Artisan Spirit: Fall 2014

FALL 2014

UNKNOTTING

TIED-HOUSE LAW

10

THINGS YOU MAY BE DOING TO HURT YOURSELF

BUILDING barrel BRIDGES:

BEER & BOOZE

INNOVATION vs.GIMMICK

millennials A NEW GENERATION of CONSUMER

Brand Design for the Spirits, Wine and Beer Industries.

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

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30

86

TABLE of CONTENTS A LETTER FROM THE EDITOR

8

THE NEXT STEP

59

Gift shops for fun and profit

THE MODERN WHISKEY THIEF

10

American Craft Spirits Association

SYNTAX SPIRITS

63

of Greeley, Colorado

FOUR YEARS, AND EIGHT SURPRISES LATER 12 Jan’s Corner

STANDARDS OF IDENTITY

66

Rules of the road

TIED-HOUSE BASICS FOR DISTILLERS 14 A general overview of tied-house law

COPPERWORKS DISTILLING COMPANY

68

of Seattle, Washington

DON’T GET COCKY

19

A word from John McKee

TALES OF THE COCKTAIL

23

A premier cocktail event

CHEMISTRY OF CUTS

27

Johnny’s Art & Science of Distillation Column

RESTING SPIRITS

30

An adventure in aging outside the barrel

MARKETING TO THE MILLENNIAL MIND 33 Plugging into their mindset and desires

EXTENDING YOUR RUNWAY

36

Financing for spirits producers

10 THINGS YOU MIGHT BE DOING TO HURT YOURSELF 72 (...and how to avoid them)

CRAFT DISTILLERY TAXES & COMPLIANCE

75

Part 1

MARKETING YOUR PRODUCT

78

Since making it’s only half the fun

EVERY PRODUCT CAN BENEFIT FROM A PREMIUM APPEARANCE

81

It is not just what’s on the inside that counts

EVERYONE IS ARGUING ABOUT WHAT IS CRAFT…BUT WHY?

84

Let’s take a step back

KINGS COUNTY DISTILLING

38

of New York, New York

SORGHUM WHISKEY

86

An introduction

IT ALL STARTS IN THE FIELD

41

Demands for quality grain

BEFORE YOUR FIRST DOLLAR

89

Hard earned lessons from those who’ve come before

HEADFRAME SPIRITS

46

of Butte, Montana

PACKAGING PERSONALITY

92

Make your bottle talk

MASH BROTHERS 51 How barrel aging beer can build bridges

ADVERTISER INDEX

94

INNOVATION VS. GIMMICK 56 Revolution and publicity stunts in the industry

from the COVER

Copperworks Distilling Company in Seattle, Washington. Image by Amanda Joy Christensen. See their story on page 68.

Issue 8 /// Fall 2014 Publisher & Editor

Brian Christensen

Creative Director Photographers

IT’S ALL ABOUT

FIRST IMPRESSIONS

PACKAGING

MATTERS

Custom glass molding Glass & accessories sourcing Production management Quality control www.newwestgateglass.com

Amanda Joy Christensen Amanda Joy Christensen Jennifer Mitchell Photography Rich Whittgreve

Contributors

Colin Blake Dave Bourne Maggie Campbell Chad Chriestenson Amber G. Christensen-Smith Johnny Jeffery Jason Lippa Chris Lozier Neal MacDonald Jim McCoy John McKee Jan Morris Steven Seim Kellie Shevlin Marc E. Sorini Matt Tilden Brandi Walerius Rick Wehner

Sales & Marketing

Ashley Monroe

ARTISAN SPIRIT is the endorsed publication of the American Craft Spirits Association.

ARTISAN SPIRIT is a quarterly publication by Artisan Spirit Media. www.artisanspiritmag.com facebook.com/ArtisanSpiritMagazine General Inquiries (509) 944-5919

Contact us T 212.520.1691 sales@newwestgateglass.com

twitter.com/ArtisanSpiritM Advertising (509) 991-8112

PO Box 31494, Spokane, WA 99223 All contents © 2014. No portion of this magazine may be reproduced without the written consent of the publisher. Neither Artisan Spirit Media nor ARTISAN SPIRIT magazine assume responsibility for errors in content, photos or advertisements.

While ARTISAN SPIRIT makes every effort to ensure accuracy in our content, the information is deemed reliable but not guaranteed. We urge our readers to consult with professional service providers to meet their unique needs.

At ARTISAN SPIRIT, we take the opportunity to enjoy many different craft spirits and adult beverages. However, it’s also our responsibility, and yours, to always drink responsibly. Know your limit, and never drink and drive.

ARTISAN SPIRIT’s number one goal is to share and celebrate the art and science of artisan craft distilling. But please remember to follow all the laws, regulations, and safety procedures. Be safe, be legal and we can all be proud of the industry we love.

OUR THIRST FOR KNOWLEDGE IS STRONG. Back-to-school season has us thinking about education. Our team at Artisan Spirit Magazine has a passion for lifelong learning and have built a business to support it. This craft distilling industry of ours is full of teachers, students, mentors, and seekers...

ACSA’s commitment to continuing education directly reflects our mission to provide our DSP and industry members with the most advanced technical & business information available. Our annual convention focuses on high-level presentations and seminars on those issues of greatest relevance to operating distillers. We also conduct hands-on classes and workshops led by industry experts that address advanced skill development in distilling techniques, compliance, and safety. Through our spirits competition and consumer outreach events, we bring direct knowledge of craft brands to the general public! — Pennfield Jensen

Continual education is extremely important to us here at Black Swan. It’s how we stay relevant to our customers. In fact, our customers are a major part of our continued education. Whether it’s learning more about the distilling and barrel aging process of each individual distillery or a customer coming to us with a desire to achieve faster age times or a more complex flavor profile, etc... Everyone’s appetite to be unique gives us the constant green light to get creative and learn more! — Heidi Karasch

As the Distillery Revolution advances and the needs of our client base expands, we are always striving to advance the Distillery Industry through the development of new Distillery Products. Laser-On’s number one priority is to assist and advance our clientele in their market base. Education is the key to not only advancing our Business but also advancing the business of our Craft Distillers and the Craft Distillery Revolution. We believe by investing the time to broaden and bend our minds we in turn can pass on that knowledge. — Janie Cantrell

IL DIST D PRO BY

LERY

S UCT

L AS

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Fort Dearborn Company supports the education and training efforts of our customers. We offer a variety of training programs to educate and keep current and prospective customers abreast of the latest technologies and processes. Our Partners for Success seminar offers a comprehensive, unbiased overview of label production. The Labeling for Success seminar provides a customer an application specific program. We also offer hands on training designed for operators at our customers manufacturing locations. Visit www.fortdearborn.com/customer-training for more information. — Jack Vogel

At G&D Chillers, we continually strive to make a more reliable and efficient product. Because we believe that simplicity goes hand in hand with reliability, we also subscribe to the KISS principle: keep it simple stupid. Continuing education is key to fully understanding the technologies available and how they can all work together without complicating the operation of a chiller. This helps us in our quest to provide the most efficient and reliable chiller possible. — Paul Johnson

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Our mission at ARTISAN SPIRIT is to share and celebrate the art and science of artisan craft distilling. We are humbled by the support of our sponsors. With their help, we can further our common goals of supporting creativity, In this industry, you never know it all. Even the legendary master distillers put in a call to each other from time to time. Many of our innovation, and integrity graduates return for workshops and training to expand their skillsets, and we within the industry have to stay ahead of the curve in order to offer relevant and practical education. we all love so Distilling is a business fueled by innovators and tinkerers that build on the ideas and much. breakthroughs of others. There’s a wisdom to mastering knowledge rooted in fundamentals and tradition while maintaining the flexibility to improve upon it. — Colleen Thomas

At O-I, delivering new, brand-building products for our customers and further enhancing the sustainability of glass is critical to our long-term strategy, so we are constantly expanding our knowledge of and expertise in glassmaking. That’s why we recently invested in a new Innovation Center at our headquarters in Ohio.

The facility is a small-scale replica of a typical manufacturing plant, giving our R&D and New Product Development teams a place to explore new technologies and new design concepts. — Danielle Catley

Our continuing education consists of conventions, shows, demonstrations and continual laboratory work. Our lab engineers find their way from seminar to seminar throughout the year and then we get to bring the fruit of these efforts to our customers in private training seminars as well as convention presentations. It is our responsibility to the industry to bring our best improvements to the market and our pleasure to team up with artisan guilds and organizations to present these improvements to our customers. — Kevin Dunbar

While our team as a whole has a wide breadth of skill sets which allows us to collectively tackle new challenges and opportunities, we as individuals continually push ourselves to learn and grow. In many young companies, early success turns to complacency which in turn breeds failure. This adds to why the craft movement has so much potential for innovative management teams who can grow with their business. — Scott Schiller

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A LETTER FROM THE EDITOR: Expansion, upscaling, phase two — all mark the growth of our industry and hopefully the prosperity of individual distillers.

There are some excellent examples of thriving craft operations

us from the first day we met him. We offer our support along

like Headframe Spirits in Montana, (covered extensively in this

with so many others in the industry and genuinely hope for a

issue) and Few Spirits in Illinois that appear to be well on course

positive outcome. This is also an opportunity for our industry

for expanding while maintaining the original vision and ideals

to learn and remember to carefully consider every possible

that set them in motion. It’s exciting and cause for celebration,

outcome before committing to “inevitable” expansion. Whether

but let us not ignore some inevitable growing pains.

it be signing on with investors, upscaling production, or selling

Things get tricky when businesses succeed. Logistics get more complicated, some independence might be traded for

a brand.

Consumers expect the bottle of a craft product to carry

strength, beloved responsibilities must be delegated, and

something special inside. Getting more of those bottles out the

founding principles get put to the fire. Some things we were all

door is integral to success, but there might be compromises

reminded of when the unfortunate situation at Balcones came

made to reach that goal. We shouldn’t be afraid of success

to light in a WacoTrib article early September.

or growth, but remember the heart of this industry is based

To be clear, I don’t have any more information to share

on the passion and creativity of individuals. Success requires

regarding the dispute at Balcones, between head distiller Chip

sacrifice, but it shouldn’t be at the expense of innovation or the

Tate and the board of managers, than is already available. I

individuals driving it.

can’t speak to the specifics of the issues at Balcones, but I can say I like Chip. I like him a lot, and he has been good to

Our craft distilling industry is more than the liquid we put in the bottles. Let’s make sure nobody forgets that.

Brian Christensen

CALL:

(509) 944-5919

EMAIL:

brian@artisanspiritmag.com

WRITE:

PO Box 31494 Spokane, WA 99223

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AMERICAN CRAFT SPIRITS ASSOCIATION

the MODERN WHISKEY THIEF FROM THE BOARD OF DIRECTORS OF THE AMERICAN CRAFT SPIRITS ASSOCIATION

THERE IS VERY LITTLE OVERLAP BETWEEN THE AMERICAN WHISKEY INDUSTRY OF THE LAST CENTURY AND THE ONE WE FIND OURSELVES IN TODAY...

We now enjoy a locavore’s interest in well-sourced ingredients; to deceive customers into thinking they’re buying completely better access to knowledgeable consumers; innumerable whiskey different products—consumers have largely been unaware. bars to serve our wares. But there’s one area that’s remarkably Consumers are just learning about this—thanks in part to articles similar to the corporatized whiskey world of the mid-to-late 20th in the Daily Beast and GQ—and they’re not pleased. century: We still mislead our consumers. It’s time for that to stop.

The craft spirits industry has benefited from a reawakening of interest in American whiskey in these early stages of our

While we distillers have long known that a few large distilleries growth. Even the large producers are struggling to keep up with in Kentucky and Indiana account for much of the product on the a rapacious demand for anything that says “whiskey”, “craft”, shelves, and that brand owners have relied on different labels “artisan” or “small batch” on the label; producers are begging

NAME CHANGE & LOGO: The American Craft Distillers Association is now the American Craft Spirits Association. The change from “Distillers” to “Spirits” reflects our core mission to be inclusive of all small, independent, artisan distillers and producers. Specifically, we embrace those artisans who bring spirits to market by distilling, blending, re-distilling, aging and finishing — and who openly disclose how these spirits are produced*. * Anyone can become a member of ACSA. Voting members must be licensed independent distillers (DSPs) producing less than 750,000 proof gallons annually. 750,000 proof gallons equals 315,451 9-liter cases (12 750 ml bottles) of 100 proof spirit.

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THE ACSA CODE OF ETHICS: “We operate in an honest, transparent and non-deceptive fashion.

We inform consumers truthfully and accurately about the sources and methods used to make our spirits through our labels, materials and communications. We expect fair dealing and respect amongst members. We obey all federal, state, and local laws.”

for vendors to send them the biggest still they can afford as soon we will work to help everyone achieve this goal. Our objective as they possibly can. While we don’t believe that there is such a is inclusive compliance, not exclusive enforcement. We expect thing as “enough” whiskey, at some point spirits production will issues of ethics, honesty, transparency and fairness to be an more closely match demand and the potential for growth will no ongoing conversation with the ACSA membership. longer be limitless.

What the code achieves is a statement of faith upon which the

As craft distillers we have a lot to gain, or a great deal to consumer can rely: what’s in the bottle is what the distiller says lose, by the way we present our spirits to the public. For craft is in the bottle. The consumer will appreciate this. And it’s the spirits to become a sustainable industry, and realize their consumer who over the long haul will decide if a brand succeeds potential to transform the beverage alcohol industry as a whole, or fails. Ethics and honesty will play a large role in that. we must protect what makes them truly special: authenticity,

In the meantime, when the consumer sees that an ACSA

conscientiousness, the knowledge that real people are making member has made the product, he or she will know that the these products and that drinking them is less like buying a bar distiller is proud of what they’ve made, and they want you to feel of soap at the pharmacy and more like sharing a meal with a just as proud to have purchased it. neighbor in your home.

The American Craft Spirits Association is “Member Owned.

I’ll drink to that.

Cheers!

Industry Driven.” Our purpose is to protect and grow this industry on behalf of all of our member distilleries—to make For more info or to join the American Craft Spirits Association visit sure that there will be opportunity for producers with talent www.americancraftspirits.org. and vision to share their products with

a receptive market, indefinitely. We believe that transparency is essential to protect and preserve the consumer’s trust, and to ensure that each drinker has the opportunity to enjoy both how the whiskey tastes and how, exactly, it’s made.

For that reason, the board of directors established an Ethics Committee at the time of our first convention earlier this year. The ACSA Ethics Committee, chaired by Paul Hletko of FEW Spirits, has spent months working to collect feedback and ultimately draft a Code of Ethics (see at top of page) that communicates these principles.

This is a statement that we believe all of our members wish to live by, and

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L

YEARS,

A

and

4

8

T

jan’s corner written by Jan Morris

SURPRISES

E

R

Almost four years have passed since we decided to buy our old building and start a distillery. There have been many surprises in this first installment of our journey. What follows are our top eight curve balls in this adventure we call distilling.

1

There are fewer fire arms than expected. Before starting our distillery, we visited a small distillery just outside of

6

According to the TTB, bing cherries have to be pitted before fermentation. Last summer I bought 680 pounds

Seattle. An appointment was necessary, and we were greeted

of them. Last winter was spent pitting them. It was a long winter

by the distiller’s assistant, who wore a fedora and a gun in his

of black cuticles. As it turns out, there are “production runs,”

shoulder holster. My adult children had come along for the

and bing cherries can be purchased from an orchard already

adventure, and they left very concerned for their parents. So

pitted. I just learned this interesting fact.

far, we have been pleasantly surprised to find no guns required.

2

Cleaning is king. Before starting the distillery I had thought it would be important. It is not important—it

prospective Mr. Right samples the products, says kind things, there can be a long period of silence. Self-doubt sets in. It

It is true that keeping track of every bottle is very difficult.

takes bravery and persistence to reconnect and follow-up. It is

One of my friends, who had started her distillery before

surprising the number of times that works.

us, told me that she was always off by a bottle when she did her reports. I thought that perhaps numbers were difficult for her.

This was not the case. In fact, bottles have tiny legs. They play hide and seek, when it comes time to count them.

4

lot like looking for Mr. Right. The first date is easy. The

and gives a date for placing an order. But then, just like dating,

is king.

3

7

Self-distribution requires bravery and persistence. It is a

8

The biggest surprise is that distilling is easy. When we started our distillery, we had thought that distilling would

be difficult. We soon learned that the difficult part is brewing the wort, and producing the wine and mead. The taste, feel, and

A distillery consumes time. When we started our

scent of our distilled spirits come from the success and failure

distillery, I imagined long winters, sitting near the stills,

of the substrates. These are the most important aspects of our

and playing cards with our friends while the snow fell lightly

distillery, and the most challenging. They also have given us the

outside. Three winters have come and gone, and there has not

greatest opportunity for creativity.

been a single game of cards. Our friends often ask when they will be invited to the distillery to play cards. I have not thought of a good answer.

5

The ability to purchase neutral grain spirits, NGS came as a really big surprise. The reader may wonder how a

distillery could exist without knowledge of this product. It is possible.

Four years and many lessons later, we’re still finding surprises.

Upon reflection, some of the surprises result in serendipitously good outcomes. All of them have changed our view of distilling and how we see ourselves as part of the distilling community.

Jan Morris owns and distills at The Hardware Distillery Co. with her husband Chuck. They are located in Hoodsport, WA. For more info visit www.thehardwaredistillery.com or call (206) 300-0877.

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Marc E. Sorini is a partner in the law firm of McDermott Will & Emery LLP, based in the Firm’s Washington D.C. office. He leads the Firm’s Alcohol Regulatory & Distribution Group, where he concentrates his practice on regulatory and litigation issues faced by supplier-tier industry members.

His practice includes distribution agreements, distribution counseling and litigation, product formulation, labeling, promotional compliance, compliance strategy, and federal and state tax and trade practice enforcement defense.

TIED-HOUSE BASICS FOR DISTILLERS

the need to evaluate both federal and state

BY MARC E. SORINI

restrictions when examining a potential tiedhouse issue. In a federal system, both the federal (United States) and state governments theoretically possess the authority to regulate. In practice, however, many

areas of law impacting distillers will be almost exclusively

T

ied-house laws and related trade practice restrictions rank among the most baffling legal issues faced by a newcomer

to the spirits industry. While issues like distribution contracts, labeling requirements, trademarks, and taxes all have parallels in other businesses, tied-house laws have few analogs outside the drinks industry. This article aims to provide a very general overview of these laws so a newcomer can at least spot potential issues.

The tied-house laws separating retailers from their producer and wholesale suppliers arose immediately after the repeal of Prohibition. At that time, many lawmakers and policy leaders viewed the “tie” between pre-Prohibition “saloons” and either distillers or brewers as a factor contributing to the drunkenness, illegal activity, and violence found in those saloons. Moreover, freeing newly-legal drinks retailers from the influence of their organized crime-controlled wholesale suppliers of the Prohibition era was equally valuable.

“Tied-house law” today is often used to describe virtually every restriction in the alcohol beverage industry. This article will take a slightly narrower view and, consistent with their history, focus on those laws (like the federal tied-house statute and regulations) that restrict the relationships distillers and their wholesalers can have with alcohol beverage retailers.

JURISDICTIONAL CONSIDERATIONS

governed by federal law — such as product labeling and trademarks — or by state law — such as distribution agreements and the regulation of sales at retail.

Examining the legality of a distiller’s or wholesaler’s relationship with retailers, by contrast, requires an analysis of federal and state law. Federally, the Federal Alcohol Administration Act (“FAA Act”) contains four provisions regulating relationships between “industry members” (the FAA Act term for producers, importers and wholesalers) and either “retailers” or, in one case, “trade buyers” (the person buying from an industry member).

These prohibit:

1. “Exclusive outlets” between an industry member and retailer.

2. “Tied-house” relationships between industry members and retailers.

3. “Commercial bribery” of retailer-affiliated persons by an industry member.

4. Consignment sales of alcohol beverages by industry members to trade buyers.

State laws include a wide variety of prohibitions, with endless variations between the states. Most state codes contain various cross-ownership prohibitions between industry members and retailers, restrict the ability of industry members to provide

One of the great frustrations distillers encounter with tied- assistance (“things of value”) to retailers, and include “indirect” house laws arise from the lack of uniformity between states and interests and assistance to cover cross-ownership and assistance

14 WWW.ARTISANSPIRITMAG.COM

through third parties, affiliates, and individuals.

Federal law, however, contains a very significant exception:

In sum, distillers must keep both federal and state law in mind Complete, outright ownership of a retailer does not constitute an when determining how to comply with the tied-house laws.

FEDERAL LAW — INDUCEMENTS AND EXCLUSION

inducement and therefore cannot lead to a tied-house violation.

Only partial ownership interests — presumably because they may

not be apparent to competing industry members — can lead to interests, a federal tied-house violation, and only if TTB also can establish relationships and programs under federal and state law, an that the partial interest leads to exclusion.

While

a

distiller

must

evaluate

ownership

interesting complexity of federal law tends to make federal

Most state laws, by contrast, do not broadly permit outright compliance somewhat more intuitive than state law. With ownership and, unlike federal law, rarely require a showing of the exception of the consignment sale provision, the federal exclusion in order to establish a violation. Thus, almost any prohibitions only violate the law if the government — today the “interest” in the retailer — “direct or indirect” — may result in Alcohol & Tobacco Tax & Trade Bureau (“TTB”) — can show that a violation. These sorts of interests often are examined during a practice results in the “exclusion” of competing products. In the licensing process, so an unrecognized problem can suddenly the case of the exclusive outlet ban, exclusion (by way of an unravel an investment or other transaction when state regulators exclusive arrangement) is the crux of the violation. In the case refuse to approve a license for the new licensee or the new of the tied-house and commercial bribery provisions, a violation owners of the licensee. requires two substantive elements. First, an act or interest by But state laws, which legislatures amend an industry member must constitute an “inducement” to the frequently due to various political retailer under TTB’s regulations. Second, that inducement pressures and constituent pleas, (partial ownership interest, free goods or gift to a retailer, etc.) often contain a bewildering must lead to the exclusion of competing products. set of exemptions from the Translated into real world terms, the exclusion element forces normal cross-tier interest TTB to show that a purported violation had the type of restrictive prohibitions. Some of these impact that the FAA Act’s trade practice provisions were designed are laughably specific. to prevent. Exclusion requires TTB to show that the retailer The tied-house statutes of in question purchased less of a competing product than it California and New York, otherwise would have, and that the practice could undermine the for example, contain a long independence of the retailer. TTB regulations include a few “red list of specific locations light” activities that the Agency will view as always undermining magically exempted from the independence of the retailer, although these regulations have the laws’ reach by those never been tested in court. states’ respective legislatures.

By managing activities to avoid potential exclusion, then, a Others authorize well-recognized distiller can avoid technical violations of the federal provisions exemptions to the usual rules by, (again, leaving aside consignment sales). To take a real world for example, authorizing tasting rooms, example: A distiller’s payment for a band playing at a retail restaurants, or other retail operations by establishment (e.g., at an event sponsored by the distiller) distillers. Not surprisingly, as craft distillers have constitutes an “inducement” and therefore a potential tied- grown in number and political clout, such exceptions are house violation. But if that payment has no strings attached, the becoming increasingly common. distiller does not take actions to dictate the retailer’s product

A host of other cross-tier exceptions exist. In many states, for selection, and the retailer’s purchasing patterns do not exhibit example, the law authorizes small cross-tier holdings of publiclyan unusual preference for the distiller’s products, the risks that traded companies. In reality, of course, such exemptions are TTB challenges the payment are quite low.

OWNERSHIP INTERESTS

a de facto necessity, as the investment portfolios of distiller, wholesaler, and retailer company employees invariably include

holdings in companies doing business in other tiers. Nevertheless, Both federal and state tied-house laws prohibit industry at least on the face of some state laws, such holdings constitute members from having an ownership “interest” in a retailer. violations of the law, making virtually all of us walking tied-

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house violations arising from

regardless of its impact on

our

the

multi-tier

investment

portfolios.

retailer’s

purchasing

practices or independence.

In the end, the federal and

State law also is subject to

state prohibitions on cross-

a host of exceptions reflecting

tier interests requires careful due diligence whenever a distiller contemplates retail operations or investments in the retail tier. And because such interests can lead to delays or outright roadblocks to mandatory licensing in many cases,

traditional practices or political considerations.

Many

mirror

federal law; for example, most states generally authorize industry members to provide unlimited quantities of POS material to retailers. But a state exception not mirrored by

distillers should conduct their due diligence before expending federal law can present dangers. For distillers (and winemakers, considerable sums investing in such operations or investments.

RESTRICTIONS ON ASSISTANCE As a corollary to the restrictions on industry member ownership

but not brewers), an activity authorized by state law does not authorize activity prohibited by federal tied-house law. Thus, a distiller should always measure its activities against the federal baseline (the “floor” of permitted activities), and then review any

in retailers, federal and state law also restricts the ability of

state restrictions that may be more restrictive than the federal industry members to provide assistance — including money, free statutes and regulations. goods, and other “things of value” — to retailers. Here, too, What violates or does not violate the laws, particularly state the general rule usually prohibits all such assistance, subject laws, restricting assistance to retailers leaves a great deal of to a thicket of complex exceptions reflecting historic practices interpretive discretion to regulators. In many cases, the law and and the special political power of certain companies or segments regulations (even something relatively detailed like TTB’s tiedwithin the industry. house regulations) simply do not expressly address a particular The federal tied-house statute and regulations presumptively

activity or practice, which a regulator might or might not view

designate all money, free goods, or other things of value flowing as a prohibited “thing of value.” Depending on circumstances, from a distiller or wholesaler to a retailer as a prohibited then, distillers in need of regulatory certainty may need to inducement. TTB regulations, however, establish a set of contact the relevant regulatory body in order to obtain their views exceptions that do not constitute inducements and accordingly on a particular practice although, alas, some regulators refuse to are often referred to as “green light” activities. These include provide advice. providing point-of-sale (“POS”) advertising materials like menus,

In short, distillers must carefully consider their interactions table tents and shelf talkers, presenting educational seminars to with retailers in order to ascertain whether they risk violating a retailer employees, and furnishing stock rotation services that federal or state tied-house provision. Making decisions in this area do not disturb the shelf space of other industry members. Other often requires a complex balancing of practicalities (the timeline recognized exceptions, like the provision of product displays, for obtaining regulatory approval is often too long to realistically are subject to dollar limitations. Most other assistance to a consult with all applicable authorities) and an examination of retailer represents a “yellow light” activity — the activity is market practices that relevant authorities appear to permit. an inducement, but violates the law only if TTB can show the exclusion element discussed above. Beware, however, as TTB

DIRECTLY OR INDIRECTLY

views a few activities, like “slotting fee” payments to retailers,

Both federal and state restrictions on industry member-retailer

as automatically leading to exclusion and therefore within the interactions generally prohibit both direct and indirect assistance “red light” category.

As with restrictions on ownership, state restrictions on industry

to (and ownership of) retailers. Indeed, while federal law expressly regulates relationships between an industry member and retailer

member assistance to retailers rarely require a showing of owners, officers, or employees, most states also regulate these exclusion (or a similar effects test) in order for the industry member relationships using the logic that such assistance may represent to violate the law. Instead, the furnishing of an unauthorized an “indirect” thing of value to the actual licensed retailer. These payment, free goods, or other thing of value constitutes a violation

broad prohibitions on direct or indirect assistance, then, can

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sweep in a wide range of conduct and may lead to inadvertent implicitly tolerated for many years. violations of law.

In the end, distillers should remain sensitive to the possibility

A typical example involves third-party promotional companies. that indirect relationships and assistance can trigger tied-house Brand owners and wholesalers routinely hire such experts issues. Exactly where a regulator draws the line will rarely be to run promotional programs, and their use is not inherently apparent on the face of the applicable statutes or regulations, problematic. But if these entities simply pass along payments, requiring a careful analysis to evaluate a particular activity or free goods, or other prohibited assistance to a retailer, then investment. the indirect nature of such assistance does not render it legal.

Similarly, if the promotional company is owned by a retailer or a

.....

As noted at the outset of this article, evaluating tied-house

retailer’s ownership, then most regulators would view payments issues presents a complex mix of federal and state law. Moreover, to the promotional company as payments directly to the retailer, given the laws’ often broad language, the existence of complex and therefore likely illegal.

and specific exceptions, and the substantial discretion exercised

Another common example that arises in the ownership context by regulatory officials, determining legality can prove frustratingly stems from complex corporate structures. Capital today, even unclear. That ambiguity does not, however, mean that a distiller for non-public companies, often comes from sources with many should simply throw up his or her hands and ignore the law. investments spread throughout the country or the world. A large Instead, through careful due diligence, distillers will find ways public pension fund, for example, may hold investments in to achieve investment and promotional objectives within the hundreds of companies, which may include retailers, producers, bounds of the law. and even wholesalers. Regulators could very well view even remote cross-ownership interests held by such entities as tied- Marc E. Sorini is a partner in the law firm of McDermott Will & Emery

house violations. In reality, however, there are undoubtedly many LLP. Nothing in this article should be construed as or used as a substitute entities with such cross-tier interests that regulators have at least

for legal advice. For more info visit www.mwe.com/Marc-E-Sorini or call (202) 756-8284.

THOROUGHBRED SPIRITS GROUP IS A BOUTIQUE SPIRITS CONSULTING FIRM. WE ARE THE TRUSTED ADVISOR TO DISTILLERIES, SPIRIT PORTFOLIO OWNERS, ENTREPRENEURS, AND DISTRIBUTORS. WE HELP CREATE BRANDS AND DISTILLERIES FROM THE GROUND UP.

WWW.ARTISANSPIRITMAG.COM 17

O

n

occasion,

there

is

DON’T GET COCKY

Whenever

we

talk

to

someone about how busy life

something that Courtney,

my wife and business partner,

has become we inevitably hear,

WRITTEN BY JOHN MCKEE

“That’s a good problem to have!”...

and I will to say to each other:

but, sometimes not so much. With A/P

“Don’t get cocky.” It’s a nice little

— A/R cycles in our industry on sometimes

mantra to remind ourselves that we’re a young business, with visions of being in business

as long as 9 months, with sunk costs of producing

for a long time, and we don’t ever want to fall into a trap of

whiskey and then having to sit on it for years, of being too

thinking something about ourselves that we’re not. We’re

small to demand more favorable terms but still needing bottles,

business owners, we create jobs

corks, cooperage, — all of it

for people, we are doing all that

— its easy to see how far it is

we can to make our place in the

you have to stretch money. And

world, Butte, America, a better

the mantra of entrepreneurs

place….and in all of that we can

everywhere was always running

never forget that we ate ramen

through our heads, “You only

for six months while we were

run out of money once.”

We’ve

getting our project financed and

heard

of

many

distilleries opening their doors

off the ground.

Then we opened the doors and

and almost immediately going

things just took off. We finished

back to their banks for additional

our first year at Year 4 on the Pro

financing to expand. They’re

Formas, and during that entire

unsuccessful in those efforts,

year we very quickly realized

generally because they don’t

that fact might be the reason we

have enough time under their

could fail.

belts to be a sound investment from

So Courtney and I were going

the

bank’s

standpoint.

a thousand miles a minute, the

Worse, some wind up giving away

business was going better than

control or influence by bringing

we had anticipated and we were

in investors that don’t do the

just trying to ride that wave of

“blood, sweat, and tears” work of day-to-day hooch making.

growth. In year 2, we came to understand that our role was

So, in this crazy industry, one

going to be managing growth —

in which we’re all growing at a

that is, not overstep our reach.

JOHN, COURTNEY, AND WYLIE MCKEE

rate that makes corn in Iowa, in

WWW.ARTISANSPIRITMAG.COM 19

August, look slow, how do we manage growth? Not sure for all cases, but I will share how Courtney and I do it.

»» HIRE GREAT PEOPLE, give them the tools they need, and get the hell out of their way.

»» STAY AWAY FROM THE LINE OF CREDIT, as much as possible. Make a daily goal of challenging every expense to come from on-hand cash in the bank.

»» BE SMART ENOUGH TO KNOW THAT YOU DON’T KNOW EVERYTHING.

»» GET A BOARD OF ADVISORS. Meet with them regularly.

Show them everything, the financials, the plans, the sales, the growth….ask them to offer frank and honest advice and insight. These don’t have to be people in the business of making hooch — none of ours are. But they have to be people who are not “yes-men” or “yes-women,” they need to be people open and honest about telling you that your baby is ugly.

»» DON’T EXTEND YOURSELF TOO FAR. Being sold in every state sounds great, but not if it’s only a case or two here and there. Concentrate on your area, own it, and then move out into larger markets.

»» BEWARE

OF OVER EXTENDING.

This can be money,

commitments to vendors, production goals, sales targets… but most importantly this is your time. Don’t give away more time than you have, you’ll lose yourself in trying to please everyone.

»» DON’T GET COCKY. “Don’t get cocky,” means a lot of things, probably something different to everyone who says it. Make your own mantra or use ours if you want, but find something that keeps you grounded, that keeps your perspective equally on the business and on the reasons why you’re doing this. In our case, that’s family and community.

John McKee, along with his wife Courtney, are the owners of Headframe Spirits in Butte, MT. John can be reached at john@headframespirits.com

20 WWW.ARTISANSPIRITMAG.COM

Welcome to the New Tradition of

Craft

Distilling

w w w.ar tisanstilldesign.com

T A L E S of the

COCKTAIL WRITTE N BY A M BER G . C H R I S T EN S E N - S M I T H

t

JENNIFER MITCHELL PHOTOGRAPHY

he Tales of the Cocktail event is Paul and Ann Tuennerman’s

directly with bartenders, distillers, and cocktail mixologists to

baby—and it’s a big baby with thunderous thighs and a loud

bring forth an enjoyable week-long affair. Along with her husband wail. It’s not sweet and innocent, nor is it “quaint;” it’s a hell of Paul, the Chief Business Officer of Tales, they have made a wella good time and an awesome amount of education balled up all known and well-revered event in the city of New Orleans that has into one week-long event. If you want to know cocktails and craft been around since 2002. and get the word out about your own baby, you need to attend this event. (Plus, did I mention, you’ll have a great time?)

WHAT IN THE WORLD IS THIS?

BUT HOW IS IT GOOD FOR A CRAFT DISTILLER? Paul Tuennerman is quick to note how Tales is a great event

Tales of the Cocktail is an event that draws in bartenders not for toiling craft spirit makers—he says it helps the distillers get only nationally, but internationally, as well. It is primarily housed

out of their “labs” and into the customer’s arena to showcase the

in New Orleans, LA, and held in mid-July each year, but also

artistry of their spirit. Craft distillers have a wonderful opportunity

holds events in other areas of North and South America. Tens

to sell their brand and to meet bartenders and distributors that

of thousands of people attend Tales annually, and we’re not just can help market their goods to the consumer. These face-to-face talking about cocktail lovers. We’re talking distributors, large

conversations with the attendees at Tales of the Cocktail can

distilling companies, craft distillers, mixologists, aficionados, help make a huge difference for the marketability of small craft media persons and others. The focus is on tasting amazing

brands—where there are hundreds of choices before a bartender

cocktails, learning new industry craftsmanship revolving around

in a distributor’s publication or for a customer when looking

cocktails, and in gaining exposure. Tales is about brands—big

on the shelf at a store, at Tales, the distiller can personalize

and small—as well as meeting new folks, experiencing awesome

the sales pitch and share their story—which can really make it

spirits, and reveling in the splendor of New Orleans.

worthwhile to the consumer when it comes to purchasing.

AND WHERE DID THIS COME FROM?

HOW ABOUT THE VALUE?

Tales was started by Ann Tuennerman to celebrate well-crafted

In addition to interviewing Paul, we were able to speak with

cocktails and has grown into an amazing trade event drawing in a

many other craft distillers and industry professionals who

plethora of attendees. Ann, as the founder and executive director attended the event. Without a doubt, they all agreed it was of the event, provides the vision behind the event and she works

worthwhile for a small distillery to attend Tales of the Cocktail.

WWW.ARTISANSPIRITMAG.COM 23

JENNIFER MITCHELL PHOTOGRAPHY

A COUPLE of REMINDERS...

On the Experience:

Ryan Malkin, an attorney focussing on the alcohol beverage industry, stated, “The great thing about Tales of the Cocktail is that it offers something for everyone in the industry as well as cocktail lovers. Established brands can engage the trade and create memorable brand experiences for media, trade

“Pace yourself, drink plenty of water and smile!

You never know who you’ll meet.”

and consumers by hosting great events. Bartenders have the

— Jeanne Runkle, LikeYourLiquor.com

peers in the industry. Distillers have the opportunity to showcase

On Bourbon Street:

“See it. You didn’t come all the way here NOT to see it.”

— Nicole Austin, King County Distillery

opportunity to learn, network with brands and get inspired by their their products and craft to their primary target audience.” Ryan adds that the conference gives small distillers a great place to see all the industry professionals and to engage with them more efficiently. Additionally, it’s easier to get your products into the PHOTO COURTESY OF RUTH’S CHRIS STEAKHOUSE

24 WWW.ARTISANSPIRITMAG.COM

hands of bartenders, and many distillers—large and small—even use Tales to launch new brands.

Paul Hletko, owner of Few Spirits, shares, “I loved the experience more than any single event, and running into people unexpectedly.” He adds that Tales is a great event to contribute to as a distiller, and it is an excellent opportunity to gather with other like-minded people.

Additionally, Dave Schmier, organizer of the Indie Spirits Expo,

CUSTOM BOTTLES

offers that Tales is an excellent networking experience, and also thinks the educational experiences are worthwhile. “It appeals to all, and different people get different benefits.” He says distributors get to see new brands, bartenders get to show and improve their skills, and small distillers make it more interesting.

Nicole Austin of King County Distillery stated that Tales is a great event to meet people and to network. She says as a small

Your Vision, Our Process In addition to our variety of stock containers, we now offer custom bottle design through our Vision Program.

distiller, “if you are aiming big, positioning yourself next to big brands can be helpful to cultivate perception.” She also adds, “Banding together is a great way for craft brands to bring a presence to Tales. The NY tasting room allowed 11 different NY spirits producers to have a presence at Tales that still fit in their budget. Even though all of the producers are very different, the

• Just $500 to get started • Minimums starting at just 50,000 bottles • Up to 90 days warehousing

fact that they were all from NY unified the group and gave the room a coherent message.”

Finally, Jeanne Runkle of LikeYourLiquor.com told us, “As an advocate for craft distilleries, it was an opportunity to talk with them, all in one place. It was also a great chance to talk with bartenders and mixologists about how craft spirits work for them behind the bar.” Jeanne feels a majority of the craft distillers are able to hold their own against larger brands nationally. Although Tales can be heavily focused on large brands, the smaller brands are really competing well.

AND THE OVERALL GRADE?

Available exclusively through

Without a doubt those of us at Artisan Spirit say “Go!” to our craft distilling friends. Tales of the Cocktail not only gives you a chance to chat it up about your craft and to network, but also gives you new perspective into the art of how your spirit may be used by bartenders and mixologists. Don’t be afraid to make new friends with like minded folks, to explore other spirits products, and to get to know distributors, bartenders, and other industry professionals. The Tales experience might just give you the growth spurt your baby needs…or at least you’ll have a damn good time.

The 13th Annual Tales of the Cocktail will be in New Orleans, LA July 15-19, 2015. Visit www.talesofthecocktail.com for more info.

Also ask us about low minimum branded stock ware through our Advantage Program.

Contact Us Today www.thepackgroup.com

(888) 997-2252

WWW.ARTISANSPIRITMAG.COM 25

Buttercyuits?

Earthy dank?

grandma’s bis

Solventy glue?

Malty

ugh. I swear I know this one!

Nutty?

roasty toasty?

AWAKEN YOUR SENSES. T R A I N Y O U R N O S E . D E V E L O P A N A R O M A T I C V O C A B U L A R Y.

www.aroma-academy.co.uk 95% of flavor comes from the sense of smell. With our aroma kits you can learn to describe scents and flavors in a pleasing manner others can easily recognize.

WHISKEY

|

GIN

|

WINE

|

MADE-TO-ORDER TRAINING PRODUCTS FOR THE DRINKS INDUSTRY

JOHNNY’S

ART & SCIENCE

of DISTILLATION

COLUMN

CHEMISTRY

of CUTS

WRITTEN BY JOHNNY JEFFERY

t

he biggest misconception, and the silliest myth, being spread yeast cell walls. All of these in combination, balanced through by distillers about cuts and the compounds in them is that the use of the still and any plate or rectification technology,

we make cuts to remove all the “bad stuff.” When we make a create the aroma, flavor and palate of the spirit. This is science heads or tails cut, we’re not removing all the bad stuff, we’re and art combined. adjusting the concentration of certain compounds that appear at

The late-comers to the party are high boilers. Their boiling points

higher concentrations than we would like in the finished product. are higher than ethanol but are in the same chemical families We have not removed them all, we have simply adjusted them. If as the low boilers. The bulk of these are alcohols with higher you remove them all you are making vodka.

molecular weight than ethanol: propanol, butanol, iso-butanol,

When running an alembic still the so-called heads and tails amyl alcohols (3,4, and 5 carbon alcohols). By themselves they compounds are coming out of the still and into the product are hideous — their descriptors include: band aid, chemical, for almost the entire run. Compounds found in the highest fuel, solvent. These sound like the kinds of things you’d want concentrations early on in the run (heads compounds), or low to get rid of completely, but the truth is that the standard of boilers as I’ll call them, include: acetaldehyde, acetone, ethyl identity for whiskey guarantees that you cannot. Unless whiskey acetate, methanol, and sometimes acrolein. These come off early is distilled to higher than 80% ABV, these compounds come because they boil at the lowest temps but they don’t all come through during the run with the hearts but like the low boilers, off early and then stop. At a certain point they fade into the this is not a bad thing. background and become part of the nose of the spirit.

High boiling compounds do a couple of important things.

To put this in perspective let’s use ethyl acetate. Not only is First, because they are high boilers they have the tendency to this ester formed in the barrel (ethanol combining with acetic stay on the palate creating a longer tasting experience before acid) during aging, becoming a necessary part of the familiar they evaporate. When their concentrations are in balance (and character of American whiskies, there’s actually a patent that particularly after they’ve had a few years to react into other was granted to a gentleman who figured out that if he added compounds and further increase in boiling temp) they stay on it to bourbon in the barrel, the bourbon was better and tasted the palate longer than ethanol will. Particularly with well-aged older to consumers than it actually was. This is one of the same spirits, you could never get the long lasting, bourbon chewing, compounds that you smell in fingernail polish remover.

tongue and palate coating experience of a beautifully aged spirit

The hearts cut of any spirit that is meant to have flavor is without high boilers. Second, and already mentioned, they are a rich and complex combination of fermentation byproducts, the substrate for aging chemistry. Whiskey, rum, or brandy that’s compounds extracted from grain and compounds extracted from going to sit in a barrel had better have some of these in there

WWW.ARTISANSPIRITMAG.COM 27

or they’re going to taste like aged vodka, because without the very large columns attached to them. The basic pot still or pot presence of these compounds much of the material necessary still short column hybrid may remove greater concentrations of for the many reactions that make up aging chemistry is missing. congeners but would be destroying the character of these spirits The last and often totally overlooked category of high boilers if it was able to remove all of them. is fatty acids (oils). The commonly found fatty acids that appear

I’ll also say that these compounds get a bad rap for causing

particularly in grain spirits, always appear after the high boiling blindness and hangovers. To be sure, drinking pure methanol tails compounds. Anyone who runs their still ABV down low would be deadly but in the concentrations found in even the after a tails cut and sees it go cloudy around 20-35% is looking worst distillates they cannot touch the concentration of ethanol, at high concentrations of fatty acids coming out of solution in itself toxic, enough to cause blindness unless the spirit has been the now cold, mostly water distillate. These fatty acids range intentionally adulterated. This, I understand, was the cause of from 5-18 carbon and have boiling points as high as 260C, but much of the prohibition era toxicity produced by the legendary come through the distillation because they are so soluble in rotgut purveyors. water that they’ll travel in the vapor. These fatty acids can be an

Distilling is not as simple as: cut out the bad stuff, let in the

asset or a problem depending on how they are included, in what good stuff. This is a balancing act between compounds that can concentrations, and what type of spirit is being made, but at cause the spirit to be overly chemical or hot on the nose, and a their best give huge body and an oily softness to mouthfeel that product that will develop subtlety and complexity as it ages on is difficult to find elsewhere. I’ve heard this late distillate called wood. Hitting this target requires creativity, artfulness, and time sweet water and in fact it is quite sweet.

invested training the palate to recognize these compounds in

The reason all of these congeners can be completely removed their new make state, and how they evolve during the course of from vodka is that the technology is designed specifically to aging. concentrate them so completely that they do not escape the system into the hearts cut. Whiskey, brandy, cognac, and pot Johnny Jeffrey is currently consulting with Santé Fe Spirits. Johnny can stills in general, are not designed for this unless they have be reached at John@ArtisanDistiller.com.

28 WWW.ARTISANSPIRITMAG.COM

RESTING SPIRITS W R I T T E N

&

P H O T O S

P R O V I D E D

B Y

M A G G I E

C A M P B E L L

Y

our spirit is aging every second of every day. Yes, higher I met him this spring he said that most people understand aging alcohol makes it more stable, but there may be more going a wine enhances flavor development, but that because spirits

on in your booze than you would expect. Flavors are forming, are more stable it is even more important and takes more time. chemical chains are bonding, then breaking apart, making new In the video he describes one of the most important processes complex formations, and oxygen is breathing maturity and finesse in flavor development, the fact that ethanol molecules grab onto into your booze. You can use this as a tool and let nature do the and break off of one another, creating long chain fatty acids that heavy lifting to create complexity and depth in your spirit with no create mouthfeel, concentration of flavor and complexity. This all added fancy or expensive equipment.

happens as a spirit sits in a neutral container post distillation.

Resting or ripening are terms used to describe spirit maturing Distillation is in fact this violent process of taking wash and low as it rests in a neutral vessel. This concept is second nature to wine, ripping them molecule from molecule, suspending them European distillers, especially in the eau de vie country of South in air and bringing it back whole again. As a spirit rests after Germany and Austria. Their centuries upon centuries of artisan this process slowly but surely new molecular shapes are created, distilling holds this fact to be as obvious as the world being changing the character of your spirit. The higher the proof the round. Conversely, in the United States the type of aging we most slower this, and the process of oxidation, occur. He holds any often think about is oak aging, but oak flavor and maturity are spirit he produces a minimum of three months, but some of two very different things. When I throw out words like ‘ripening’ his finest brandies he will rest for up to 5 years to foster the or ‘resting’ I’m often met with doubt in our burgeoning craft character he desires. scene. The presence of oxidation, esterfication and long chain

I was really inspired yes, but I also needed to be a believer.

molecular flavor formation are all happening whether or not the I had already implemented protocols resting our spirit about 6 oak is present, so let’s start the conversation about the life of weeks from distilling to bottling and we already were proofing spirits and how they age in a tank, in a demijohn, or in a bottle.

in small steps with resting in between, but this would be a whole new layer to our production. It required setting timing

THE CHEMISTRY

and production schedules to allow spirits a bit more rest time

I was exposed to ideas of resting spirits through a few different in tank before bottling. However, the payoff was huge. Flavors distilleries over the past 10 years. Some distillers here in the US transformed from the primary flavors of fresh raw distillate (clean were very aware that after proofing, pumping or agitating a spirit white apple flesh) to tertiary flavors (golden dried apple peel) in it would taste ‘hotter’ than a spirit that was allowed to rest, but just a matter of a few extra weeks. Finally we found a place where chalked it up to intuition. Hubert Germain-Robin talks about the our spirit seemed to reach it’s ideal expression and slow down cognac concept of ‘tumult,’ that a spirit will need to calm down in its production enough that we were ready to bottle, which after any process and that doing too much to a spirit in quick happened to be at about 3 months. Slowly we are transferring secession could bind up flavor and create off, ‘upset’ flavors. our standards to reflect this time and reserved tank space. It I had heard the term resting from a few European eau de vie costs us nothing but a little forward planning and a few weeks makers, but that’s a hard culture to connect with in our bourbon of holding to up our game immensely. Discovering that it tastes centric nation. It was, in fact, someone from the incredible better means I can never go back. eau de vie distilling heritage of Southern Germany who finally impressed the importance of ripening to me and gave me the concepts to make it all click.

THE ALCHEMY Elevage is a concept I am passionate about and bring to

It was a simple short internet video titled Stählemühle—The everything, especially my spirits. Elevage means the raising, the Art of Master Distiller Christoph Keller and it gave me facts and rearing of something as though it is a child. I get to know each inspiration to truly understand ripening or resting a spirit. It finally batch, its quirks, its character and I give it everything I can to clicked. In the video he can be seen in a cellar resting many care for it so I can send it out into the world to reflect what I hope spirits in glass demijohns, treating them almost as wines. When I have instilled in it. This idea inherently applies to resting and

WWW.ARTISANSPIRITMAG.COM 31

ripening spirits. Just like a child, when you change things or alter the situation, it needs time to settle in before it can thrive. After every proofing, stirring, pumping, we allow it to rest and then unfurl its flavor and calm its warming heat of ethanol. As it sits and rests it also grows up and matures. It starts as a simple child and advances through its adolescence, tasting a bit different everyday as it finds different parts of its expression. This is until it expresses itself fully as a young adult and it is ready to show the world what it’s got.

Tasting for harmony is a large part of this process and therefore requires developing tasting skills, something no distiller should be without. I highly recommend taking an intro wine class from WSET (Wine and Spirits Education Trust). So much of the history and chemistry of wine can inform you from a distillation perspective with new and illuminating insights. Tasting for harmony may not be picking out every nuanced little flavor, but it means looking for concentration with complexity as well as disjointed or complementing aromas and textures. Once your mind is listening to your taste buds, the simple resting of a spirit should show up on the palate in flavor and texture.

SO HOW DOES THIS WORK IN PRACTICE? In vessel, with volume and head space, seem to reflect the aging fastest. If the tank is filled to the brim, little character will develop, as you are allowing the spirit less oxygen to play with.

The same goes for a full bottle that offers but a tiny ullage. It is always wise to rest bottles right after bottling, but you can’t expect much flavor development due to the limitations a bottle offers. If the spirit is at lower proof and is a small volume in the bottom of a mostly empty vessel it may over oxidize and blow off flavor and loose body. Balancing proof, volume, and head space is very important for coaxing out the flavor you want.

Resting and ripening spirits, especially clear spirits, offers you the opportunity to develop flavor and character in your booze without purchasing additives or buying expensive equipment. It allows spirit to pick up terroir (we are seaside and see a huge effect from this) and offer luscious mouthfeel to spirits that often can taste thin and hot when they lack time in oak. Your spirit truly is aging every second of every day no matter the vessel it is in, so you might as well make it an asset.

Maggie Campbell is currently in the Level 4 Diploma program for the Wine and Spirits Education Trust out of London and working towards her MW and holds the position of Head Distiller at Privateer Rum. Her advice for aspiring distillers, “Read all the books you can and knock on every distillery door you can get to. Having mentors with different philosophies gives you a whole world of tools to pull from.”.

32 WWW.ARTISANSPIRITMAG.COM

MARKETING TO THE MILLENNIAL

MIND WRITTEN BY BRANDI WALERIUS

I

f you haven’t already put financial muscle behind attracting and marketing your brand to the newest

crew blowing out their twenty-first birthday candles, what are you waiting for? As the last of the millennials turn the legal drinking age, beverage brands are placing a strategic marketing focus on captivating the generation born between the years of 1980 and 1993. With an estimated purchasing power of $2.45 trillion and over 80 million members strong, the largest and most influential consumer group is deserving of the attention. In fact, not understanding the millennial mindset and not adapting your marketing strategy to your newest set of consumers is one of the easiest way to fail.

SO WHAT DO WE KNOW ABOUT THE MILLENNIALS? These digital natives have an affinity for technology and a desire for constant connection. No need to look any further than the newest online social hangout to find this brilliant tech-savvy group. Innovative thinkers with spirited personalities, most will respond best to creative communications that speak with them and not at them. Often coined as the “selfie generation,” they have a unique sense of self. It’s easy to write them off as self-absorbed, but don’t believe all the narcissistic accusations. This demographic is also noted for throwing support to purposeful causes and meaningful community movements. As the highest educated generation yet, the desire to

WWW.ARTISANSPIRITMAG.COM 33

be informed and involved with the brands they become obsessed

stories and celebrate with their following and other fans to build

with is as strong as their grip on their newest smartphone. a loyal community.

The millennial generation is already redefining the beverage alcohol landscape. This group serves as the backbone to the success of the craft beer industry, is rediscovering bourbon and whiskey, contributing to a 35% sales growth, turned wine from a special occasion luxury into a social drink, and driven an innovative surge in beverage creation as their willingness to try new drinks is greater than any generation before them. Times, they are a changing, and it is time to rethink how we reach these consumers and adapt to their buying habits. As these experimental drinkers search for flavor offerings that extend from

HAVE A DIGITAL AND SOCIAL FOOTPRINT. Having a significant digital presence can no longer be an afterthought; it must be at the core of your marketing strategy.

Your online presence is imperative to build awareness, retain attention, and influence purchasing power. The challenge though is that the same consumers who are actively using social media to aide buying decisions tend to be skeptical of sales pitches.

Less direct sales techniques and more focus on your brand’s likeability is necessary to win over the millennial’s approval. More

spirits to craft beers you need to embrace the millennials and than ever, sales is about relationship building and you must be able to expand your ability to make and develop relationships in invite them to join your brand community.

BE SHARE WORTHY. The objective of your marketing strategy needs to turn the

the online social arena. This relationship with the millennials may

be a touch on the needy side. They expect full engagement and instant gratification, so mastering the art of two-way reciprocal

consumer into powerful brand advocates and enthralled product marketing with real-time responsiveness is necessary. fans. Creating engaging, entertaining, and relevant content and campaigns will make your customers active participants.

Millennials will quickly spread and reinforce a message that they deem share worthy. In addition, companies need to provide a communication vehicle to encourage fans to share their product

EMBRACE THE INDUSTRY INFLUENCERS. This group is quick to leave feedback, ratings, and reviews and even quicker to trust what they read posted online by friends, family members, and even strangers. Be consistent with your brand

34 WWW.ARTISANSPIRITMAG.COM

message and execute your product promise the right way, every all that you do, and stay true to what makes you and your brand time. Customers’ interaction with your products at every touch great. Possess corporate social responsibility and genuinely point must be positive to create a tribe of customer champions. stand for a cause that is important to you and your brand. Start a

PROVIDE SIGNATURE EXPERIENCES.

movement around your products and demand attention with this

hashtag obsessed population. Yes, #inspireaction #butbegenuine Millennials just want to have fun and create memories. #andalwaysbeauthentic by selecting hashtags that help push Defining a customer experience specific to your brand with the information and create conversations. goal of highlighting your unique positioning will do just that.

As millennials reject old traditions and thirst for new offerings Aim to surpass your consumers’ expectations to encourage and experiences, it is the perfect time for brands to create a positive reputation and future loyalty. By orchestrating innovative ways to reach and engage this dynamic population.

distinctive customer experiences you can intentionally create Create share worthy content. Wear large shoes to leave a the kind of positive impact you desire. Excite the adventure- significant digital and social footprint. Welcome the industry hungry millennials by providing a visual showcase of the world or influences by giving them nothing but cheers and positive lifestyle that your brand makes possible, host affordable events feedback to relay. Create memories with signature experiences. like sample tastings, and keep this need-to-know-everything Tell your stories and be authentic. Implementing and executing

demographic informed and involved by providing product these strategies will get you in the minds, and win the hearts, of workshops and creative, informational, engaging packaging. this large and influential group of consumers as they continue to

WEAVE YOUR STORY IN ALL YOU DO.

transform the alcohol beverage industry for years to come.

As customer-centric as millennials may demand you to be, Brandi Walerius owns Black & White Consulting, has an MBA and is the

they are also curious about your story. They want to know who you Corporate Content Writer for TruGrit Beverage Group, where she can

mix her love for business, consulting, writing, and great cocktails. When she’s not transforming ideas and thoughts into printed words, she is living important to you. Weave your history and your brand’s values into happily ever after with her husband and two sons in Sylvania, OH. are, how you got started, how your products are made, and what’s

FLavor you seek

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EXTENDING YOUR RUNWAY FINANCING for SPIRITS PRODUCERS written by RICK WEHNER

D

o you remember how much fun it was to daydream of making accepting partners and investors is somewhat unknown since you’ll a living doing something you were truly passionate about? be giving up a piece of your company for future value. However,

Like, perhaps, opening your own distillery? Do you hold on to that distilleries have the pleasure of being a “sexy” investment and at image when you are sitting at your desk filling out the endless a time when a lot of money is still sitting on the sidelines waiting maze of TTB forms, or writing checks against the neverending for the right investment, it can be a great option for someone flow of invoices that arrive uninvited to your mailbox?

looking to raise a lot of capital quickly. For more information

When applying for financing, there are many options. Banks on this, read the great article by Scott Schiller in Artisan Spirit and credit unions are always a good place to look for money but be Magazine’s Fall 2013 issue. prepared to be very heavily scrutinized.

Regardless of what source of money

Don’t wait until the last minute to

you approach for your financing, there

approach them because they are not known for their speed or their flexibility.

More than likely, they will put a lien on your business and all of your assets which could hinder future expansion.

On the other hand, if you have a strong case for getting approved, such as strong time in business, good personal

Distilleries have the pleasure of being a “sexy” investment and at a time when a lot of money is still sitting on the sidelines waiting for the right investment...

credit, and a strong balance sheet, you

are a few basics that you should be aware of before you take the next step.

First of all, be prepared. You are asking someone to lend you money and they aren’t going to do that without asking a few questions. If there are issues with your personal or business credit, bring them up ahead of time. Most likely, the underwriter will need to put together a

probably won’t find cheaper money. A good relationship with your write up and present the finance request to a committee or credit bank will pay dividends in the future.

department. Let them help you by being honest with them from

Equipment leasing/financing companies are another great the beginning. This should be like when you talk to your doctor source of funding and when it comes to approvals, can be quite — tell them the truth, not what you think they want to hear. flexible. In fact, many leasing companies don’t even require After all, they’ll find out when they do their due diligence anyway financial disclosure on transactions under $75,000-$150,000. and if you aren’t prepared to answer questions about your own They are quick and flexible and will typically only put a lien business, it isn’t going to reflect very well. on the specific asset that is financed. Leasing and equipment

Have an honest discussion with your partners before you start

finance companies also work with startups as well as “challenged applying for financing. It amazes me how many people go into credits.” Finance terms are “risk based,” so a startup or someone business together without any idea of what kind of financial with some skeletons in their credit closet are going to pay a little stability or personal credit their partner(s) have. Most underwriters more than the distillery with 5 years in business and strong are going to require the personal guarantee of anyone that has credit, but they still stand a chance of getting approved.

Investors are another great source of “financing.” The cost of

20% or greater ownership in a small business.

When it comes to startups, it is tough to know when to apply

36 WWW.ARTISANSPIRITMAG.COM

for your financing. It is kind of a “chicken or egg” situation. Do won’t recoup the costs for up to several years? You can finance you get approved for financing, THEN open a bank account and those and pay just a few dollars per month for each barrel as it sign a landlord lease agreement, etc., or do you build it in the works its magic. Depending on how they are financed, you can hopes that the money will come? Most lenders are not going still depreciate them. At the end of the term, you’ll still own the to be the first ones in the water. You’ll have to form your legal barrel and you can turn around and sell it to a brewery for a nice entity, open a business checking account, and at least have an idea of where you will physically be located when you open your doors.

Distillery equipment is a great asset.

Having some equity in the equipment is a nice bonus for a lender and could be the difference between a decline and an approval. Equity can come in the form of

little sum. In most cases, this will offset

The key to getting financed is to be prepared to answer questions, and to be upfront and honest with your underwriter.

a larger down payment on the financing,

the cost of the financing in the first place.

Do you want to use short term cash for a long term asset? For many start up and expanding businesses, it makes sense to spread the cost of ownership over several years which allows the equipment to pay for itself. The key to getting financed is to be prepared to answer questions, and to be upfront and honest with your

or you could put money down to the vendor and finance the underwriter. It is always a good idea to start early and build balance. If you don’t have money to put down on the equipment business credit with smaller purchases so when you have to do or if you want to conserve working capital, consider using some that big expansion, you already have a track record. of your free and clear equipment as additional security.

In addition, barrels are not just an ingredient that adds Rick Wehner has been financing equipment for the alcohol industry since color and glorious flavor to spirits, they are an asset and can 2005. For more information, visit www.breweryfinance.com or call be financed. Why put out all of that money up front when you (303) 800-1063.

Adams-ArtisianSpirit-082214.pdf

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8/14/14

1:33 PM

C

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Y

CM

MY

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WWW.ARTISANSPIRITMAG.COM 37

KINGS COUNTY DISTILLING WRITTEN BY AMBER G. CHRISTENSEN-SMITH

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PHOTOS PROVIDED BY KINGS COUNTY DISTILLING

AND SO IT BEGINS

2010. By distilling bourbon and moonshine seven days

Colin Spoelman and David Haskell,

owners

of

King

County

Distilling

in

New

York City, are two fortunate fellas to own the oldest craft distillery in the city. But let’s back that train up a bit to where our story begins…

Colin, a former Kentuckian,

a week, sixteen hours a day, the demand for their fabulous craft spirits is growing, as is their production. In the past four years, they have won awards, seen demand move steadily, and are now looking at growing their operation even more so.

grew up in moonshine territory know at least one bootlegger

GOOD ‘OL (NEW) BOYS

or moonshine maker. It was

It’s somewhat curious to

a dry county where he was

be the oldest distiller in the

where it was not uncommon to

raised as a kid, but that

city and only be established

didn’t stop bootleggers from

since 2010, but being young

bringing

from

craft spirit makers doesn’t

across the state border, nor

discourage their charm or

alcohol

in

from producing the infamous white lightning. Colin’s fascination with moonshine began young

their

actual

passion

and

knowledge for production. Colin is obviously very knowledgeable

and he even found himself dabbling in the home production of of his craft. As a maker of moonshine and bourbon, Colin is a it due to his curiosity.

When he moved to NYC as a young man, he loved the natural

master of pot distilling—twice distilling his batches for increased alcohol content and then aging the liquid in barrels. He believes

curiosity New Yorkers are known for in the world (as it is an in aging his craft spirits in the barrels for the length it needs, not epicenter for cultural revolution), and especially the culinary

for necessarily a specific time point. Whereas many craftsmen

world. Colin learned that NYC actually has a rich, but forgotten, are aging their booze in barrels around six months to one year, distilling history, with some people placing the first legal

Colin finds himself aging his bourbon around eighteen months

distillery on Staten Island. There were known “moonshine wars” on average and he plans to age it longer as the company matures. with illegal Irish distillers after the Civil War and Colin shares Their master blender, Nicole Austin, ensures their flavor profile that many people don’t think of urban distilling so much, but is on key for their aged whiskies and she manages barrel tasting there actually was quite a bit of it going on.

And as it goes, it seems New Yorkers are always willing to

at King County. The spirits are tasted throughout the process and are bottled once they have the correct flavor.

try anything new—Colin found that the New Yorkers he shared

Colin and David have made well for themselves in the craft

moonshine with were adventurous and willing to try it, and

distilling world with their know-how and passion for making

many noted their excitement to try it. Soon, he found there was

a quality product. They are currently producing moonshine,

actually a demand for the age-old liquor and he began to explore

bourbon, and a chocolate whiskey. The chocolate whiskey is

producing the liquor on his own (with the encouragement of of particular interest as it creatively infuses the moonshine friends like David) to sell on a regular basis to those wiley New

and ground cacao bean husks, and tastes like a dark-chocolate

Yorkers.

cocktail. Their packaging for their bottles is simple, something

Colin, along with his friend David, decided to venture into

Colin came up with and typed on his typewriter then scanned for

their own distilling business, and here is where their luck

production—which makes for cheap graphic design costs and is

enters—they became the oldest whiskey distilling company in

also very effective and clean looking.

New York City since prohibition by starting their business in only

Their products are certainly not going unnoticed—in fact their

WWW.ARTISANSPIRITMAG.COM 39

accolades have even been on the rise. At the ACDA convention, King County Distilling won two silver medals for their bourbon this year (in 2012 it was a bronze), a “Best in Category” award for an under two year old bourbon, as well as a gold medal for their moonshine’s packaging at ADI this year. They have also been named the number 2 craft bourbon by the New York Times.

FORWARD, YOUNG MEN Just two years ago in 2012, Colin and David found an awesome 115-year-old Paymaster building in the old Navy shipyard of NYC that is now the current residence for King County Distilling’s production and tasting room. The building has served them well as it has a great history and layout perfect for their distillery.

They have production areas, a tasting room, and a couple of

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areas that are great for even spaces. Colin noted that, when they are open for tasting—which is about three hours per week—they get about 150 patrons passing through their doors.

Colin also openly talks about the popularity of home distilling Anton Paar® USA

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in the East and South of the US. Colin shares, “Definitely a lot of people are home distilling in the northeast.” The guys at King County have run into several people beginning to distill at home and they note the popularity of distributors like Hillbilly Stills for home distilling.

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For the future, Colin has many ideas. He and David have

published a book called “Guide to Urban Moonshining,” which

is a documentation of how to distill at home, taste whiskey, and is also a memoir of their own process. Following on the heels of this book, is a new publication that will be about the “Dead

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Distillers,” the distillers that came before them, those distillers’ stories, and the cultural history of distilling. Additionally, the boys have begun to discuss growing their production line. They are exploring the idea of moving their production headquarters into a new building so they can upscale and then use the Paymaster building as headquarters and a tasting room. They have also discussed possibly offering tasting and distilling classes as their space at the Paymaster building allows for these accommodations.

Things are looking good for the lucky guys at King County Distilling. Who would have thought, by sharing an interest in moonshine with the local New Yorkers would have resulted in an

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exceptional business in becoming your own “bootlegger” in the big city. Here’s to the oldest distillers in NYC.

Kings County Distillery is located in Brooklyn, NY. Visit www.kingscountydistillery.com for information.

40 WWW.ARTISANSPIRITMAG.COM

IT ALL STARTS

IN THE FIELD WRITTEN BY CHRIS LOZIER

///

PHOTOGRAPHY BY AMANDA JOY CHRISTENSEN

J

ust as the number of diverse craft breweries and distilleries has grown exponentially, so has the demand for more diverse grains. Striving to meet this new demand are many specialty grain brokers, malters,

suppliers and growers. With more people developing and testing grains than ever before, brewers and distillers have a wider array of new products and new ideas to work with, and a sharper understanding of the classic ingredients and techniques, as well.

GROWING VARIETY

Center in western Washington’s Skagit Valley. The region is a

It all starts in the field, and Brook Brouwer, a Graduate unique microclimate, one of six in the world, which produces Research Assistant at Washington State University, says the low protein, large kernelled grain. “This has to do with generally search for quality grains begins with the farmer. “We start by cooler temperatures and abundant moisture which allow the grain addressing the needs of the farmer, by selecting varieties with to develop fully,” explains Brouwer. “Plump kernels are generally disease resistance and good agronomic qualities,” explains associated with higher extract, which brewers and distillers tend Brouwer. “If it doesn’t work well for the farmer, it will be very to appreciate. hard for distillers to obtain a variety at a price they are willing to pay.”

He and his colleagues are growing and testing both new and old strains of grains here, working on finding the best varieties for

Brouwer conducts research at the Mount Vernon Research different applications, including baking, brewing, and distilling.

42 WWW.ARTISANSPIRITMAG.COM

The program hopes to open up new options for grain farmers and end users here and elsewhere, where grain production has largely been streamlined to the most commonly grown varieties.

“There is interest in new varieties developed from historically important distilling varieties such as ‘Golden Promise,’ so we have made crosses between older European varieties and modern varieties,” says Brouwer. “Ultimately, it will be up to the distillers to tell us what they want or need and help pick out varieties that are distinctive and fit well in their process.”

Cara Fields, grain broker for Brooks Grain in Minneapolis, Minnesota, says she is seeing a more diverse interest from distillers, who are buying a larger variety of grains now than they have in the past. “Specialty grains, such as rye, are seeing increased demand,” she tells us.

Brooks Grain mainly supplies rye for the distilling industry, but Fields also works with malt, corn and wheat, telling that distilling accounts for the majority of her brokerage business.

She says that while distillers only purchase a small amount of the total grains grown in the US, “Distillers do have an impact on the small grains market — and the increase in demand for both malted barley and rye is only increasing at this point.”

RAW VS. MALTED Grain flavor profiles vary greatly depending on whether the grain is mashed raw or malted first. Malting is an age old process whereby the raw grain is steeped in water and allowed to germinate, releasing enzymes in the grain that convert its starches into fermentable sugars. After germination, the grains are dried to stop the germination, most commonly in an electric kiln. Some malters use fire to dry the grain, the most obvious example being the peat-fire-dried malt used in Scotch, lending the malt and the subsequent spirit a peat smoke flavor and aroma.

Malted grains generally fall into two categories: standard malts, and specialty malts. Standard, or base, malts are the basis for mash, with high levels of enzymes, complex carbohydrates and sugars, which makes yeast fermentation possible.

“Typical base distillers’ grains include corn, rye, wheat, and barley,” says Rich Ellis of Briess Malt & Ingredients Co. in Chilton, Wisconsin. “Wheat, rye, and barley are offered in both raw and malted form. Malted varieties of these grains contain enzymes for starch conversion, and also possess more subtle flavor profiles than their raw versions.”

WWW.ARTISANSPIRITMAG.COM 43

Specialty malts are produced by using different steeping, mashes are raw grain with some portion coming from malt, as low germinating and drying methods for traditional and non- as 5% for many bourbons,” he explains. “On the British Isles, traditional grains.

much of the whiskey is made from 100% malted grains. Here

Ellis says craft distillers are just as interested in these specialty we’ve come to rely mostly on exogenous (added) enzymes, so the malts as craft brewers are. “There is a strong interest in specialty malt isn’t as important for the brewing phase of mashing.” malts which offer unique flavors to spirits,” he tells. “Distillers are utilizing almost our entire product line. There is no one style of either kilned or roasted specialty malts that dominate what the Craft Distiller is using. Essentially every roasted offering from Caramel

FLAVOR COMPONENTS When it comes to making a mash, the grain used obviously

20 through Midnight Wheat is being used to produce spirits. depends on the desired flavor profile. Jeffery offered a quick Ellis said that distillers now have more options for malted rundown of some of the flavor characteristics of the most popular ingredients, too, from whole grains, grist and flours to malt distilling grains: extract and pre-gelatinized flakes. “This gelatinization allows access to starch granules by enzymes in the mash without the need for a separate cooker,” he explains. “Though enzymes are not present in flakes, the pre-gelatinized flakes will allow conversion of starches in the same way as malted grains in the presence of enzymes.”

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John Jeffery, distiller and former researcher at Michigan State University, says that while malts are gaining popularity, American

While distillers are familiar with the flavor profiles of specific

distillers traditionally use mostly raw grain. “The bulk of American grains, exactly why the flavors are different is still largely unclear.

44 WWW.ARTISANSPIRITMAG.COM

“Flavor contribution of grain varieties to an end product (i.e. whiskey, beer or bread) is not a simple question,” explains WSU’s Brouwer. “I attended the North American Barley Researchers Workshop this spring and representatives from the largest breweries, the craft brewing association and several university faculty all got together to puzzle over that very question.”

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Jeffery explains that the flavor characteristics of grain do not necessarily come from the starches that are being converted into alcohol, but instead the other characteristics of the grain. “It may have to do with specific proteins and certainly there’s an effect from different combinations of fatty acids.”

Brouwer agrees, explaining that many parts of the grain kernel are just as important as the sugars. “The outer layer of grains (think wheat bran) are packed with various phenolic compounds which I would suspect could contribute aspects of flavor,” he offers. “A lot of work is still being done to pull apart differences in variety, growing location, and microbial communities associated with the grain and processing methods. What we do know is there are tremendous differences in flavor and functionality, and finding the right fit for new varieties is a fun challenge.”

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WWW.ARTISANSPIRITMAG.COM 45

HEADFRAME S P I R I T S WRITTEN BY CHRIS LOZIER

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PHOTOGRAPHS BY AMANDA JOY CHRISTENSEN

WWW.ARTISANSPIRITMAG.COM 47

g

rowth happens at different rates for different distilleries,

When planning the distillery, John talked to several still

but adding 25 employees within two years of opening is manufacturers, looking for continuous stills similar to those they

somewhat unheard of. For John and Courtney McKee, the 2013 built for biodiesel. “I went to all the equipment manufacturers Montana Entrepreneurs of the Year, growth came fast. The team and I asked them, ‘Where’s your continuous stills?’ and they said at Headframe Spirits now operates two distilleries, a bottling ‘We don’t know what you’re talking about,’ and I said, ‘Well I plant and a still manufacturing business.

know you made one 45 years ago for Makers,’ and they said

The McKees opened Headframe in Butte, Montana in 2012, ‘Yeah, but we haven’t made one since.’” after John’s last job vanished into corporate thin air. John and

Most large distilleries keep a showpiece copper pot still in the

several business partners invented a biodiesel distillation process, tasting room, but behind the wall, continuous stills do 90 percent designing stills and building refineries across the country, and in of the work. John explained that continuous stills are consistent, their nine years of business, nearly the entire biodiesel industry accurate, and capable of producing a lot more distillate because adopted their technology.

when a fermentation tank runs dry, you just switch the hose to

“When we entered the industry, no one was distilling biodiesel, the next tank. and when we left the industry the big jobbers wouldn’t accept

For many, a copper pot still invokes a romantic image

biodiesel unless it was distilled,” said John. When the economy of distilling, but Courtney explains that it is the process and tanked and a shareholder buyout went bad, John and many others understanding of distillation that is romantic, not the shape of left the company, including Headframe’s current stillbuilder, the still.

Mark Chadek.

Courtney says they would have trouble keeping up with demand

John and Courtney talked about what to do next. When running a pot still, telling us, “There’s nothing romantic about Courtney said they should look into distilling beverage alcohol, having to set up a cot next to your still because you’re behind on they developed a business plan that allowed them to live and do your production schedule and you have to sleep next to that baby business in Butte.

to keep it running at a sufficient rate.”

48 WWW.ARTISANSPIRITMAG.COM

John said that a lot of distillers and consumers think that a pot Mark Chadek, a mechanical engineer that worked with John still is a magic machine, lending the spirit its special character. designing and building the biodiesel stills, said the switch to While this is true to some extent, the majority of a spirit’s making spirits was not nearly as exciting to him as the ability to character comes from other factors. “What we really believe is keep designing and building stills. “I do enjoy a drink from time that distillation, when done properly, especially in brown spirits, to time, but you don’t find me hanging out at the bar much,” he in our opinion only accounts for about 30 percent of ultimately tells. “What appeals to me more than anything is the engineering what that flavor’s going to be,” explains John. “It’s mash, it’s challenge and building stuff like that.” ferment, and it’s oak.”

Chadek said the continuous stills are precise, capable of

Since they could not buy a small scale continuous still, John producing exact flavors with consistency. “I don’t think you have and some friends started designing and building their own. Their the same level of control, or ability to produce as wide of a variety first still operates in their storefront and tasting room in uptown of distillates with a pot still as you would with something like Butte, while across town, at Phase 2, they run a second still to this, honestly,” he tells. “And then you do find that sweet spot keep up with demand.

or that nice product that you want, that everyone wants to buy,

At Phase 2, they also operate Mountain Consolidated Packaging, you certainly have a much better ability to produce or keep up where distillers can ship their bulk spirits to be bottled, labeled with demand.” and boxed for distribution. If new clients send bottles that they

Headframe Spirits Manufacturing stills have been very popular

do not already have a bottle jig for, they take the bottle to the with distillers, which John credits to the innovative designs that machine shop on the other side of the building, where the still Chadek, the team of still builders, and himself have engineered. builders measure the bottle, build a cad design, and machine a For instance, with the push of a button, the still can switch from new jig in a matter of hours.

making Headframe’s whiskey to their vodka in a few minutes

At the machine shop, still builders and crew design and build time. continuous stills for clients at Headframe Spirits Manufacturing.

While manufacturing stills for new clients, they are also

WWW.ARTISANSPIRITMAG.COM 49

working on larger stills for their recently announced Phase 3.

They are negotiating to purchased an old mine site, with a large yard and warehouses, where they plan to build the largest distillery west of the Mississippi. Plans are still in development, but they include lodging, event space and a restaurant, all with the idea of creating a destination distillery.

The new distillery will be capable of producing a 53 gallon barrel of whiskey every 7 minutes. Some of the whiskey will be sold under Headframe’s label, with the rest being sold to other brands.

John and Courtney expect to create as many as 50 full time positions at Phase 3, fulfilling one of their goals from the start, Return on Community (RoC). John explains that, “Return on community is what you do, in everything that you do, that actually gives back, or creates, or does something to enrich a place.” He said that the jobs and the revenue created from their business now, and their business in the future, are beneficial to Butte, 712383 Middletown Line, RR 3 Tillsonburg, ON N4G 4G8 Canada Tel: 519-842-9175 Fax: 519-842-4446 www.ontariospecialtygrains.com

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allowing them to give back to the community that supports them.

Butte was built on mining, and three mine claims actually had their Headframes, the lift that lowers miners into the mine, within a couple blocks of the current tasting room, hence the name Headframe Spirits. John and Courtney have worked to celebrate that history in every part of their business, even naming their spirits after mining claims, like Destroying Angel Whiskey and Orphan Girl Bourbon Cream Liqueur.

A portion of Orphan Girl’s profits go to the World Mining Museum in Butte, and thanks to their rapid growth, Headframe has been able to donate to many events, causes and organizations.

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John tells that, “In the year and a half we’ve been open, we’ve donated $50,000 of cash to events like the Montana Folk Festival, An-Ri-Ra, Evel Knievel Days, the Original Festival…and various other things that are good purposes and good things and can use a cash influx.” John says that recipients ask them why they give so much away when they are such a young business, and he tells them that it was their money, anyway. “You gave it to us

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when you bought a bottle of booze, but it was still your money,” says John. John and Courtney seem to view the business’ swift success not as a means to get rich, but as an opportunity to benefit their corner of the world while enjoying the ride.

“We don’t give everything back, but we give enough that we www.prosperoequipment.com

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feel that we’re giving back in the way that the community gave to us,” John explains. “We paid off everything we needed to do, everybody’s salaries are paid, we put our savings away. Alright, well, let’s give it back.”

Headframe Spirits is located in Butte, MT. For more information visit www.headframespirits.com or call (406) 299-2886.

50 WWW.ARTISANSPIRITMAG.COM

MASH BROTHERS How barrel aging beer can build bridges.

WRITTEN BY STEVEN SEIM

///

PHOTOGRAPHY BY AMANDA JOY CHRISTENSEN

B

arrel aging beer is a trend that has quickly gained popularity previously aged in the barrel will account for a major share of the in the craft brewing community. To age their beers, brewers characteristics imparted into the beer.”

often look to distillers for used barrels. Distilleries have a chance

Besides the added flavor benefits from a barrels’ previous

to recuperate some of the cost of the barrel by selling it used, occupant, aging a beer in fresh oak can ruin a beer in only a few and the brewery can make a unique product. But besides aging hours’ time due to its low alcohol percentage. When brewers buy beer, how else do distilleries and breweries interact? What new barrels, Black Swan recommends filling them with boiling can a distillery gain from working with a brewery? What kinds water many times prior to filling them with beer to avoid overof projects can they undertake together? How can a distillery oaking. Also, after being filled, it’s not a bad idea to check the choose a partnership that benefits them? We spoke to several beer on a daily basis. distilleries, breweries, as well as a cooper who helped us explore

Another factor worth considering when putting beer in barrels

barrel aged beer and what can happen when a distillery and a is sanitation. “It’s very easy for bacteria to grow in the nooks and crannies of the inside of a barrel,” Heidi details. If the goal is

brewery collaborate.

PERSPECTIVE Barrel aging beer isn’t a new phenomenon. We spoke to Heidi Karasch at Black Swan Cooperage for her opinion. She cites the Festival of Wood and Barrel Aged Beers (FoBaB) in Chicago, which has run for 11 years so far. As Heidi notes there are beers

only micro-oxygenation then a barrel could theoretically be used for 50 years if the brewer can maintain sanitation. However, just like spirits, if the goal is to extract flavor, the lifetime of a barrel will drop to 2-3 usages before it no longer imparts the barrel’s previous flavors.

ROOMMATES

on display aged in barrels from “the entire spectrum of products that are being made; sherry, cognac, wine, port, whiskey and

As both breweries and distilleries grow, some are opening their

other forms of spirits.” Black Swan noticed a significant growth own new divisions that either brew or distill. The partnerships in attendance from their two appearances in 2011 and 2013. between those separate divisions of the same company are Consistent growth over its 11 years shows the tradition of aging obviously much closer than others. Dogfish Head in Milton, beer has been expanding for some time.

Delaware is such an example, and we spoke to Justin Williams,

Heidi pointed out two of the key reasons breweries age their their “Off-Center Storyteller,” about the distillery side to find beer: flavor and regulation.

She

said

“from

our

understanding, it is illegal for a brewer to simply pour spirits directly into their beer, so a used spirit barrel is the only way to achieve that particular flavor.” Heidi also mentioned what happens to beer that ages in a used barrel.

“Micro-oxygenation

out how the two sides work

“Whether the beer is aged for 6 weeks or 2 full years, the micro-oxygenation paired with the unique spirit previously aged in the barrel will account for a major share of the characteristics imparted into the beer.”

— Heidi Karasch

BLACK SWAN COOPERAGE

is as important for barrel

together and what other distilleries can learn about the benefits of having a brewery so close.

In their case, both the distillery and experimental brewhouse share equipment, which means they schedule around each other when the distillery needs to produce a wash or the brewery needs

aged beer as it is in the spirit-aging world, as it is a major factor to brew. The distillery side also gets to make use of the brewery’s in flavor,” she said. “Whether the beer is aged for 6 weeks or 2 many ingredients. full years, the micro-oxygenation paired with the unique spirit

Since Dogfish Head is still best known for its beers, the

52 WWW.ARTISANSPIRITMAG.COM

distillery is a welcome surprise for many fans touring the brewery. place for Black Button. So while their name isn’t the same, they The distillery is only marketed at their brewpub and through word share a building and thus have a very close relationship. They’ve of mouth at the moment, so sending fans of Dogfish Head home already agreed that as soon as Black Button is finished with their with a bottle of spirits is a special treat for them. “It’s always bourbon barrels, Rohrbach has first claim to them. When a beer great to see a customer walk away with a growler of beer and a from Rohrbach aged in Black Button’s barrels is finished, both bottle of rum,” Justin said.

brands will be represented on the final labeling. Jason also told

Justin told us about two of the collaborations the different us that the distillery is considering buying back the barrels again sides of Dogfish Head have done. For one, the distillery took the and aging more bourbon with the added beer flavor. formula for Fort, one of Dogfish Head’s fruit beers, and created

Sharing the building space has afforded the distillery other

a distilled spirit from it. He also described a project called benefits, as well. They tied into the brewery’s existing glycol D.N.A. 2012, in which both the brewery and distillery produced system for the distillery’s cooling needs, and they share other separate liquids from the same collaboration. The brewery general equipment regularly. They also found that the farmer brewed a blueberry and honey braggot, which was made entirely who grows grain for the distillery is more than happy to take the with ingredients from their home state of Delaware (including spent grain from both the brewery and the distillery for their beef the yeast). The distillery then distilled that wort. Having both cattle. sides come out with their own unique product was exciting for the company.

In addition, Black Button has also begun a relationship with a smaller brewery that is producing a very unique product.

Black Button Distilling in New York also has a close Abandon Brewing is a small brewery down in the Fingerlakes. relationship with the brewery they share a building with, but After striking up a conversation at a festival, it was revealed the this collaboration came about by accident. When Jason Barrett, brewery was making a spiced wheat beer. Black Button makes owner of Black Button, was close to finalizing an agreement their gin with wheat, and wondered what would happen if they for another space, the deal fell through. The almost-disaster put their gin botanicals in the wheat beer. They decided to find turned into an opportunity when an unfinished storage room in out. Abandon produced two pony-kegs, and served them at a the Rohrbach Brewing Company suddenly became the perfect father’s day event this year. Both kegs were gone within an hour.

WWW.ARTISANSPIRITMAG.COM 53

Now Abandon is planning on making a bigger run of the product, the barrel with no strings attached. They often sell to brewers and if it’s successful they are considering making it a permanent they’ve met at conventions or on the road, who are put on a offering. They’ve also agreed that both companies will be on the waiting list that can last as long as 4 months. The second tap handle when the beer is served.

offering is to enter a licensing agreement whereby Dry Fly’s logo

Jason, when asked about analyzing the return on investment is represented on the final product. In this scenario they don’t for his distillery from the time and energy spent working with charge for the barrel (except maybe freight costs if they’re far breweries, said that he wasn’t concerned with the data of it all. enough away). This allows breweries, wineries, mead makers He hasn’t made any agreements for profit sharing, he is simply and more, an opportunity for a mutually beneficial co-marketing happy with the mutual publicity he and the brewery will receive. venture.

Since his goal is to continue running a profitable distillery,

As part of the deal, Dry Fly usually asks that the partnered

not to sell it, he doesn’t crave huge leaps of growth like other company has a launch party for the product and advertise that it companies might. He enjoys the learning process collaborations is aged in Dry Fly barrels. Something like a $10 combo-offering can provide, which help him to expand his knowledge and make of a glass of the new beer and a shot of Dry Fly’s wheat whiskey better products.

SHARING THE SPOILS In Spokane, Washington, Dry Fly Distilling helped inspire a closer look at the relationships between distilleries and breweries.

They have a history of advertising events, using social networking, where a brewery will release a beer aged in used Dry Fly barrels.

Don Poffenroth from Dry Fly told us how these relationships are formed and how a typical arrangement is constructed.

Dry Fly offers their used barrels in two ways; the first is to sell

is common at these events. We asked Don what Dry Fly’s options were if a product turned out poorly. He explained that since it’s a licensing deal, Dry Fly can revoke the license at any time and pull their name from the final product to protect their brand image. It hasn’t happened yet, however.

Why not charge for the barrel and make the licensing agreement part of the deal? Don and his partner Kent come from a marketing background, and Don says that Dry Fly just wants to keep making sure new people see their name. “Craft beer customers and craft

54 WWW.ARTISANSPIRITMAG.COM

whiskey customers are the same exact people…it’s all about soft

According to Don, it’s also possible to grow your brand in new

selling a brand. To see [our] logo on a tap handle, that’s all I need.” territories using your old barrels. Selling through distributors in other states, who have contacts with breweries, can introduce your

“It’s all about soft selling a brand. To see [our] logo on a tap handle, that’s all I need.”

— Don Poffenroth

DRY FLY DISTILLING

But Dry Fly has been around for 8 years and has built itself into one of the Northwest’s most popular distilleries, so doesn’t that mean a brewer might be getting the better end of this deal?

Don says it depends on the brewery, but it’s possible. They’ve had arrangements with small breweries and big breweries such as Pike Brewing. But both sides always benefit, and Don doesn’t believe it’s about ‘winning’ the deal in any way. “Sometimes it’s really good for them, sometimes it’s really good for us. It’s never bad for us.” And if Dry Fly can attach their brand to the marketing savvy of a popular brewery like Pike or Ninkasi, Don welcomes that opportunity.

brand to new areas. Don emphasized Dry Fly’s use of networking as a way of meeting new distributors and gaining access to states that haven’t seen their product yet. If a distributor knows a brewery looking for barrels, Don says “Heck yeah we’ll send three barrels to Kentucky,” or wherever there exists an untapped market.

HAND IN HAND Besides aging beer, there are several other possibilities a distillery can take advantage of by working with breweries: sharing ingredients, recipes, and co-marketing are a few. One of our favorite sentiments was from Jason at Black Button, who said, “I would love to see the craft distilling movement do more collaboration. You’ll learn a ton from creative people, get you out of your element and help you re-examine how you’re doing what you’re doing.” He hopes there are more distillery collaborations with other distillers, breweries, food-makers, or whatever they can think of. “It’s something new and different.” We agree, Jason. Here’s to future collaborations and exciting products that continue to challenge the distilling world.

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I N N O VAT I O N VS. G I M M I C K written by CHRIS LOZIER

B R E A S T S .

Big chicken breasts, stripped of exterior fats and oils for hours

Maybe you remarked on how smooth it was so you didn’t feel

in cold running water. The meat is hung raw in the neck of a

like you were duped, but it fell flat on your tongue and you could

still filled with twice distilled mezcal and over 200 pounds of

suddenly see the dust motes that had gathered on the shoulder

wild apples and plums, some almonds, red plantain bananas,

of the bottle as it waited on the shelf to waylay you in your

pineapples and a couple pounds of uncooked white rice. Some

naiveté. You got gimmicked.”

swap the chicken for rabbit, wild turkey, or deer, or add different

Clodfelter would know, having sampled and studied an

fruits, herbs and spices. There are many ways to make it, but

extensive array of spirits from many distilleries while working as

once the final distillation is finished, they are all called Pechuga.

Head Distiller for Corsair, the 2014 Whisky Magazine Innovator

The price is steep and the supply is short, but spirits

of the Year.

enthusiasts, especially tequila and mezcal aficionados, have

She also points out that it is not just a marketing question,

high praise for this spirit, with its fruity, spicy nose, soft texture,

but a production question, as well. “For those of us on the

and balanced palate of herbs, fruit, agave, salt, and savory meat.

production side rather than marketing and sales, the line

Ron Cooper of Del Maguey Single Villiage Mezcal says that,

separating innovation from gimmick can be just as blurry,”

“in 1952 it was an ancient tradition — published in a book in

she says. “Innovation isn’t just the finished product, but how

Spanish on Pulque referring to Pechuga de Jalisco — putting a

you approach your distillery on a day to day basis. If you can’t

baby goat breast in the liquid of the second distillation.” While

look at your distillery procedures and yourself and see room for

Pechuga’s origins are not well documented, they don’t really

improvement it becomes hard to push outside the limits of

need to be to call it an innovation.

what good whiskey or gin or rum have traditionally tasted

If you like distilled spirits (admittedly a terribly redundant

like in order to create something special.”

Almost all of Corsair’s products are non-traditional,

question), take a moment to appreciate the new flavors you have access to. Inside every spirit category — whiskey, vodka, gin,

and they have gained a near legendary reputation

tequila, rum, etc. — new spirits are hitting the shelves every

because of it. Their Triple Smoke Whiskey,

day, spirits that meet all of the traditional requirements of their

made from malted barley smoked with peat,

category, yet still taste different.

cherry and beech woods, is featured

While many of these new spirits will fade away, some of them will stay, and a rare few will stand alone, creating new subcategories all their own.

Distilling experimental and innovative spirits has been going on for centuries, but never at a breakneck pace like this.

With so many new spirits to choose from, how can you tell if a new product is an innovation or a gimmick? Where do you draw that line, if it even exists?

“The line that separates innovation from gimmick falls on the consumer’s tongue,” says Andrea Clodfelter of Corsair Artisan Distillery in Nashville, Tennessee. “Is the perceptible difference more than a passed on consumer-cost for an unnecessary process? We’ve all had whiskey that tastes like good marketing.

in DISCUS and USDA international

THE LINE THAT innovation of American distillers.

Not just because it is unusual, SEPARATES but because it still yields INNOVATION a high quality product FROM GIMMICK birthed from an FALLS ON THE innovative blend of ingredients.

CONSUMER’S Quality and TONGUE. promotions as an example of the

dedication to

the

ANDREA CLODFELTER CORSAIR ARTISAN DISTILLERY

WWW.ARTISANSPIRITMAG.COM 57

product INNOVATION IS seem to REVOLUTION, account A CHANGE, A for part of METAMORPHOSIS. the separation between innovation A GIMMICK IS and gimmickry. Will USUALLY A Maschmeier, founder of PUBLICITY 3 Howls Distillery in Seattle, STUNT. Washington, makes a hopped whiskey in the hop-forward style

WILL MASCHMEIER

of Northwest India Pale Ales. Filling a

basket

with

“Marketing seems to drive gimmickry but the difference between the two has nothing to do with marketing,” explains Maschmeier. “I find that people who are gimmicky tend to follow the bandwagon, while people who are innovative tend to take the road less traveled. Innovation is revolution, a change, a metamorphosis. A gimmick is usually a publicity stunt.”

When it comes to driving sales, gimmicks work. However, when it comes to earning a lasting spot on the shelf for your product and your distillery, associating yourself with innovative, quality products is a better tactic in the long run.

Many new distillers face the problem of finding shelf

Northwest-grown

space for their new products, even if the products are better

Amarillo, Horizon and Chinook hops, he

than the competition. This is largely because their product

fumes twice distilled rye whiskey through the

is not all that different from their competitors, whether it be

hops, resulting in an exceptionally aromatic and

ingredients, technique, flavor or packaging. There are only so

flavorful spirit. “It’s hard work developing a hop blend

many moonshines a bartender will stock and learn to work with,

3 HOWLS DISTILLERY

gin

distillery’s image.

that doesn’t clash with itself and fits the flavor profile

regardless of whose great grandpappy developed the recipe.

of a whiskey,” he shares. “As far as how to differentiate it

“There’s a misconception that you can make what you already

from a gimmick, a gimmick is a trick that’s usually done to

like to drink and that other people will like it too,” says Clodfelter.

gain attention. I’d say that you’d be able to call it a gimmick if

“The problem with this is that, if it’s already available, why

I purchased a hopped flavored chemical called Hops, blended

would a consumer switch from a consistent, quality product to

it into a whiskey and then claimed to have a hopped flavored

your micro-approximation of the same thing? There’s no gain for

whiskey.”

the consumer, so you need to differentiate your product in order

Maschmeier got the idea for his whiskey from Corsair’s hopped

to offset the risk of trying something different and potentially

whiskey, Rasputin. “It’s definitely an innovative idea,” he says.

disappointing. If you’re not bringing anything new to the table

“Hopped whiskeys are an entirely new category of whiskey.”

in terms of product innovation, then you might as well enjoy

As the current market stands, there is no shortage of flavors and styles, so creating new spirit categories does not seem to

your favorite brands and save yourself the trouble of starting a distillery.”

be essential. However, it is desirable and marketable, and one

Does this mean the shelves are full and there isn’t any room

of the key components to the meteoric rise of artisan distilling.

for your bourbon? Not necessarily. But it does mean if you

Innovation provides consumers with new and exciting flavors,

want your bourbon on that shelf, your product, your story, and

introducing them to your brand and the rest of your product

your packaging need to stand out with integrity. You want your

lines. It also attributes a revolutionary, independent bent to your

product to be an experience, not an ambush.

DI

ER L L I ST

LOGO BRANDED DISTILLERY PRODUCTS

Y

FOR YOUR

TASTING ROOM

CTS U D PRO N BY

L AS

AND

GIFT E-STORE

ER-O

INFO@DISTILLERYPRODUCTS.COM

(844) 837-1515

“YOUR SPIRITS will be REMEMBERED” 58 WWW.ARTISANSPIRITMAG.COM

the

T X E N EP T S How adding a gift shop and/or tasting room can enhance your profit and market your products WRITTEN BY AMBER G. CHRISTENSEN-SMITH

///

PHOTOS BY AMANDA JOY CHRISTENSEN

S

o you’ve bit the bullet and started a distillery. Good on

room space and products. As a service, she shares, “We take a

you! Now what? How do you maximize the profit on your

look at what they already have planned, and make suggestions

awesome products and get people in the door? A gift shop and/ or tasting room might be your best bet and best investment for

accordingly.”

Several companies, like Kate’s, are out there to help distilleries

getting everyone to notice your fabulous spirits. Nathan Kaiser of

with tough questions regarding planning for a new space should

2bar Spirits in Seattle, Washington shared with us that, “Brand

they get stumped by how to start.

and customer relationship building —it is your #1 opportunity to

Janie adds, “Creating attractive product displays can draw the

engage with the customer one-on-one about your products, your

customer in, and promote the distillery. Take time to plan the

brand, and why you do this.”

display utilizing key features embracing the uniqueness of your

Adding a space for marketing your products and accessories make your customers’ visit memorable and can keep them coming back for more. We interviewed a number of distillers, marketing companies, and product suppliers regarding their best advice for building a space to market and interact with your customers. We gathered together some great information for those of you who are ready to venture into this important part of marketing your distilling operation, and hopefully provide a few new ideas to those of you ahead of the curve.

LAYOUT

Craft Distillery. Make sure the point of sale location is designed for good traffic flow and easy access for customers to browse.”

FUNCTIONALITY VS. AESTHETICS Another item to consider when planning is if you want your space to be functional, aesthetically pleasing, or both. Most locales focus on both functionality and aesthetics as balancing both can be the best use of space and will draw the most interest.

Having a space that is out of the way yet easily accessible to customers is important. You want a location that can house

One of the first items you need to consider when deciding to

your inventory and that works into the flow of your distillery, tour

integrate a gift shop or tasting room into your operation is where

space, and tasting areas. Customers often like having a space to

you are going to house it, and how much space it is going to

mingle after tasting or a tour of the distillery, and this can be an

occupy. According to Janie Cantrell of Laser-On, a marketing

awesome placement for distillery branded products.

company that makes custom marketing products for distillers, it

Additionally, making a space that draws a customer in because

is important to pay attention to your available space, traffic flow, it is pleasing to the eye is key. Customers are more likely to demographics, and your budget.

interact with products that are placed well, organized, and are

You should be asking yourself:

labeled clearly. Janie notes, “It needs to be a part of the Tasting

»» What is the best placement for our gift shop/tasting

Room process and overall educational experience and of course

room?

scheduled tours to work around the production schedule.”

in the way of production?

Branch wants you to consider “How will this be staffed—will

looking for in products?

staff be conducting the business? Is there room to expand?”

»» Does the space enhance the flow of our distillery or is it »» Who is coming through our doors and what are they »» How much can we afford to invest in a space and our branded products?

Kate Cardinali of Innovative Media Designs offers services to help distillers make decisions about their gift shop and tasting

You’ll also need to consider staffing. Steve Beam at Limestone the volume justify a full time attendant or will the production You’ll need to be thinking about the need to pull a person from production or hiring someone to help out, which is all dependent on how much capital you have to invest in this portion of your business. However, Steve continues by saying that having a gift

60 WWW.ARTISANSPIRITMAG.COM

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BRANDED INVENTORY shop/tasting room can really bring in some critical cash flow that

We’ve mentioned branded inventory, but why is branded

is great for a beginning distillery, and it can bring forth brand

inventory so important? If you can get someone to wear, carry,

recognition and loyalty.

POINT OF SALE TIPS When it comes to sales, both distillers and marketing professionals express that it’s important for you to understand the value of the tasting room or gift shop, even if it’s not the most obvious profit grossing part of your distillery. While a t-shirt or any other branded item may not be a huge profit maker, it is a great way to get your brand image out the door and noticed by others.

Additionally, make sure the items you stock are of good quality and fit into your brand image. Nathan shares, “Keep it simple. Just because you can sell something doesn’t mean you should. Focus, focus, focus on the products that help build your business.”

or display your brand image, you can increase the likelihood of future sales to others and you encourage the original purchaser to remember your product and buy more. Tami of SDC adds, “If you’ve got a cool t-shirt with our logo on it, and folks want to wear it…Boom, you’ve now got a walking advertisement.”

Kate of Innovative Media Designs says the most popular branded products customers buy are typically glasses, stickers/ magnets, apparel, headwear, and bags. Having items that showcase your brand image on these items are fun for customers to buy as souvenirs and gifts during their visits to your distillery.

Janie also adds that barware can be a popular item for customers to buy, as well.

THE LONG TERM EFFECT

Nathan also says to not be afraid to elicit a sale: “Sell them.

In talking to our distillers and marketers, we’ve found it’s

Don’t be pushy, but definitely encourage a sale. Don’t be afraid

important to recognize your gift shop and/or tasting room is a

to ask for the sale, that is the simplest and hardest step for most

revenue generator and a marketing tool. Not only can you make

people to make.”

a bit of profit off of merchandise you sell with your brand image,

Remember that even if a customer doesn’t buy something big, but you also get your brand out on the streets so it is noticeable that a tasting room or gift shop is still a great place to win over to even more people. “Distillery products that are used regularly new customer and keep them coming back for more. Tami Joyce

creates more brand recognition and recall,” states Janie. Plan

of Seattle Distilling Company (SDC) shares, “A tasting room lets

carefully, bring in goods that enhance your product, and be just

you engage with people. You get to have a conversation, learn

as passionate about these branded items as you are for your love

about your customer, tell your story. It’s invaluable.”

of spirits.

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Greeley, Colorado

Syntax Spirits Written by Steven Seim

w

Photographs by Amanda Joy Christensen

hen hearing Heather Bean describe leaving her job at

with her partner Jeff Copeland, who still works full time as an

Hewlett-Packard to start Syntax Distillery, her enthusiasm

atmospheric scientist. Syntax makes Class V vodka, Powder

shines through. She was notably excited to tell us her process of white rum, Perky Pepper flavored vodka, and a bourbon, with designing the floor layout, helping to weld and solder, and doing

more products in development.

her own steam fitting. After spending much of her life home-

We asked Heather what her definition of craft was, and how

brewing wine and beer, she was introduced to craft distilling

she thought her distillery fit into that idea. She told us, “it’s

when she was sent to Portland, Oregon by HP. After that, forming

something that you make from scratch that is a unique product.”

Syntax became the culmination of her private experimentation And she’s enjoyed experimenting in order to find out exactly with alcohol and working as an engineer.

Based in Greeley, Colorado, Heather formed Syntax Spirits

what flavors she can draw out of her spirits. Heather’s goal is for anyone who tastes the spirits to know that they are different

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from any else they’ve tried. “For good or for bad, you will get our also mentioned an espresso infused homemade substitute for unique take on anything we make.”

Kahlua. “They’re just for us so we can have a full cocktail menu.”

As an example, Heather described the process of finding yeasts That sounds like as good a reason as any to go to the distillery to use in their Russian-style vodka. “We found that there were these vodka yeasts out there that would produce…” She paused,

for a visit.

One of the more unique aspects of Syntax distillery is the art

thinking of a description, “it tasted like water and we hated it.” on their labels. While we never judge a book fully by its cover, the They ended up using yeasts that are intended for other spirits

design of their labels is certainly enough to warrant picking up

than vodka, but they like the flavor profile better. Heather said

a bottle and looking closer. Renowned pinball artist Greg Freres,

their vodka ends up with subtle sweet and grain focused flavors. best known for his Elvira pinball table, has drawn all the art for Colorado’s laws restrict spirits sales in the tasting room to only those products produced onsite at the distillery, so Syntax

their labels. “We tend to go for a lot of color,” Heather told us.

And since she’s proud of being one of the growing number of

has had to get creative for their home crowd. They create their women-owned distilleries, she said, “I have a lot of my female own in-house infused spirits for cocktails, and have a bar full of extreme sports heroes on the labels.” The kayaker which adorns concoctions they don’t sell to the public. “If we want to make

the vodka labels, Heather says, is a representation of how she

something like a vodka margarita, we have to make our own

sees herself. On the back of each label is a tall tale about the

citrus-infused liqueur. We can’t just go buy Triplesec.” Heather origins of the characters, including their rum’s heroine who

64 WWW.ARTISANSPIRITMAG.COM

has to snowboard the Rockies each year to help the snow melt, off at the Liquor Division. Heather told us they are continuing providing water for the distillery. For their bourbon and light

to meet with new distributors and will push on spreading the

whiskies, they used the distillery’s cat, Gustav, as a model. His

influence of Syntax Spirits.

royal stature is their best guess as to how Gustav sees himself.

In June of 2014, we’re sorry to say that Syntax, and much of

Heather says some people don’t appreciate their labels. She’s

their neighborhood in Greeley, Colorado suffered from flooding.

heard some ask, “Well how can you be making high quality spirits

While the distillery received some damage, we’re happy to report

when you have these frivolous looking labels?” to which Heather that cleanup has gone well. Heather and their entire staff have responds, “drinking should be really fun, that’s our whole idea.” been channeling some of the heroics of the characters on their Distributing their spirits has been easy so far, as they’re able

labels: Once they were cleaned up, they started hosting benefits

to drive their product to any retailer in Colorado themselves. for other flood victims in their town. They’re a great example of As long as they’re not signed with a distributor that covers the

the type of passion project that we love to show off for the rest of

same territory, they can self-distribute, which means they can

the distilling world. So she may have never said it, but we will:

cover most of the northern half of the state. They have worked

thanks for sending Heather to Portland, HP.

with distributors to reach the southern half of the state. Since Wyoming is a control state, distribution there is as easy as driving Syntax Spirits is located in Greeley, CO. For more information visit the 45 minutes north to Cheyenne and dropping their product www.syntaxspirits.com or call (970) 352-5466.

P R O V I D I N G R Y E to the distilling industry for over 50 years.

Brooks Grain Improving the quality of life with grain.

WWW.BROOKSGRAIN.COM

WWW.ARTISANSPIRITMAG.COM 65

S D R Y A T I D D A O T N R E N H A T E F T O D S f I ULES o WRI

TTEN

IM

BY J

MCC

OY

R

O

ne of the first regulatory terms encountered when putting

Grain ,” these spirits are the most commonly used in making

together product ideas is “standards of identity.” We have Vodka and other products. Other commodities used to make

all seen terms like “whisky” and “vodka,” or “rum” and “brandy”

neutral spirits include potatoes, sweet potatoes, beets, or even

on labels, and we generally know that whisky is a grain spirit that sugar cane. Sugar cane? We thought that was rum! Ok, rum is has been aged in a charred barrel, vodka is pure alcohol cut made from cane, usually from molasses. Cane Neutral Spirits to 80 proof, rum is made from sugar cane and brandy is from

are not rum. The standards identify “ Rum ” to be defined

grapes or other fruit. The key to all standards of identity is that as spirits made from cane distilled below 190 degrees proof. they are linked to the source material from which the spirits Note that the distillate must also have the “…taste, aroma and were made, and they each must be distilled and/or bottled at, other characteristics generally attributable to rum...” for it to be above or below a specified alcohol content. Where do these rules

classed as rum. A neutral cane spirit distilled above 190 cannot

come from and can we simply illustrate some of the basics of the be classed as rum, and if redistilled, cannot be converted into identity structure?

rum.

Federal Distilled Spirits labeling rules are found in Title

There are some folks making a “moonshine” from a mash of

27, Code of Federal Regulations (CFR), Part 5. Other labeling “grain and cane” — using corn and a quantity of sugar in the guidance can be found on the Alcohol and Tobacco tax and Trade mash to match the traditional corn and sugar mash that illegal Bureau website at www.ttb.gov. Within the regulations, at Section

moonshine has historically been made from. “ Moonshine ”

5.22, are the actual standards of identity which the distiller — what is it? Moonshine is a fanciful name which distillers apply must conform to. Let’s take a look at how the standards work. to a variety of products, typically a corn whiskey, spirit whiskey, “ Neutral

Spirits ”

is the first “class” of spirits listed or a formulated flavored specialty product. It is a marketing

in the regulation. Within each “class” of spirits are subsets of

designation associated with jug and jar products which are a

spirits “types.” Sometimes a product can be labeled with the popular segment of the growing spirits industry. “class” of spirits alone, as the class also denotes the “type”

A subtle statement in most of the standards is that a product

for that product. “ Vodka ” stands alone as a class and type

must possess the characteristics, taste and aroma of the class

designation, unless the Vodka is a “ Flavored

Vodka ,”

which is actually a different class of spirits.

and type which is represented on the label. The art of making spirits is that natural taste tones and nuances are carried through

Further addressing “neutral spirits,” note they are always the processes to create differentiation between brands or types of distilled at or above 190 proof, made from a specific commodity products which otherwise meet the standards to be in the same or commodities. Most common are neutral spirits made from class or type under the Federal rules. Source materials, processes grains, such as corn, barley or wheat. Commonly referred to and treatments employed to make spirits create the perceptible as “ Grain

Neutral Spirits ” or “ Neutral Spirits

differences that give products their unique quality and value

66 WWW.ARTISANSPIRITMAG.COM

position in the marketplace.

distiller must ensure are followed in labeling their products. Gin

For example, “ Bourbon ,” is whiskey, has three types within its class. distilled at under 160 proof from at least 51% of a specific

Many products are typically made under TTB approved formulas,

type of grain. Bourbon is stored at not more than 125 proof in

the basic rule being that if a product involves the addition of any

new charred oak containers. Why “New charred oak containers”?

flavoring or coloring material it is required to be made under an

The product in the whiskey class which we know as Bourbon gets approved formula. If it otherwise does not conform to any of the its unique character from its time spent resting in the charred oak barrel. A distiller has choices of grains in the mash, levels of

specific standards, it is classed as a “specialty.”

The standards of identity which the distiller must conform

char in the barrel wood and length of time in the barrel to craft to have a structure and some logic which can be taken apart their own style of bourbon, but irrespective of those choices, the and understood: following the source material, manner of product must meet the stated basic standards for TTB to approve distillation and processing, and an ultimate conformity to the basic characteristics attributable to the standard. Summarily,

the product as being a “bourbon.”

A whiskey label is required to show the state in which it was these rules are meant to channel creative efforts into defined distilled, and if the whiskey is less than 4 years old it is required to and understood standards, presenting the consumer with readily show on the label an age statement. Does the age of the whiskey defined terms which can be relied on to identify what a product matter in regard to the standards? Only if it is desired to label it

was made from and in a general sense how it may be compared

as “straight.” Anything else in regard to age of the whiskey is a to other similarly classed products. subjective taste and quality issue. As long as the class standard

for “whiskey” is met, the actual type of whiskey is determined Jim McCoy is Managing Consultant for J. McCoy Alcohol & Tobacco

Compliance Consultants LLC in Cincinnati, OH. Jim served over 32

by the specific materials, processes and treatments used. years with ATF and TTB, establishing his consulting firm in 2010 Other “standard” type products are gin and brandy. Similar to assist alcohol and tobacco businesses in their efforts to meet Federal to whiskey, brandy has a structure of “types” which the brandy regulatory and tax requirements. Visit www.jmccoyconsultants.com or

email jmccoy@jmccoyconsultants.com for more information.

Craft distillery equipment designed by craft distiller Robert Cassell exclusively for your craft distilling needs and manufactured in North America by one of the leading craft brewery manufacturers for over 25 years — Specific Mechancial Systems. Available with industry best lead times in modular 240G and 600G all-in-one skid mounted systems or custom still work available.

Exclusive Sales Agent: Millstone Spirits Group

WWW.MILLSTONESPIRITS.COM 1-800-996-0595 VISIT OUR STILL SHOWROOM: New Liberty Distillery 1431 N Cadwallader Street Philadelphia, PA, 19122

info@millstonespirits.com

OR OUR MANUFACTURING FACILITY: Specific Mechanical Systems 6848 Kirkpatrick Cres Victoria, BC Canada V8M1Z9

WWW.ARTISANSPIRITMAG.COM 67

COPPER

WORKS DISTILLING WRITTEN BY STEVEN SEIM

///

COMPANY

PHOTOGRAPHY BY AMANDA JOY CHRISTENSEN

I

t’s both a name and their motto, “copper works.” Co-founders process, such as an unexpected delay or shortage, the brewery Jason Parker and Micah Nutt come from many years of consults with Copperworks about how to proceed.

brewing experience, and started Copperworks Distilling Company

Working with breweries instead of building their own brewhouse

with the idea of seeing what kinds of spirits they could make was done for several reasons. While they were in the process of from a range of different beers.

agreeing to move into their location, its designation changed to

Jason’s long history of brewing includes starting as the first a historical landmark. That meant two things: the building won’t brewer for what is now Pike Brewing Company and ultimately ever get torn down, but they also can’t add onto the structure working as Brewmaster for Pyramid Breweries. Micah is a creative or have a grain silo outside, so they’ll never be able to build a home brewer who started crafting beer with his brother in the 80’s. brewery at their current site. While they still consider building They don’t operate their own brewery, instead partnering with their own brewery a possibility in the future, the savings from breweries around Seattle who produce their wash. The distillery not operating and maintaining one at the moment has been a operates four Scottish-made copper stills to produce gin, vodka, financial benefit during their first few years of operation. and whiskey, all from malted barley.

Copperworks has developed a special kinship with their

In their partnerships with breweries like Pike Brewing surroundings. Appreciating the opportunity to be close to more Company and Elysian Brewing Company, Copperworks orders people and possible customers, they located themselves on grain, specifies what they want brewed, and lets the brewers Seattle’s waterfront. They benefit from the ample foot traffic of operate their own equipment. Usually either Micah or Jason is tourists and locals alike. Micah explains, “Most distilleries are on site while the brewing occurs. If anything changes during the located in industrial or remote areas where rent is less expensive.

WWW.ARTISANSPIRITMAG.COM 69

Here, people are wandering around all times of the year.” One by listening to the feedback of the local spirits industry. One piece possible risk Jason mentioned, was that too many people would of advice changed the way they approached their first batches of come in and sample without buying anything, and the distillery whiskey. They were told several times that if a distillery is aging would lose money. But thus far that has not yet been a problem. anything in less than full-sized barrels, it’s harder to be taken On a nice weather weekend, Jason says they get 150 people seriously by distributors and buyers. Originally, they planned a day. Their location has become an important part of their on starting out with smaller barrels, but decided that they were marketing strategy, spreading their message by word of mouth going to invest in the quality of their whiskey; whiskey they would from visitor to visitor.

want to buy, and which was good enough to make in high volume.

They attribute part of the supportive attitude in the area to The reaction from the public is that they’re “doing it right,” the resurgent cocktail culture in Seattle. Besides the abundant Jason says. Interestingly, the impact of their choice hasn’t been help available from brewers and other distillers in the area, limited to their aged products alone. They’ve found businesses Copperworks has maintained a dialogue with many of the local are more willing to stock Copperworks’ gin after hearing that they bartenders and waiters that serve their products. “That culture were aging their whiskey in full-size barrels. The respect they is a two-way street,” Jason told us. Bartenders from around the gain from bartenders and restaurants by aging in full barrels, is city come to tour the distillery, and making a good impression on helping foster their reputation around the city. them has become a primary goal for Copperworks. If an educated

Their decision to operate a Scottish-style still has forced

bartender leaves Copperworks with a good impression, they’re them to adapt to several challenges as well. In Scotland, most going to pass that on to their customers.

distilleries operate along a river and use the river water for

Jason and Micah are eager to share several lessons they’ve cooling, often going through 70,000 gallons of water per batch learned in the first couple years of operation, some of it gathered and recirculating the water back into the river when the job is

70 WWW.ARTISANSPIRITMAG.COM

done. To accomplish that in Seattle, each gallon would have to the core of the city is difficult. Micah describes that, “Part of be purchased from the city as part of their utilities. Washington what makes us an attractive target [to distributors] is that we’re also requires a company to use cooling water twice, which meant already in 90-100 bars and restaurants in Seattle, which is a lot figuring out how to store a massive amount of liquid. To combat for ten months open.” these obstacles the engineer that helped build their glycol system

Currently merchandise makes up around 10% of their profits,

designed an old fashioned cooling tower, their own “Scottish Jason told us. “In the tourist area we are in…we sell quite a bit.” river” as Jason puts it. It takes advantage of the dew point of But figuring out which products sell has been a challenge all its the local temperature, which is usually cool enough to keep the own. Guessing which things will be more popular than others is water at the temperature they need. This system requires 5,000 an onerous science, so Copperworks has learned that starting gallons of city water per batch, which has allowed their distillery small is the way to go. Orange hats are Jason’s favorite, but no to function more efficiently.

one else in the distillery thought they’d sell. Now they’re one

Choosing the flavors they ended up with in their Gin was of the more popular gifts to buy. White t-shirts, which everyone an adventure as well. While they were initially working toward thought would be a success, don’t sell nearly as well. Jason says something akin to a London dry, the end result became more they’ve learned to buy a single box of merchandise first, and exciting than they had anticipated. After receiving input from while the profit margins won’t be as potentially large as a bulk friends and bartenders, they went through multiple revisions purchase they can safely learn if something is going to sell or crafting batch after batch, changing small things each time. “It’s not. He then suggests purchasing a full palette, saving on cost like cooking without a recipe but you know all the ingredients. per individual item, and making more money once the product You just don’t know how much of what and how long.” The end has been tested successfully. result doesn’t fit the London Dry or any other specific gin category

Copperworks also sells products from other people that carry

and that’s proved to be a plus. Their gin has won several medals interesting stories of their own. Brad Feather, a distiller at in national and international spirits competitions and sales are another distillery, ran a Kickstarter campaign to create his own meeting their targets.

tonic water, and Copperworks sells more of Bradley’s Kina Tonic

In terms of distribution, they have been delivering product than all of his other Washington accounts combined. It sells great themselves around town. Signing with a distributor is a lifetime combined with Copperworks’ own gin. They also sell balsamic contract in Washington State, so they have taken their time vinegar made by a distiller outside of Seattle, and custom food finding the right ones to help them grow. Distributors are products are in the works, as well. interested; they have a substantial enough capacity that there

Adapting their traditional Scottish-style stills for life in a big city

is little concern of running dry, and they have a solid backstory. has had its challenges, but it’s all becoming part of Copperworks’ The challenge now, Jason says, is making sure they don’t leave story, which continues to grow. Many of us in the distilling industry money on the table by giving up on self-distribution too early and are excited to see where the next chapter takes them. committing to a distributor’s fees. They know they will never be able to self-distribute outside of Seattle, but finding a distributor Copperworks Distilling Company is located in Seattle, WA. For more willing to take on areas outside of Seattle without also receiving info visit www.copperworksdistilling.com or call (206) 504-7604.

WWW.ARTISANSPIRITMAG.COM 71

YOURSELF

MacDonald Neal

TO HURT

by

you might be doing

written

10

THINGS

Even if hillbillies turned actors on the Discovery channel portray it with pickup trucks, scrap metal, and rain-drainage areas they call “freshwater creeks,” being a craft distiller is difficult. You know firsthand, it’s at once a technical challenge in distilling, a legal challenge in dealing with the government, a bafflingly opaque challenge working with distributors, and a marketing challenge with the public. Alas, I have little advice to offer from a technical standpoint, a legal perspective, or some miraculous (and ethical) way of dealing with distributors. But I do often see craft distillers overlook the marketing side of things and commit some errors that are otherwise easily avoided. Here is a list of common errors I’ve seen, which will hopefully save you some agony in the future. After all, there’s plenty of that coming from the governmental regulators.

1.

YOUR NAME IS too hard TO SPELL OR PRONOUNCE. We don’t doubt that you’ve had many late night arguments about a name that represents you and represents your spirit. But please, please remember that your customer—who probably first enjoyed your spirit in a half-inebriated state if things were going well—is going to have to remember the name, be able to ask for it with dignity at the bar,

Auchentoshan, Bruichladdich, Laphroaig, and Ardbeg Airigh Nam Beist can get away with this kind of thing. Lacking centuries of pedigree and a mythical construct of hairy, kilted Scotsmen making guttural noises at each other over their cups, you need a nice simple name that is easy to recall

2.

YOU insist ON USING SPECIAL OR NONENGLISH CHARACTERS.

often in ancient, obscure, and decidedly non-English languages, you want to stay faithful to the spirit. So you give it the little je ne sais quoi it deserves! In addition to baffling the consumer—who, we guarantee, has probably not spent a fraction of the hours researching these ancient,

obscure,

and

non-English

languages that you have—you commit another very problematic sin: you baffle the search engines.

If what you want to put in the name of your spirit doesn’t appear on a standard

and/or find it in the store. Even more

If spelling is a problem, going outside

QWERTY keyboard, then it may not belong

importantly, they have to be able to type

the English language can be worse. We

in your name. The further you get away

it semi-correctly into a search engine.

know: after the exhausting and long hours

from a recognizable character, the harder

Yes, Scotch distilleries with names like

you’ve spent poring over historical records

it is for a search engine. For example, The

72 WWW.ARTISANSPIRITMAG.COM

“enye”—the n with the little tilde on it

vodka spawns a bunch of flavors plus a

can try to shift to the consumer but they

like thus: ñ—isn’t really that big of a deal.

gin or two; molasses presents itself and

will resist. Second, if you’re going to use

These sorts of letters have close English

out pops a couple of rums, one of them

those ingredients they absolutely and

analogues. However, liquor juggernaut

spicy; a farmer comes to you with a crop

unequivocally have to taste better! We

Beam, Inc. should’ve known better. They

of fruit and out comes an eau-de-vie; and

have tasted liqueur upon liqueur that use

produce a rye whiskey that they wanted

you always wanted to make whiskey and

the freshest and most natural possible

pronounced as “rye-one” but insisted

its aging away but in the meantime you

ingredients but simply do not taste as

on printing it as: (rī) . Yes, those are

go ahead and distill some microbrewery’s

good as the mysterious “all natural”

parentheses, a dictionary long-vowel symbol

celebrated beer; and then all the liqueurs.

essence. Your target market includes

(macron) over the “i”, and a superscripted

Before you know it, you have two-dozen

lots of those people who buy deep-fried

numeral “1.” Google can figure that

labels and counting. Then you’re trying

Twinkies at the County Fair: so first and

out…barely, but retail sites have a hard

to carve a niche for yourself with exotic

always, use what makes your spirit taste

time with variations of “ri1” and “(ri1)”

spirits that no one’s ever heard of (raki)

the best that it can.

and “rye one.” Why put your consumer

or barely understand (absinthe) or some

through

kind of liqueur featuring some third-world

1

those

sorts

of

gymnastics?

spice known only to Tai Chi yogis and the

3.

YOUR NAME IS too PLAIN.

And after you’ve forsaken your unique, non-English names you can err on the other side: the name is too plain. Once again, think of the search engine! For the customer, as frustrating as getting nothing is getting too much. Disaster falls upon the spirit that names itself after an adjective!

Names like Pur Vodka, Blue Gin, and 1 Barrel Rum… these are all tailor-made for multiple matches and an intense

new age medicine industrial complex.

Don’t end up like Van Gogh with, in our database, 35 different labels all retailing for $30+. Yes many distilleries get away with exactly this but as a general rule, it’s far better to have one label with lots of shelf space than many labels each with small amounts of shelf space.

6.

YOU’RE LOYAL TO A fault TO YOUR REGION. Very closely related to the ingredient problem is the region problem. You want to be local and support your local businesses. But if blueberries don’t grow well in your area, then don’t use them. If your area is not known for wine or corn or barley, then source those ingredients elsewhere. As above, try to first and always

5.

YOU’RE LOYAL TO A fault TO YOUR INGREDIENTS.

use what makes your spirit taste the best that it can. That comes way before getting to name the farm that grows the for

grain and brag that it’s only 20 miles

help those tequilas that have “agave”

something. Organic ingredients, local

away. But there’s a more subtle problem.

featured in their label.) In one of the

ingredients, fresh ingredients… these are

While we’ve met some craft distillers who

worst cases, this year’s winning flavored

the hallmarks and, frankly, the beauty of

claim to only want to sell to their local

vodka from the 2014 San Francisco

craft distilling. But it can be taken too far.

neighborhood,

World Spirits Competition was “Infuse

Outside of your locavore segment, people

people feel that eventually it might be

Cinnamon Apple Vodka.” Searching for

love the idea of “local and fresh” right

nice to sell beyond the pedestrian access

“infuse” anything will probably return

up until it gets in the way of “price and

of your distillery. Even if there’s some

half of all flavored vodkas in any given

taste.” The first barrier, expense, should

blueberry farm in the middle of New

database, which is sad because this

go without saying. First, if you’re going

Mexico that grows the best blueberries on

looks like a potentially great vodka.

to use some kind of exotic-cousin of the

earth due to some micro-climate anomaly,

lemon, lovingly grown in soil shipped in

nobody’s going to believe that outside of

YOU TRY TO MAKE everything.

hermetically sealed but biodegradable

New Mexico. Meanwhile, Leopold Bros.

containers from Europe but housed in

does a great job of using ingredients that

You’re a craft distiller, you’re successful,

the local communal garden by unionized

are “terroir famous” such as New England

and fair-trade certified pickers…well,

cranberry and Georgia peach. The wise

that’s going to cost. That is a cost you

craft distiller would follow suit.

frustration to potential purchasers. (God

4.

and pretty soon it occurs to you to try your hand at just about everything. A

Craft

distillers

love

to

stand

most

honest

business

WWW.ARTISANSPIRITMAG.COM 73

7.

YOU can’t SCALE. “Handcrafted” has a definite

cachet. We’ve heard distillers brag about hand zesting hundreds of pounds of citrus fruit. Or buying up all the ginger root at a given market and chopping it up by hand. Alaska Distillery makes a Birch Syrup vodka where they brag that 508 hours of work go into each bottle… yikes!

That’s a splendid story but please dare ask yourself: what happens if this stuff actually becomes popular? Is this how you want to spend your time? Hand chopping ginger root? If you’re able and willing to scale, is your market able to continue to

indisputably

For

(!) and 1 sage leaf. That’s crazy…nobody

example, there are spirits that taste like

an

acquired

taste.

has this stuff. It might be the greatest

over-sweetened corn syrup. Then some

cocktail on earth but unless you order

stray (but willing!) person will wander by,

it in a bar, it’s never going to inspire a

try it, and announce, “This is great… I

purchase. Cross reference with North

can’t even tell I’m drinking alcohol!”

Shore’s Sol Chamomile Citrus vodka…

*sigh* Your use of 18 spices with a nice

their Sol Cosmopolitan calls for simply

dry sharp finish will not appeal to these

Sol, triple sec, cranberry juice, and lime.

people. Make those sophisticated liquors

Easy.

but be careful to not superimpose your palate on the wrong or unwilling market.

9.

YOU RECOMMEND really HARD COCKTAILS.

10.enough

COOL

YOUR BOTTLE ISN’T .

And after all the advice about making sure your product tastes as good as it

provide the produce? Confronting actual

Craft distillers are often delving outside

can…we tell you to spend on the bottle.

success, you could find yourself cutting

of the comfort zone—or at least the bell

When people are buying a craft-distilled

the very same corners that Big Liquor

curve—of customer experience. But in

product they don’t want cheap glass.

cuts simply to save your sanity and your

the real world, people need to be told

More importantly to you, the bottle and

knuckles. As an alternative, how about

how to use, say, an alpine liqueur or an

label should be recognizable on the back

seasonal editions and special releases?

aged gin. Please don’t overestimate what

bar so that your would-be customers can

These can be reasonable cases but be

a would-be purchaser has in their kitchen

recognize and call for it in dim lighting.

very cautious about building your brand

or what they’re willing to do. They don’t

Using standard bottles or clear labels are

around such practices. North Shore

have specialty syrups or flower water.

essentially guaranteeing that you will be

Distillery has enjoyed enormous success

They typically don’t have several different

hard to recognize by those elite who scan

with annual special releases of specialty

styles of liqueur…they’re going to have

the bar from their restaurant dinner table

products…best of all, they never have to

to buy it along with your product. Zesting

looking for something different to order.

“handcraft” those spirits a second time!

fruit, muddling it with raw sugar, shaking

Help out those customers!

8.

and

YOUR PALATE IS too SOPHISTICATED.

Tastes are myriad. That’s the beauty of the spirits world. But spirits are

straining,

floating,

garnishing…

these are all labor-intensive and very intimidating. One daring recipe called for apple ice wine, Grade B maple syrup, 4 “sprays” of bitters using an “atomizer,”

- Private Labeling - Contract Bottling - Consulting

Neal MacDonald is editor of Proof66.com, an independent, informational service. The data it provides includes aggregating scores from several critical institutions and combining those results with user reviews.

Clive, Iowa 515-559-4879 dehnerdistillery.com

Dehner Distillery is one of the fastest growing micro distilleries in the USA. We are already one of the largest producers of Rum and Vodka in North America. We do a lot of private labeling for companies all over the USA, WE CAN DO YOURS TOO!

74 WWW.ARTISANSPIRITMAG.COM

C

CRAFT DISTILLERY raft distilling is an industry that

is

exploding

in

popularity and anyone who has

opened up a new distillery can tell you first hand that through those

beautifully

assembled

bottles and beyond that shiny centerpiece of a still, lies what it took to get there: a wake of blood, sweat and tears. When starting a distillery, there is a need to pay extreme attention to detail when it comes to virtually every decision made throughout the entire planning process. The simple plan that often hatched one late night amongst friends can quickly get mired down by seemingly endless challenges that present themselves every step of the way. When the time comes to open the doors to the public, craft distillery owners often find themselves over

budget

and

behind

schedule. This, in turn, adds more pressure to get products made, both in the bottle and out on the shelves. In the haste to begin production and implement

the

long-planned-

out marketing strategies, time and time again one critically important thing gets overlooked:

S E X A T D N A E C N A I L P M O C PART ONE

WRITTEN BY JASON LIPPA

Federal compliance in spirit production and the associated records, reporting and tax requirements.

the malt whiskey that was going into those bottles. Upon our

In life, timing is everything. Back in 2007 I was introduced to

first meeting, Jake toured me around Stranahan’s then-home

Jake Norris and Jess Graber, the masterminds behind Stranahan’s

on Blake Street in Denver. I was in awe and on that very day

Colorado Whiskey. Founded in 2004, Stranahan’s had recently

I set my sights firmly upon a new career direction within the

released their first handful of whiskey batches to the public and

spirits industry. Within the year I would find myself as one of

was enjoying an influx of interest. As an avid beer brewer at the

four individuals on the SCW team, making one of Colorado’s first

time, my imagination was captured by their venture; I was lured

whiskeys of the modern-day revolution.

by the romance of distillation and the complexity and depth of

At the time that I joined Stranahan’s, they found themselves

WWW.ARTISANSPIRITMAG.COM 75

struggling after growing at a rate faster than anyone could have predicted. They simply could not keep up with the demand for the whiskey. I’ll

challenges that arose out of moving and upgrading to the new facility, we began to get our production dialed in and meet our goals.

never forget Graber saying to me, “I thought this would be nice; In the time that followed after the move, Stranahan’s ran like I’d come down to Denver to distill a barrel or two a week and clockwork, pumping out new-make whiskey 24 hours a day, 6 retire and relax while I made a little bit of whiskey.” Just five years from when the first drop of distillate came off of their

days a week.

As with many things in life, as I became more tenured in my

revolutionary (for the time) custom-designed Vendome pot- position at SCW, the initial glow and romance began to wear column still, Stranahan’s was distributed in 40 states and 7 off with the limited responsibilities that came with the title of “distiller.” Seeking new challenges, over time, I received more

countries.

In 2008, reflective of their success and having outgrown their

responsibilities and learned the ins, outs and subtleties of craft

original production space of 2,000 square feet, Stranahan’s

whiskey production from the grain to bottle and everything in-

purchased, upgraded and moved their home to a 100,000

between. Eventually an opportunity presented itself to me in

square-foot facility on the south side of Denver. Far above Jess’s

the form of an opening in the front office. Without hesitation I

original vision, it wasn’t long before Jake posted signs throughout

accepted the position and dove in head-first.

the distillery that read, “R U A GO? 18!” a motivator for the

In a relatively short amount of time, SCW had grown from a

distillation team to hit our goal of 18 barrels per week in the new

manageable set of operations to one that was busting at the

facility. It took time, but after working out the requisite kinks and

seams and stressing the limits of every system that had been

Your Ideal Package, From Concept to Reality Phoenix Packaging offers custom packaging solutions that make your spirit shine as much on the outside as it does on the inside. From bottles to closures to decoration, every detail of your packaging will reflect the soul of the contents within.

www.phoenixpackaging.com

1-800-661-6481

info@phoenixpackaging.com

Your Ideal Package, From Concept to Reality

76 WWW.ARTISANSPIRITMAG.COM

D E N TU

put into place to manage the distillery from day one. One of my first tasks upon moving into the front office was to straighten out and organize the stacks of orders sitting on the office desk.

Having become a whiskey distiller, I’d made the short-sighted

Y S TA

AXES T : I I T

decision that I was content to move away from my background in computers and leave my first career as a software developer fixed firmly in the rearview mirror. It would take a lot, I thought, to bring me out of retirement. It took whiskey. It didn’t take much, either, before I gave in and offered to write an order management application to track finished product inventory and incoming orders through order fulfillment at the distillery. This was the beginning to the end of my time on the production floor.

Jess decided pretty early on that he was going to introduce me to and assign me to the task of monthly taxes and reporting to both the federal and state governments. Though I didn’t know it at the time, I had just been pushed down a rabbit hole and to this very day I’m still finding out how deep it goes. To my point, when distilleries first open their doors, they are often behind the eight ball, eager to get into production and get product out the door, and some of the things that should not get overlooked do get overlooked.

Taxes for a small craft distillery are a complicated, albeit important matter. In a nutshell, both the federal and most state governments impose an excise tax on the spirit that distilleries make and sell. The current Federal Excise rate for distilleries in the United States is $13.50 per proof-gallon (one gallon of spirit at 100-proof), so as the spirit leaves the door of a distillery, a single 90-proof 750mL bottle of whiskey costs the distillery approximately $2.41 in federal taxes alone. This single point of taxation creates a series of record keeping and reporting responsibilities for the distiller, on the federal level alone, that

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details

and

requirements involved in these reports and records and much to my chagrin, they would become a part of me. The simple computer program that took me out of my nearsighted “retirement” as a programmer, would blossom and grow into a new life’s passion.

In the next installment, I’ll dive deep into some of the details of Federal Taxes, Reporting as well as Daily Records and Reports.

We’ll talk about some of the daily, monthly and quarterly compliance and recordkeeping requirements and how to stay ahead of the game and prepare for the possibility of an inspection or, in a worse-case scenario, an audit by a TTB Agent.

would require most individuals weeks, if not months, to fully

Jason Lippa is owner and lead-developer for Distillery Solutions in Denver, CO. For more info visit www.distillerysolutions.com or call Over the next two years, until 2011, I would dig deep into the (303) 900-8433.

understand.

WWW.ARTISANSPIRITMAG.COM 77

MARKETING YOUR PRODUCT SINCE MAKING MAKING IT’S IT’S SINCE ONLYHALF HALFTHE THEFUN FUN ONLY

WRITTEN BY JEANNE RUNKLE

Y

our bottles just hit the shelf! You’ve

are things like print ads, radio, social

too. I’m sure we’ve all seen the news on

poured blood, sweat, tears and

media, community events. Your tactics

distasteful and offensive tweets by brands

money into your still and your chosen elixir

are the things available within those

and celebrities — don’t be that guy.

was revealed. You’ve run the gauntlet of

channels — a banner ad, promoted posts,

the TTB, and the myriad other legalities

festivals. These depend on your budget,

of distilling. And you’ve found someone

time and overall marketing know-how.

You mostly need to live under a rock

to distribute your juice or you’ve pounded

Keep reading, we’ll teach you a few tricks

to not be at least passingly familiar with

the pavement yourself, getting your baby

to help get you started.

social media. Even if you’ve never used

out into the world. Cue the triumphant music! Pour a glass to celebrate!

But you’re not done. Far from it.

YOUR BRAND...IS YOU

SOCIAL MEDIA — POST THIS, NOT THAT

Facebook, chances are someone you know has. It can be difficult to decide

There’s more talk than ever about

where to start: Facebook, Twitter, Insta-

If no one knows about you, and they see

branding. Who are you? What do you

what? Here’s a quick list of the five big

your bottle on the shelf, why will they buy

stand for? How do you make what you

social media sites, how their content

yours over a name they know? Sure, some

make? And sometimes, WHY do you make

works and how to choose. One word of

may be curious and that might sell a few

it? That’s all part of brand. At this point,

warning on any of these social media

bottles. But what about the rest? Since

you’ve chosen the look of your bottle

channels: it’s important to maintain your

you’re likely in this to sell more than just

and what’s called positioning — are you

branding in your posts. If your identity

a few bottles, let’s explore marketing.

an ultra-premium product? Super? The

doesn’t include funny memes or pictures

label tells your story, along with your

of cats doing strange things, save that for

website, social media, advertising, and

your personal account.

THE BASICS There are two basic concepts that

who’s pouring your hooch at an event.

will help you understand how marketing

Make sure that the face of your product

works: strategy and channels/tactics.

is clear and engaging — make it you. The

Blogging is another way to reach a

Strategy is just what it sounds like: who

authenticity that craft distillers bring to

few people who reach many people.

are your customers? Where do they shop?

the market should never be discounted.

Bloggers are very passionate about their

What do they like? What’s their income

Now more than ever, consumers want a

chosen topic — food, travel, babies,

look like and how much do they spend

brand they can believe in and feel good

puppies, cocktails. You name it, there’s

on discretionary things like alcohol? The

about buying. Give it to them. Tell your

a blog for it. A little internet research

second part is channels and tactics — the

story through your brand. Make sure it’s

can help get you on your way to a new

execution part of your strategy. Channels

consistent throughout all your channels,

fan base. Try searching “<your city>

BLOGGERS — WHO?

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FACEBOOK You can post both pictures and as much text as your fingers can type (within reason). You can promote your brand page,

and “boost” a particular post. Both cost money. And neither guarantees that once someone likes your page, that they will ever see it again. Facebook uses algorithms to show content in a person’s newsfeed. I’ve seen some info that says the content is only shown to as few as 10% of the people that like your page. Facebook, in my opinion, is a necessary evil, but spend wisely.

TWITTER

A slightly different platform, Tweets (messages you post on Twitter) are limited to a mere 140 characters. It does take a certain amount of skill to craft a message that short that still tells your audience what you want them to know. You can include pictures that take up space in the 140 characters, but research has shown it increases interest. One thing that Twitter offers is a series of three, 30 minute calls with one of their experts. Free. (Facebook has a minimum requirement of spending several thousand dollars to get any help other than online FAQs). The expert I worked with was very knowledgeable and easily adapted his answers to my level of knowledge. The campaigns take a little bit of effort to set up (Twitter will help if you ask) but once running, the maintenance is minimal. Set the budget and off you go. But please no tweet-spam: there’s a balance between talking with your customers on Twitter and shouting at them. Keep your tweets to a few a day, until you get the hang of it.

INSTAGRAM They say a picture is worth a 1,000 words, which is exactly why Instagram was created. Having a bottling party? Take

a picture. Have fresh botanicals for your gin? Take a picture. Invite your customers into your process through pictures. It’s a mostly mobile platform: snap a pic with your smartphone, and you’re 50% finished! Sparingly use filters (if at all), and add a description. This is where #hashtags are important. A hashtag is like a file folder — it groups pictures with the same hashtag in one place that users can explore. Hashtags are something to use sparingly, don’t string them together to make sentences. Three to five will work nicely.

PINTEREST Another platform that centers around pictures, though these tend to be more professional shots. Pinterest is organized

in boards — think of digital bulletin boards. Some of the more popular ones have started featuring craft cocktails, so start a board for your distillery and post your best pics. Take a little time to connect with other users that post similar things: food, beverages, green/ environment. If you’re a grain-to-glass distillery, it’s a good place to showcase it.

LINKEDIN

This is much more of a job search platform, though LinkedIn is starting to offer content publishing opportunities. If you’re looking for a box manufacturer, you can try searching LinkedIn. It’s possible that they’re connected with someone you know and you can easily ask for an introduction (or just contact them directly). Plus, for those folks looking for jobs within the industry, they can check out your profile.

GOOGLE+

Initially billed as a competitor to Facebook, Google+ is a different beast. It’s meant more to link businesses with professionals, instead of a business running a contest or sharing a joke like Facebook. It also slightly resembles LinkedIn, but in more informal way, less of a, “here’s my resume” way. It’s a Google platform, so it shares some of the ease-of-use as their other products.

If you’re in the market for new staff members or want to connect with other industry professionals, it may be worth the time to invest in Google+.

food bloggers” or try searching the local

is easy to find. Contact the ones that

of the best ways to get your product,

entertainment site and see who’s writing

appeal to you: do you like their writing

even a quarter shot, into the hands of

the articles. Contact them, see if they’re

style? Their photos? Both? There’s a wide

your potential consumers. Talk to them,

interested in interviewing you or sampling

variety of writers on that site, you should

explain what’s in their glass — granted

your products. Not all bloggers accept

be able to find at least one you like.

yes, some may just be there for the free hooch and won’t care about your grain to

samples, and the ones that don’t are very clear about their preference. You can also check sites like DrinkWire by Liquor.com,

COMMUNITY EVENTS —

glass philosophy. But some will. Those are your future customers. It may take a

a site that’s fueled by alcohol/cocktail

GET OUT FROM BEHIND YOUR STILL

writers, bartenders, you name it. There

Hopefully you’ve already gotten a good

about research. Ask your fellow distillers

are bios with every post, so contact info

handle on your local events. This is one

about the best events in town. If there

little trial and error — again, this is all

WWW.ARTISANSPIRITMAG.COM 79

Great Chiller Systems for Great Distilleries

aren’t any — maybe you can start one! Most places have some kind of beer festival — try to hitch your wagon to those.

ADVERTISING — IT’S MORE THAN JUST PRETTY PICTURES Time for some research. Check out the ads in any publication you read, see how they’re laid out, what attracts you and makes you want to know more. That’s the kind of ad you want. Think about the local papers in your area. Ads can be relatively

prochiller.com 800-845-7781 Auburn, WA | Mocksville, NC

inexpensive, depending on the publication. Look into things that end in Weekly or Beat (i.e. The Seattle Weekly or City Beat in San Diego). Contact them, ask for a rate card and go from there. Some include basic graphic design for free (The Seattle Weekly did for their Voracious Dining Guide). Since your marketing budget is likely small or maybe non-existent, you’ll need to do a little more homework if you’re not as familiar with print/online ads. Contact the publication, find an account exec. and ask as many questions as you need to to understand and feel comfortable.

LIGHTS, CAMERA, ACTION So, you want to do some advertising, or make a slightly more professional video than your phone produces. But again — there’s your budget to consider. Try contacting the local arts colleges and institutes, many of them have student job posting boards.

You can hire them freelance and some even offer internships — they get experience, and you get the graphic design help you need. Maybe even for free!

IT’S A WRAP You’re one step closer to tackling the marketing for your distillery! It’s a huge topic, and a skillset that professionals spend time and money to develop, just like distilling. Don’t get discouraged if some of this seems like a foreign language. Just like “wash” doesn’t mean doing laundry and “plates” aren’t what you serve dinner on, marketing has a terminology all its own.

Depending on your budget, time and tolerance, you can choose to tackle this yourself, hire an intern, or hire a marketing services company. Jack Summers, of JackFromBrooklyn.com recently told me, “Sell once, you’ve made a sale. Sell twice, you’ve made a customer.” Get your marketing under control and make new customers!

Jeanne Runkle currently lives in San Diego, and is a craft liquor aficionado and freelance marketing expert. Her specialty is the brown stuff, whether it’s bourbon, rye or good ole American whiskey. She can be found at LikeYourLiquor.com, PancakesAndWhiskey.com or stalking the aisles of a liquor store, answering the random craft liquor queries of eager consumers.

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EVERY PRODUCT CAN

BENEFIT FROM A PREMIUM

APPEARANCE WRITTEN BY MATT TILDEN

LET’S DROP THE PRETENSE — IT IS NOT JUST WHAT’S ON THE INSIDE THAT COUNTS. At least not as far as your product is concerned. What is on the inside, if it is of any quality, will most likely sell itself. Provided, of course, consumers actually give it a try. So what gets consumers to try a product? How do you entice people to make that first purchase and give you the opportunity, through the quality of your product, to earn a repeat sale?

WWW.ARTISANSPIRITMAG.COM 81

The answer is, of course, on the outside.

THE APPEARANCE OF YOUR PACKAGE MATTERS REGARDLESS OF YOUR PRODUCT’S POSITION IN THE MARKET. Look briefly at two successful brands that carry very different price points in the spirits market — Cîroc and Arbor Mist. A 750mL bottle of Cîroc will cost up to 6 times the same volume of Arbor Mist, but both

Each of these players should be able to contribute some advice on direction(s) you may want to take, usually from his or her own perspective. One of the first things most folks look at is the container (bottle) itself and its shape, and you will have numerous things to consider. You want a shape that identifies the product inside to your target audience in a positive way, and obviously, that is a very complicated topic in and of itself. In a nutshell, I think you have two main options:

1)

brands have obviously taken great pains to create a

PUT YOUR PRODUCT IN A CONTAINER THAT IS SOMEWHAT TYPICAL FOR THE PRODUCT.

unique premium image in their categories.

The need to focus on the outside is even more important in the craft distilling world. With a big enough marketing and advertising budget, it is theoretically

2)

possible to create an impression with customers that could make up for potential deficiencies in packaging and still achieve good sales results. Craft distillers, however, most often rely very heavily on their package to create those impressions.

When you begin to think about how to present your product, remember what you are doing with your package aside from providing a vessel to contain your excellent spirits.

YOU ARE SELLING AN EXPERIENCE.

DO SOMETHING RADICALLY DIFFERENT AND MAKE A STATEMENT.

There are possibly more risks with option two; but, if you pull it off, the rewards could be greater, too.

In all cases, though, I think a product will benefit by projecting quality and uniqueness in its glass.

Consumers often perceive clarity as high-quality, and a unique shape will help set your brand apart. For white spirits, go for as white a flint bottle as you can afford.

For darker spirits, this may matter less because the color of the liquid may hide slight tints in the glass.

And your product is, from the drinker’s perspective,

Of course, you could opt for a more standard shape

just the vehicle used to have that experience. The

or more standard quality glass and still project a

customer will translate numerous sensory inputs into

premium image if you dress up the outside of the

an impression of how they will FEEL when they take

bottle. You just need to consider a few questions:

a drink. Of course, the more positive the image the customer creates in his or her mind, the more likely they will make the purchase. It is your job to make sure the package helps do that.

>

IS YOUR PRODUCT ONE WHICH WILL THRIVE IN A NICE CLEAR BOTTLE, OR DO YOU NEED TO THINK ABOUT ADDING SOME COLOR OR FROST TO THE OUTSIDE?

>

WHAT TYPE OF COLOR — MATTE, GLOSSY, TRANSLUCENT, OR OPAQUE? DO YOU WANT THE SURFACE TO BE SMOOTH, OR HAVE SOME FORM OF TEXTURE?

>

WILL A LABEL OF SOME KIND BE APPROPRIATE OR SHOULD YOU CONSIDER SCREEN PRINTING YOUR ART?

Before we dive into some of the elements of package presentation, let me quickly note that it is important to consider ALL elements of your package before you go too far down any one road. For example, in my line of work, I often encounter clients who select their glass before considering how they are going to decorate it. They sometimes find out later they must select a different container to achieve the look they are seeking.

For this reason, it is very important to bring everyone — from the glass supplier to the decorator, label maker, carton supplier, and filler — into the mix as early in the product development process as possible.

82 WWW.ARTISANSPIRITMAG.COM

Again, there are lots of options to consider, but in general heavier packages project higher quality, so I would usually recommend a thicker-heeled bottle. The rest of your selections will depend entirely on the image you are trying to present. It often makes sense to aim for consistency across product lines, but certain types of spirits that command more premium prices might also command a package all their own.

The last thing to think about is more subtle and more difficult to achieve.

YOUR CUSTOMER DOES NOT NEED YOUR SPIRIT IN THE WAY THEY NEED CLOTHING OR SHELTER, SO WHAT THEY ARE SEEKING IS AN EXPERIENCE. They want to feel a particular way. Your package tells the story that will draw them in and give them that feeling. Beyond just the shape and images on your package, the customer will see the name of your product and the story you present and make a psychological connection with the product. The nature of this connection is important because the nature of craft distilling is not commodity production. Everything about craft spirits is, necessarily, more rare. Your package needs to speak to that rarity because it will increase the perceived value of the product inside.

Craft distillers’ primary passion is the product, as it should be. Great amounts of time and care go into crafting superior products. Those superior products will sell themselves over and over again. Just as much time and care need to be spent thinking through the presentation of the product through its packaging.

The result of doing so will often be that first sale — that first experience — that leads to the loyal repeat customer.

Matt Tilden is Business Development Manager at Sérigraphie Richford.

Visit www.serigraphierichford.com for more information.

WWW.ARTISANSPIRITMAG.COM 83

WHAT IS CRAFT...

BUT

WHY S

?

WRITTEN BY KELLIE SHEVLIN

EVERYONE IS ARGUING ABOUT

omeone once said, “Craft is like pornography: I can’t define it,

year, less than 25 percent of the craft brewery is owned or

but I know it when I see it.” As the craft beverage business is

controlled by a beverage company outside of craft brewing,

changing and expanding to welcome new members from the beer,

and the company focuses on beers that focus on traditional

wine, spirits, cider and mead industries, there have been growing pains in terms of what the industry really means and who should be included in its membership. If you want to ignite debate, just ask any craft producer what it means to be “legitimately” craft.

or innovative ingredients and fermentation processes.

Craft wineries are usually defined as a family owned, small producer that makes less than 50,000 cases per year.

However, even among industry members there is a huge

Every answer is different and each conversation becomes hotly amount of controversy surrounding these definitions. Should the contested.

definition be about production size? Ownership? Ingredients? All

No one understands this more than distillers that are on of the above? However, I want to ask: Who are we defining it for the forefront of the discussion. With the formation of the new and does it really matter?

American Craft Spirits Association, there was an immediate

It’s not that any of these definitions are wrong. Some are

need to quantify and qualify members. Even those in the older inclusive, offering a very broad definition while others are industries like beer have had somewhat of a craft identity crisis. exclusive and narrow in their scope. There will always be For example, to keep Sam Adams as a member of the craft an exception to any definition because the craft industry has family, the definition was changed to six million barrels up from emerged as a collective for all things different. After all, the two million barrels.

original purpose was to create something new and innovative and

This conversation has led to a range of definitions across each to give consumers a choice in a very monopolized marketplace. of the major associations:

To move the industry forward and achieve specific goals and

The American Craft Spirits Association says a craft member objectives, I would suggest that the conversation be framed cannot make more than 750,000 proof gallons per year.

differently. Otherwise, it just becomes a circular argument. If

CraftBeer.com says that an American craft brewer is a we know why we are having the conversations, then we can small company that produces less than six million barrels a determine the kind of beneficial outcomes that can be achieved

84 WWW.ARTISANSPIRITMAG.COM

throughout the industry.

As a starting point, we need to decide if the conversation is for: Â&#x201E;Â&#x201E; Consumers and a unique marketing stance? Letâ&#x20AC;&#x2122;s face it, most consumers do not care how many barrels or gallons are made each year as part of their decision to buy a product or not. They are looking for unique tastes and new

ard Winning o Aw t k or e 1855 S u p p ly i n g C sinc s r lle d i st i

buying experiences. Â&#x201E;Â&#x201E; Business protection and taxation purposes? A critical issue for everyone in the craft industry is protecting their business, dealing with taxes, and addressing the regulatory environment. Much of the discussion about what defines the craft beverage industry may be focused on these issues in hopes that some agreement in definition could standardize business practices to assist in solving these issues. Â&#x201E;Â&#x201E; Ego and pride? While some in the craft industry subscribe to â&#x20AC;&#x153;the more, the merrier,â&#x20AC;? others may consider it a source of pride that they adhere to an exclusive, and some might say elitist, approach to the industry where there should be limits placed on what is craft so that it does not become too commercialized. They do not believe big is better and that a certain level of success essentially dilutes the message that the craft business started with, about being small and different than the corporate spirits, beer, and wine makers.

Ĺ­ KFMJOFL DPN

For each of these segments, there are different motivations, influences, and agendas as part of the evolutionary process of the craft industry. And, trying to include each of those segments into the conversation only creates further complications. To make any progress, there needs to be agreement that it is okay to have multiple conversations about the same industry in order to better address these individual components and audiences.

At the same time, it is important that the different conversations do not prohibit the overall dialogue that the industry need to continue having in order to learn from each other and establish best practices and serve the growing community.

To provide a framework for achieving both, the next three articles will explore each of these questions further and address the accompanying conversations. Perhaps the latest definition for craft distillers is just the starting point. By taking a look at consumers, business practices, and ego and pride, distillers and the rest of the craft industry can improve their dialogue to generate success for everyone within the industry while also benefiting consumers.

Kellie Shevlin is Executive Director of the Craft Beverage Expo, a comprehensive conference tailored specifically to suppliers of craft wine, beer, and spirits. For more info visit www.craftbeverageexpo.com or call (202) 288-8898.

WWW.ARTISANSPIRITMAG.COMâ&#x20AC; 85

Sorghum Whiskey WRITTEN BY CHAD CHRIESTENSON

///

O

PHOTOGRAPHY BY RICH WHITTGREVE

riginating in northern Africa, Sorghum is now the fifth of sorghum syrup anywhere. most important cereal grain crop in the world. While the

While sorghum moonshine was a favorite of both sides during

botanical genus sorghum consists of about 30 different varieties, the civil war, its use in distillation has dwindled as drastically most people are referring to the sorghum bicolor varietal when as its production. Only a handful of distilleries currently use it speaking about the plant. Sweet sorghum, a cultivar of sorghum and only two of those make sorghum whiskey. Oddly enough, bicolor, is used for syrup and ethanol production.

both of those distilleries are in Wisconsin, and both source their

In the 1840’s, with rumblings of a divide between the northern sorghum from the same farmer. and southern states, sweet sorghum was introduced into the

“The characteristics I’m looking to impart from the barrel

upper Midwest with the hope that it could replace cane sugar partition better into water than ethyl alcohol,” Charles McGonegal as a sweetener north of the Mason-Dixon Line. It took very little explains. A chemist by training, he is in charge of fermentation at time for its cultivation to spread across the southern and eastern Aeppeltreow Winery & Distillery in Burlington, WI. “Hence, we cut parts of the country.

the Brown Dog whiskey down to about 105 proof prior to aging. I

After the Civil War, production continued to increase. By the think the toasty notes really work well with the sorghum character.” time the Great Depression arrived sorghum syrup was common in most households.

McGonegal and his wife, Milissa, who is in charge of distillation, have been making their Brown Dog Whiskey since

But, with the advent of globalization and mechanization of 2009, when they added apple and pear brandy to their hard cider agriculture that followed the economic crisis, it was soon cheaper and perry winery. “The impetus for getting into distilling had to to import sugar than to streamline sorghum production. As a do with quality control,” Charles explained. “We wanted to make result, by the mid 1980’s it was almost impossible to find a jar Pommeau, a fortified cider traditional to northern France, but

86 WWW.ARTISANSPIRITMAG.COM

the quality of the brandy we were buying was all over the place, stalks are pressed right here behind the cab, a drip pan catches making it nearly impossible to deliver a consistent product.”

the syrup and pumps it into trailer behind me. When the trailer

When they started distilling, the husband and wife team is full, I unhook it and haul just the syrup back. It makes things decided to produce a whiskey as well, but ran into a problem. a lot more efficient.”

“I’m not a brewer,” Charles points out. “I make wine. I don’t

“I joke that this tractor is Nathan’s,” Rich laughs, referring to

have brewing equipment. I wanted to do a whiskey but I needed Nathan Greenawalt, owner of Old Sugar Distillery in Madison, to find a base that didn’t contain any solids.”

WI and purchaser of more than half the farmer’s sorghum crop.

At a winter market in Milwaukee, Aeppeltreow had a booth “He’s really the one who’s paid for it.” across from sorghum farmer Rich Whittgreve of Elkhart Lake, WI.

At 32 years of age, Nathan has already been distilling for five

McGonegal saw the sorghum syrup at Rich’s booth and saw no years. He explains the subtleties of oak aging, as he pours two reason he couldn’t make a whiskey from it.

samples of his whiskey. The Queen Jennie sorghum whiskey is

One hundred miles north of the Aeppeltreow winery, nearly elegant in its simplicity. The sorghum character stands Whittgreve’s Rolling Meadows Farm lies halfway between out both on the nose and the palate yet is not overwhelming.

Lake Winnebago and Lake Michigan. Rich grows hay, oats and The oakiness on the nose gives way to an extremely smooth, soybeans, but sorghum is his primary crop. In fact, at 30 acres, straightforward whiskey, with dominant notes of butterscotch he is one of the largest sorghum producers in the U.S. There are and caramel and finishes with hints of tobacco and leather. only a handful of farmers in the country who grow more than 20

“I made several sorghum beers as a homebrewer,” says

acres. Traditionally, sorghum is harvested by hand. Those who Greenawalt, leaning against the bar in his rustic Madison tasting grow beyond hand production have had to invent or modify most room. “The problem was that it fermented too well, leaving little of the equipment they use.

residual sugar and a beer without much body or malty taste.

Rich takes me across his front lawn toward a hulking piece of While this is a challenge for a beer brewer, it’s ideal for a distiller partially deconstructed machinery. “We took an old combine and since we’re concerned only with alcohol content. So, we gave it stripped it down to pretty much nothing,” he explains, “After a try and it’s a good thing we did. It rapidly became one of our rebuilding the head to work for sorghum, we cut the back off and most popular products.” welded on part of a completely stripped combine, then reinforced

The Queen Jennie is named for famed Madison bootlegger

the whole thing with this 1/2” steel plate.” He taps a heavy piece Jennie Justo. When prohibition went into effect, she rapidly of metal that runs the entire length of frame. “What we now have opened two speakeasies in Madison’s Greenbush neighborhood is a completely hydrostatically controlled harvester that’s almost not far from the university. Justo was arrested several times and impossible to get stuck, even in the fall rain of Wisconsin.”

spent more than a year in jail. But, she remained undeterred and

Whittgreve, an engineer by training and farmer by passion, continued to run her speakeasies until prohibition was repealed goes on to explain the system he invented using the combine to in 1933. harvest and crush the sorghum entirely in the field. “What we’ve

Nathan has a pretty simple formula for making the Queen

done is eliminated a lot of extra material from being moved. The Jennie. At 140 proof, the spirits go into new, 10 gallon, heavily

WWW.ARTISANSPIRITMAG.COM 87

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and a year. After aging, it is blended with reverse osmosis filtered water to bring it down to 80 proof, then bottled and labelled by Nathan and his two-man team.

Old Sugar uses a 220 gallon modified pot still. Nathan chose this for a number of reasons but, primarily because it doesn’t strip off the alcohol at anything higher than about 150 proof.

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This means 25% of the final product is not alcohol. That quarter contains water and the ‘character’ of the base, whether it’s his brandy, honey liqueur, ouzo, grappa or award winning Cane & Abe Small Barrel Rum. Back at Aeppeltreow, Charles walks me past pallets of cider to look at their still while Milissa plays host to a nearly constant stream of customers in the tasting room. Handing me a small glass of their sorghum whiskey, he explains its name.

“Moonshiner slang for unaged whiskey is ‘White Dog.’ Our young whiskey is a light brown in color. Naturally, we named it Brown Dog.” Simple as that.

The flavor, on the other hand, is much more complex, in spite of being less smooth than Old Sugar’s sorghum whiskey. In fact, the two whiskeys are almost nothing alike. The Brown Dog opens with an oaky nose and slight hints of sorghum. The palate is dominated by applewood and layered with notes of sorghum, sweet tobacco, oak, and cherry, and finishes with hints of dried apple.

Brown Dog’s complexity is borne out of its aging process. The McGonegals start by filling six 30 gallon American oak barrels with their whiskey. The spirit ages in these barrels for only one month before being transferred to stainless steel. At this point, American oak, wild cherry, American chestnut and Apple wood chips are added and the whiskey spends between one and two months aging further. It is then bottled by the barrel. Nearly all of the Brown Dog is bottled at cask strength. Charles & Milissa feel it shows best this way.

Neither

of

these

sorghum

whiskeys

have

the

harsh

characteristics found in many ryes. They are sweet up front and lack the sour finish of a bourbon. Without any smoky or peaty presence, they fall on the far end of the whiskey spectrum from Scotch. All comparisons aside, however, the important thing to note is how smooth and easy they are to drink. Those who can find them will be pleasantly surprised at what a nice addition either, or both, bottles make to any whiskey connoisseur’s bar.

Chad Chriestenson has worked in the beer, wine & spirits industries.

He currently lives, drinks & writes in Madison, Wisconsin. You can reach him at chad.chriestenson@gmail.com.

88 WWW.ARTISANSPIRITMAG.COM

I

’m fortunate enough to be a part of the craft distilling industry, but I’m not a

distiller. I’m not an owner. I’m not a blender or bottler or in any of the traditional roles one thinks of. I’m an educator, and I’ve been lucky enough to play that role in hundreds of people’s education as they strive to open and operate their own distilleries. And whenever I’m talking to someone harboring dreams of distilling the same question always emerges, “What’s the best piece of advice you can give me?” The answer is always the same, “Plan more.”

When you’re talking about an industry where you buy a half-ton of crafted copper before you even open your doors, then even small mistakes can become terrifyingly costly.

Sometimes it makes me weak in the knees to hear about the mistakes people have made. I’ll quote Carson Taylor of Peerless Distilling in Louisville, Kentucky to illustrate my point, “Whatever you think you’re going to spend on building your distillery, double it. Then you’ll at least be close to what you’re actually going to spend.”

You can’t anticipate every single thing you’re going to encounter, but there is a lot you can plan for and everything you can get ahead of will save you money in the long run. To help reveal the myriad number of things to consider when planning a distillery I reached out to some of our friends in the craft industry, all of whom were overjoyed and excited to share their advice and point out potential pitfalls.

PLANNING & FORECASTING Out of all the responses I received when I contacted distillers, the majority fell into the planning and forecasting stage of business development. The first thing you should consider, and

ake y Colin Bl Written b

that you have to be honest with yourself about, is if there is even a market for your product. “I would suggest you think hard about what product(s) you intend to make and talk to some distributors about it to judge their

interest level,” says Greg Eidam of Sugarlands Distilling Company in Gatlinburg, Tennessee. “ I understand many upstart distilleries are having a hard time getting distributors to even pick them up. Also, you need to plan on spending serious money on marketing. Your distributor will not do any marketing for you and it doesn’t matter how good your product is, nobody will know about it unless you hit the streets yourself and sell it.” Do market research on your proposed product to see if there is market for it, or if you can even sell enough of it to make your distillery sustainable.

WWW.ARTISANSPIRITMAG.COM 89

Steve Beam of Limestone Branch Distillery in Lebanon, if you have all the money that you could possibly need, you Kentucky

also

pointed

out

how

important

marketing can’t write checks to make everything work on your timeline.

considerations are at the inception stage of planning. “Making “Always consider lead times,” offers Joe Heron of Copper & it is the easy part, what to do with it after that...that’s the 2-3 Kings American Brandy in Louisville, Kentucky. “Order your still million dollar question. Trust me the world is not ready to beat at least one year out. Don’t get to the point where you’re ready the path to your distillery’s door because you have some fantastic to bring in equipment and then assume you can just go buy it.” recipe for coconut pepper vodka that your circle of friends tells If you don’t already possess patience, you should probably learn you is great. This may happen...but the odds are probably not. it for everything you’re going to have to deal with, and wait for, You may want to speak with a few distributors to see what the in the process of getting your distillery up and running and your first bottle out the door.

interest is in your product.”

And one way to do some simple market and industry research is educate yourself about the business and make a point to speak

BUILDING, ZONES, & CODES

to, and learn, from other distillers. “Take a class,” suggests When looking at locations there is more to consider than foot Pete Kamer of Distillery Engineering. “Visit a number of small traffic and space. Is the building zoned for a distillery? Can the distilleries to learn what they do, what they make, and what it sewer system handle your projected waste? Will you run into sells for. Also, shadow or intern at a small distillery to find out restrictions when remodeling the building? There is a lot to how much work it is and if you like the work.” consider when looking for a place to locate. Brad Call of Call Even when you know what you’re going to make and have Family Distillers in North Wilkesboro, North Carolina has some your plan in place, remember, there are lead times with nearly great advice: “I would recommend getting very acquainted with everything. Plan ahead for the time it takes to build or remodel local building inspectors and fire marshals. They will make or your building, to get equipment, to get permits and licenses, break you as far as where and when you will be in business. Also, to receive label approvals, and hundreds of other things. Even it’s good to have a Plan B!”

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You should also consider the future; will your production this business are those that love the art and science of distilling. outgrow your space? “Visit as many micro-distilleries as you can If your goal is to simply have a bottle with your name or brand on and ask each distiller their opinion of how well the space they are it, then pay someone else to make it and you go out and sell it.” currently operating in is working for them,” says Randy Allender

Now, that being said, if you are ready to take on the onslaught

of R Allender Consulting in Bardstown, Kentucky. “If possible, of planning, juggling, and headaches that will come along with pick those that are similar in equipment capacity as you are opening a distillery, let me leave you with this: There is not a considering. Size does matter! I know of at least 3 distilleries step-by-step list available on how to do this. There aren’t two that are looking to relocate because they have outgrown their distilleries that went through the steps in the same order or had original space in just a few years.”

FLOOR DRAINS

the same challenges. Your challenges, your path, you distillery, will be as different as the product you intend to make. When trying to piece everything together always ask yourself, “What’s

“You can never have too many floor drains” —Every distiller ever. next?” or, “What could go wrong?” because there’s always something.

HONESTY

Ask questions. This is the most open, honest, and sharing

While pouring over all the replies I received from various distillers, industry I have ever encountered, so don’t be afraid to reach one stuck with me. I wasn’t quite sure how to categorize it, so out to other distilleries and ask questions. You’ll be surprised I made a section just for this piece of advice. It really should how much time most people will make for you. Just remember, be the first on the list but I wanted it to be one of the closing when it comes to the point where other people are asking YOU thoughts. “If you aren’t comfortable with the idea of opening and questions, answer them. You’ve got a long road ahead of you, running a distillery for free, then consider putting your money into enjoy the journey, just don’t forget to plan for it. something else,” says Paul Tomaszewski of MB Roland Distillery

Colin Blake is Director of Creative Services for Moonshine University. For

in Pembroke, Kentucky. “Those that are and will be successful in more info visit www.moonshineuniversity.com or call (502) 301-8130.

WWW.ARTISANSPIRITMAG.COM 91

g n i g a k Pac y t i l a n o s r e P NITE ED BY IG

RNE VE BOU N BY DA WRITTE

S

///

PROVID PHOTO

ometimes we get a dozen calls a week from excited

It’s like naming a child. You have to live with it forever. It must

entrepreneurs ready to start a distillery or launch a spirit

be unique. It must be memorable. It must be relevant to your

brand. They want to know what it takes to produce the product, product. On top of all that, it must be original so that you can how much it’s going to cost and how long it will take. But here trademark the name. is one question that doesn’t always come up: How do I make

Here are a few tips on naming. First, go back to the core

people aware of my brand and convince them to try it? Not concept of why you are doing this and what got you excited in thinking this through can cause trouble down the road because the first place. You had an idea. Maybe it came from a story you consumers need a reason to pick your bottle off the shelf instead

heard, a grandfather’s recipe or a local legend. These are all

of a hundred others.

great sources for a meaningful and memorable product name.

People often think a wonderful concept for a new spirit flavor and distribution to stores or bars will assure success. But a good product concept is only half the story. Consumers want more than new flavors and gimmicks. They want personality. One

Step Have a brand story that adds Two as a backdrop of your product.

striking example of just how powerful personality can be is Dos Equis. “The most interesting man in the world” campaign took

People love to share stories, so you want something you can tell

a tired beer brand and made it one of the most talked about

over and over again. The better the story, the more they will tell

and mimicked campaigns in the last decade. The company has

it. Backwards Distilling Company in Wyoming is a great example.

recently reported that sales during their campaign have increased Chad Pollock, Head Distiller, says “the Milk Can Moonshine was inspired by local moonshiners during prohibition who evaded the over 22% while other imported beers fell 4%.

A strong personality can create loyalty,

longevity

and

wider

awareness. But how does a brand get personality? Believe it or not, it only takes a few steps:

Step You need a One great name.

The

right

name

can

eyes of law by pouring their handiwork into milk cans and ladling it out to patrons from dairy wagons.”

Step Have a great Three bottle design that amplifies your name and theme.

Gray

Ottley,

transform an average spirit

Manager

into

desired.

partner at Distilled Resources

Sounds easy right? Wrong.

in Idaho says, “besides having

something

and

Branding a

Principal

92 WWW.ARTISANSPIRITMAG.COM

an amazing liquid inside the bottle, packaging is what people first sources like LinkedIN will often produce many good options. If see. Perception is reality. Often people will judge the quality of our you already have a team in place to create your brand, make sure liquid solely based on how the packaging looks. If the packaging you always step back and look at everything from the point of is great, that extends to how they perceive what’s inside.” view of your consumer. It’s important to create something you Now that you have some basic parameters about creating like, but it’s essential to be compelling to the people who will brand personality, there are a few important considerations to ultimately buy your product. keep in mind...

Creating personality Tip shouldn’t be a gimmick.

Dave Bourne is Founder/Creative Director of IGNITE, one of the world’s leading branding and design firms for the spirit and beverage community. For more information www.ignitebeverage.com or bottled invisit colorado, usa call (503) 244-0836.

It should come from something real that is connected to the

person has nothing to do with drinking, alcohol, family history or

high proof spirits CoNtrACt BottLiNg high VoLUME CApABiLitiEs CoMpEtitiVE priCiNg BottLED iN CoLorADo, UsA

any thread of relation to your product, then it doesn’t make sense

WE pUt thE JUiCE iN thE BottLE

core of what your brand is all about. For example, if you find a story about a local hero and put him on your bottle but the

to use that story. It’s called “borrowed interest,” and consumers don’t like to buy products that seem like they are using someone

blue egg bottling

or something just to make a buck. Not every great story can be

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overcomplicate your bottle Tip Don’t design or make it hard to use.

BLUE-EGG-AD.indd For example, we’ve had many potential clients approach us

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over the years with the idea of making a spirit bottle in the shape of a woman’s body. As much as that may sound like a good idea in places like Las Vegas where the idea might be more accepted, club owners and bartenders often find odd shaped bottles difficult to pour. The bottom line is that bottles in the shape of women, guns, flames, rockets, etc.,become oddities that are seen by consumers and retailers as specialty items. That means they often find their final resting place on dusty shelf at the back of the bar or liquor store. The exception to this rule is Crystal Skull, which has thrived because of its impeccable timing with the pirate craze of the early 2000’s, the celebrity endorsement of Dan Aykroyd, as well as a lot of luck, money and great distribution.

As the owner of a beverage branding and design firm, I’m naturally inclined to recommend you seek out the help of professionals in creating your brand personality. Much like a talented distiller, people who have specialized training in design, packaging and writing will find opportunities to set your product apart and help you get an edge on the competition. Searching

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Jack’s guiding words were ‘Every day we make it, we’ll make it the best we can.’

That’s a big reason we bottle in glass.”

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Master Distiller, The Jack Daniel Distillery

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