The consumer is like, ‘Oh yeah, of course. It’s craft beer, it’s craft spirits. That’s what we do here in Colorado.’ From that sense, it’s been a lot easier to get consumers on board.” Many distillers point to the state’s laws regarding alcohol production and distribution as a reason why distilleries flourish here. According to the Craft Spirits Data Project, Colorado had 102 active craft distilleries as of August, 2019. “We have really friendly, intelligent laws surrounding [alcohol] that allows the freedom to be able to run the business well,” says Jake Norris, a distillery consultant and the founding head distiller at Stranahan’s Colorado Whiskey and Laws Whiskey House. “With a distillery license here you can manufacture, you can sell a bottle out of your gift shop, you can sell a drink by the glass, you can self distribute to either a restaurant or a distributorship and then you can go through a distributor. It’s really friendly in that respect.” Karen Hoskin, the co-founder of Montanya Distillers in Crested Butte, says those laws
helped her company through trying times in its early days. “We’ve really been able to benefit from some of the laws that [craft brewers] helped advocate for over the years,” says Hoskin. “I would not have survived if I had not been able to have a full-scale bar and restaurant for as long as I’ve had. It was helping me survive some times that were incredibly lean so that I could put away more liquid in barrels and age it longer.”
Al Laws of Laws Whiskey House
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COLORADO DISTILLERIES
A brief glance at some notable distilleries in the Centennial State.
Rob Masters at The Family Jones Spirit House in Denver
“I think we make a different style of whiskey that you can’t replicate in a more humid climate.” —Rob Masters of The Family Jones
Al Laws of Laws Whiskey House in Denver believes that decades of exposure to craft brewing makes Coloradans hyper aware of what goes into their favorite beverages. “You’re competing against people that care a lot about the quality that goes into your bottle,” says Laws. “That creates a cool competitive environment
Marble Distilling
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In Vail, 10th Mountain Whiskey & Spirit Co. crafts spirits from locally sourced ingredients in the name of the mountain lifestyle that was influenced by the original 10th Mountain soldiers. … In Denver, Ironton Distillery & Crafthouse produces vodka, gin, rum, aquavit, liqueurs and a range of bitters. … Bear Creek Distillery produces handcrafted grain-to-bottle spirits one batch at a time in the heart of Denver. … Black Bear Distillery of Green Mountain Falls produces small batches of craft spirits in a 70-year-old log cabin. … In Centennial, Broken Arrow Spirits proudly produces the Branch & Barrel lineup of whiskey. … In Fort Collins, it’s CopperMuse Distillery’s calling to find the best inspiration, distill it and share it with the world. … In Buena Vista, Deerhammer Distilling Co. is steeped in whiskey tradition, but its methods are infused with curiosity and creativity. … In the historic Baker Neighborhood, Denver Distillery bills itself as the city’s original distillery-pub. … In Colorado Springs, Distillery 291 aims to replicate the taste, smell and folklore of the Wild West by making whiskey with the character of that unforgettable era. … In Fort Collins, Feisty Spirits are purveyors of unique grain-toglass whiskey and other fine spirits. … In Denver, Laws Whiskey House aims to be a place dedicated to whiskey, a temple of sorts, a place to come and explore your passion for whiskey. … Golden Moon Distillery of Golden was founded to produce premium hand-crafted herbal liquors and liqueurs using the best available herbs, spices and botanicals, and made with the same type of artisan production processes utilized by distillers making premium products in the mid-to-late 1800s. … In Denver, Leopold Bros. is an independently owned distillery founded by brothers Todd and Scott Leopold. … Marble Distilling of Carbondale is a family-run business that operates on three core tenets: spirits, sustainability and service. … Montanya Distillers of Crested Butte is a craft rum distillery and Certified B Corporation. … Steamboat Whiskey Co. of Steamboat Springs believes in following traditional distilling practices while embracing new trends and continuously experimenting with small batch recipes. … One of the state’s first distilleries, Peach Street Distillers of Palisade prides itself on doing things the hard way—the right way, from the grain to the glass. … Sand Creek Distillery Ltd. is a veteran-owned & operated distillery located in Hugo, Colorado. Call it a craft-, micro-, nano-, or even a pico-distillery—the goal is the same: to produce traditional, hand-crafted, pot-distilled, world-class spirits. … Storm King Distilling Co. in Montrose is the result of a family passion for finely crafted spirits and a dream to share this love with others. … At Talnua Distillery in Arvada, Gaelic tradition meets American pioneerism. The distillery’s name is born of the Irish-Gaelic words talamh, meaning land, and nua, meaning new. … At The Family Jones in Denver and Loveland, the distillery is wholeheartedly committed to re-invigorate the connections between eating and agriculture. … In Boulder, Vapor Distillery started in an unassuming garage, with just a simple 3-gallon pot still, where Ted Palmer began producing what is now Boulder Gin. … Whistling Hare Distillery is a small-batch distillery located in Westminster, specializing in premium spirits using local ingredients. … And in Salida, Wood’s High Mountain Distillery is inspired by the outdoors, creating whiskey, gin and vodka.
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for people to achieve.” To that point, there is a wide variety of spirits in the state. Beyond whiskey, vodka, rum and gin, distillers in Colorado make brandy, liqueurs, absinthe and shochu. “Pretty much every ilk of spirit on the planet is made in Colorado at this point,” says Stephen Gould of Golden Moon Distillery in Golden. And the diversity in spirits carries over to the atmosphere at each distillery, according to Meagan Miller, the co-founder of Talnua Distillery in Arvada. “No two distilleries in Colorado are alike,” says Miller, who also serves as president of the Colorado Distillers Guild. “We all have different cultures. … I think you really get a full gamut of choices between what kind of vibe you’re feeling or what kinds of spirits you’re wanting.” Innovation and experimentation are on display in every corner of the state. In Palisade, on the western slope, Peach Street Distillers takes the idea of grain-to-glass and fruit-toglass distilling to another level, growing pears inside the bottle of its pear brandy. In Colorado Springs, Distillery 291 founder Michael Myers finishes his high-proof whiskey with charred aspen staves. Myers is one of many distillers who raves about the benefits of barrel aging at altitude in a dry climate. At The Family Jones, Masters believes it allows Colorado whiskey makers to create something truly unique.
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“My angel’s share percentage on my first blend of rye whiskey was 22% in 2 and a half years,” says Masters. “You don’t get that in Kentucky in 8 years. … I think we make a different style of whiskey that you can’t replicate in a more humid climate. It’s not to say ours is better, or theirs is better. It’s different.” Lower boiling temperatures are another benefit of high elevation, according to Connie Baker of Marble Distilling in Carbondale, which includes a luxury inn. “We’re distilling here at 6,300 feet,” says Baker. “We’re distilling at much lower temperatures than lowerelevation distilleries. We believe it gives us a much better product because we never have any scorching. Even our vodka, we’re coming off the still at 164 degrees which is a very low number for distillation.” The climate is also ideal for ingredients, says Todd Leopold of Leopold Bros. in Denver, which recently expanded its on-site malt house. “We do have world-class grains here and a very dry environment, which is a big help for growing barley and growing rye and wheat,” says Leopold. “It’s a big advantage that we have over other states where moisture is a problem and therefore disease is a problem.” Combine the quality of the grains and the advantages of barrel aging, and P.T. Wood, a co-founder of Wood’s High Mountain Distillery and an ACSA Board Member, says
Wood’s High Mountain Distillery
the state’s craft spirits producers can create something special. The aging process in Colorado concentrates initial flavors that go
Peach Street Distillers is based in Palisade, but the distillery will have a presence in Boulder with the opening of Ska Street Brewstillery, a collaboration with sister company Ska Brewing.
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Backwards Distilling Co.
CRAFT DISTILLERIES GAIN GROUND IN WYOMING
Talnua Distillery
into the barrel, he says. “We’re putting the flavors in originally and letting the effect of the dry air, the altitude and the wild swings in temperature that we have really work their magic on those flavors.” As for the future of distilling in the state, Hoskin believes craft producers need to look beyond the basics. “We all are going to be having to look ahead to ramp up the customer experience to give them something more than just a distillery tour and more than just the cocktail in their hand,” she says. “How the spirits are made and how we connect with our farmers. How we think about sustainability. How we create diverse work environments. All of that is going to become more important in Colorado over the next 5 years.” ■
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When Amber Pollock and her family were doing research before opening Backwards Distilling Co. in Casper, Wyoming, bars in the state rarely had a dedicated cocktail menu. More than 5 years later, the landscape has changed. “Now I think it’s pretty common,” says Pollock, an ACSA Board Member. “In terms of getting those places focused on local products, there’s still a lot of ways to go there … but at least they put together a menu.” Wyoming is the least populous state in the U.S., but its craft distillery scene is growing. As of August 2019, the state has 12 operating craft distilleries, according to the Craft Spirits Data Project. Of course, the smaller population does present challenges. “For most small distilleries, the vast majority of sales happen in their own state, and Wyoming only has half a million people,” says Pollock. “That home state market that is so critical for small distillers is too small for us to be able to rely on that in the way that other places might rely on their home state market. A lot of distillers [in other states] are in home towns that have more people than the entire state of Wyoming.” That isn’t stopping distilleries from thriving in the Cowboy State. Backwards recently opened a tasting room in a renovated building in downtown Casper. And spirits from Jackson Hole Still Works are ubiquitous across the state. For smaller distilleries, there is a strong connection to the land. That’s the case for Cody-based Single Track Spirits. The distillery was founded in 2011 by Tom Pettinger, who has brought on his daughter, Natasha Pettinger, and her husband, Ben Westesen, as partners. “My dad started it with the idea that he wanted to make a super, high-quality product and keep it community centered,” says Natasha. “That’s something we want to keep in mind. We can source all of our grain locally and we’re excited to work with new businesses,” like nearby Wyoming High Desert Malt. In the southeastern corner of the state, Pine Bluffs Distilling creates its own malt as the Wyoming Malting Co. Co-founder Chad Brown was living in Las Vegas when he was lured to the state by his cousin, Gene Purdy. “When I left there wasn’t a lot of state pride in Nevada,” says Brown. “We moved out here and holy cow, everyone is proud to be from Wyoming.” Single Track Spirits
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raw materials
REPATRIATING RYE Experiments with heirloom rye could reinvent local agriculture. BY JEFF CIOLETTI
A research project involving a Pennsylvania distillery and a local university that started with only 5 grams of rye seeds about 5 years ago already has resulted in a (very) small batch of whiskey—which could be a harbinger for greater things to come in the realm of heirloom rye cultivation. Dad’s Hat Rye in Bristol, Pennsylvania, teamed up with Delaware Valley University in nearby Doylestown to develop a whiskey based on the heirloom Rosen rye variety, a popular grain at the turn of the 20th century that’s been all but lost to time. Dad’s Hat procured its initial 5-gram supply from the United States Department of Agriculture’s (USDA’s) National Seed Depository— a series of banks throughout the country that house seeds for plant species past and present. The distillery’s first batch came from the
seed bank in North Dakota in 2015. “The seed banks are maintaining heritage varieties, and old varieties of seeds are kept for research purposes,” explains John Urbanchuk, chair of the agribusiness department at Delaware Valley University. “And they only release very small amounts. Five grams is roughly what you’d get if you went to a hardware store and bought a pack of seeds.” “The idea is to introduce an heirloom variety of rye … and really to support the growth of agriculture in Pennsylvania,” Urbanchuk says. The University will have its fourth harvest this July. Urbanchuk concedes, however, that 2019 wasn’t a particularly good year for the grain, as the region experienced massive flooding last spring. “We had a lot of standing water and were able to harvest only
To invest in the future of American rye, farmers must leverage the past.
Harvesting Rosen rye
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about 38 pounds.” Still, after several seasons of planting, harvesting and replanting, Dad’s Hat finally had enough grain for its modest Rosen-based test batch last summer. And from that, the distillery was able to get a sense of the sort of flavor and aroma characteristics the heirloom variety brings to the finished product. “There are … roasted, grilled pineapple tropical fruit flavors coming from some of the longer-chain fatty acids that we see,” reveals Herman Mihalich, founder of Dad’s Hat Rye (Mountain Laurel Spirits LLC). “What our nose seems to tell us, we do see differences [from other rye varieties]. We’re still kind of sorting through that.” Dad’s Hat already typically makes rye with a point of difference from many of its peers. Where a lot of the distillers in the region will rely on corn as the secondary grain in the mash bill, Mihalich favors malt, as he says it’s truer to the historic style of the whiskey. Mihalich used his grandfather’s 5-gallon copper still—which he re-registered with the government to ensure that it’s legal—to produce the Rosen-based batch. For now, the spirit is only used for research purposes, as it will be a while before the distillery can produce a large batch to bottle and sell. “Because of our scale, our batch size is typically 2,000 pounds of grain,” he explains. “So we’re going to need another year of planting to get a big enough harvest to be able to do that.” Cultivating rye varieties like Rosen can have its own peculiar set of challenges, largely due to the fact that it grows higher than most of the non-heirloom grain that’s farmed domestically. “Many of the heirloom varieties can grow quite tall, which can be an issue at harvest, ” Mihalich notes. “[The industry] has got to find farmers who are willing to manage that situation.” The team at Delaware Valley University had to get a bit creative with its own harvesting methods. They’ve been cutting it with old-school sickle bars and having students hand-harvest it. The school also has a small thresher that it uses to separate the stalks from the grain.
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In other words, to invest in the future of American rye, farmers must leverage the past. “Market rye [in America] is relatively thin, used mostly for feedstocks, as opposed to Europe where it’s used extensively as a food grain,” says Urbanchuk. “It’s coming back [here] because of the beverage uses. So farmers are looking at how [the grain] was used in the 1900s.” Lucky for the university, it benefits from a significant store of late-19th-century to early-20th-century agricultural equipment. “Interestingly enough,” Urbanchuk adds, “we have some equipment that was specifically designed to work with tall grain.” Last year, Delaware Valley University was among the recipients to obtain a more sizable quantity of rye seeds—50 pounds to be exact—through the Delaware Valley Fields Foundation, an organization committed to helping the region’s agricultural industry. The Foundation and its SeedSpark initiative are the brainchildren of Laura Fields, who also launched the American Whiskey Convention. The Foundation also partnered with Penn State University and Stoll and Wolfe Distillery in Lititz, Pennsylvania. Ubanchuk says those seeds were planted last October on the half acre of land on the University’s main campus, one of two pieces of land his team works with. The other is a little over a quarter acre in North Wales, Pennsylvania. “We should have a really good harvest this year,” Urbanchak predicts, “barring some catastrophe or other.” Beyond 2020, Mihalich is optimistic for the long-term cultivation of heirloom rye and its role in the craft spirits industry. There are already about a dozen or so distilleries in the Keystone State that are making highquality rye whiskies—Wigle in Pittsburgh, for instance, is one of the leaders in that space. And that number will continue to grow, especially if local grain alternatives emerge. “One of the things that I’m excited about is that [the grain] could yield a very interesting rye whiskey that’s even closer to what some of the older-school Pennsylvania ryes were like,” he says. “But what’s really exciting for me about this program is that it’s shedding light on the fact that American farmers can be the suppliers [to meet] rye whiskey demand. Right now a lot of rye is grown overseas and I’d like to see American farmers participating more in the growth of the industry … [just like] we’d like to see Pennsylvania grow this whole breed of new distillers bringing really tasty stuff to the market.” ■
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Herman Mihalich of Dad’s Hat Rye
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Retail: On-Premise
TABLEMATES: CREATING A COCKTAIL DINNER Distilleries are teaming up with restaurants to create memorable dining experiences for the everyday meal and special nights out. Foresight and proper planning are key to success. BY JOHN HOLL
For spirit pairing dinners, Watershed KItchen & Bar varies between low-proof and full-proof offerings.
PHOTOGRAPHS: (OPPOSITE PAGE) GREG DAVIS; (THIS PAGE, BOTTOM) NIKI JAIMES
With the number of craft distilleries on the rise in the U.S., some spirits makers are looking for ways to reach new consumers. At the same time there are restaurants with robust cocktail programs that want to show off their chops. Together, the two segments are creating specialty dinners that showcase individual spirits, cocktails and a menu that perfectly complements. While spirit pairing dinners are not as popular as wine or beer pairing dinners—yet— there is still an increasing number of them happening across the country and everyone, it seems, is learning as the trend grows. Spirit or cocktail dinners are a three-way collaboration between the distillery, the chef and a mixologist. The first important thing is making sure a distillery has a diverse portfolio. A distillery that only makes whiskey, or a specific kind of spirit, may be difficult to pair with multiple courses. “Overall these dinners are more challenging, but I do think that if done well, [spiritbased] cocktails do just as well or even better than wine at pairing dinners,” says Jimmy Marino, the bar manager and co-owner of Black Sheep Brasserie in San Jose, California. “But it helps if a distillery has a gin, a vodka, an agave spirit, because it helps the chef broaden out into different food items and it helps us create cocktails to match.” Often these dinners are seasonally based, allowing the bar to use fresh herbs, produce and more to bring out flavors and highlight what comes out of the kitchen. Bradford Faris, the lead bartender at the Ritz-Carlton, San Francisco, says having a wide range of spirits to choose from helps everyone have a better experience. It can also mean using the spirits as part of the recipes. He recalled a recent dinner with St. George Spirits of Alameda, California.
“We made an effort to highlight the spirits as a component in the food as well,” he says. “Some of this is spelled out in the menu, others were verbally explained by our chef as the dishes were being served. I recall he used the Breaking & Entering [American] Whiskey in the marinade for the lamb loin, thereby showcasing the spirit in three forms: taste of spirit, cocktail and food. We received some positive feedback on that approach.” On the menu at Watershed Kitchen & Bar in Columbus, Ohio, executive chef Jack Moore says variety is key to creating a proper experience. This is not just for special pairing dinners, but everyday service. “There are some things that are heavy and meat-centric. And others that are lighter and refreshing. If someone chooses a highly acidic sweet cocktail, I would try not to pair it with our Brussels sprouts, which would be similar,” he says. “If the cocktail will wake the palate up, we have an opportunity to put a little something heavier on the plate. If the food is a little more acidic and sweeter like our Brussels sprouts, we can go with a little boozier cocktail. It can be hard for an average diner to see how much thought is put into the menu on a daily basis because they end up choosing their preferences.” When it comes to a specific dinner however, the kitchen and bar can work more closely on finding just the right balance. It is also important to remember alcohol strength during these dinners. “We vary between low proof and full proof,” says Josh Gandee, the beverage director at Watershed Kitchen & Bar. “We absolutely need to be mindful about this sort of thing. I’ve been to chef tasting dinners where you’re leaving in a coffin at the end.” Clearly, that’s not the goal. There’s also a service component to take
Carolyn Kanzaki and Jimmy Marino of Black Sheep Brasserie in San Jose
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Bradford Faris of the Ritz-Carlton, San Francisco
into account. Unlike wine or beer dinners where pours can happen quickly, cocktails— especially for a crowd—can take time. Prep work for garnishes can happen in advance and other ingredients can be measured out, but planning is necessary to make sure drinks are served in a timely manner and not watered down by melted ice. These dinners are a chance for distillers to get in front of a different crowd to talk about their passion. Restaurateurs interviewed for this article said that many of the folks who have signed up for cocktail diners are previous clients at wine and beer dinners and are curious about drinks and growing their alcohol education. “We’ve seen people who came in not knowing what to expect leave surprised and pleased,” says Marino. The key to that, says Moore, is encouraging diners to speak up in advance and to have servers ready to guide a conversation towards the right pairing. “Keep note of what you like or don’t like,” he says. “Speak up when you like it or don’t. It doesn’t hurt our feelings. We want people to enjoy their experience when they are in our building.” Gandee agrees, saying it’s important for both sides to “tear down the language barrier and help guide [the] experience. You won’t have as much fun as if you had been open and started the conversation. Be open to being turned on to new things.” For the everyday, the bar and the kitchen can work in tandem. They both have different food needs for dishes and cocktails, but sometimes an abundance of one ingredient can be a boon for the other. “We collaborate a lot on the creation of things,” says Gandee. “What is the best way to make this syrup or puree? Or I have all of these leftover pistachios. Can the kitchen use them? A lot of our collaboration comes from the sustainability side of things.” For the distiller, this means being aware of what is in season, or what might work with your product and offering up suggestions to favorite restaurants nearby. For the diner, it means a memorable night of good food and drink. ■
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Retail: Off-Premise
CHAIN GAME Understanding the Intricacies of Working with National Retailer Chains BY CLARE GOGGIN SIVITS
When it comes to getting a craft spirit on the shelf at a national retail chain account, a number of puzzle pieces must fall into place and every retailer requires a different arrangement. As Dave Smith, vice president and head distiller at St. George Spirits in Alameda, California, tells it, “One size doesn’t fit all.” That said, Smith identifies pieces each puzzle has in common. “[One of] the key elements to start off with is to recognize there’s a question of footprint,” he says. “Let’s say they’re a western national chain and they operate in six states and you’re in five of those states and that sixth state is a control state. This whole
thing can become really challenging depending on the laws in that control state.” Once the distribution has been solved, the next step is to understand the buying and purchasing processes of the chain. “Every retailer, they all buy for different reasons or at least they have different buying processes,” says Paul Hletko, founder of Few Spirits in Evanston, Illinois. “As a supplier, prior to getting on the shelves, you have to really understand what, how and why they’re buying and how they make those decisions.” Buying processes may differ, but Max Solano, beverage program specialist and whisky
“There’s as many marketing plans that can win as there are grains of sand on the beach.” —Paul Hletko of FEW Spirits
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& spirits educator with Southern Glazer’s Wine & Spirits of Nevada, suggests that any supplier needs to be ready to make a case for two big factors. “I find that craft distilleries, craft products, when we’re pitching them, two things really have to stand out: one is value and second is quality,” he says. A distributor partner who has an existing relationship with that chain can provide insight but it also helps to become familiar with the retailer. As an example, Hletko notes, “Look at BevMo versus Total Wine … Total Wine has way more linear square feet [on average] than BevMo does so BevMo is very restrictive on what they bring in.” Having these details can give a supplier a hint of what they’re in for when they walk into a pitch with the buyer. At that pitch, buyers want to be convinced that your product will sell. “You can come in showing data or a marketing plan illustrating how you’re going to [support] them or you can come in with aggressive pricing programs,” says Hletko. “If you come in prepared and talking their language … that can be a very compelling pitch.” “Data is certainly the language that these accounts have to operate in and will certainly recognize,” Smith agrees. If you can show sales and growth data, that will bolster the case for a bottle getting placement on the shelf. When it comes to pitching, Smith adds, “Unless we’re really forced into it, we don’t really do presentations without spirits.” The buyer needs to understand the product and the best way to do that is to put it in front of them. Meanwhile, Jake Holshue, head distiller of Old Trestle Distillery in Truckee, California, likes to leave something tangible with a buyer. “I always go into those meetings with some sort of brand book,” he explains, something that will take up space on their desk. It might be just the thing to keep the brand front of mind for a buyer. Finally, a well prepared marketing plan should be presented to the buyer. What’s in that marketing plan is based entirely on the
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distiller’s resources, but it needs to show an intention to support the product once it’s on the shelf. “There’s as many marketing plans that can win as there are grains of sand on the beach,” Hletko says. “If you don’t have that, you’re not speaking their language and it’s gonna be tougher and tougher to get those placements.” Components of the plan could include social media advertising, tasting events at multiple accounts, staff education, pricing programs or marketing assets. But, again, every retailer chain is different in their process. In the case of Total Wine, a pitch isn’t even required. Craft distillers are invited to submit products through an online portal. Buyers will review and make a determination within 30 days. If a product is deemed a mandatory item for the chain, it will get stocked in multiple locations. But a product that earns approved status requires more work on the local level. For suppliers who don’t have boots on the ground outside their home market, the distributor relationship will be key in scoring those placements. “Essentially you are … an optional listing at these units in these states,” says Smith. “Then you have to restart that whole process on a boots-to-the-ground level to get your distributors and your sales team to actually go into those accounts and personally sell.” Getting bottles on the shelf is not the last piece of this puzzle. It needs ongoing support and this is where the marketing plan comes into play. Eli Aguilera, senior vice president of merchandising at Total Wine & More says, “[Craft distillers] need to sustain a minimum sales velocity of an average of $400 per store per SKU.” While it’s not a huge sales hurdle, it does require involvement from the distiller. “The most successful craft producers frequently come to our stores to taste and engage with customers,” Aquilera adds. For Smith, in-store tastings and extensive staff training are crucial to supporting the product. He notes that if the staff at an account are excited about a product, they’ll share that with their customers, resulting in sales. Smith goes on to suggest, “You have to be able to follow some of that off-premise national chain work with on-premise work to ensure that people will discover your products. And then they can go into a national chain, a retail account, and ask for us or see it right there.” “If your product does not sell through, you are going to get dropped,” warns Hletko. “And
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if you get dropped, it is 10 times harder to get that [product back] in than it was to get in the first time.” Having exposure at a national chain retailer can be very beneficial to a brand. But it can also be a challenge—and very expensive—to keep up with the demand of both supplying and supporting those placements. A craft distiller of any size needs to be prepared to do both to make that happen. ■
Clare Goggin Sivits is a marketing manager by day and a beer, wine and spirits writer by night, scouring her hometown of Portland, Oregon, for the best beverages available.
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legal corner
COMMON LEGAL QUESTIONS FROM CRAFT DISTILLERS A lawyer addresses compliance issues that regularly face alcohol beverage attorneys. BY ART DECELLE
Editor’s Note: This article and the questions and answers below are only for general educational purposes and do not constitute legal advice. Effective legal assistance requires an attorney-client relationship to provide the attorney with sufficient knowledge of a distiller’s business and the details of a particular issue or situation. Operating any independent businesses is a tremendous challenge in the 21st century. You signed your life away to cover startup expenses. Dozens of tasks await you each day. Profitability may be a few years out and good help is hard to find! The gritty realities of owning a distillery are even more daunting. On top of the obligations facing every small business, you soon learn that you entered what is known in the legal profession as a “heavily regulated industry.” Layers of unique federal and state law govern your daily activities. Even after you overcome the challenges of getting your first batch out the door, new tax bills await. Starting out with a strong back office is simply a bridge too far for many small distillers. But getting the fundamentals in place at the outset and maintaining a legal compliance plan are essential tasks. If you do not think of compliance as a means of protecting your investment, consider real-life consequences of ignoring or putting off compliance. A successful distiller’s award-winning products attracted the attention of a substantial new investor. A huge opportunity existed to erase debt, upgrade equipment and provide loyal employees with a long-overdue raise. The investor’s attorney did an initial diligence review of the distiller’s permits, labels and formulas. Changes had been made to the distillery for perfectly valid operational
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purposes. The facility no longer resembled the diagrams on the approved federal permit and state license. The formula of the flagship brand was “tweaked,” but a new or superseding formula was not obtained. Months of work and approval processes would be required to correct these issues. Legitimate concern existed that the changes in the formula and need for new labels would undermine confidence of retailers and consumers. The investor got cold feet and moved on in search of other prospects. Opportunities for growth and success are routinely lost because an owner just never reached the end of the to-do list where the regulatory issues languished. Often, a distiller or any industry member considers a visit with a regulatory lawyer to be akin to a long-overdue trip to the dentist. You know you should just schedule the appointment, but embarrassment or dread over the consequences makes it easy to postpone. A veteran dentist can precisely estimate how long you postponed your visit in the first few seconds of an exam. Likewise, experienced alcohol beverage lawyers quickly figure out whether a client’s “conceptual question” is really about a project already well under way or a practice dating back months or years. The client simply was unaware of an obligation or just didn’t get to that “confusing government paperwork.” Below are five common questions on basic compliance issues that alcohol beverage attorneys might face over the course of several months. With each question is an alternative translation, which is meant to encourage procrastinators to correct a situation that may be nagging them, posing a risk to their business, and even costing them sales or money.
How do I determine how my distilled spirits product is classified for labeling purposes? (Alternative translation: My new assistant inadvertently mixed neutral grain spirits with a barrel of aged whiskey. Is it still whiskey?) Distilled spirits are subject to detailed standards of identity spelled out in federal labeling regulations published by the Alcohol and Tobacco Tax and Trade Bureau (TTB), specifically Title 27, Part 5, Subpart C of the Code of Federal Regulations (CFR), which is easily accessible at ecfr.gov. TTB regulations are helpful to the industry in the sense that they provide some consistency with respect to general product definitions. The entire spectrum of distilled spirits products is organized into 12 different classes and numerous subcategories known as types. Like any regulations governing a dynamic industry, the speed of product innovation and sheer number of products in the marketplace far outpace the government’s ability to update regulations to address every question or issue that arises. Hundreds of guidance documents and Q&A lists exist on TTB’s website to fill in the blanks on issues that are not directly addressed in the formal regulations. In addition, TTB personnel must make good faith judgments to apply the regulations and agency guidance to specific issues that arise in approving individual formulas and labels. Classification of basic distilled spirits products is fairly straightforward for experienced distillers. Beyond the basics, developing products to meet current consumer demand for variety, novel flavors and premixed cocktails raises far more challenging classification issues. If you believe that you have a unique product that will define your niche, but you are uncertain about the
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Opportunities for growth and success are routinely lost because an owner just never reached the end of the to-do list where the regulatory issues languished.
classification, seek experienced help before moving forward with full production and the attendant expenses. For the distiller whose erstwhile assistant accidentally mixed neutral grain spirits with aged whiskey, the resulting mixture is no longer whiskey. It will have to be redesignated, reprocessed or used to produce another class of distilled spirits. When do I need to get a new federal certificate of label approval or state brand registration? (Alternative translation: We added this wonderful image, created by a local artist, to our label. We had to move some of the text around, but it is all still there. Should we have resubmitted the label for approval?) The Federal Alcohol Administration Act, approved by Congress immediately after repeal of Prohibition, mandates pre-approval of all distilled spirits labels. While a new label approval is not required for every minor change in an approved label, certain changes require a distiller to apply for and obtain a new certificate of label approval (COLA). TTB’s website has helpful guidance on “allowable revisions” in distilled spirits labels. When in doubt, the safest course of action is to file a new COLA application for your brand. It may take a few weeks for approval, but an approved COLA provides a distiller with strong evidence of compliance with federal regulations. Many states also accept the federal approval as evidence of compliance with state law. For the distiller who moved text on a brand label to accommodate new artwork, a risk of
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an inadvertent violation exists. TTB requires certain “mandatory information” to appear on a brand label and to be legible. Changes in the location of mandatory information should be assessed to ensure compliance. For example, the new artwork or a new color scheme could obscure the mandatory information. If TTB reviews the label in an audit or routine review of products in the market, the distiller could be forced to make revisions, and in a worst-case scenario, TTB could notify the distiller to remove the product from the marketplace. Why do I need a distribution agreement? (Alternative Translation: I’ve been doing business with my local wholesaler, who told me that a handshake is good enough, but I can never get his general manager on the phone, and our requests for deliveries to our city’s best restaurant always seem to be lost or delayed.) This issue often arises as a distiller grows and recognizes that its business is stuck or dying in a given state or market. In the absence of a written agreement, a distiller lacks concrete evidence of assurances that a distributor may have made about brand support, sales goals, placement of point of sale materials and other critical aspects of a business relationship. Distillers may be surprised to find out that appointment and territory designation forms were filed to give a distributor rights to brands in an entire state, far beyond the metropolitan area where the distributor’s sales and delivery teams are regularly deployed. In states where distributors enjoy franchise protections, termi-
nation of distribution rights is extraordinarily difficult without a written agreement. A simple distribution contract can avoid many misunderstandings, require ongoing communication and mitigate the risk of entering a relationship that is virtually impossible to exit. Contract terms should specify the territory to be serviced, brands to be distributed, and a distiller’s ownership of trademarks and other intellectual property. Obligations to develop annual business plans, confer on strategy, and deploy resources are fundamental to a distiller’s ability to communicate with a distributor in the current environment where thousands of brands are competing for finite shelf space. Termination clauses should be included that are consistent with state law. For the distiller frustrated by the inability to communicate with a distributor, the options to change the situation are based on an analysis of state law and whatever evidence exists of the relationship between the parties. E-mails, presentations, other documents and recollections of the distiller and the distributor management are often difficult to reconcile. The lack of clarity leads to a tedious and discouraging process to resolve disputes, often involving lengthy negotiations and significant compensation to resolve. What do I have to do to keep my federal basic permit, operating permit, distilled spirits plant registration and my state license current? (Alternative Translation: I am aging whiskey in a barn about 2 miles from my distillery, and someone told me that I should have obtained authorization
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in advance to move and store product at another location.) Independent craft distilleries are by nature evolving businesses. TTB has different requirements for notification of changes in the information provided in your basic permit, operating permit and distilled spirits plant registration. For example, changes in operations and location must be approved in advance. Changes in shareholders, officers and directors must be filed within 30 days of the effective date. TTB’s Permits Online (PONL) system helps avoid the need for duplicate filings. The safest way to proceed with changes in your business is to figure out what legal disclosure and pre-approval obligations exist prior to making any changes, avoiding inadvertent violations. The same information should also be reported to the state where your distillery is located. An annual review of all licenses and permits in conjunction with your annual business audit or corporate tax filing. Failure to update permits and registrations is among the most frequent issues discovered in TTB audits. The distiller with an aging warehouse that is not identified in the federal permit and
plant registration risks serious penalties for noncompliance. Distillery operations occurring outside the bonded premises registered with TTB are viewed as operating without a permit. While civil penalties are normally imposed for violations of TTB regulations, federal law also authorizes TTB to impose criminal penalties. Unauthorized activities could trigger the threat of criminal prosecution. Am I eligible for the lower federal excise tax rates for distilled spirits enacted in 2017? (Alternative Translation: I did not take advantage of the lower rates in 2018. Can I still get a refund?) All domestic distillers are eligible for the reduced tax rates enacted in 2017. The $2.70 per proof gallon rate applies to the first 100,000 gallons removed and the $13.34 rate applies to production in excess of 100,000 gallons and up to 22,230,000 gallons. The reduced rates became effective on January 1, 2018. The law originally applied to removals during calendar years 2018 and 2019. In December 2019, the reduced rates were extended through calendar year 2020. To prevent larger companies from dividing
their production among multiple distillers to take advantage of the lower rates, Congress included two safeguards known as “controlled group rules” and “the single taxpayer rule.” Both rules require a careful accounting of spirits produced by all related distilleries. Distillers engaged in contract production and those who have any type of ownership interest or relationship with more than one distillery must get good tax advice to understand any limits on their eligibility for the reduced rates. For the distiller that did not take advantage of the reduced rates in 2018, the normal time frame for refund claims is three years after the due date of the tax return that included an overpayment. ■ Art DeCelle is senior counsel at Lehrman Beverage Law, PLLC, where he focuses on alcohol regulatory and distribution issues.
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packaging
GLASS BREAKTHROUGHS Craft spirits companies are moving beyond traditional designs for their glass bottles. BY ANDREW KAPLAN
When Jill Kuehler was launching Freeland Spirits in 2017, she wanted to have a bottle that truly stood out and got the new company noticed. “It was important to me to come out with something that was strong, that was going to last,” she says. “I knew the market’s pretty crowded and I really wanted something that was going to stand out from the beginning and that really represented everything that Freeland is about.” So Kuehler enlisted the help of Dando Projects, a design and branding studio based in Brooklyn, New York. The outcome was a raindrop-shaped glass bottle that not only is hard to miss on a store shelf or in a bar, but also helps tell the Freeland story through a variety of visual cues.
Craft distillers, like Kuehler, have long been aware of the important role packaging can play in getting their products noticed. Only this objective has taken on new importance today as the craft spirits market has grown increasingly competitive. The good news is that the glass industry is adjusting to the needs of the growing American craft spirits movement. New glass factories, for example, are opening up in North America for the first time in decades that tout state-of-the-art technology designed to give craft distilleries more bottle options. In August 2018, Saverglass opened its first North American factory in Mexico. And Arglass’s new factory in Valdosta, Georgia, will open by the end of this year. “Our plant is focused on producing a greater variety of
bottles so that each craft spirits producer will be able to have their own bottle rather than having to use a standard or stock bottle,” says José de Diego Arozamena, Arglass’s chairman and CEO. Whether choosing a stock bottle from a catalogue or a custom-designed one, the fact is that arriving at just the right bottle for a spirit can be one of the more painstaking projects a distiller does, and just as much an art as distilling itself. There are many choices to be made and each can have far-reaching impact on the result. A good way to start is by working with a designer who has experience with alcohol brands, and even better, craft spirits brands. Innovative Examples One such designer is the Portland, Oregon-
“Sometimes, I’ll walk into a bar and see [the bottle] turned sideways. It doesn’t happen very often though. Most people like to give her room. It glows on a back bar.” —Jill Kuehler of Freeland Spirits, on the distillery’s raindrop-shaped bottle
PHOTO CREDIT: JOHN METCALF
PHOTO CREDIT: RACHELLE MISHAN
Jill Kuehler and Molly Troupe of Freeland Spirits
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based Sandstrom Partners. The company has worked with a variety of craft spirits brands and found ways to bring out their stories through the bottle design or utilize it to emphasize what defines a brand. “The craft distillers have to understand that creating that brand right out of the gate is really, really important,” says Jack Peterson, the company’s president. Craft spirits brands Sandstrom has worked with show the possibilities of modern glass bottle design. Hue-Hue, for example, is a coldbrewed coffee rum made by Eastside Distilling in Portland. Sandstrom decided to focus its bottle design on where the coffee beans were procured from—Huehuetenango, Guatemala. “The bottle is meant to be reminiscent of what a burlap bag looks like,” Peterson says. Sandstrom repurposed an olive oil bottle for Hue-Hue and altered its color. “We wanted it to be that coffee flavor even as the bottle started getting depleted,” he says. Another Eastside Distilling brand Sandstrom worked on is Burnside Whiskey. For this project, the bottle’s visual cues harken to the Burnside neighborhood, a center of nightlife in Portland. So, the bottle has a large enough front panel for bold labels that suggest the music posters that hang all around the neighborhood. A third project, BERTOUX Brandy, is all about the elegance of a cocktail brandy. Sandstrom picked a stock bottle that is distinguished by its large punt. Once the bottle was selected, Peterson says everything else about the bottle design fell into place. “Don’t buy somebody else’s style,” Peterson says. “You can go to the different people that specialize in spirits and you start to see a common design aesthetic that comes out for every brand and it’s like, really? Where’s the differentiation? Where’s the individual spirit of that company, of those personalities, of the place coming through?” Kuehler wanted such things reflected in her bottle for Freeland. “If I couldn’t be standing in the liquor store or the bar telling the story of Freeland, how could the bottle do it for us?” she says. The bottle’s raindrop shape is symbolic of the Oregon climate, and Kuehler’s own agricultural background. It also pays homage to the popular Teardrop Lounge craft cocktail bar in Portland. And, she wanted the shape to be feminine enough to reflect that Freeland is women-owned. “We really wanted something feminine, but functional too,” she says. The front of each bottle also has the company’s logo, a woman holding up a stalk of
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grain, symbolic of her grandmother for whom Freeland is named. “Sometimes, I’ll walk into a bar and see [the bottle] turned sideways,” she says. “It doesn’t happen very often though. Most people like to give her room. It glows on a back bar.” Glass Options Lag Chris Tubertini, director of business development at packaging distributor Saxco, stresses that an attention-grabbing bottle design can help create a new craft spirits consumer who may not be familiar with the category and which brand to choose. “If a craft spirits producer were to put their product in a generic or a very basic looking bottle with a paper label on it and stick it on the shelf, your consumer would walk right past it,” he says. And yet David Cole, owner of David Cole Creative in Bellingham, Washington, who also specializes in designing spirits bottles, has observed a lag between what today’s American craft spirits companies are looking for and what is available on the market. “A lot of the companies that produce glass are European and they have a lot of very elegant, feminine European-looking offerings,” he says. “And it surprises me that the manufacturers haven’t caught up to the American whiskey boom, in my opinion. Nobody that’s out of Kentucky, nobody that’s stateside is going to want to use any of those.” He continues, “It’s hard to articulate, but there’s a feeling to American whiskey, right? It’s old-timey, it’s vintage and it’s a little bit masculine, most of the time. So, I think within the industries the design aesthetic and the demand is definitely toward those things, but I don’t think the glass industry has met that need necessarily.” Among the trends he has noticed are some experimentation with textured glass. “I feel like there’s been more interest in exploring some of that bumpy, frosted or even little bubbles in the glass,” he says. “Or geometric shapes or patterns embossed in the glass over the whole bottle. “Most people have shied away from that,” he continues, “thinking it looks too fancy or maybe kind of old-fashioned but not in a vintage way. And I think people are coming around to that a little more. And I think that’s cool.” Saverglass is one manufacturer that continues to expand its offerings for the craft spirits market. It recently began offering a concept it calls POP that uses swing tops for closures, offering consumers the ability to reseal the bottle. FORTY-SIX is the flagship model of the collection, characterized by a generous shoul-
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The glass industry is adjusting to the needs of the growing American craft spirits movement. der, taper, distinctive punt, soft rounded bulb and an extra tall finish. As consumers have become sensitive to environmental concerns, there has also been some growing interest in reducing the weight of the bottles. “We see ‘right-weighting’ as one of the most promising technology trends,” says Scott Jost, vice president of innovation and design, Studio One Eleven, the design division of Berlin Packaging. “Using tighter manufacturing process controls and computer-aided finite element analyses, we’re able to design, engineer and produce glass that strikes an optimal balance between aesthetics, product protection and weight.” One other technical breakthrough that may impact bottle design in the near future is 3D printing. “Some of our manufacturers have been able to do models much more quickly with 3D printing,” says David Schuemann, owner and creative principal, CF Napa Brand Design. “It allows us to kind of push the limits of what bottle shapes can be. The clients are able to hold it in their hands without waiting for either a unit sample or some other kind of plastic model. To be able to do that through a 3D printer is super rapid prototyping.” Schuemann says the rapid speed and lower-cost of 3D printing may open the industry up to more experimentation with designs. “It’s fairly inexpensive and you can look at more aggressive designs faster without investing a lot of money into a mold only to find out that maybe it doesn’t work as well as you’re hoping, or you don’t like it aesthetically,” he says. “I think that’s going to be kind of interesting territory.” And it might just mean we’ll be seeing a lot more innovative bottle shapes like Freeland Spirits’ raindrop bottle in the months and years to come. ■
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September 14 - 16, 2020
Holiday Inn Capitol Hill Washington, D.C. contact:
victoria.lange@distilledspirits.org carason@americancraftspirits.org
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Business Sense
SUCCESSION PLANNING Investing in people boosts morale and helps build a promising future for craft spirits businesses. BY GREG LEHMAN
It can often be hard to see the forest through the trees, so to speak, when in the day to day of building and growing a craft spirits business. There are countless operational tasks, and the production and sales of the spirits can become all consuming, particularly for a small team. Actively thinking about who will fill a void should a key role on the team be left open becomes an afterthought—something to worry about if and when it happens. Yet the loss of a business-critical team member is not only a real possibility, it could mean the difference between success or failure for a small craft spirits business. “Great distillers are always looking to the future—new products or how long something will be in a barrel,” says Jeff Wuslich, cofounder of Cardinal Spirits in Bloomington, Indiana. “We’ve also made huge investments in equipment, buildout and marketing. It should be a no-brainer that we also plan for when key employees or partners leave. That said, not many of us do. It is vital that we change that.” Succession planning, or the process of identifying and developing current employees to assume critical roles in the business, is really essential to any business, but particularly in a younger industry like the craft spirits business where we often experience talent scarcity in the workforce. As the number of craft spirits businesses in the U.S. steadily increases and existing distilleries grow and add employees, a resource drain is placed on an already small pool of candidates with experience in and knowledge of this industry. Nonetheless, embarking on the process of succession planning in a craft spirits business is an important step as it will help identify skills gaps and areas in which a team may need additional training or support to succeed. The act of investing in current employees boosts morale, thereby retaining more employees and subsequently, retaining more institutional knowledge as your craft spirits business grows. It also provides you with
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The loss of a business-critical team member is not only a real possibility, it could mean the difference between success or failure for a small craft spirits business. the opportunity to create replenishment for unique and specialized competencies critical for your success. On the most basic level, in order to begin succession planning, you need to identify the roles you can’t live without. Think about the people who are doing something specialized (whether it be at a leadership or contributor level). If losing them would potentially cripple your business for a period of time, this is a role you need to focus on in your succession planning strategy. Sometimes succession planning is as simple as cross training functional employees to cover for an interim period of time. Other times it is identifying key contributors and high achievers and then mentoring and training them in order to be ready to accept a promotion, fill a brand-new role or assume leadership in someone’s absence. When Watershed Distillery was founded in Columbus, Ohio, a formalized succession plan was far from our minds, but we did focus our hiring and mentorship efforts in these three ways. 1. Identify sharp people with big motors. When Watershed was founded in 2010, we were one of the first distilleries to open in Ohio after legislation changed. Clearly there wasn’t a high probability of finding someone with craft distilling experience to join our team, so we focused on hiring smart people who had as much passion and hustle for the brand as we did and trained them to do the role they were hired for.
2. Figure out what excites them and build trust through transparency. As we grew and retained employees, we learned about their strengths and what got them excited in relation to the business activities, and we began increasing the transparency to particular areas of the business based on their interests, goals and strengths. 3. Invest in people to create business returns. Providing support through mentorship, covering the costs of educational and development opportunities as well as providing employee benefits that increase the richness of their life at work and at home, shows the team that the business is interested in investing in them and rewarding them for their loyalty, productivity and knowledge share. The return on this investment has been retention which has had countless benefits on the business. Fast forward a decade, and though we are still focused on the previously mentioned values, we are working toward a more formalized succession plan to support our growth and maturity. In support of this goal, we are incredibly transparent with information at all levels of the organization. At the production level, that means documenting every process and having a place where all those processes live so that anyone can reference them at any time. We also ensure cross training in this department. For instance, all members of the production team are cross-trained on the bottling line so that should we lose a bottler on short notice,
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PHOTOGRAPHS: COURTESY OF WATERSHED DISTILLERY
everyone is able to jump in and assist in order for us to achieve our production goals and timelines. Some of our bottlers are also crosstrained on distilling processes in order to ensure we can keep the stills running regardless of personnel changes. Moving away from production and into the leadership level of our organization, we sit down with department heads regularly to go over all the metrics we evaluate across the organization. The managers of production, marketing, sales and the restaurant all meet to go over our scorecard, looking to see what we produced, what we sold, what we spent on marketing, what we spent on the sales side—a view of the business’ successes and opportunities across all departments. All the numbers are right there for everyone to see. This better prepares the leaders we have identified in our organization to step in for an interim period or a lateral transition if needed. Identifying and planning for your exit strategy should also be a critical part of succession planning for all leaders in craft spirits businesses. In that regard, John and Courtney McKee at Headframe Spirits in Butte, Montana, are great examples of leaders in the industry actively practicing succession planning with an exit strategy in mind. “Having a concrete goal in mind, and building a plan to get there, is a great way to build a business that meets our own definition of success,” says Courtney. “Headframe Spirits’s goal, for example, is to build a business we can sell to our employees. We want it to exist for the benefit of the community when we are no longer the owners. Knowing this informs how we make many of our business decisions. It was one of the first questions we were asked when we started telling folks we wanted to open a distillery. “At first, we were frustrated to be asked. Why would we be trying to figure out how to get out of a business we were working so hard to get into? Coming up with an answer quickly and using that to inform how we built our business plan, was strategically valuable, and we’d encourage everyone to develop their answer and use it as a road map.” My goal as the CEO here at Watershed is to identify a number-two contributor under each of my five managers who could step in if the director of that department had to leave tomorrow. Focusing my time and efforts on mentorship assures there will be someone I trust to step in should I no longer be able to run the company for whatever reason. We’ve also enlisted an active team of advisory board members with a complete view and under-
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Watershed Distillery is celebrating its 10th annniversary.
standing of our organization and a complex knowledge of business that we are able to leverage in the event temporary leadership would need to be assumed. As Watershed has grown as a company and retained critical employees for seven or more years now, we’ve been able to identify a more formalized succession plan as part of our growth process, but there isn’t one set formula for every distillery. Each craft spirits business needs to determine what works for their team and know that whatever level of succession planning you are doing, as long as you are prioritizing it as a business activity, is
a good use of time and a wise investment in the future of your business. ■
Greg Lehman is the founder and CEO of Watershed Distillery, an independent distillery based in Columbus, Ohio, entering its 11th year in business.
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Sales & Marketing
The retail shop at Twelve 33 Distillery
OFF THE RACK Selling distillery merchandise can boost profits and generate more brand awareness. BY JON PAGE
Long before husband-and-wife team Kevin and Rebecca Osborn founded Twelve 33 Distillery in Little River, South Carolina, they knew a retail shop would be a key part of their business. They were naturally suited for the task, as Kevin had previously served as vice president of West Marine, a boating supply and fishing retail chain, and Rebecca had experience as a merchandising manager for Eddie Bauer. But their desire to launch a retail shop in tandem with the opening of their distillery was more than a passion project—it made economic sense. “There’s obvious benefits,” says Kevin. “It builds brand equity. You can get your name out there. It’s additional add-on sales beyond selling your spirits.” Indeed, with a smart approach, craft
distilleries can reap many benefits from selling merchandise at their tasting rooms. The sales of glassware, hats, t-shirts, hoodies or other products can boost profits for fledgling brands; apparel can turn into free advertising that creates buzz around town or on social media; and through it all, customers may become more loyal to a particular brand. “The trick is that you’ve got to get $100 a head from everybody who walks through the doors of your distillery,” says Bryan Weisberg of Thousand Oaks Barrel Co. and distillerystore.com. “That $100 is a combination of liquor sales and merchandise. Just about every sale you have, there should be some add-on component of merchandise, and in some cases the merchandise is going to be
“You have to have a clear message when people walk in, and it needs to be easily shoppable and they have to be able to understand your assortment.” —Kevin Osborn of Twelve 33 Distillery
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PHOTOGRAPHS: (OPPOSITE) COURTESY OF TWELVE 33 DISTILLERY; (THIS PAGE) JON PAGE
more than the liquor.” At Twelve 33 Distillery, visitors must walk through the 1,000-square-foot retail shop on their way in and out of the tasting room. That design was intentional. “It’s why Costco puts the refrigerated section and the commodities at the back of the store to make you walk through everything else to get there so that you load up. It’s the same approach,” says Kevin. “You want people to walk through it so that they stop and go, ‘Oh, look at that,’ and hopefully stop to pick up something on the way or on the way out.” Martin Duffy, the U.S. representative for Glencairn Crystal, agrees that visibility of merchandise is imperative. “You can buy all the merchandise in the world but if nobody sees it or knows it’s available, what good is it? You’ve got to promote it,” says Duffy. While the company may be best known for its iconic Glencairn Glass, it actually started 40 years ago as a decanter company. Today Glencairn continues to make decanters, including one that looks like a pot still, as well as a variety of glassware and premium presentation boxes. Duffy says the company is also seeing an upswing in sales of Glencairn-branded cufflinks, lapel pins, key chains, earrings and charm bracelets. At Twelve 33, a variety of products are available in the shop, including apparel, glassware, barware and more. But rather than simply stocking the store with products that appealed to the Osborns, they asked a local supplier about their bestsellers. Since Twelve 33 is located near Myrtle Beach, the distillery
sells many items that appeal to beachgoers and golfers. “I’ve walked into so many [distilleries] where it’s unshoppable,” says Kevin. “They never really thought it out and just started buying all this crap, and it has no rhyme or reason to the way the space is laid out, and it’s just all jumbled and thrown together. That doesn’t work. You have to have a clear message when people walk in, and it needs to be easily shoppable and they have to be able to understand your assortment.” When it comes to initial orders, Janie Sciacca, the premium sales director for Distillery Products, recommends starting small. “If people call us up and they need assistance or they don’t know what to do, we really take them under our wing and say, ‘Hey, you know what, don’t buy 500. Buy 20,” says Sciacca. “See how it goes. Spread your money around. We want them to stay in business. We want them to come back to us.” For distilleries where space is limited or owners would rather not set up a shop, there are creative options. At Distillery 291 in Colorado Springs, Colorado, founder Michael Myers initially eschewed displaying actual merchandise in the distillery’s small tasting room. The memories of seeing carelessly presented apparel at breweries played a large role in his thinking. “They would have t-shirts hanging on a rack or hats just out, and they’d be dusty and dirty looking and just not great at representing the merch,” says Myers. “I really didn’t want that hanging in my tasting room.” Initially, the distillery’s merchandise sat on
a shelf behind the bar. But several years ago, Myers thought of a different approach. “Back in the day when Banana Republic was more about Banana Republic-type clothes, meaning safari-type clothes, their catalogues were all illustrated,” says Myers. “I thought that was a great way to represent merch in a small space.” Myers says his CFO rolled his eyes when he first mentioned the idea, but the weekend that a local artist painted depictions of the merchandise on the tasting room wall, Distillery 291 sold out of its merchandise. “Merch wasn’t really moving that much, and then all of a sudden we painted it on the wall and it just moved.” Myers says that Distillery 291 includes its merchandise as part of its marketing budget, since it often gives away hats and t-shirts at festivals. As Weisberg points out, those can help serve as reminders of a brand’s products. “The merchandise really plays a very big part in getting a brand off the ground,” says Weisberg. “If everybody who buys a bottle has a t-shirt, or has a keychain, or has a barrel head or some wall art that they can [take home], all of a sudden you keep in front of those people all the time. The chances of them buying that second or third bottle are huge.” And as Sciacca is quick to remind, the more people who see that branding, the better. “I truly believe in the 100-person rule,” she says. “[After] someone walks out of the door with your product, with your logo on it … 100 people are going to see it, they’re going to say, ‘Where is that company?’ “It’s kind of like an avalanche. You want to create an avalanche of your market.” ■
Renderings of merchandise on the wall at Distillery 291 C R AF TSPIR ITSMAG.COM
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distribution & Logistics
FINDING A PATH TO DISTRIBUTION There are a lot of hurdles to cross before beginning a distributor relationship and it’s never been more difficult. Experts from the three-tiered system offer advice. BY JOHN HOLL
One of the biggest challenges facing craft distilleries is access to the marketplace through the three-tiered system. Because of the growing number of companies in existence and the constraints that many wholesalers have with the number of brands they can represent, it has never been harder for a craft spirit maker to get proper distribution. While it is true that some craft spirit makers will choose to only sell from their distilleries or self-distribute where applicable, the goal for many is to get out into a wide network to share their bottles with as many customers as possible. “Over the past 10 years distribution has become challenging for small to midsize brands. Large distributors swallowed up smaller ones at a time when the number of craft brands was rapidly increasing,” says Cheryl Durzy, founder and CEO of LibDib, a distribution company that offers a web-based platform to sell wholesale alcohol. “Distributors couldn’t bring on every brand that came out. It simply didn’t, and still doesn’t, make business sense for them. They can’t deliver one case at a time—they will lose money if they do. So, distributors were able to become more choosy and brands had to work really, really hard to grow.” Consolidation of the larger wholesalers has led to a number of smaller operations opening, often serving niche, or craft clients. In fact,
according to the Wine & Spirits Wholesalers of America, in 2016 there were 11,188 active wholesale licenses. This number increased to 11,843 in 2020. Still, it is not as easy to just call a wholesaler and get them to represent your brand. It is also important to make sure that, as a craft spirit maker, you are entering into a long-term relationship that you feel comfortable with. So, how do you find the right partnership? Experts in the field say it starts at home and determining if your product is ready for shelves. For more than 40 years, Rudy Ruiz, the executive vice president of emerging spirits brands at Southern Glazer’s Wine and Spirits, has been working with distilleries to get their product ready for market. “The one thing that I would say, whatever your idea is, take into account who you are competing against,” he says. “Don’t think you’re by yourself. Look at the space. See who you are competing against and who are the brands that are there and what makes them successful. If you do enter the space ask yourself, ‘How can I make mine different than the one that’s successful?’ Many times the liquid itself doesn’t cut it.” Ruiz says that any distillery that wants to enter the space needs to have interesting packaging, a story and a face of the brand. “That helps tremendously,” he says.
Ruiz says they are careful to choose distilleries that will have the greatest chance of success, since that’s what will ultimately drive sales, but that there is no accounting for “consumer pull.” “If there are some issues or if the pull is not there, we try to work on what the problem is. Maybe the product is not well explained, or the pricing is out of sync. So we go through this process for three, four or five months to find the sweet spot between pitch and price,” he says. There are metrics that Ruiz uses to see if a product is going to be successful, and unsurprisingly it comes down to sales. He uses the example of getting a threecase stack into a retail outlet—18 bottles—and if it’s able to sell out in 30 days, “We got something.” If it takes 45 days, “It’s okay but not as exciting.” And if it goes past 45 days, “There’s an issue.” Jamie Siefken, the executive vice president at Cedar Ridge Winery & Distillery in Swisher, Iowa, said that by focusing early on its home market, the distillery was able to sustain steady growth and build a relationship with its distributors. “It comes down to finding the right person at the right place,” he says. Before that it’s important to rack up as many positive reviews and awards as possible to give a wholesale partner as many reasons as
KO Distilling’s Bill Karlson
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possible to want to sign with your company. It can also help to find ways to appeal to an audience outside of the traditional spirit audience. He points to No. 9 Iowa Whiskey, a blend of 3-to-4-year-old straight rye and straight bourbon the distillery made in partnership with the band Slipknot. “It always comes down to giving people a reason to pull your bottle off the shelf,” he says. Drew Levinson, the vice president for business development in emerging craft brands of the Trident division at Breakthru Beverage Group says he sees a lot of companies that want to grow quickly and get into as many states as possible but that often he has to put on his “psychology hat” and “have hard conversations on expectations.” “The cost for expansion versus ROI is exponential,” Levinson says. Oftentimes it makes financial sense for a distillery to stay in a home market and get as much penetration as possible there before trying to branch out beyond state lines or time zones. After signing with a distributor, the work doesn’t end. A distillery needs to make sure that it is providing support through a workforce to sell and maintain retail relationships. “We have expectations,” says Levinson. “Who is going to be the face of your brand? We can’t be the face. We can sell it, we can love it, but you have to put in the manpower and resources.” Getting involved with a distributor, no matter the size, needs to be a “win-win relationship,” says Bill Karlson, the co-founder, CEO, marketing and sales director of KO Distilling in Manassas, Virginia. In-house sales reps are a must and they need to work with the distributor sales reps hand in hand “because that’s the only way to success.” It’s also not enough to just sign and sit back. “Have your local distributors come and visit for tastings and tours and to meet people. It gets them in the mindset that you are local, just like them and that you can work together.” ■
Southern Glazer’s Wine & Spirits
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Cedar Ridge Winery & Distillery
Consolidation of the larger wholesalers has led to a number of smaller operations opening, often serving niche, or craft clients. APR I L 20 20
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Technically Speaking
A BLUEPRINT FOR GROWTH As demand for craft spirits continues to rise, distillers are learning valuable lessons about building new facilities. BY ANDREW KAPLAN
In its 7-year history, Lee Spirits Co. has expanded its distillery three times. It began in a 300-square-foot basement in 2013 in Colorado Springs, then upgraded it to a 400-square-foot space nearby. Now, for the third expansion, in Monument, Colorado, the distillery is ready to jump to a much larger facility that totals 5,000 square feet, 1,000 of that for a tasting room, 1,500 of that for production, and about 2,500 dedicated to storage. Buying a bigger still or adding a second one to keep up with growing demand is on co-founder Nick Lee’s wish list once the new distillery is fully completed this summer. But there’s also something a bit less flashy Lee Spirits was quick to add to its new, larger space: a forklift. “We were able to buy a forklift which changed the game significantly,” Lee says, “which is kind of weird because you don’t think of stuff like that when you’re thinking about distilling.”
Cole Chapman and Nick Lee of Lee Spirits Co.
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As in the case of Lee, the industry’s rapid growth has made quick experts of many craft distillers when it comes to getting the most from new facilities, revealing to them, often by trial and error and painstaking firsthand experience, the important priorities. Many of these things are unique to each operation, but there are also quite a few that are commonplace these days no matter the size or location of the project. The Experience Matters One of the first things those who have built new craft distilleries recommend may seem a bit obvious to many, but still merits including right at the top: making sure the new distillery has ample room for guests. After all, craft distilleries are no longer just about production these days. As more communities have loosened their liquor laws, things like tasting rooms have surged in popularity.
“Ten years ago, when we first started designing distilleries, they were focused on production,” says Scott Moore, president and principal architect for Dalkita. “And now people are realizing, especially with smaller craft distilleries, that, like breweries, customers are very interested in the craft and the making of the product and the authenticity. They want to be able to see the distillery and experience it. “A lot of our clients want people to have a tasting inside a barrel storage room, for instance, or they want to be able to have them sit at the bar and be able to watch people in production operating the still and be able to look at the beautiful equipment and so forth.” Along these lines, distilleries are beginning to also add restaurants and gift shops where guests can pick up a t-shirt or shot glass. “If you can have them spend more time there and have a meal in between your tour of the distillery and your tasting, then it’s another revenue stream for the distillery,” Moore points out. In fact, Jake Holshue, head distiller at Old Trestle Distillery in Truckee, California, says today it makes sense to actually plan your production space with outside guests in mind. This could mean a dedicated pathway for tours around the equipment, for instance. “If I had a bazillion dollars and all the space in the world, what I’d do is have a catwalk that goes around the distillery,” Holshue says. “That literally removes them from the production floor, and still allows them to see what’s going on there. A production floor is inherently not a safe area for the general John Q. Public to be walking through.” Keeping Things Flowing Many of the things distillers have learned are important in their new facilities are decidedly unsexy. Take floor drains, for example, and lots of them.
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“I think selecting a location where your distillery business is compatible with the other businesses that are around is probably one of the most important things and one of the things where people make the biggest mistake.” —Scott Moore of Dalkita
Having worked on retrofits of distilleries converted from various uses such as a city incinerator and a train station, Holshue says one of the things most buildings are not set up for is to handle the enormous amounts of water spirits production requires. Having enough floor drains, and a gradient on the floor to handle that expected flow of water, is paramount when designing a new distillery. “Whatever amount of floor drains you have,” Holshue says, “double that, and then probably double it again. And it’s probably still not enough.” When Eric Strom and Austin Adamson were designing their recently-opened facil-
Baltimore Spirits Co. installed a geothermal energy system.
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Scott Moore of Dalkita
ity in Lakewood, Colorado, for Ballmer Peak Distillery, water usage influenced where they placed their production equipment. “We wanted to minimize the length of our hosing, so we positioned our equipment strategically and created the drains in accordance to how we wanted our workflow to go,” Adamson says. “We have this idea of a more wet side and a less wet side—where the bigger messes are likely to happen.” Adamson says they carefully studied the original drawings of the building which informed their decision-making. “The slope on the floor had us smartly position our trench drain,” he says. “Instead of having the
water have to fight up a hill, we put it at the downslope of things.” Sustainable Options Speaking of water, many distillers today are trying to incorporate sustainable systems into their facilities. Strom and Adamson, having grown up in Phoenix, were sensitive to water conservation. Their new facility includes a water recirculation system. “We’re not just taking city water and cooling our stills with that,” says Strom. “We’re using the same water, over and over and over.” As an added bonus, the recirculation system helps to also heat the space. “So, in the winter, when it’s snowing out, we’re able to open our four garage doors and it’s like we’re essentially outside,” Strom says. Baltimore, Maryland might not be the first place that comes to mind when it comes to geothermal energy, but that didn’t stop Max Lents and his team at Baltimore Spirits Co. from installing such a system. It draws on six wells in the parking lot that tap into a vast supply of year-round 58-degree water 300 feet under the city. “Baltimore city has a non-potable water table, which means the FDA won’t let you use that water to cool food production equipment, and that’s what our stills are technically. So we use the well water to cool (treated) potable water and we use the potable water to do our cooling,” Lents says. “The advantage is we’re not sending that potable water down the drain after it goes through the condenser. It also circulates back into a tank and the tank gets kept cold by heat exchanging with the well water.”
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Scenes of construction for a new facility for Routt Distillery in Steamboat Springs, Colorado
He continues, “While the geothermal system was not cheap to install, it wasn’t significantly more expensive than the relative sized glycol chiller would have been. That glycol chiller, however, would have demanded more electricity than our entire space, including the geothermal system, needs all together. It helps our distillery use less than 50% of the energy it would have needed otherwise.” Moore, of Dalkita, says sustainable uses for water like these are becoming increasingly common in craft distillery planning. “Running the water through the still and putting it down the drain, we almost never see that today because water is expensive and the public isn’t really anxious to hear people say, ‘Yeah, we just waste all this water and throw it down the drain,’” he says. Patience is a virtue. Moore says it takes on average two-and-ahalf to three years from date of conception to opening a new craft distillery. Six to 12 months of that is formulating the plan for the distillery and raising funding with partners, another six to 12 months designing the new building, and then another final six to 12 months doing the actual construction. Working with local government to get the necessary permits is one of the processes that can be particularly time-consuming. Sometimes that process can go smoothly, but some distillers, especially in smaller towns, say they often encounter officials not familiar with distilling. Given this, they recommend patience and persistence. Sometimes, just finding the right person who is more knowledgeable can make things go faster. “Building distilleries is still new enough for most jurisdictions that you get these curve balls as the inspectors and the building departments really start to learn and understand the needs and the requirements of the distilleries,” says Nels Wroe, co-founder of Dry Land Distillers in Longmont, Colorado. His company is expanding to a space four times the size of the current one. Wroe says his experience was helped by a building department that had previous experience with breweries. “They’ve only done a couple of distilleries, so we found that there was a need to guide our building departments with what we needed and we had to be prepared to explain why we were doing things the way we were doing as it related to code,” he says. “If you do encounter a requirement that seems to be quite burdensome as you’re building out a craft plant, it helps to under-
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stand where they’re coming from,” he adds about working with local officials. “Because often, once you understand the end objective, there are different ways to tackle that problem and get to the same solution.” Brad Christensen is encountering such a challenge as he finishes construction of a new facility for his Routt Distillery in Steamboat
Nels Wroe of Dry Land Distillers
Springs, situated in northwest Colorado snow country. “For the local building departments and the local fire departments, it’s a lot of stuff that they have never seen before and they don’t really know how to deal with it,” he says. “How the code is interpreted changes a little bit from person to person that works within these departments.” As a result, Christensen has learned to be patient as he has diligently worked, with help from Dalkita, getting the necessary permits for his new distillery from overlapping jurisdictions of county and city governments. Location, Location, Location With 30 years in the design and building industry, Moore, of Dalkita, says one thing that is wise is to choose a good location for your facility to begin with. He stresses making sure it fits in with what is going on around it. “I think probably the number one biggest mistake that people make is not giving enough consideration to their location and the sort of synergy they can get with businesses around them,” he says. “I think selecting a location where your distillery business is compatible with the other businesses that are
Ballmer Peak Distillery
around is probably one of the most important things and one of the things where people make the biggest mistake.” He’s also learned to pay attention to the guidance coming from the unique qualities of each project when deciding on the final design of the distillery. That could be the distiller’s goal statement, building codes, financial costs, site conditions or a host of other details. “We say, ‘Let the building become what it wants to be and avoid preconceived notions,’” Moore says. “I find that people who have a preconceived notion about something and are unable to let go of it, struggle the most. So, an open mind and flexibility is probably the most important thing people can have.” ■
rooks Grain B 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 | Victoria Doughty | Email: victoria.doughty@brooksgrain.com | Phone: (812) 280-6668
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closing time
FROM VALUE TO ULTRA
SHARE OF SPIRITS CATEGORY*
Spirits Dollar Growth by Price Tier
By Price Segment
+9.1%
+12.1%
Super-Premium
Ultra Premium
+6.6% Premium
Value
-1%
Mid-Price +0.7%
Ultra-Premium 8%
Value 6%
Super-Premium 22%
Mid-Price 31%
Premium 31%
While mid-price and premium segments combined make up nearly two-thirds of all spirits dollars in the U.S., super-premium and ultra-premium are taking a larger and larger piece of the pie. (Note: Due to rounding, numbers do not add up to 100%.)
Premiumization is alive and well and that bodes well for craft, as craft spirits brands tend to be on the above-premium tiers.
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Source: Nielsen *Off-premise channels, 52-week period ended 12.28.19
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THE CONVENTION YOU WON’T WANT TO MISS
SAVE THE DATE FEBRUARY 28 - MARCH 2, 2021 LOUISVILLE, KENTUCKY
8TH ANNUAL DISTILLERS’ CONVENTION & VENDOR TRADE SHOW KENTUCKY INTERNATIONAL CONVENTION CENTER Host Hotel: The Galt House Hotel
AMERICANCRAFTSPIRITS.ORG
WALK AWAY ENERGIZED AND INSPIRED AS WE CELEBRATE THE CRAFT SPIRITS COMMUNITY