Artisan Spirit: Summer 2017 by Artisan Spirit Magazine

SUMMER 2017

OREGON OAK

CAPTURING WEST COAST TERROIR

BRANDED HOUSE vs. HOUSE OF BRANDS

Romancing

THE REVIEWER

Aquavit NOT JUST GIN'S SCANDINAVIAN COUSIN

MALICIOUS METHANOL

HOW MUCH IS TOO MUCH

TABLE of CONTENTS A LETTER FROM THE EDITOR

QUARTERLY GUILD REPORT

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

THE ART OF LOBBYING

From the American Craft Spirits Association

AMERICAN DISTILLING INSTITUTE QUARTERLY REPORT

GRAIN LIFE

Spirits start in the field

MALICIOUS METHANOL 84 23

How much is too much?

ROMANCING THE REVIEWER 86 Tips for great press relations

WHY RUM?

BC SPIRIT RESCUE

BRANDED HOUSE VS. HOUSE OF BRANDS 37

DISTILLERY VISITOR EXPERIENCE

CODE PROFESSIONALS

SNAKE BILE WINE

CHECK YOUR REGULATOR’S ID

AQUAVIT 98

ALBANY DISTILLING COMPANY

MAKING IT SOUND AS GOOD AS IT TASTES

101

OREGON OAK 51

THREE SIMPLE RULES

105

BELTWAY BANTER: WITH ART LIBERTUCCI

A CONSULTATION IN GIN

109

AGING CELLAR BEST PRACTICES

MIXING UP SUCCESS

111

DISTRICT DISTILLING

KENTUCKY’S FIRST MODERN MALTING OPERATION

114

THE GREEN RUSH

116

Conference numbers, judging awards, and workshop announced

APPROACHES TO SPIRITS DIRECT SHIPPING Legal avenues to getting your products delivered to consumers across the country

Montanya Distillers of Crested Butte, Colorado

Two distillers team up to rescue an aged brandy

Brand Buzz with David Schuemann

Starting off on the right foot

Avoiding regulatory fraud

of Albany, New York

Capturing West Coast terroir

Interview between Arthur Libertucci and Robert Lehrman

Start with the end in mind

of Washington, D.C.

Designing the distillery consumer experience

Something a bit more unique in the world of spirits

Gin’s Scandinavian cousin inspires creativity

Noise reverberation reduction in a micro-distillery tasting room

A short course on marketing and advertising your spirits

The intensive and alluring process of gin recipe development

With master blenders

Kentucky Artisan Distillery's journey into malting their own grains

TOASTING MY SPIRITS

Maillard and the incredible reactions he uncovered in 1912 Part 2 – The Maillard Reaction and Distilled Spirits Production

Distillers are now hitting hemp

SO YOU WANT TO BUILD A DISTILLERY?

THE HYPER-FOCUS REPERCUSSION

118

PROFIT & LOSS

PARADISE FOUND

120

BROTHER FROM ANOTHER KOMBUCHA MOTHER

ADVERTISER INDEX

122

Best practices for project management

Determining profitability

Thomas & Sons Distillery of Portland, Oregon

from the COVER

There's danger in losing sight of the bigger picture

Tiki’s Caribbean origins

Oregon Barrel Works in McMinnville, Oregon. Image by Amanda Joy Christensen. Read about the use of Oregon Oak on page 51.

NOW PROVIDING DISTILLING EQUIPMENT FOR ALL SIZE PRODUCTION FACILITIES. PLEASE CALL TODAY FOR MORE DETAILS AND PRICING ON EQUIPMENT.

DISTILLING EQUIPMENT BOILERS • BREW HOUSES CELLAR EQUIPMENT TANKS • REFRIGERATORS FILTERS • PUMPS FILLER MONOBLOCKS SCREW CAPPERS COUNTER PRESSURE MONOBLOCKS LABELING MONOBLOCKS MOBILE BOTTLING SOLUTIONS

Corporate Office West Coast North Northwest Canada British Columbia Pleasantville, NY Windsor, CA Geneva, NY McMinnville, OR Montreal, QC Kelowna, BC

Issue 19 /// Summer 2017 PUBLISHER & EDITOR Brian Christensen ASSISTANT EDITOR & SENIOR WRITER Chris Lozier CREATIVE DIRECTOR Amanda Joy Christensen CONTRIBUTORS Dan Autenrieth Luis Ayala Shawn Bergeron Colin Blake Renee Cebula Amber G. Christensen-Smith Brian B. DeFoe Carrie Dow Andrew Faulkner Brett Glick Tyler Gomez-Basauri Harry Haller Julie Hart Bethany K. Hatef Paul Hughes, Ph.D.

James E. Hyland Tim Knittel Margie A.S. Lehrman Robert Lehrman Ryan Malkin Courtney McKee Shannon O’Neal Scott Risser David Schuemann Andrew John Sheehy Marc E. Sorini Gary Spedding, Ph.D. Tripp Stimson Gabe Toth Margarett Waterbury

ILLUSTRATORS Francesca Cosanti

Lanette Faulkinberry

PHOTOGRAPHERS Amanda Joy Christensen Brian Christensen Carrie Dow

Chris Lozier Carl Murray

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

twitter.com/ArtisanSpiritM

General Inquiries (509) 944-5919 Advertising (509) 991-8112 PO Box 31494, Spokane, WA 99223 All contents © 2017. 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.

DistilaMax

& DistilaVite

Quality yeast and yeast nutrients for beverage alcohol fermentations.

For more information, visit

www.lallemandbds.com

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

THEY SAY THAT PRINT IS DEAD. WE DELIGHT IN PROVING THEM WRONG. Each issue of Artisan Spirit Magazine is

filled with pages of content gathered to educate, inspire, challenge, and delight the minds of distillers. We work hard to ensure our ad-to-content ratio is low, ensuring a higher return on value for our readers and the companies seeking to reach them.

6â&#x20AC;

BA T M ILE, ALA

WWW.ART ISANSPI RI TMAG.CO M

Artisan Spirit Magazine is proud to be

SPIRITS E PI

C N R

SUPPORTED AND SPONSORED BY COMPANIES THAT VALUE AN EDUCATED INDUSTRY.

ARTIS

AN DISTILLING & EDUCATION

WWW.ART ISANSP IRITMAG.COM

IRI

TS OF INTEGRIT

A LETTER FROM THE EDITOR: It is fun to be a cheerleader for the distilling industry. More producers, a larger market share, high profile spirits awards, and a booming industry make everyone a little giddy. However, it can be short-sighted to live life with only rose-colored glasses. One of our publication’s main goals is to share knowledge, and at times that means discussing the hard parts. This edition of Artisan Spirit does a bit of that, primarily in the name of planning. Success isn’t the only thing that can roll downhill and build momentum. Mistakes like to snowball just as quickly. Many of our beloved writers are back tackling mistakes that can be avoided with good planning, long-term thinking, and a willingness to seek out help. The distilling industry is not for those seeking the easy road. Let’s learn from each other’s mistakes and do our best to keep this eager attitude alive.

Brian Christensen

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

ANY CONTAINER CAN HOLD YOUR SPIRIT, BUT ONLY ONE

CAN CAPTURE IT. Every spirit evokes its own, well â&#x20AC;Ś spirit. It could be the life of a party. A toast to family and friends. A moment over candlelight. Or a thousand other things. Whatever the essence of your brand, nothing projects it, and protects it, quite like the honest purity of glass from O-I.

glass@o-i.com

Y L R E T R A U Q T R O P E R D GUIL

rought in r season b he summe state ew guild ation from arvest of n and inform s w a healthy h e n st y. late the countr you all the om around ue to bring n ti n o c ill updates fr We w ciations are e woods. d elections. s and asso r neck of th stivals, an u fe yo s it in ir n o State guild sp g s, what's goin bying effort rk with lob let us know d n a t u o hard at wo ach sitate to re d don't he to state, an

COLORADO COLORADO DISTILLERS GUILD It is spring in Colorado and the Colorado Distillers Guild is getting ready for high water on our rivers, spring skiing on our high peaks, and flowers in our valleys! The CDG is actively looking for a executive director who will help lead us into the future. We have WWW.ARTISANSPIRITMAG.COM â&#x20AC;

also recently started designing a Colorado Distillery Trail map which will help guide visitors to our member distilleries across the state. In addition we have just closed another successful legislative session in Denver and are starting our spring/summer festival season. I am also excited to continue as chair of the ACSA State Guild Committee which is working on a number of interesting topics including a potential state guild retreat later this year. There are also a number of national

issues that will involve the state guilds over the next year so stay tuned! As summer begins, take a moment to be sure you are up to date on both your state guild and ACSA membershipsâ&#x20AC;&#x201D; both are fighting for you and really need your membership and involvement to be successful. Cheers, P.T. Wood President, Colorado Distillers Guild Vice President, ACSA Wood's High Mountain Distillery, LLC

CONNECTICUT CONNECTICUT SPIRITS GUILD The CT Spirits Trail and Guild continue to see the industry’s ranks within our state grow. New distilleries are coming online and established ones are joining the Trail. We will be making announcements about new members soon. We continue to work within the threetiered system and the State Legislature and hope to see some widening of the CT tasting room laws. Our prime goal is to be able to sell a cocktail; we feel this will be visitor-friendly as many request it upon their stop into our

FLORIDA FLORIDA CRAFT DISTILLERS GUILD This year, the Florida Legislature adopted new legislation that will allow consumers to purchase up to six bottles of each brand in distillery gift shops. This is an increase from the previous limit of two per person. The Legislature also adopted language reducing craft distillery license fees from $4,000 to $1,000. “We are grateful for this legislation to give consumers the freedom to purchase more of our product directly on-site, and we hope Governor Scott will sign it,” said

distilleries. We have cautious optimism that the current legislative session will enact this. We shall see. The local general and industry media outlets continue to support our efforts to raise awareness of the Trail. Our local industry trade publication—the CT Beverage Journal—has published a wonderful local/ CT glossy print advertising section aimed at shining the light on CT’s distillers’ products to the trade. Hopefully this will increase sales for all of us—whether we are self-distributed or wholesaler-distributed. One of the state’s large circulation lifestyle magazines—CT Magazine—will be publishing a special bridal edition and will

be highlighting Trail members’ products as a tie-in to wedding gift-giving. Some of our Trail members are also included in beer-spirits and/or spirits-only transportation tours provided by a new startup company called CT Beer Tours. Overall, we are starting to see nice collaboration amongst our distillers and brewers. Our Trail members continue to work with industry and non-industry groups to host events in our spaces. We are all getting great feedback on the unique venues and alternative experiences our spaces provide.

Philip McDaniel, co-founder and CEO of St. Augustine Distillery and founding president of the Florida Craft Distillers Guild. “This move is a key step towards putting Florida distillers on a more level playing field with Florida breweries and wineries, who have fewer restrictions on what they can sell on-site.” While the regulatory environment has significantly improved, the state’s distillers will continue to push for further reforms so that Floridians have better access to quality craft spirits. “While we recognize reforms don’t happen overnight, we are grateful for the Legislature’s willingness to disrupt a regulatory and distribution system that has existed for 80 years,” said McDaniel. “We

are very grateful for the support we’ve gotten from the Legislature and Governor, and we will continue to work with a broader coalition of partners as the marketplace continues to demand more consumer options and choice.” The Florida Craft Distillers Guild is now focusing its efforts on actively participating in and helping gain support of the S.236/ H.R.747, Craft Beverage Modernization and Tax Reform Act of 2017. Throughout the state, distillers are appealing to members of Congress to ask for their support to enact this important legislation that will provide an immediate benefit to all craft distillers, regardless of size or scale. Kara Pound

Tom Dubay Hartford Flavor Company President, CT Spirits Guild/Trail

St. Augustine Distillery

GEORGIA GEORGIA DISTILLERS ASSOCIATION The Georgia Distillers Association (GDA) continues to add to its membership. To date the association has grown in size to 13 of the 25 registered DSPs in the state of Georgia. 2017 has been one of monumental change for Georgia distillers. The State legislators have voted, passed and now have sent legislation to the Governor’s desk for signing of some of the widest sweeping three-tier

system changes since the repeal of the 18th Amendment in 1933. Georgia distillers will now have the ability to sell all products produced on-site for on-site consumption. The new law also grants the ability to sell up to 2250 ml (three 750 ml bottles) to a consumer to-go per day. The law does come with a yearly quota not to exceed 500 53-gallon barrels consumed from on-site consumption and to-go sales. GDA members are actively assisting the state’s Department of Revenue with the preparing of the interpretation of necessary regulation and tax payment framework that will work for all Georgia

distillers. The GDA is also actively lobbying our House Representatives and Senators for FET reform and support of H.R.747 and S.236. Members of the GDA executive committee are coordinating meet and greets with the state’s representatives pushing for their support and sponsoring of each bill. The members are educating them about the importance of federal excise tax reform. This one reform can have lasting effects on all distilleries across the United States. Chris Sywassink President Georgia Distillers Association WWW.ARTISANSPIRITMAG.COM

WE MAKE IT. YOU PERFECT IT. THEY DRINK IT.

WITH MGP’S TEAM OF EXPERTS AND PREMIUM DISTILLED SPIRITS, THE POSSIBILITIES ARE ENDLESS. Partner with MGP for a single source of world-class brown and white distilled spirits. Our esteemed master distillers and team of experts are dedicated to helping you produce a premium product that will elevate your brand—and continue to satisfy your consumers’ ever-evolving tastes.

BOURBONS • WHISKEYS • GINS • GRAIN NEUTRAL SPIRITS NON-GMO GRAIN NEUTRAL SPIRITS

Visit MGPINGREDIENTS.COM/ALCOHOL or call 913-360-5299 to get started.

MARYLAND MARYLAND DISTILLERS GUILD On the heels of having the ADI conference in our state, Maryland distillers are inspired and proud to be part of the distilling landscape, and we enjoyed hosting tours and workshops last month. Our guild is growing,

MASSACHUSETTS MASSACHUSETTS DISTILLERS ALLIANCE Established in 2015, the Massachusetts Distillers Alliance continues the long and storied history of distilling in the Commonwealth. Consisting of distillers located throughout the state, the goal of the Massachusetts Distillers Alliance is to open lines of communication between distillers, educate the public, and serve as a collective voice in government affairs. In 2017, new board members were elected and goals have been established that will move the Alliance and Massachusetts

NEW MEXICO NEW MEXICO DISTILLERS GUILD The New Mexico Legislature ended its 2017 "long" session in mid-March without resolving the state's budget crisis and without advancing the two bills supported by the New Mexico Distillers Guild. One bill would have allowed for retail reciprocity giving craft distillers the ability to serve and sell New Mexico craft beer and wine in our tasting rooms and vice versa. Presently, state brewers and winegrowers enjoy such reciprocity but distillers do not. Our bill passed the legislature two years ago only to have the governor sign a competing bill limiting reciprocity to brewers and winegrowers which, by all reports, has been a tremendous boon to their bottom

14â&#x20AC;

with 19 licensed distiller members and eight associate/startup members. The farmers market and festival season has begun, and our distillers are participating under their off-site permit, which allows for samples and sales of bottles to-go. The Guild is hosting a number of Spirits Showcases around the state, highlighting member expertise through distiller-led talks and tastings. And starting July 1, Class 1 distilleries will no longer need

a separate Class 2 rectifying license to bottle (a $600 savings) and they can now serve samples in the form of a cocktail. The guild also partnered with the winery and brewery organizations to create a new Maryland Craft Beverages map/brochure, with over 20,000 in circulation.

craft distilling forward through legislation on both the state and federal level, promotion of Massachusetts craft spirits at tasting events, continued brand awareness, and retail marketing. Top priorities for 2017 include legislative initiatives to reduce Federal Excise Tax by working with the Massachusetts members of congress in order to pass the Craft Beverage Modernization and Tax Reform Act of 2017 (H.R.747/S.236). On the state level, MDA is working on initiatives to pass An Act Authorizing the Sale of Farmer-Distiller Products at Farmersâ&#x20AC;&#x2122; Markets (H.198/S.124) throughout Massachusetts. MDA is currently designing a new online

distillery trail. Local craft spirit fans will be able to access the Distillers Trail online while printed versions will be available for tourism boards and other interested parties.

lines. This session saw greater and more organized opposition to our bill from holders of full liquor licenses (i.e., bars, restaurants and package stores that can sell all three categories of beverage alcohol) whose licenses were "threatened" with devaluation by the legislation, despite the fact that we would all be limited to the sale of New Mexicomade products, whereas they could sell any domestic or imported products. The bill died in committee in the final days of the session. The other bill up for consideration this round would have allowed holders of restaurant beer and wine licenses to also serve NM craft spirits. Despite the fact that this bill was limited to specific business districts and enterprise zones so as to address full liquor license holders' previously expressed concerns about expanding the number of liquor licenses in the state and thereby devaluing their investments, this

bill also died in committee. One success in this session was the defeat by the NMDG and its allies of the so-called "25 Cent Drink Tax" which sought to curb the ill effects of underage drinking, DWIs and alcoholism by the passage of an end user tax per drink; however, upon further investigation it was shown to be an increase in the excise tax which would have made New Mexico state excise taxes the highest in the nation for beer, wine and spirits. Since the legislature failed to reach agreement with the governor on the state budget she has called legislators back into session this spring, and part of the agenda includes "comprehensive tax reform," so the NMDG is advocating for state liquor excise tax reduction as we seek parity with the state's brewers and winegrowers who presently pay a much lower rate.

Jaime Windon Owner/Co-Founder | Lyon Distilling Co

MASSACHUSETTS DISTILLERS ALLIANCE BOARD MEMBERS Andrew Cabot Alison DeWolfe Matt Nuernberger

Privateer Rum Damnation Alley Distillery GrandTen Distilling

For more info, find us at massdistill.com. Alison DeWolfe Damnation Alley Distillery

Dr. Greg McAllister Algodones Distillery WWW.ARTISANSPIRITMAG.COM

NEW YORK NEW YORK STATE DISTILLERS GUILD Late this spring the New York State Distillers Guild, joined by the New York State Brewers Association and the New York Cider Association, made a unified lobbying trip to our state capital, Albany. We’re pleased to comment that we have been awarded

OHIO OHIO DISTILLERS GUILD The Ohio Distillers Guild has increased participation and membership 40 percent in the last year. We will be holding elections for new officers in the fall of 2017. One of our largest achievements to date was the passing of House Bill 351 which increased production limits and allowed for distillery service

OREGON OREGON DISTILLERS GUILD We had our annual general membership meeting last quarter, and with the updated bylaws the ODG board was increased to five members, representing four statewide zones. At our April Board of Directors Meeting we defined the new board. We are proud to announce our new lineup of the ODG board. Tad Seestedt and Rick Rickard attended a recent state legislative meeting and spoke out in support of HB 2089, which gives distilleries the ability to sell vermouth without a wine license. From a consumer point, it improves the customer experience because they can get a “martini kit” and head straight home, versus not having purchased

additional funding through the legislative budget for the 2017 year. We are very grateful to have a legislature that recognizes the importance and impact of our industries on the state and national economy. With the inaugural New York Craft Beverage Week scheduled for the last week in September, the third quarter of 2017 will be very active for our organization and its members. Focused on the growth of our association, we are in an ongoing search

for an executive director to assist us in the operations and advancement of our industry here in New York state. Our next membership meeting and presentations will be held at the end of August in Brooklyn, NY.

options. Several distilleries have begun to take advantage of this bill, and have added full service restaurants to their operations. A new house bill is currently being formed to amend several operation constraints and improve parity with our neighboring staterun spirit businesses. We held our first member event of the year, the North Market Mix and Shake Event in February, and continue to develop additional opportunities for member-to-consumer driven events.

Guild members are focused heavily on a new state modernization platform for our control system. This includes state consolidation of warehouses and new operating systems for inventory management, retail and wholesale sales as well as on-site sales at our distillery agencies.

OREGON DISTILLERS GUILD BOARD MEMBERS President Vice President Treasurer Secretary At-Large position

Christian Krogstad House Spirits Brad Irwin Oregon Spirit Distillers Rick Rickard Rolling River Spirits Kevin Barrett Swallowtail Spirits Tad Seestedt Ransom Spirits

a distillery’s gin because they didn't want to make another stop at a liquor store to get vermouth. Thankfully, it passed! The guild is making a valiant effort to recruit every distillery in the state as a member to bolster support for legislative

Cheers! Cory Muscato Lockhouse Distillery – Buffalo, NY President – New York State Distillers Guild

Ryan Lang Head Distiller l Owner Middle West Spirits, LLC

changes, establishing a framework that levels the playing field for all of Oregon's alcohol producers. An ambitious push to enact laws that no longer favor only beer and wine, but rather declare that all alcohol producers are created equally and should be afforded equal rights. The ODG is advocating an avid NO towards an additional $0.50 per bottle tax attempting to be imposed by the governor. Oregon has one of the highest state liquor tax packages in the nation, and this potential tax will add just another layer of cost to the consumer. We are supporting Dr. Buehler, our State Representative, who opposes this unfair tax.

Rick Rickard Owner, Rolling River Spirits ODG Board Member

WWW.ARTISANSPIRITMAG.COM

Something TO LIFT Your SPIRITS From the leader in distilled spirit labels Todayâ&#x20AC;&#x2122;s bottles need high-impact decoration and innovative print capabilities to stand out in a crowded marketplace. We service brands large and small with cut & stack, pressure sensitive, roll-fed and shrink sleeve labels using a variety of substrates. Together with specialty finishes, there are no limits to producing labels that set your brand apart.

Your labelâ&#x20AC;&#x2122;s objective is to give customers a clear picture of what your brand is about.

Show off your eye-catching design and let details retell the story of your brand!

MEMBER OF ACSA: American Craft Spirits Association ADI: American Distilling Institute

TEXAS TEXAS DISTILLED SPIRITS ASSOCIATION As the 2017 Texas Legislative Session comes to an end (June 1), Texas distiller legislation is still fighting to get to the finish line. The distributors and package stores have strong lobby coalitions that fight us every step of the way. The Texas Distilled Spirits Association ran with four legislative initiatives this session. One was a bill to increase bottle sales at distilleries from two 750 ml bottles per

VIRGINIA VIRGINIA DISTILLERS ASSOCIATION The newly formed Virginia Distillers Association (VDA) focuses 50 percent of its efforts on increasing the awareness of the Virginia spirits industry, and the other half on improving the regulatory environment within the Commonwealth. The VDA currently has 16 member distilleries, and aims to have 25 on board by the end of 2017. Upcoming major marketing initiatives for the summer/fall include the scheduled Phase II launch to VirginiaSpirits.org, which will include a “Virtual Virginia Spirits Trail” of member distilleries. It will also include a dedicated section for regulatory and legislative advocacy. In addition to Phase II upgrades to the industry website, the VDA has plans underway to expand upon the state-wide campaign for “September Virginia Spirits Month.” The campaign highlights

WYOMING WYOMING DISTILLERS GUILD It has been a big year for distillers in Wyoming. We recently held our second annual in-person meeting in Jackson, WY at Jackson Hole Still Works, where we were

person per month to six if the distillery sells a variety of products. The second was to allow distillers to bring their product to a product sampling at a package store, as opposed to purchasing at the store’s marked-up price, as mandated in current Texas Statute. The third was to allow distilleries to sell at festivals and farmers markets. The fourth was to remove the mandated presence of a distributor at new business solicitations. April 11 was officially “Distiller Day” at the Texas Capitol, and we had distillers from across the state travel to Austin to talk to their legislators about promoting Texas distilleries as tourism attractions and the importance of

easing the burden on these entrepreneurs as small businessmen and women. As we continue to claw towards success, we look forward to the 2019 Legislative Session because the Texas Alcoholic Beverage Commission will go under sunset review. Sunset review is the audit process that occurs for state agencies every 10 years. It is our hope to shine a light on many of the unfair practices under the current law and seek parity with our friends in the beer and wine industry.

member distilleries “Showing Their Virginia Spirit” through crafted op-eds, point of sale materials and promotions of specialty #VaSpirits cocktails at participating trade partner (restaurant/bar) establishments. The campaign will also include the first annual Virginia Spirits Month Cocktail Competition, which will be held at a kickoff event in conjunction with the campaign. The Virginia Tourism Corporation has stepped up to offer “Virginia Is for Lovers” trucker hats with the purchase of Virginia spirits products throughout the month of September at participating Virginia ABC stores (while supplies last). The last time Virginia Tourism Corporation supported the sales of Virginia-made-products with their (gift with purchase) trucker hats at Virginia ABC stores, sales of Virginia products increased by 262 percent. The Virginia Distillers Association is moving forward with developing a formal agenda for the 2018 legislative session. Of utmost importance to our membership is

working with Virginia ABC to create internal policies that support in-state products (such as favorable listing and delisting procedures), increasing the commission paid by Virginia ABC to distillery store operators to a fair and equitable amount (comparable to the costs to run their distillery stores), the ability to serve product samples without having to purchase our own product first, direct-toconsumer sales opportunities, the ability to serve products not distilled on-site as part of cocktail samples (e.g., vermouth for a manhattan), and more.

able to reflect on our first full year as a guild. Our year coincided with a large revamp of some old state liquor laws, and we as a guild were deeply involved in working with both the Wyoming Liquor Division and the Wyoming State Liquor Association to ensure passage of legislation that will continue to support and protect the budding craft spirits industry in

our state. The guild also has devoted a good segment of its efforts toward gaining support for the FET tax reform, including letters written to all Representatives and Senators, in-person meetings with Senators at our distilleries, and in-person representation in Washington, D.C. Let’s all keep our fingers crossed that this piece gets passed in the

Carrie Simmons Texas Lobby Group

For additional information, please contact: Amy Ciarametaro, VDA executive director amy@vadistillersassociation.org or Curtis Coleburn, VDA government relations curtis@vadistillersassociation.org Amy Ciarametaro Executive Director Virginia Distillers Association

WWW.ARTISANSPIRITMAG.COM

Ingredients tailored for artisanal distilling.

Discover the many facets of artisanal distilling with fine ingredients from Briess. We understand craft distilling and the impact that specialty grains have on your spirits. We have proven this through both sensory and analytical analysis, but the real proof comes from tasting our grains prior to mash, and appreciating the aromas and flavors that come through from mash, fermentation, distillate and finished aged spirit. The Briess portfolio of fine, handcrafted ingredients uniquely positions Briess as your partner in craft distilled spirits.

• Distillers Malt • Handcrafted Specialty Malts • Malt Extracts • Pregelatinized Flakes • High Yield Flours • Raw Grains

near future! Other highlights of the year were rooting each other on at various industry conventions as multiple members brought home medals. We held our first (and second) guild-wide tastings for the public with great success. Our new logo has been adopted and our Facebook page is up and running. Membership of all levels is encouraged and

we look forward to growing. The goal moving forward for the guild is to continue to stand together as a voice for the industry in Wyoming and across the nation. We are stronger together than we are on our own. We will serve as a resource to each other and to new members. Our membership is set to grow significantly

as new distilleries open across the state, and our impact shall grow accordingly. Amber Pollock Backwards Distilling Company

suppliers! istillers and d ft ra c f o ce w guilds. nal audien ach a natio inspire fello re d n to a y s, it e n g u n ort latest challe on this opp solve your â&#x20AC;&#x2122;t miss out to n o s n D io ? st e G g SIN est sug rters, requ TE GUILD MIS T INVOLVED! E G O T M IS YOUR STA test victories, recruit suppo O .C G la ANSPIRITMA Share your RIAN@ARTIS

EMAIL B

20â&#x20AC;

WWW.ARTISANSPIRITMAG.COM

High-Proof Spirit Bases for your Custom-Crafted Blends

Expand your formulation options

Increase proďŹ tability & value

Diversify your product line

HIGH-PROOF SPIRITS Neutral Spirits Gin (3 options)

Organic Spirits Unaged Whiskey

Aged Bourbons, Rye & Whiskey Cream Liqueur Base

Rums

Brandy & Cognac

CONTACT: Alyssa Gianino: alyssa@ultrapure-usa.com

877.778.5872 | 203.662.9761 | www.ultrapure-usa.com

How do you make your product really shine?

Talk to the experts!

Your brand is your most important asset. It represents everything your prospective customer perceives about your company and your product. Wright Global Graphics offers innovative designs, state of the art production and fulfillment capabilities, and more than 55 years of experience creating successful branding.

• Custom Printed Labels • Award Winning Design Services • Hand-tooled & Refractive Foil Stamping • Embossing & Tactile Finishes • Large Inventory of In-Stock Substrates • Knowledgeable of TTB Regulations • Tasting Room & In-Store Graphics • Custom Retail Displays

WRIGHT® Global Graphics 800-678-9019 • www.wrightglobalgraphics.com

the ART of LOBBYING W R I T T E N BY M A RGIE A .S . LE HRM A N, E XECUT I VE DI RECT OR OF AMERI CAN CRAF T SPI RI T S ASSOCI AT I ON & JAMES E. HYL AND, ESQ.

he art of making a quality craft spirit is unique. It takes time, the right ingredients, and skill. The art of lobbying, or moving a politician or public official to take an official position, is similarly a mix of time, skill, and using the right touch. There is a growing push within the states, particularly led by guilds, to move legislatures to expand the rights of craft spirits producers. They are not alone. The American Craft Spirits Association (ACSA) continues to take the lead in lobbying for craft distillers on Capitol Hill in Washington, D.C., particularly in the ongoing battle to reduce the excessive taxes distillers pay (Federal Excise Tax or FET). How did lobbying begin? Just as whiskey has a storied history in our Republic, from Mount Vernon to today, so too has lobbying been part of our history. It is reported that as early as 1792, William Hull, one of the country’s first lobbyists, was hired by the Virginia veterans of the Continental Army to lobby for additional compensation. In the 1850’s, gunmaker Samuel Colt, seeking to extend a patent, had lobbyists pass out pistols as gifts to lawmakers and even to one member’s 12-year-old son. Legend has it that that the term “lobbyist” originated at the Willard Hotel when Ulysses S. Grant was in office (1869 - 1877). President Grant would frequent the Willard Hotel to enjoy brandy and a cigar, and while he was there, he would be hounded by petitioners asking for legislative favors or jobs. Those petitioners would sit patiently in the lobby, waiting for the President to

WWW.ARTISANSPIRITMAG.COM

arrive. Some say President Grant coined the term by referring to the petitioners as “those damn lobbyists.” Today there are estimated to be 10,000 registered lobbyists, and the number is probably higher for those that offer “strategic advice” but choose not to register. While each state has its own set of regulations governing lobbying, at the federal level the Lobbying Disclosure Act, as amended (2 U.S.C. Sec 1601) governs. Although this section of the Code is cumbersome, three core questions must be answered to determine whether registration is necessary. Specifically, the petitioner must determine:

1. Whether more than $3000 is earned from lobbying over a three- month period.

2. Whether there is more than one lobbying contact.

3. Whether more than 20 percent of the time was spent on a single client over that three-month period. If you’ve ever visited Capitol Hill, you will notice thousands of people crisscrossing the halls of the House and Senate office buildings advocating for any number of causes. Amongst this group, education and backgrounds are as diverse as the ingredients used in craft spirits. Still, there is one common denominator: the ability to persuade. The lobbyists’ goal is to cement the right connections and put into understandable terms the pressing issue. Ultimately, the lobbyist must know every

nuance of the issue and the reasons why it matters to his/her client. Like all things, lobbying really begins with the basics. What is it that you want legislators to do? Sometimes it is to advance a good idea, other times it may be to promote or protect funding, and sometimes it is to stop bad ideas. Generally, though, legislators need to know what your “ask” is. Craft distillers have a very simple ask: Reduce our taxes and give us parity with small brewers and vintners. Once the ask is determined, a simple message must be created. One to two pages should suffice to describe the problem. In this age, there is little patience to read more than a short summary. It also helps to have a story to tell. Facts and figures are great, but the personal anecdote cannot be underestimated. Craft distillers have a very simple message: PARITY. How might you begin within your state? Start local. Everyone has a Representative. Get to know that person. Attend local events. Seek out the local staff. Attend a fundraiser. Just think, if your local Congressman doesn’t support your issue, why should others? One of ACSA’s founding members approached his local Congressman about the FET, forming the catalyst for the first bill to be introduced in the U.S. Congress. This alone should encourage you to invite your Member of Congress to your distillery. No better way exists to share your story and discuss issues of importance to your small business, including the massive tax burden and other regulatory issues. Show

them where you would place a new still if you had the money to do so or how you would expand your tasting room. Tell them about the employees you could add to staff. Because your product and business is distinctive with widespread appeal, you will have your invitations accepted. Sometimes the millennial staffers will even bring and amplify your message back home to Congress. Extend an open invitation to them. The best times are usually weekends, possibly Mondays and Fridays, when they are back in their congressional districts and not in Washington. Many times they have longer breaks around holidays, like Memorial Day, Fourth of July and almost all of August. Moving beyond local staff, it is imperative to figure out the structure of Congress and the interplay of committees. The U.S. House of Representatives has 20 standing Committees, each with their own jurisdiction and staff. Since the FET reduction concerns tax, it falls in the jurisdiction of the Ways and Means Committee in the House and the Finance Committee in the Senate. Each has

a Chairman. In the House it is Kevin Brady (R-TX) and in the Senate Orrin Hatch (RUT). Senator Ron Wyden (D-OR), who has become one of our key bill champions, is the most senior Democrat on the Senate Finance Committee. Eric Paulsen (R-MN) is on the Ways and Means Committee, and he is our bill champion in the U.S. House. While we have key champions, the goal is to reach and persuade each member of these committees to support our bill, The Craft Beverage Modernization and Tax Reform Act of 2017 (H.R.747 and S.236). The last step to success is how does it get done? Small tax bills sometimes make it to the President’s desk and sometimes do not. Major tax bills rarely come along. 2017 is one of those years when there will be a major tax bill, as President Trump made clear during his campaign and while in office. Now is our time and our place to strongly advocate for a reduced FET with a full-frontal assault on this issue. How? ASCA is inaugurating its first annual legislative fly-in on July 24 and 25, 2017. It will feature a welcome reception, a reception

with members of Congress, meetings in Congress, a lunch featuring one of the most important players in the tax debate, as well as useful business and regulatory updates for our members. We have secured a hotel (with an incredible rate) within walking distance of the National Mall, the Congress, and museums. We need you to participate. If you’ve never lobbied but pride yourself on knowing how to communicate, this is your time. Inperson visits from constituents—YOU—can make the difference between a reduction of your FET from $13.50 to $2.70 up to the first 100,000 proof gallons or maintaining the status quo. Invest in your business by being a part of our effort. And learn firsthand the critical role lobbyists play in advancing a cause.

Margie A.S. Lehrman is Executive Director of American Craft Spirits Association. Visit www.americancraftspirits.org for more information on ACSA and to join. Contact James E. Hyland, Esq. by emailing Jim@PennsylvaniaAvenueGroup.com.

WWW.ARTISANSPIRITMAG.COM

A GREAT SPIRIT COMES FROM A GREAT STILL

CUSTOM COMMERCIAL DISTILLATION SYSTEMS HBSCOPPER.COM

AMERICAN DISTILLING INSTITUTE Q U A R T E R L Y R E P O R T WRITTEN BY ANDREW FAULKNER

///

P H O T O S B Y C A R L M U R R AY

THE NUMBERS SPEAK FOR THEMSELVES “Not Fake News!” said American Distilling Institute president Bill Owens. “The numbers don’t lie: Craft spirits are on the same trajectory that craft beer was.” Over 1,730 people attended ADI’s Conference and Vendor Expo, April 3–6, in Baltimore, MD, including 802 distillery representatives, 43 international attendees from seven countries, and 164 vendor booths. The event set a new record for attendance, as the ADI Conference continued its longstanding run as the largest gathering of licensed distillers in the world. ADI Research Economist Michael Kinstlick confirmed Owens’s assertion in his fifth annual State of the Industry address. Kinstlick said, “This is a classic growth pattern of renewal that many industry resurgences have seen, and I have no sense of what the ceiling is in

The main floor of the Baltimore Convention Center was packed for the keynote, benefit auction and lunch sessions as more than 1,700 members of the distilling community came to the American Distilling Institute’s 14th Annual Conference and Vendor Expo, April 3-6.

WWW.ART ISANSP IRITMAG.COM

terms of either craft beer or craft spirits.” Kinstlick went on to speculate that the market ceiling for both craft beer and craft spirits could be as high as 70 or 75 percent. “Imagine a landscape where instead of craft beer having 5,000 entrants and a 15–20 percent market share, it has 25,000 entrants and a 75 percent market share. It’s not inconceivable,” said Kinstlick. “It’s not inconceivable that the distilled spirits market generally could reach the same disaggregated production and distribution model.” The number of entrants has been doubling every two or three years, currently adding about 250–300 new DSP permits a year. “I think the opportunity set for craft distillers going forward over the next 10, 15, 20 years is still enormous,” he said. Kinstlick followed keynote speaker Karen Hoskin, co-founder, president and CEO of Montanya Distillers. Hoskin took the large stage to call for unity, diversity, and sustainability in the distilled

ADI President Bill Owens, left, hands the Bubble Cap Award for 2017 Distillery of the Year to the staff of the Cedar Ridge Distillery during the Awards Gala. Owner and founder Jeff Quint is next to Owens.

Before the Awards Gala, the Maryland Distillers Guild hosted a tasting of Craft Spirits.

spirits community. “I am hoping we can start a conversation about what the long range looks like and work together on it,” she said. Hoskin also talked about how diversity in hiring practices at Montanya Distillers had affected her community. She addressed her efforts to reduce waste at her business not only in the speech but also in a breakout session entitled “10 Ways I Freed my Distillery from Environmental Irresponsibility.” With breakout sessions like hers and “New Directions in Distilling Technology” by Dr. Kris Berglund, “Federal Fair Trade Law Overview” by David Bateman, “Ethyl Carbamate: a Technical Review” by Liz Rhoades, and “High Proof Tax Incentives for the Craft Distiller” by Aaron Coffeen, ADI boosted the diversity of knowledge available to distillers at the most advanced levels while creating a welcoming home for first-time attendees and the suppliers whose booths filled the expanded vendor expo. For the second year in a row, ADI hosted the Women in Distilling Networking Luncheon. “The luncheon was our largest gathering to date, with over 120 women present. It was inspiring to be in a room filled with so many women in distilling!” said LOAD co-founder Samantha Katz. “I can't thank ADI enough for giving women in the industry the opportunity to gather, share and engage. Cheers!” This year’s excitement and energy was palpable, and ADI is looking forward to an even larger and more exciting event in Portland, Oregon next year (March 26– 31, 2018).

The Australian Distillers Association traveled from the far side of the world to give a “panel discussion” on Monday night and brought a lot of bottles that needed discussing.

JUDGING AWARDS ADI also announced the awards from the 11th Annual Judging of Craft Spirits. With 805 spirits entered, ADI recognized nine Double Gold, 47 Gold, 208 Silver and 298 Bronze Medals. The awards were handed out Tuesday night of the ADI Conference and a complete list of winners can be found at:

distilling.com/events/judging/awards/

APPLE BRANDY WORKSHOP ANNOUNCED Following the success of last year’s Hands-on Apple Brandy Distilling Workshop with Hubert Germain-Robin at Tuthilltown Spirits in Gardiner, New York, ADI announced it will hold another similar class this year, October 15–20. This weeklong advanced class offers a rare opportunity to study with master distiller and master blender Hubert Germain-Robin, an international consultant, creator of world-renowned Germain-Robin brandies and author of “Traditional Distillation: Art & Passion” and "The Maturation of Distilled Spirits: Vision & Patience." The workshop will combine traditional techniques of European-style brandies with four decades of experience in working with New World fruit to create new and interesting flavor profiles. The workshop addresses the conditions a craft distiller must be mindful of throughout distillation and maturation. For more information, go to:

distilling.com/events/distilling-workshops/brandy-workshop/

Andrew Faulkner is vice president of American Distilling Institute. For more information visit www.distilling.com. 28

WWW.ARTISANSPIRITMAG.COM

A BOTTLE CRAFTED TO TELL YOUR STORY. You carefully sourced local ingredients and honed your distilling process. Now you need a one-of-a-kind bottle to make a stunning first impression. Anchor Hocking will help create an American-made craft bottle that conveys your unique story and embodies your brand.

www.anchorhockingbottles.com 1-74 0-43 8-8 453

FEATURED CRAFT BOTTLE

APPROACHES to SPIRITS DIRECT SHIPPING BY MARC E. SORINI AND BETHANY K. HATEF

irect-to-consumer (DTC) sales of alcohol beverages have been a hot topic in the alcohol industry for the last two decades. The wine direct-shipping landscape has changed greatly over the past 15 or so years, most dramatically by the U.S. Supreme Court’s 2005 decision in Granholm v. Heald. Today nearly every state—plus the District of Columbia—allows wineries to ship wine across state lines directly to in-state consumers. The same cannot be said for spirits. There are, however, a few avenues craft distillers may consider to get their products delivered to consumers around the country. Further, an initiative is underway to pursue litigation to secure DTC rights for spirits. Although it is far too early to speculate about the outcome of any such litigation, the current effort suggests the potential for interstate distiller-to-consumer sales in the coming years. Of course, lingering ambivalence toward spirits (as opposed to wine) by the public, lawmakers, and alcohol regulators makes the prospect for any legal change uncertain.

BACKGROUND Explosive growth in the number of small WWW.ARTISANSPIRITMAG.COM

wineries in the U.S. gave wineries sufficient political clout to secure DTC rights within most states. In-state distributor and retailer interests, though, sought in many places to limit those rights to in-state wineries. The Supreme Court’s 2005 decision in Granholm v. Heald declared such laws unconstitutional under the “dormant” Commerce Clause. In Granholm, the Supreme Court required states allowing their own wineries to direct-ship to consumers to also grant such privileges to out-of-state wineries. Largely as a result of Granholm, the vast majority of states today allow wineries (and, in some cases, retailers) to direct-ship wine to consumers. In contrast, only roughly a handful of states (plus the District of Columbia) currently permit interstate DTC shipments of spirits; none of these states are key markets by size. Many who argue against allowing DTC sales for alcohol beverages generally cite the importance of preserving the three-tier system. Many states have adopted this concept in their alcohol beverage codes, which creates three separate tiers in the alcohol industry—the supplier tier (i.e., producers and importers), the distributor tier, and the retailer tier—and mandates strict separation among the tiers. Contrary

to popular belief, however, federal law does not mandate a threetier system, and the laws of some states still do not mandate separation between the supplier and distributor tiers. The lack of a threetier system in some jurisdictions reflects FEDERAL the immediate postLAW DOES Prohibition legal structure, where NOT MANDATE “tied houses” A THREE-TIER were banned SYSTEM, AND THE (hence a LAWS OF SOME two-tiered supplierSTATES STILL DO and-retailer NOT MANDATE s y s t e m SEPARATION k e e p i n g retailers BETWEEN THE independent), SUPPLIER AND but separation DISTRIBUTOR between producer TIERS. and distributor was not mandated. Today, however, the majority of states do require producers and importers of spirits to sell only to distributors, which in turn sell to the retail market.

KEY APPROACHES TO DTC SALES 1. DIRECT INTERSTATE SALE AND SHIPMENT The simplest direct-shipping option involves shipments directly from the place of production (or a central warehouse) to a consumer. Direct interstate sale and shipment allows the supplier to capture both distributor and retailer margins, and/ or allow the consumer to benefit from eliminating those margins. This method is also highly efficient. Shipments typically

are made by a third party common carrier (e.g., FedEx), and state laws authorizing DTC interstate sales and shipments generally impose requirements on the shipping supplier (e.g., monthly quantity limitations) and on the common carrier making the actual shipment (e.g., require a signature from an adult recipient upon delivery). Today, direct interstate sale and shipment is typically limited to shipments of wine only to consumers by U.S. wineries and, in some states, retailers. Only a few states currently allow DTC sales and shipments of spirits:

»» »» »» »» »» »» »»

Alaska D.C. Hawaii Nebraska Nevada New Hampshire North Dakota

Moreover, most of these states limit DTC shipments of spirits in some way. For example, some states require A the shipper to hold a permit, while others LEGAL limit the amount of CHALLENGE spirits shipped TO THE STATUS to a consumer, QUO COULD BE etc. As occurred in VIABLE WHERE the midA STATE PERMITS 2 0 0 0 s DISTILLERS with wine, a legal TO SHIP DIRECTLY challenge TO CONSUMERS, BUT to the PROHIBITS s t a t u s quo could DISTILLERS be viable FROM EXERCISING where a state THE SAME permits in-state PRIVILEGE. distillers to ship directly to consumers, but prohibits out-of-state distillers from exercising the same privilege.

IN-STATE

STATE

OUT-OF-

2. INTERSTATE “SPRAY AND PRAY” Like the direct interstate sale and

shipment option, this approach also involves interstate shipping, but it is much riskier from a legal perspective. Interstate “spray and pray” refers to direct sales and shipments by a company, typically a single (i.e., non-chain) retailer with little interstate presence, with little regard to the consumers’ state laws. Many nationally known specialty retailers and beer and wine clubs appear to ship directly to consumers nationwide. Such companies typically obtain products through customary (generally three-tier) channels in their home state, then sell products DTC nationally. Because such companies usually operate within the retail tier, this approach fails to eliminate distributor and retailer margins. Quantity discounts, though (where permitted by law), often allow favorable pricing by such operations. While most states allow direct delivery by in-state retailers, so far the federal courts have mostly upheld laws discriminating against out-of-state retailers (as opposed to producers), suggesting that a state may deny direct-shipping privileges to out-ofstate retailers as a means of protecting the three-tier system. In Granholm, the Supreme Court labeled the three-tier system “unquestionably legitimate.” As permitting direct interstate shipping would undermine a state’s ability to maintain an orderly three-tier system within the state, several courts have reasoned that to apply non-discrimination principles to retailers would be contrary to the Supreme Court’s endorsement of the three-tier system. The Supreme Court has not yet clarified this point. So, in the absence of statutory authorization to interstate ship (i.e., the current status in most states), and having no success yet challenging bans on interstate shipping by retailers in the courts, single-location (or few-location) interstate shipping retailers essentially choose to ignore the law, apparently as a result of weighing their business upside against the risks of enforcement. The legal justification offered is that the sale occurs in the shipping retailers’ state and the consumer

causes t h e interstate s h i p m e n t of wine. This argument, however, has failed to win the day in any case where it was challenged in court. States have few enforcement tools and resources to bring cases against out-of-state retailers, so a retailer with a single-state presence rarely faces consequences if a remote state deems it in violation of the law. For distillers, there is not much upside to pursuing the interstate “spray and pray” strategy. Distillers having—or aspiring to have—personnel and holding alcohol licenses in multiple states would offer state alcohol regulators clear and easily-exercised jurisdiction, making an enforcement action more likely. An enforcement action could lead to loss or suspension of a distiller’s license, and/or an injunction against sales, any of which could have a devastating financial impact on a distiller’s business (particularly a newly established craft distiller). Undermining three-tier structures also could alienate the distributors and retailers that most distillers must rely upon.

3. INTRASTATE “BRICKS AND CLICKS” SYSTEM Because most—although not quite all— states allow in-state retailers to deliver alcohol beverages to consumers within the retailer’s state, delivery of spirits to consumers could be accomplished through a network of retailers in each state (or in

WWW.ARTISANSPIRITMAG.COM

certain k e y markets) to create a viable DTC platform. Under this approach, product moves through the three-tier system. Accordingly, the “bricks and clicks” strategy does not offer the advantage of compressed margins that direct interstate sale and shipment offers. This method does, however, involve lower shipping costs, because product would be delivered to consumers by instate retailers, rather than from remote locations. Further, to a consumer placing an order (most likely online), the ordering and delivery experience is similar to that of the direct interstate sale and shipment model. On the downside, the “bricks and clicks” strategy is expensive and resourceintensive. Retail locations can be expensive to establish, and in most states a retailer must have at least some nominal retail store functions (i.e., be open to the public at least sometimes). Fulfilling consumer orders on a national level also would require significant capital investments. Existing large national retailers are best-positioned to use this strategy for direct-delivering spirits to consumers: Since such entities already have retail licenses and premises, additional investments necessary to establish a delivery system likely would be WWW.ARTISANSPIRITMAG.COM

modest, and the retailers’ existing w a l k - i n sales likely would support the company’s operations during the establishment and growth of the “bricks and clicks” model. It likely, then, does not present a very practical option for most craft distillers, as this method is typically exercised by large retail chains. Distillers wishing to participate in a “bricks and clicks” strategy to directdeliver spirits to consumers would face other legal obstacles. Under the alcohol laws of most states, distillers cannot own or hold an “interest” in a retailer. Moreover, a distiller directly partnering with a retailer also would face substantial regulatory problems. Federal tied house laws, and most state tied house laws, would prohibit exclusive arrangements—whereby the retailer would reserve its online sales only to the distiller’s products. Finally, federal and state alcohol regulators could view channeling email traffic and the like to one retailer as giving that retailer a prohibited “thing of value” in violation of tied house principles.

4. B2B2C INTRASTATE E-COMMERCE/

THIRD PARTY PROVIDER The rapidly expanding, fairly new channel of alcohol sales and deliveries involves delivery of product to consumers by individual retailers through alcohol delivery apps such as Drizly, Minibar, and Klink. The entities running the apps are unlicensed third parties, and do not actually make any sales or deliveries of alcohol beverages themselves. Instead, product moves through the three-tier system (so, again,

no elimination of margins), and the apps leverage existing players in the industry (i.e., off-premise retailers). As with the “bricks and clicks” strategy, business to business to consumer (B2B2C) intrastate e-commerce gives consumers the same “feel” of the traditional DTC experience. State alcohol beverage regulators are still figuring out how to handle “third party STATE provider” operations, ALCOHOL but developments in BEVERAGE several states are encouraging. In REGULATORS a few major ARE STILL m a r k e t s FIGURING OUT HOW (California, Illinois, and TO HANDLE “THIRD New York), PARTY PROVIDER” the state OPERATIONS, BUT alcohol DEVELOPMENTS regulators h a v e IN SEVERAL published STATES ARE g u i d a n c e ENCOURAGING. concerning the role of third party providers in alcohol beverage transactions. Unlike the interstate delivery models, existing distributors and retailers support this model (unsurprising, given that third party e-commerce providers really just facilitate sales of alcohol beverages, thus increasing sales for distributors and retailers with no expenditures or additional effort required). Although distillers’ ability to legally become involved in the e-commerce channel has not yet been clearly outlined by most state legislatures or alcohol regulators, we likely will see more guidance on this issue in the coming years. The future of e-commerce looks promising for suppliers. Third party providers are not retailers, so suppliers face fewer restrictions on their relationships with such entities. A distiller paying for advertising services may be viewed as analogous to payments distillers may legally make in many states to other third parties, like stadium venues. Favored advertising placement (such as

preferred links) also seems issue seems to be heating up IT IS IMPOSSIBLE TO SAY WHAT THE FUTURE HOLDS less problematic from a in the industry, much as it did FOR DTC SALES AND SHIPMENTS OF SPIRITS, BUT regulatory perspective when for wine a decade ago. THE ISSUE SEEMS TO BE HEATING UP IN THE dealing with an unlicensed third party provider instead of a retailer. Of INDUSTRY, MUCH AS IT DID FOR course, there is still some tied house risk Marc E. Sorini is a partner in the law firm WINE A DECADE AGO. associated with a distiller’s contemplated of McDermott Will & Emery LLP, based in the Firm’s Washington, D.C. office. He leads involvement with a third party provider, and the Firm’s Alcohol Regulatory & Distribution a distiller should carefully evaluate these 2017, the campaign had raised over Group, where he concentrates his practice risks if considering getting involved in the on regulatory and litigation issues faced by $19,000. e-commerce channel. supplier-tier industry members. His practice for Although $19,000 is a very small amount craft distillers includes distribution agreements, of money when considering the expense of distribution counseling and litigation, spirits CURRENT LITIGATION INITIATIVE litigation, particularly the potential scope of formulation, labeling, promotional compliance, the litigation this campaign contemplates, As a final point, although state restrictions compliance strategy, and federal and state tax the primary fees relating to the litigation on DTC sales and shipments remain lawful, and trade practice enforcement defense. would be contingent on a successful civil currently the American Distilling Institute Bethany K. Hatef is an associate in the law firm rights lawsuit under federal law (which is supporting a campaign to bring a legal of McDermott Will & Emery LLP, based in the provides for the recovery of attorney’s fees). challenge aimed at striking down state laws Firm’s Washington, D.C. office. She is a member To represent them in the planned litigation, prohibiting DTC shipments of spirits. This of the Firm’s Alcohol Regulatory & Distribution Group, where she concentrates her practice on the parties have hired an attorney heavily effort is being led by Doug Stone of Fora wide variety of regulatory and distribution involved in wine direct shipping litigation Lovers LLC, an online retailer of whiskey, issues involving alcohol beverage suppliers. Her that ultimately led to the Granholm as well as two small distillers. The parties practice includes counseling on distribution decision. At this preliminary stage, it is conducted a crowdfunding campaign relationships, trade practice compliance, and impossible to say what the future holds for that sought $15,000 for costs and fees alcohol regulatory and distribution risks DTC sales and shipments of spirits, but the relating to the litigation effort. As of May 3, associated with corporate transactions.

OUR CRAFT BECOMES ONE WITH YOURS. The Barrel Mill crafts tight grained white oak staves into premium barrels. Then the magic happens. We toast and char the barrels to your specifications to inspire the unique flavor profile you desire. Here’s to excellence – from barrel to glass.

Barrels in stock. Ready to ship. 800.201.7125 Choose from five sizes

Gallon

THEBARRELMILL.COM

WWW.ARTISANSPIRITMAG.COM

a legend in the making PROUDLY BUILT IN THE U.S.A.

stills•mash tuns •automation • fermenters • spirits safes

now offering

continuous stills•electric test stills BOISE, ID U.S.A. | WWW.CORSONDISTILLING.COM | (208) 407-4268 | INFO@CORSONDISTILLING.COM

BRAND BUZZ

BRANDED HOUSE VS. HOUSE OF BRANDS WRITTEN BY

DAVID SCHUEMANN

For many startup spirits companies, the question of whether to build a “branded house” or a “house of brands” is a critical one to answer for their company and brand’s future success.

hether you plan on launching just one product or dozens, considering your company’s strategy for brand architecture and how it will evolve over time is a critical first step to ensure your brand’s success and ultimately its strength in the market. The “Branded House vs. House of Brands” comparison refers to the two primary ways of structuring a business’s brand(s) and products.

4 BENEFITS OF A CLEAR BRAND ARCHITECTURE

1. Improves the cost effectiveness of your 3. Provides clarity and consistency to your brand and marketing investment.

2. Aligns brand positioning and value propositions appropriately with market segments.

brand vision and marketing efforts.

4. Creates a clear decision-making

framework for launching new products and updating existing products, allowing you to be more nimble and dynamic.

HOUSE OF BRANDS STRATEGY 4 REASONS TO BUILD A HOUSE OF BRANDS

1. If any issues arise with one of your products the other products remain largely unaffected.

2. You can launch more niche-focused brands that can

live apart from the parent brand, allowing you to craft your messaging specifically for each segment.

3. Creating separate brands allows for premium

and value products to live separately from one another. Your value brands won’t detract from the quality or reputation of your premium brands.

4. If your growth model or exit strategy includes selling portions

of your portfolio, creating different brands allows you to sell a brand versus the entire company to reposition or raise capital.

WWW.ARTISANSPIRITMAG.COM

This is a multi-brand strategy. In this brand architecture, all the products produced by your company bear their own unique brand names as opposed to your company name. Most established alcohol beverage companies have historically operated as a house of brands. For example, Brown-Forman owns Jack Daniel’s whiskey, Herradura tequila and Finlandia vodka. These are all stand-alone brands within their respective alcohol categories. Companies that follow this model are marketing-driven organizations in which each separate brand is supported by a marketing staff and a substantial marketing budget. The advantage of this model is the ability to create numerous strong, independent brands that each stand credibly within their own category unfettered by your other brands. The downside of the house of brands architecture is the significant resources required to support such an approach. Few organizations have the marketing talent and financial resources required to make this type of approach successful.

BRANDED HOUSE STRATEGY or stand for values that resonate This is a single brand strategy. with the target consumer. Using With this brand architecture, your a branded house strategy allows company is the brand which acts 4 REASONS TO BUILD A BRANDED HOUSE for an equity transfer by lending as an umbrella encompassing 1. You have a more limited branding and marketing credibility and quality assurance all your products wrapped into a budget. Building a branded house saves significant across all your product offerings. single identity. Two well-known capital that would otherwise be spent on The downside of the branded examples are Virgin and Apple, developing and marketing multiple brands. house architecture is that it can but many successful craft spirits 2. You want a simpler model to build, follow, and diminish your flexibility and producers have also chosen control. (Your products will all share the same ability to adapt to changes in the the branded house architecture budget, customer, and market position.) market—you can only stretch a due to its simplicity and cost 3. It simplifies your communication policies, centralizes your specific positioning so far to fit effectiveness. branding strategies, and creates consistency in your image. different products. It is also more Organizations that follow 4. New products and line extensions can be launched far more difficult to transition a product this model need to ensure their quickly since the brand is already established, and they’ll out of the branded house and company presents itself as a carry the prestige already associated with your brand. into a stand-alone brand, either brand, not a financial holding for market reasons or to sell the company. In addition, the brand brand. In fact, selling the brand should provide an overarching will more than likely require the sale of your entire portfolio of reassurance to customers by standing for something, such as quality, products since they all share the same brand name. You will be innovation, or some other admirable attribute. Ideally, the brand starting over if you want to continue in the business. should fulfill a customer need, take a leadership role in a category,

WHICH STRATEGY IS THE BEST? Both strategies have pros and cons, and choosing the correct one for your company depends upon market scenarios as well as your long-term plan. The key is knowing your market, your product, and your capacity to manage your products and brands. There is no

question that choosing and establishing a clear brand architecture strategy that fits your company best will lay a strong foundation for future success.

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

Branding: Distilled is an in-depth exploration of brand The author draws on her 25 years of experience d practices for branding and design, including establ design team, managing the design process and sour and retailers explain what they look for when consid ful small batch distilleries provide readers with insi This book is rich with visual inspiration for distille images from across the country provide examples of advice for distillers and other specialty producers succeeds in the marketplace.

PUT OUR CUSTOM INTO YOUR CRAFT.

Published by White Mule Press, Haywa

custom-metalcraft.com 417-862-0707

WWW.ARTISANSPIRITMAG.COM

THE ORIGINAL.

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

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

distiller the vo ice

of cra ft

distil

ling

A publica tion of the ng Institu

n Distilli

America te

The Distille of Marylandries Washington & , DC

Vol. 12 issue 3

TTB Revamps Labeling Requi rements

winter

As Went Beer, So Goes Spirit s Pay to Play and the Impac Cocktail Culturt on e

2016-17 Distiller cover

WI 16-bottles.indd

12/22/16 8:06 AM

™

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

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

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

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

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

Scotland

from the introduction…

A Whisky Lover’s

Guide

ding and packaging design for craft spirits. designing successful brands to share best lishing your brand strategy, selecting the rcing materials. Distributors, bar owners dering which brands to carry, and successights from the front lines. ers, designers and spirit lovers. Over 150 f excellence in packaging. It offers expert looking to create a premium brand that

The Distiller’s Guide to

RUM by

Ian Smiley, Eric Watson & Michael Delevante With Contributions by

Eric Zandona and Martin Cate

ard, CA, whitemulepress.com

White Mule Press Hayward, CA whitemulepress.com

This book was inspired by the recent popularity of rum among the cocktail circles, and by the advent of so many new rum distilleries in North America. Rum is now being made in micro-distilleries all over the United States, including a return to the original epicenter of rum distilling, Newport, Rhode Island. At the time of the American Revolution, there were about 30 rum distilleries in Rhode Island, 22 of which were in Newport alone, and the rum produced there was revered by some as the best in the world. The last Rhode Island rum distillery of that era closed in the 1840s. But, now they are coming back and not only in Rhode Island, but in all of New England, and across the United States and Canada.

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

In this book, you’ll read about the story of rum and how it is made, written by the well-known distillery expert, Michael Delevante. The book also details the ingredients, equipment, and processes used to make rum. You will learn about the lubricious effects of barrel aging, and the various ways that it is done. And, there is a chapter that explains step-by-step how to make a 155-gallon batch of rum mash and how to distill and age it, written by Ian Smiley.This chapter gives a new micro-distillery a proven recipe and process to get a running start in producing their first product. There is also a chapter on the batch distillation of rum using a hybrid batch distillation system comprised of a pot still and a rectification column written by Eric Watson of AlBevCon.

Ted Bruning

PO Box 577 Hayward CA 94541 (510) 886-7418

CODE START OFF ON THE RIGHT FOOT with

PROFESSIONALS W R I TT E N BY S H AW N B E R G E R O N

closed my last article by saying we’d be moving towards fire pumps, alarms, and chillers but the forces of the everchanging world of craft distilling have made me take another path. We keep hearing from distillers who are facing difficulties and we need to stop this from happening. Let’s talk through some of these difficulties, and remember, it’s less expensive to learn from the mistakes of others. A few weeks back I received a call from a successful distiller looking to expand. Their products are doing well, they’ve won awards for their spirits, and they have a client base. They need to move aging out of the distillery as they need another still, and they want to know if we can help them design a new rickhouse? Sure we can, sounds easy, until we get there. Like many startup distilleries this one was never really planned, it just happened. One day they were doing the nine-to-five and a few days later they’re mashing and bottling—the evolutionary process that leads to many startups. All has gone well as the locals love them and they’re bringing new business to an area that’s been a bit depressed. They go to the local permit office for the rickhouse expansion and that’s where the yeast suddenly becomes tainted. There’s a new planner in town and this one goes by the book. “Let’s see, the distillery was never ‘really’ approved, you never came in for the required planning review, and you don’t seem to have a Certificate of Occupancy. You’re gonna have to get these things taken care of before anything else and by

WWW.ARTISANSPIRITMAG.COM

the way, you shouldn’t even be operating.” This happened and now our guy is in a world of crap! Here’s a second true story. Another successful distillery with more than a decade of success, distribution in more than 30 states, and a bright future, has never had much of a tasting room, but this needs to happen since part of their expansion plan is to do wonderful tastings and bring in local chefs. They need to show off their new seasonal gin and bring the local food scene together. All good for them and all good for the community, a real win-win. At first blush, easy peasy; who’s not going to support this? My distiller does what they’ve done for years: They call their favorite contractor who loves their gin and has always done a wonderful job from start to finish. He gets the building permit and he’s off and running. Walls are coming down, new walls are going up, paint colors are being chosen, and the fire chief walks in and the conversation goes like this: Chief – “What’s going on? What are we building?” Builder – “We’re doing that tasting room, the one that we just got a permit for.” Chief – “You don’t have a fire department permit. No one called me. This is an expansion and change of use. The building needs a sprinkler system and I need to review the plans. You’re going to have to take a break for a while.”

Sure enough, they’re now caught beneath the full weight of the permitting world, which does not function in a businesslike manner, and worse, apparently doesn’t like gin. Like a ship without a rudder, this project is completely dead in the water and quickly drifting towards the reef. What do these two scenarios have in common? No planning, bad planning and/or a lack of knowledge of how things have changed in the world of permitting. Every agency, bureau, board, and authority wants their piece of the pie and needs it to justify their existence and yes, they will do so at your expense. Don’t kid yourself. You need a consultant and probably more than one, but who are these people and what do they do? There are real estate professionals, title professionals, lawyers, land surveyors, planners, architects, engineers, distillery consultants, code specialists, and permitting specialists. There are so many and their titles are so vague it’s like reading labels to determine which is the perfect gin. Most will tell you that they are your go-to guy but let’s look at what these consultants do and help you determine who you really need for your project.

Real Estate Professionals — Usually the person you talk to when you’re looking to purchase that amazing 100-acre abandoned farm to construct your lifelong dream. Ask lots of questions. Is this person a full-time realtor who has a reputation for selling successful commercial properties, or do they usually sell single-family homes? Have they been in the community through a few downturns or are they new to the neighborhood? Do they know the local municipal players and can they bring you to the water department, the town offices and to meet with the fire chief? You want the old grizzled lady or gentleman that specializes in commercial properties and has been in the neighborhood for decades. The last thing you need, and there’s far too many of these out there, is a realtor who invests most of their energy telling you what they think you want to hear so they can get their 8 percent at the closing. If you’re starting a distillery from scratch, the right realtor can make or break your venture before it even begins, and there are usually many to choose from in every town. Keep going until you find the one you like, have faith in, and doesn’t have a reputation for selling waterfront lots in the desert.

Title Professionals — Oh the mistakes that can happen. One of our clients purchased a beautiful and well-maintained family farm and down the road from that farm constructed a wonderful small-batch distillery. When the time came to start aging in oak they looked towards the beautiful barns on their farm as bucolic aging warehouses. Guess what? One of the strangest things I’ve ever seen—a previous owner had put a restriction on the deed which denied the use of the farm (forever) for anything to do with the production of alcohol for consumption. As weird as that is, a careful title search would have brought this to the forefront before the property was purchased.

Lawyers — Today everyone needs one and some of us need more than one. You’re going to need help making your new distillery a legal business entity and a lawyer can advise you about sole

proprietorships, limited-liability corporations, and other types of business structures. They can help you with property purchases, equipment leases, and limiting your personal liabilities. Believe it or not a good lawyer can be a good friend and you want that friend. Don’t forget them during the holiday season and try to learn their birthday. When you’re in a mess and have to call, you don’t want that call going to voicemail. Here’s a hint: most of my attorney friends like a nice beverage now and then.

Land Surveyor — The guy or gal that measures property using high tech computerized equipment to document and measure every detail and then they put all the “boundary and existing features” information on paper so you can figure out what your land looks like and where the buildings might go. You may want to talk with a good land surveyor before you sign that purchase-and-sale agreement as again, this is someone that does things every day which you don’t know anything about, and often they know interesting things about the history of properties in their region. How do you choose a surveyor? You’re looking for a firm or individual who’s surveyed at least half the county and if they didn’t their ancestors did. Surveyors are usually dry, sometimes fun and once you get them started, they may like to talk … a lot. Every day they walk the landscape and spend hours poring through ancient records in quiet institutional places. They spend hours and days talking to themselves and often can’t communicate in full sentences, but they’re generally very smart and can tell you things about a property that you need to know. Pick their brains as you’re paying for their wisdom. Ask them if the local ordinances allow a distillery on this property and ask them how deep the soils are. How far is it to bedrock and will you be able to construct an adequate drainage system? You can learn a lot from a good surveyor before you sign on the dotted line, wisdom that can make for a great venture or can prevent you from making a purchasing mistake.

Architects — This is the design professional that can help you with configuring your building, and some may be able to help with initial site layout. Remember, form usually does follow function and this means your building will likely take the shape of what’s going on within. To some extent, this works for the overall property too, so a good architect can at least begin down the path towards basic site layout. When you’re selecting your architect don’t worry about the diplomas on the wall or the alphabet soup after their name. Visit some of their past projects, walk through and around the spaces and see if you like what’s in front of you. Ask if you can talk to last year’s clients … all of them. Any architect that’s been in business for a few years can usually come up with names of five people that will talk with you, but are they willing to let you talk with “references” of your choosing? Granted, business relationships are like personal ones, not all work, but you want to know that your design professional has more successes than failures, and if you hear of a failure, be fair. Ask them about what you’ve heard as it’s important to know both sides of a story. When you first sit down to interview an architect observe how they act as this can tell you a lot. Are they listening intently, taking notes, WWW.ARTISANSPIRITMAG.COM

and sketching down your ideas, or are they fidgeting, interrupting and saying things like “No, no, that’s not what you want?” If it’s the former you may have a keeper, but if it’s the latter ease them out the door. This is your distillery, not theirs. I’ve learned over the years that the people who are going to work in a space know better than anyone how that space should be configured, they just need help with the details. Regarding those details, how detailed is your architect’s work? When you sign up with the architectural design professional of your choice make sure you know what the final product is going to be. A properly designed project begins with concept drawings, works through design development, and ends with proposal or construction documents including a full set of plans and a specifications manual. Each construction element, material, and system needs to be planned and depicted on the drawings and described in the specifications manual. If you start hearing, for example, that the electrical and heating systems are going to be “design build,” once again you’re probably working with the wrong professional. I cannot tell you how many times we’ve heard “design build,” probably hundreds, but I can tell you with certainty there’s almost always no design in that process there’s just build, and often lots of very bad build. If you’re faced with an architect who wants to only provide pretty pictures and let others work out the details, you’ll be faced with a project that goes beyond the completion date, goes over budget, and ends with unhappiness.

Engineers — The spectrum of engineering is so broad it’s like sending someone to the liquor store with a directive to bring home something good to drink. Are we talking “drink with your date over proposal dinner” or “drink with the boys during poker night?” I believe there’s quite a difference. There are civil engineers, electrical engineers, environmental engineers, structural engineers, fire protection engineers, and the engineers that drive the train. If you’re designing a new distillery from scratch you’ll probably need a civil engineer for site planning and design. You’ll need a structural engineer to make sure the building your architect is designing can stay upright when the winter snows lay deep on the roof, and you’ll need an electrical engineer to work through the complexities and nuances of a distillery electrical system. You may need some of the other engineering specialties too, so give this some thought before you jump forward with your project.

Distillery Consultant

— It’s not possible to read any distillery magazine without seeing an ad for this consultant, and like “engineer” this can mean an array of abilities, but if you find the right one, this is the consultant that can really make your project a success. This person or company may be educated and licensed in any of the multitude of professions described above or they may have decades of hands-on experience in the distilling industry, but most importantly what they have is the wide-angle vision that can guide you through the maze and around the pitfalls that can destroy your distillery project. This person or company can often help you from real estate purchase to running that first sample batch or any part in between. Lastly, we need to talk about how these folks get paid and how

WWW.ARTISANSPIRITMAG.COM

they can justify that expense. First, and we tell this to clients all the time, good planning costs money, lots of money and it doesn’t matter if it’s your distillery or a nursing home. The upside of this huge expenditure is every dollar is an investment, as good planning probably provides more than a 100 percent return on that investment. If the situations that I talked about earlier had received more planning from the inception there wouldn’t have been disasters, and the huge expense of righting these wrongs would never have been necessary. Six months before you decide to quit the nine-to-five and open a distillery, you should be putting together your consultant team. Trust me, this is more important than the fermenters, still, mash bill, and labels. How do these consultants charge for their services? Well, they charge a lot, or at least it’s going to look like they do. If the amount the average consultant charges was proportionate to what they drove and drank their rides would be always be glistening and their spirits top shelf. That’s usually not the case and they don’t have a banking account in the Caymans. Permitting is the most difficult task a consultant can do, because despite their day-to-day experiences and best efforts, it’s always a crap shoot. Rules change without anyone telling you and the folks issuing permits are here today and gone tomorrow. A good permitting consultant can usually tell you with reasonable accuracy the odds of getting a project through permitting but, if they’ve been at it for long, they’ll never guarantee an approval. Look at it this way: Permitting is like swimming through sharks. Some days you will be shredded in seconds and other days they’re not hungry. Permitting consultants will often provide a fee range to cover the various permits you need, and usually you’re going to pay within that range regardless of whether the permits are obtained or not. Consultants that permit large projects often don’t sleep well. It’s a very difficult, unpredictable way to earn a living. Architects, engineers, and surveyors may also look like they’re well overpaid but usually they’re not. It takes a long time to develop plans to the microscopic level that various agencies want to see and then the agency reviewers think nothing of asking for unnecessary information and updates again and again. It’s also not unusual for regulatory agencies to require “third party review” which means they’re going to hire someone else on their behalf (and your checkbook) to review the work of your team. Look at it this way: The team you’ve put together and are funding are your front line. They’re taking and giving the big hits while you’re looking downfield for a receiver. If they do their jobs well you won’t get more than a bump and you’ll end up winning the game. Wishing you that 15 percent fermentation and best wishes for a happy summer of distilling.

Shawn Bergeron is an NFPA and ICC Certified Fire Protection Specialist, Building Official and Permit Specialist with Bergeron Technical Services in North Conway, New Hampshire. For more information or assistance call (603) 356-0022 or visit www.bergerontechnical.com. They will be happy to help you with your distillery no matter how near or far.

With over 30 years of experience, Boss Expos LLC is excited to announce a new opportunity for suppliers, service providers, wineries, breweries, distilleries, and cideries to come together and explore the newest trends, topics, and tricks of the trade. Here is what just a few Industry Suppliers are saying about the Exposition and Conference: “Mid America is starving for a trade show & conference to feed the rapidly growing craft beverage industry. So often the east coast gets attention for beer and spirits, the west coast gets attention for wine, but Mid America is booming with diversity in all the craft beverage industries. St. Charles, MO is perfectly located to support an event in this new hot spot for not only beer and wine, but for craft spirits as well.” Matt Haney, Hillbilly Stills & HBS Copper “We believe it is important to have a Mid America show for new and existing wineries to come meet with vendors and learn about new technology out on the market to improve their winery.” Matt DiDonato, Prospero Equipment

Presented by

For more information on the Mid America Exposition and Conference, call 888-273-4533

www.midamericabevexpo.com

Check your Regulator’s ID. WRITTEN BY CHRIS LOZIER

n the distilling industry working with new enforcement officers from city, county, state, and federal organizations is common practice. Unfortunately, some scammers are taking advantage of that tradition. Recently in Oregon, people claiming to be officials from the Oregon Liquor Control Commission (OLCC) and other agencies have been calling and visiting businesses licensed to serve alcohol and requesting money and information. On some occasions they told business owners they would be arrested if they did not meet them to pay fines, and on other occasions they took photos and copies of employee information. In April 2017, police in Eugene arrested one man who allegedly collected employee information at two bars while claiming to be an OLCC agent, and there may be others using the same tactic in Oregon and around the U.S. While staying compliant with local and federal laws should be a priority for distillers, protecting employees, themselves, and the business should be, too. One of the simplest ways to achieve

WWW.ARTISANSPIRITMAG.COM

both is to check the regulator’s ID. James Lynch, OLCC Public Safety Division Salem Regional Manager, says nearly all officials carry some form of ID— whether it be a badge or a business card— and he says business representatives should not be afraid to ask to see proof that the regulator is actually who they claim to be. If for some reason the person in question does not have any ID, he says asking them questions about what office they work out of and what territory they cover may provide clues to their legitimacy. “If I go into an establishment and they already know me,” explains Lynch, “then I’m probably not even going to show a piece of ID. But in those cases where we’re unfamiliar with them or they’re unfamiliar with us, I’m going to hand them my business card, I’m going to explain who I am.” Lynch says that many OLCC officials work certain regions, which means quite a few of the people at the businesses they inspect recognize them when they drop in. Sometimes, though, the regulators will be new faces for the folks at the

Don't get scammed. Don't be afraid to ask to see proof that the regulator is actually who they claim to be. Ask questions about what office they work out of and what territory they cover for clues to their legitimacy. If necessary, call the local police to come by and confirm the regulator's identity. If they are legitimate, they should not have a problem waiting. Do not pay fines or provide personal information to unverified regulators. Do not attempt to detain a suspected scammer. 45

business, and Lynch says they will not be offended to be asked for identification. If that official does not have a badge or other ID the business representative feels comfortable with, Lynch says businesses can call the local police to come by and confirm that person’s identity. If the regulator is legitimate, they should not have a problem waiting. While there may be more cases that Lynch and OLCC are not aware of, the instances he knows about involved similar circumstances with people either asking for money or personal information they might be able to profit from. In December 2016, Lynch received two calls from representatives of two different concerned OLCClicensed businesses in quick succession. Business representatives said a caller told them they owed money and if they did not meet them at the courthouse a warrant would be issued for their arrest. Lynch asked the business representatives to write a statement of what happened, then he contacted OLCC Public Affairs Specialist Christie Scott and she issued a press release warning businesses to be on guard. “Once the second call came in I decided I needed to take care of this pretty quickly,” says Lynch. After the first press release on December 30, more businesses contacted the OLCC saying people impersonating OLCC regulators actually came to their establishment and tried to access employee information. OLCC’s Scott updated the first press release and issued the new version on January 13, warning licensees to be wary of both in-person and phone scammers.

2017-4-26DistAd7.5x4.88.indd 1

While the OLCC may need access to business records and may issue fines in certain cases, Lynch says those actions are initiated through certified mail. “I’ve never known an incident where somebody would just walk into a place and say, ‘You owe us money, give it to us,’ and/or want to take pictures of people’s service permits or whatever other information that these people have,” he explains. “That’s just not something we would do.” Lynch says he’s very pro-business, and that while fines and administrative actions are sometimes necessary, he says most of the OLCC’s contact with licensed businesses is focused on providing education to keep the businesses and their communities safe. He hopes business representatives will see regulators like the OLCC in this light, and recognize that they are not going to get in trouble for questioning the legitimacy of someone who visits their business and asks for money or personal information. Most important, says Lynch, is ensuring everyone’s safety. While he says business representatives should not be paying fines or providing personal information to unverified regulators, they also should not try to prove that person is illegitimate on their own or detain them if they believe they are lying. “If they’re not comfortable with who they have, or the person isn’t being straightforward about who they are and showing their badge and showing their ID for observation,” says Lynch, the business representatives “need to step back, have somebody or themselves call for local law enforcement, and follow up with us.”

2017-04-27 10:27 AM

WWW.ARTISANSPIRITMAG.COM

ALBANY DISTILLING COMPANY WRI TTEN A ND PH OTOG RA PH ED BY CH RIS L O ZI E R

ounded in 2011, Albany Distilling Company is located in the warehouse district of Albany, New York—a oncebustling, later abandoned, and now reawakened group of massive buildings in the state capital. Alongside the distillery, two breweries, one winery, a cidery, and

WWW.ARTISANSPIRITMAG.COM

food carts are attracting more business to this part of town, and co-owners John Curtin and Rick Sicari plan to open a new bottle shop and tasting room just down the street from their current production facility this year. Albany Distilling holds two licenses:

one that allows them to use out-of-state ingredients to make their rum and vodka, and another called a farm distillery license that gives them tax and retail advantages in exchange for using at least 75 percent New York-grown ingredients. “We really like that idea and what it is

about,” says Sicari, “so we’ve actually gone 100 percent. So for our bourbon we’re using 60 percent corn and 25 percent rye from a farm called Checkered Mills—they’re an organic farm in the Southern Tier area— and then we’re getting all of our barley and our malted wheat from a malthouse in Western New York.” Sicari says that each day they focus on making whiskey because it’s their passion. To make their Ironweed line of bourbon, rye, and straight malt whiskeys, they use a 160-gallon hybrid pot still and age the spirit in 30- and 53-gallon barrels which they store at the distillery and at another bonded warehouse. Altogether, Sicari says they have more than 140 barrels aging. Once they dump a barrel, they use it to age some of their Quackenbush rum, a spirit inspired by their town’s history. In the 1700s distilling was illegal in

Albany (then called Fort Orange), but just outside the gates of town in Quackenbush Square the Quackenbush Family operated Quackenbush Stillhouse, a rum distillery that was very popular with the area’s English residents. “It was one of the biggest inland distilleries in the country at the time,” explains Sicari, who says that as American ties with England deteriorated the distillery’s sales fell until finally the distillery was abandoned. “It wasn’t until the year 2000 that they were building this parking garage and they were excavating it to put the foundation in and they found one of the fermenters,” Sicari continues. “They started excavating the whole area and they found the mash tun, they found the still, and they moved all that to the Albany Institute. The archaeologists that did that dig gave us all the information and we recreated this rum

from that.” Sicari says he tries to emulate what he imagines the original rum would have been like, but the tolerances are very tight when trying to retain some of the big butterscotch and caramel flavors without developing other flavors that modern palates are not used to. Alongside their aged and unaged rums and whiskeys, Albany Distilling also makes ALB vodka and Death Wish Coffee flavored vodka, which Sicari says is their bestselling product. Death Wish Coffee is a well-known coffee roasting business just north of Albany, and they beat out tens of thousands of other small businesses in the 2016 Intuit QuickBooks Small Business Big Game contest to win a free Super Bowl commercial. Sicari says the coffee brand is wildly successful with a cult following of loyal supporters, something that definitely WWW.ARTISANSPIRITMAG.COM

boosts the sales of their co-branded coffee vodka. The relationship between the distillery and coffee roaster began with barrels. Death Wish bought some of the distillery’s used whiskey barrels, and they aged coffee beans in them prior to roasting to create their “Barrel Brand” coffee. Sicari says the beans plump up with the residual whiskey in the barrels, and even though the alcohol and liquid is evaporated during the roasting process, the coffee beans have a strong whiskey flavor. Sicari says this special release coffee always sells out in just a few hours. For their collaborative coffee-flavored vodka, Death Wish roasts the beans, then nearby Olde Saratoga Brewing Co., where Sicari previously worked as a brewer, makes a cold brew coffee which Albany Distilling uses to proof down their vodka. WWW.ARTISANSPIRITMAG.COM

In addition to Death Wish Coffee, Albany Distilling partners with several other local businesses to make collaborative cobranded beverages. Right next door to their distillery in the Albany Pump House, C. H. Evans Brewing Co. makes barrel-aged beers with the distillery’s barrels, and Sicari helps brew those beers whenever possible. Originally a brewer, Sicari completed the Master Brewer program at Siebel Institute, something he says has transferred very well to distilling. Nearby cidery Nine Pin Ciderworks also uses the distillery’s barrels to make barrelaged ciders, and once a year the beverage makers join forces to make a product called The Tenth Pin. Using Nine Pin’s cider, Albany Distilling makes an apple brandy and ages it for two years in their used rye whiskey barrels. Nine Pin and Albany Distilling are also

part of the Albany Craft Beverage Trail, which Curtin and Sicari helped to form several years ago. Curtin is the president and Sicari is the treasurer, and from the original four member businesses in the warehouse district the trail has grown to include producers in eight counties. Besides being a tool for marketing, the trail is also a way to share production and education costs and resources. “We’re scheduling a preventative OSHA audit, so there’s going to be one OSHA officer that’s going to come in and speak with us about what we can do to make sure that we’re operating a safe labor environment,” Sicari explains. “And I’m ordering 150 barrel racks; and certainly I don’t need 150, but we’re going to divvy them up amongst the trail, so you sort of have that cooperative buying for pricing and things like that.”

Aside from their involvement in their local community, Curtin is also vice president of the New York State Distillers Guild. Sicari says guilds and other organizations are a great resource for new distillers because they offer the chance to share information and learn as a group. “There are so many resources for knowledge, and I think new distillers should get involved in the community of distillation, ask questions, throw their Artisan_7.5” x 4.687.pdf 1 02/02/17 ego out the window, and just learn from

each other,” shares Sicari. “Really take advantage of all the mistakes that other people have made, because we’ve made a lot of them.” And while it’s not a prescription for success, Albany Distilling does have a secret marketing tool: cats. Since they operate in an old warehouse with lots of grain, they brought in their original cat, Cooper, to control the mice. Eventually Cooper wooed a girlfriend named Montgomery, and 19:53 besides taking care of pest control they

have become social media stars. “We’ll post seemingly a really interesting picture about some type production or barrels and we might see 150 likes,” tells Sicari. “Then we’ll post a picture of a cat and we’ll get 400 likes, so those celebrities have to get all the credit. Everyone else at the company just kind of hangs out in the background.”

Albany Distilling Company is located in Albany, NY. For more info visit albanydistilling.com or call (518) 621-7191.

WWW.ARTISANSPIRITMAG.COM

N O G ORE OAK

n the North American spirits industry, American White Oak (Quercus alba) is king. Barrels made from American Oak hold Kentucky’s entire bourbon inventory, the vast majority of Canadian whisky, and virtually all of Mexico’s maturing reposado and añejo tequilas— not to mention the lion’s share of maturing Scotch whisky on the other side of the Atlantic. But an intrepid group of Northwest craft distillers is questioning American Oak’s hegemony by turning to a tree that grows a bit closer to home. Oregon Oak (Quercus garryana) is a completely different oak species than American White Oak. For many years, it was used for little more than firewood, but today, it’s offering distillers a distinct set of new flavors—the artist’s equivalent of a brand-new paint color. For distillers located in Oregon Oak’s territory, it also offers a tantalizing chance to express an untapped source of terroir, the beverage maker’s Holy Grail.

IN THE COOPERAGE Oregon Oak’s history as a cooperage material likely begins centuries ago, when European settlers first arrived in the Oregon Territory. Back then, barrels weren’t just used for beverages; all sorts of things were shipped in barrels, from cooking oil and sardines to ball bearings. But Prohibition undermined the nation’s regional cooperages, and many—including those in the Northwest—never recovered. But in the 1990s, Rick DeFerrari, a winemaker with a forestry degree, decided it was time to bring coopering back to the valley. After apprenticing with a French cooperage for 18 months, he opened Oregon Barrel Works in McMinnville in 1996, and released WWW.ART ISANSP IRITMAG.COM

WR IT TE N BY WA TE RB UR Y T ET AR RG MA

BY PH OT OG RA PH Y N SE EN ST RI AM AN DA JO Y CH

his first Oregon Oak casks in the late 1990s. Initially, he targeted winemakers. Oregon pinot noir was beating French Burgundies at competition—if Oregon grapes were just as good as the ones in France, mightn’t Oregon Oak be, as well? But it turned out that Oregon Oak’s flavor was quite assertive, and the winemakers that did use it didn’t need many barrels to add its distinctive, spicy edge to their wine. “Although the Oregon barrels tend to be a little rustic, they add complexity in small doses,” Brian O’Donnell, winegrower and winery owner at Belle Pente Winery & Vineyard, told Touring and Tasting magazine in 2013. But there was another early adopter: Steve McCarthy at Clear Creek Distillery in Portland. “Steve was one of our very first customers, and he was the first guy to start playing around with this stuff in distilling,” says DeFerrari. Clear Creek started using

Oregon Oak casks to age a portion of its Islay-style single malt, McCarthy’s Oregon Single Malt Whiskey, which is now aged in 100 percent Oregon Oak casks. For several years, Oregon Oak casks were a small portion of Oregon Barrel Works’ business. But as the craft distilling industry grew, interest in distinctive materials began to build. Today, Oregon Barrel Works sells about half of its Oregon Oak casks to distilleries, and demand is fervent. “The distilling side is on fire right now,” says DeFerrari. “We have somebody who wants 1,000 barrels a year right now. Another wants 300 a year.” To help meet that growing demand, reWine, a cooperage in Salem, Oregon, has also been growing its Oregon Oak business. The bulk of reWine’s business is refurbishing casks for the wine industry, but over the last few years they’ve also begun offering new Oregon Oak casks designed specifically for the distilling industry. reWine sources the lumber (which needs to air-dry at least three years) and sends it to a cooperage in California where the casks are assembled; then, they’re shipped back to reWine, where they’re opened, re-charred, and sold to distilleries. “Oregon Oak is exploding,” says Todd Dollinger, owner of reWine. “People are begging me for it. I even have an order out of Kentucky now.”

IN THE FOREST Despite skyrocketing demand, the supply of Oregon Oak casks is tiny. Dollinger estimates he’ll make 120 Oregon Oak barrels this year, compared to up to 4,000 refurbished American oak wine casks. Why? Because the lumber is so difficult to source. “If I could get the wood, I could sell 1,000 barrels,” he says. “But the wood just isn’t here, because it’s protected.” Oregon Oak’s habitat stretches from Vancouver Island all the way to Southern California. Its territory was once much larger than it is now, but its preference for growing in flat, fertile valleys meant Oregon Oak fell victim to habitat loss as the cities and agricultural communities of the Northwest grew. Today, different regions regulate the harvesting of Oregon

Oak differently. In areas where habitat loss has been particularly severe, like Western Washington and British Columbia, harvesting is restricted to dead or downed trees, and in parts of Vancouver Island, damaging an Oregon Oak tree carries a $10,000 fine. In Oregon, where virtually all Oregon Oak casks are made, harvest is still restricted, although a bit less stringently. According to Dollinger, the best way to find Oregon Oak lumber is a little bit of old-fashioned fleshpressing: visiting small towns, knocking on doors, and asking questions at the local hardware store to track down backyard mills where farmers might have cut lumber from trees they removed from their fields. “I’m running around everywhere, buying every stick I can,” says Dollinger. “My checkbook’s in my pouch, and I’m scouring, knocking on doors, talking to farmers, asking if they have a mill in the back yard.” Because of the restrictions on Oregon Oak harvesting, much of the wood Dollinger does manage to find is of uneven quality, with nail holes, rot, or other issues that make it unsuited for cooperage. He says just 30 - 40 percent of the Oregon Oak lumber he encounters is good enough for a barrel, so he’s using the remaining 60 - 70 percent to develop a new line of adjunct products like sticks, cubes, and shavings for producers looking to get its spicy flavor another way. For now, sourcing Oregon Oak casks remains a daunting task for distillers. “You can’t just go order them from a website,” says Steve Hawley, director of marketing at Westland Distillery in Seattle. “You have to be involved in the entire process. You have to hunt the stuff down, work with the mills directly, work with the coopers directly, let it season properly, be patient with it.” And Hawley says there’s little aged stock left over from the wine barrel project. “That was sitting in mills across the region, waiting for somebody to remind the mill owner it was there. But that stock is disappearing.”

IN THE DISTILLERY Given the challenges, one would be forgiven for asking: Is all the effort it takes WWW.ARTISANSPIRITMAG.COM

to procure an Oregon Oak cask worth it? According to the producers working with them, the answer is a resounding yes, although distilleries are using different strategies to incorporate the casks into their programs. At Westland Distillery, Quercus garryana plays an integral role in warehouse operations. But they don’t call it Oregon Oak—they call it Garry Oak, after its scientific name (and perhaps as a slight nod to Oregon and Washington’s goodnatured rivalry). “Garry Oak was something we started using from the very beginning,” explains Matt Hofmann, Westland’s head distiller. “We believe strongly in making a whiskey with a sense of place.” Westland laid down its first Garry Oak casks in 2011, and released some 100 percent Garry Oak single cask whiskies in 2014. “It’s so dynamic,” says Hofmann. “It’s not a subtle thing that fades into the background.” Hofmann describes the flavor contributions of Garry Oak as darker, smokier, and sweeter than American Oak, with notes of molasses, clove, roasted coffee grounds, and dark fruit. “It has incredible personality to it,” he says. “It’s different than American Oak, but really different from French Oak as well.” However, Westland has since found that Garry Oak-aged whiskey works better as a blending component rather than a standalone expression when it comes to their distillery style. “We believe very strongly in balance,” says Hofmann, “and part of that was tempering Garry Oak, which has the biggest flavor notes of any oak species we’ve worked with.” Blending experiments with other Westland whiskeys led to the creation of Garryana, an annual special release that contains about 20 percent Garry Oak-aged whiskey. Other distillers are taking a different route to achieving a more delicate Oregon Oak character in their spirits. Hood River Distilling in Hood River, Oregon introduced Trail’s End Bourbon in 2015, an eightyear-old Kentucky bourbon finished with Oregon Oak staves as an homage to Lewis & Clark’s historic journey from the Midwest to Oregon. Eastside Distilling also makes an Oregon Oak-finished whiskey, resting

its sourced bourbon in charred Oregon Oak wine casks for 60 days. Further south, Immortal Spirits in Medford, Oregon uses exclusively Oregon Oak barrels—no American or French Oak in sight—and their casks get a serious workout. First, they age their whiskeys in new Oregon Oak casks. After those are dumped, the casks are re-used for rum, and after that, they’re used as maceration vessels for Immortal Spirits’ absinthe. Finally, they’re transferred to Arch Rock Brewing Company in nearby Gold Beach where they’re used to age a porter. “From a standard American barrel, you hear a lot of cream soda, vanilla, coconut, and toffee. On the flip side, French is a variety of dried fruits and gingers,” says John Matacin, Immortal Spirits’ lead distiller. “I would say that you will get vanilla, coconut, cinnamon, black pepper, a bit of ginger, and golden raisin from Oregon Oak, but it’s more peppery, a little more hot. It’s not quite as sweet. It’s kind of a spicy barrel, so a sweet and malty mash bill is preferable.” Why go all-in on Oregon Oak? “I’m a hyper locavore by nature,” says co-owner Jesse Gallagher. Like Westland, Immortal uses locally grown barley, theirs sourced from the Rogue River Valley. Immortal Spirits also finds that the flavor contributions of Oregon Oak jive well with the sweet, malty flavor of their whiskeys, all of which are made on “bitchy direct-gas-fire old-school hand-made pot stills that have their own little attitude.” But no distillery has made a more dramatic commitment to Oregon Oak than Rogue Ales and Spirits in Newport, Oregon, which recently launched Rolling Thunder, their very own all-Oregon Oak cooperage. “Everybody told [us] it was a ridiculous idea,” says Jake Holshue, Rogue’s head distiller, “so like most Rogue things, that’s usually the thing we go for with great fervor.” Driven by their distinctive DIY ethos, Rogue bought a full suite of cooperage equipment from a company in Canada that had gone out of business. They wrote the check before they’d even constructed a building to house it, let alone taught themselves to use it. “Most of the WWW.ARTISANSPIRITMAG.COM

equipment is so old that the manufacturers are no longer in the business and the technical manuals have been gone forever,” says Nate Linquist, cooper. “I’m pretty sure some are pre-World War II out of France.” After they got the equipment through customs, Rogue built a 9,000-square-foot cooperage, sent one of their longest-tenured employees to apprentice with DeFerrari at Oregon Barrel Works for nine months, and launched Oregon’s newest cooperage in 2015. They work exclusively with air-dried Oregon Oak, sourcing raw staves from Oregon Barrel Works and dressing, bending, assembling, and charring the casks in-house, by hand. Eventually, they plan to bring milling in-house as well. They’re now cranking out seven or eight complete barrels each week, all of which are used in-house to age whiskey as well as an imperial stout called Rolling Thunder. Holshue says Oregon Oak is a natural fit for Rogue. “Rogue has always been very proud of its Oregon history and its Oregon roots ... so for us, Oregon Oak is really special.”

THE FUTURE Decades of industry research has given distillers detailed information about what to expect from French and American oaks, but Oregon Oak remains largely unstudied. For some, that lack of information might be off-putting—but for these pioneering distilleries, it represents an opportunity to learn and grow. “It’s really, really exciting,” says Westland’s Hofmann. “If you look

WWW.ARTISANSPIRITMAG.COM

at French oak, that’s all one or two species, and they know which forests are going to produce which kinds of oak. They’re mapping the terroir of this species of oak through France and Europe. That’s something we have no idea about here in the Northwest, but we see that as a big potential thing. There’s a lot to play with there.” Could different populations of Oregon Oak—say, trees growing in damp and mild Western Washington versus trees growing in the warmer, drier Rogue River Valley—have flavor profiles as distinct from one another as casks made from Limosin and Allier French Oak? Only time will tell. Procurement is also on everybody’s mind. “Sourcing is always a challenge,” says Matacin at Immortal Spirits, especially since Oregon Oak benefits from an extended air-drying time. “Garry Oak, with all its tannins, needs to be air dried for three years, so we’re working on finding the oak for casks we’ll be using in 2020,” says Hofmann. With so many distilleries wanting to use the material— and so little lumber to be had—growth could be limited for years to come. Fortunately, some forward-looking distillers are hoping to change that. In recognition of Garry Oak’s diminished habitat in Washington State, Westland has also partnered with a nonprofit organization called Forterra to help restore oak savannah, recently planting 10 acres of Garry Oak in a forestry restoration project. For anybody who values the unique character of Oregon Oak—distillers, winemakers, and consumers—it’s an investment in our collective, delicious future.

BELTWAY BANTER with ART LIBERTUCCI Interview between Arthur Libertucci & Robert Lehrman

elow is an email interview between Arthur Libertucci and Robert PROVIDED BY ART LIBERTUCCI Lehrman. Art was the top person at TTB from the founding of the agency in 2003 until his retirement from government service. He has more than 40 years of experience in the alcohol, tobacco and firearms industries. Art began his government career with the U.S. Department of Treasury, Bureau of Alcohol, Tobacco and Firearms (ATF) as a field inspector in New York in 1970. He worked in many jobs at ATF and then TTB through 2005. He retired as the first Administrator of the Alcohol & Tobacco Tax and Trade Bureau (TTB). Art is currently a Senior Consultant with Buckles Consulting Group, LLC. Art holds a BA from Providence College (1969) and an MBA from Monmouth University (1984). He currently resides in the Washington, D.C. metro area.

What was your last job with TTB? I was the Administrator for TTB. In 2003, when TTB was established as a separate Treasury Bureau and “spun off” from ATF, I was chosen as its first Administrator. At the time, I was responsible for doing all the things needed to set up a new government agency, not dissimilar to starting up a new company. We started from scratch, having to set up offices, hire people and set up systems and infrastructure to support the proper regulation of the alcohol and tobacco industries and the collection of taxes. At startup, TTB had about 600 employees and an annual budget of about $80 million.

What was your first government job? I started my government career as an Inspector for the Alcohol and Tobacco Tax Division of the IRS. At that time, neither ATF nor TTB existed as separate bureaus. The regulation of alcohol and tobacco products and their taxation were the responsibility of the IRS. I applied for the job after a friend told me about how he was taking an exam for jobs in the federal government. I had been drafted back then in 1969 (I was a draft lottery pick) and that day I was sent home after reporting for duty, having failed my physical exam. My friend told me he was taking the job exam that Saturday and I should go with him and take the test. At that time, taking the test was done at the post office and on a walk-in basis. I took the test and received scores a month later. I received my first job offer from ATF to become an Inspector. I interviewed for the job, was offered a position in Boston, but it was later rescinded due to a sudden federal job freeze. A week later I was called and asked if I would consider the same position in New York City, where they had been given a job freeze exemption. I took the offer and started my career on March 17th, 1970 in New York.

“I started my government

career as an Inspector for the Alcohol and Tobacco Tax Division of the IRS.”

Any good recollections from first year, last year, middle? During my first year in New York City I could see the construction of the World Trade Center. It was perhaps half done at the time (1970). Our offices were about three blocks away, at 120 Church Street. The new World Trade Center was an awesome sight. In the late 1970s, I think it was 1978, I had an office nearby (I was the Supervisor of the New York Office of Inspectors), and I watched one day as a man climbed the side of the World Trade Center with suction cups. He made it to the top and became famous. The middle of my career was started with coming to ATF Headquarters as the head of what is now the Regulations and Rulings Division. Shortly after that we implemented the rules on the government warning statement that appears on all alcohol beverage labels today. After being promoted to Associate Director for Compliance Operations, I was asked to become the ATF CFO and agreed. I was CFO for four-plus years and after that became Associate Director for Compliance for about a year. ⟶ WWW.ARTISANSPIRITMAG.COM

This was after ATF and the FBI confronted the Branch Davidians in Waco, Texas and there was a change in ATF Director. For those too young to know, in 1993 the Branch Davidians shot and killed four ATF agents who were attempting to serve a search warrant on a residential compound in Waco, Texas. After the Sunday morning encounter, the Branch Davidians, headed by David Koresh, engaged in a long standoff with federal agents headed by the FBI. At the time, there was concern that women and children in the compound were being harmed. After a standoff of more than 90 days, and major national media attention, Attorney General Janet Reno gave the go-ahead for the FBI to enter the compound using tear gas and other techniques to end the siege. A fire erupted during the incursion and the entire compound, fueled by high winds that day, erupted in flames and burned to the ground. There was evidence that Koresh ordered the setting of the fires, in essence committing the inhabitants to a mass suicide. Subsequent to this, Congress held hearings, along with various investigations. Ultimately, Treasury issued a report, and certain high ATF officials stepped down. John Magaw became Director after the resignations. He had been the Director of the U.S. Secret Service. That was a difficult time at ATF, with a lot of uncertainty about the future of the Bureau, and media attention on the Waco situation. After that I served as the ATF CIO for two years, again at the request of Director Magaw, and later became Assistant Director for Alcohol and

“Popular myths

about government employees being lazy or less than enthusiastic about what they do, are just that, myth and not fact.” WWW.ARTISANSPIRITMAG.COM

Tobacco in 1997. ATF by then had been completely reorganized. My job was to head up all alcohol and tobacco operations for ATF including tax collection, international cooperation on anti-smuggling efforts with other governments, and the like. In 2003, after the fall of the World Trade Center and the creation of the Department of Homeland Security, ATF was transferred from the Treasury Department to the Department of Justice and TTB was created as a new independent bureau in the Treasury Department. It was at that time that I was appointed Administrator.

What have you been doing since? I have been working as an independent consultant for alcohol and tobacco industry members, and as part of the Buckles Consulting Group.

“Industry and

business leaders were trying to do the right thing and at the same time comply with the rules.”

What did you learn about government during that time? That working for the government can be an incredibly rewarding career and was an opportunity for me to learn so much about how our government really works. I also learned that popular myths about government employees being lazy or less than enthusiastic about what they do, are just that, myth and not fact. I had the opportunity to work with so many great people who took their work very seriously and also considered their service as important to this country. I am so proud to have been a part of that and to have worked with so many loyal Americans.

What did you learn about the industry? That, for the most part, industry and business leaders were trying to do the right thing and at the same time comply with the rules. I met a lot of people in the industry while in government, and after that, who impressed me with their real desire to work within the rules.

What did you learn about people? Nothing I didn’t know before. It reinforced that there are so many different types of personalities, and adapting to their needs is a key ingredient to success in anything we do.

What were the best and worst parts about working for the government? The best was working with so many great people and also working with such a diverse set of technical areas of expertise. I loved my job because it never got boring and every day brought something different. I enjoy problem solving and even today, as a consultant, I encounter new problems to solve. The worst parts were having to accomplish the impossible on an ever-decreasing budget. Governments today are not adequately funded for what the public and businesses expect in terms of service. It’s really interesting and actually frustrating to hear about how certain elected officials want to reduce government spending but their constituents want more and better service. It is impossible to have a government that does more for its citizens without paying for that.

Any instances where a President acted directly and forcefully as to the Bureau?

Did you meet any famous people during your tenure?

In 1980, when Ronald Reagan became President, there was a concerted effort in the Administration to abolish ATF. Primarily the issue was President Reagan’s promise to abolish gun rules implemented in the 1960s. But ATF was saved at the eleventh hour by Congressional intervention. Nevertheless, from about 1980-1986, the ATF budget was cut substantially, effectively blunting efforts to enforce gun laws in a meaningful way. Also, at the time, in 1981 the new Reagan Administration rescinded ingredient labeling rules and regulations that were published just before the election.

Ernest Gallo and I met several times both at his office in Modesto and once in his home there, where he hosted a meeting of international wine officials. Mr. Gallo was an active and interested party in international trade negotiations that I was involved in and these meetings were helpful in understanding the wine industry’s goals in these trade talks at the time. This was the 1990s mostly. I also met several Treasury Secretaries since I had to occasionally ⟶

attend U.S. Treasury Bureau Heads meetings that were conducted every month. Larry Summers was an interesting person to say the least. He was and still is a brilliant man and staff meetings with him were challenging since there was no fooling the smartest man in the room. It was sort of fun for me seeing some bureau heads try to gloss over significant issues and be asked probing questions by a very perceptive individual. Larry Summers was smart, knew it, and loved to demonstrate that to his staff. Another really interesting Treasury leader was Sam Bodman, Deputy Secretary under Secretary John Snow. He was a shrewd businessman. He came from the energy industry and had been Deputy Secretary at Commerce before coming to Treasury. Subsequent to my retirement he became the 11th Secretary of Energy. He was a nononsense person and was outstanding in handling Treasury operations, in my opinion. He commanded respect and was easy to talk to, never missing a thing and a quick learner about some of the unique aspects of the alcohol beverage industry.

58â&#x20AC;

What is an example where the Bureau enforced in a tough manner?

Top accomplishments at TTB. Top disappointments.

I cannot say that ATF/TTB enforced the rules in anything but a fair manner, neither lenient nor tough. At ATF/ TTB we always tried to take into account all factors in deciding on corrective action. Voluntary compliance was and still is the goal but sometimes administrative actions were needed to get the message across to some. The Bureau always used permit actions (suspensions and revocations) and Offers in Compromise in a way that would hopefully promote voluntary compliance in the future. Speaking of specific cases would be inappropriate on my part since there are laws that assure the privacy of both individuals and companies with respect to their dealings with the government.

I suppose my top accomplishment was successfully managing the transition of TTB when TTB was split off from ATF in 2002-2003. Among other things, we had to: start from scratch, establish a workable budget, recruit and retain the best people, set up offices where we needed them, and so forth. At the time we decided to employ mobile workplace rules in a big way, saving a lot of money. Today, most of the TTB workforce can work from or out of their homes, especially the field investigators and auditors. Physical offices are at a minimum, allowing TTB to be both flexible in its staffing and responsive to changes in work priorities. As for any disappointments, I cannot say that I had any of major consequence. When ATF was reorganized in 1994, it wasnâ&#x20AC;&#x2122;t something I agreed with totally, but of course I was supportive of the decision. It was at a time when firearm and explosives enforcement was a priority and the changes affected the alcohol and tobacco mission in a negative way. Resources were gradually diverted from the alcohol and tobacco programs. However, several years later ATF leadership, including the Director, realized that some adjustments were needed; eventually the Alcohol & Tobacco office was established to renew focus on that mission. Ultimately the events of 9/11 led to the establishment of TTB so, in my mind, things were moving back in the right direction.

Something funny that happened? I am drawing a blank on this one although I am sure I laughed once in awhile. Something wonderful that happened is that I met my wife while working at Distillerie Stock in New York City in 1971. Linda was assistant to the VP and General Counsel. She was responsible for filing the tax returns and paying the taxes every two weeks, filing for COLAs and formulas, etc. That was a time when the tax returns and checks were handed to the government officer on premises (me) no later than 2 pm every two weeks on the 15th and the last day of the month.

WWW.ARTISANSPIRITMAG.COM

How did government work change during your tenure?

If you could do it again, what would you do differently?

When I started in government, we did a lot of what today is very low priority work. I learned a lot back then because every day I had the chance to work on something different. As an inspector, I had the chance to work at vinegar plants, industrial DSPs, flavor manufacturers, hospitals and universities that held ATF permits, gun dealers, explosives users, tobacco export warehouses, cigar manufacturers, wineries, breweries, the list goes on. Today, the variety of work is much less. Consequently, the new people will never learn as much about the rules and the many intricacies of the regulations associated with such a wide variety of businesses. Also, managers today have a tougher job in government because of the lack of resources. When I started, ATF had more than 2,000 government officers devoted to regulatory work. Today, TTB has less than 400 officers, with the same rules, laws and regulations to enforce. Plus, they have to collect more taxes than ever before from so many more companies that hold permits to operate. This is an incredible challenge.

Nothing.

Some of the best people you had the honor to work with? The first person who comes to mind is Bill Drake, former Associate Director for Compliance operations, who retired in 1989. Heâ&#x20AC;&#x2122;s passed now but he was a real leader and innovator who took risks when they were needed and always did the right thing. He was the hardest worker I ever met, putting in more hours than most CEOs. He always had the time to mentor people at all levels. Without the details, he was instrumental in ATF surviving its planned demise in 1981. Beyond Bill, just about every person I met at ATF left me with some positive impression. Integrity, hard work, and desire to serve were expected qualities of all ATF/TTB staff and I had the pleasure to see that displayed daily by just about every person for my whole career. Most people cannot say that and for that I feel incredibly privileged.

WWW.ARTISANSPIRITMAG.COM â&#x20AC;

Any advice for lawyers who deal with TTB often? Yes, I do. The majority of people at TTB may not have a law degree, although many do, but they probably know more about alcohol law and policies than anyone can get from reading the law or from law school. My recommendation is to learn from them all that one can.

Any examples of really good lawyering, from the Bureau or the private side? The best alcohol and tax lawyer I ever met is John Manfreda, current TTB Administrator. John wrote and was a big part of implementing the all-in-bond regulations back in 1979-1980. John had a part in just about every regulation and law promulgated since he started with ATF in the 1970s. On the private side, Abe Buchman was so effective at helping his clients in some pretty sticky situations. He was a terrific communicator, was disarming in some pretty stressful situations and always had respect (which he earned) from ATF regulators.

Robert C. Lehrman is a lawyer at Lehrman Beverage Law, PLLC in metro Washington, D.C. Since 1988 he has specialized in the federal law surrounding beer, wine and spirits, such as TTB permits, labels, trademarks and formulas. The firm has seven beverage lawyers, over 50 years of combined experience, and publishes a blog on beer, wine and spirits trends at www.bevlaw.com/bevlog.

AGING CELLAR BEST PRACTICES WR ITTEN BY LUIS AYAL A

ging, the wonderful transformation of a spirit inside a wooden cask, is one of the most critical and expensive links in a distillery’s operation, yet it is often disregarded as something that “just happens” regardless of how we allow it to happen. Having an elegantly aged spirit, produced within the time allowed, on-budget and with the profile one desires, is not an easy task, but it is one that can be made easier by following this advice. First of all, you must start with the end in mind.

Congener level:

What is the congener level of the desired final product? Knowing the answer to this question allows the distiller to produce a distillate with the right composition of congeners from the heads and tails.

Esterification level:

Aside from esters that may have been left in the distillate going into the barrel, how many other esters need to be formed during the aging? The answer to this question will help shape the decision of how long to age and in what part of the warehouse to do so.

Wood extractives and tannic intensity: When aging bourbon or

whiskey, which require the use of new barrels, the only options are size, oak type and level of toast or char. If aging other spirits, which allow new or used barrels, then the answer helps determine the barrel purchase and replacement practice for the

cellar master. It is important to think of barrels as tea bags, realizing that with each use the quantity of the wood extractives contributed to the spirit inside decreases, and even longer “steeping times” do not match the intensity of the first or second use. This means that, in order to achieve consistency, some of the barrels in the final blended product must always be newer than the others, which of course requires a constant capital expenditure.

Target proof:

If the target proof is 80, for example, and the desired aging time is three years, filling the barrels with a distillate at 80 proof will result in disappointment and headaches at the end of the three years. The reason for this is simple: As the alcohol inside the barrel reacts with the oxygen, some of that alcohol is transformed into aldehydes. The exposure of aldehydes to oxygen continues transforming them into acids and, finally,

when the acids are formed, some of them react with the remaining alcohol to produce molecules of esters and water. What this means, in simpler terms, is that the proof of the alcohol inside the barrel gradually decreases over time, so the proof of the distillate going inside the barrel must be higher than the desired bottle proof. But how much higher should it be? If it is too high, the alcohol will evaporate much faster, but the number of barrels needed to store it will be lower. If it is very low, the number of barrels needed will be higher. Another consideration is that aging at very high proofs means that one will need to add a lot more water prior to bottling, meaning the flavors will be diluted more than if we age slightly above bottle proof and only add a small amount of water prior to bottling.

Age statement on the label (if any): If the aged spirit must have an age

statement, then the question of how long to age is already answered. The challenge under this scenario is then to ensure that the product consistency can be maintained. Filling all the barrels at the same time means that we can only have one production per year on the anniversary of the filling, which may or may not be practical. Filling a WWW.ARTISANSPIRITMAG.COM

Having an elegantly aged spirit, produced within the time allowed, on-budget and with the profile one desires, is a task that can be made easier. small percentage of the barrels each month means that every month, after the aging goal is achieved, we can empty and refill barrels and set finished product aside.

Expected final retail price:

Nothing will kill a new brand faster than being priced over competitor’s products while also under-delivering quality. A failure to start with the end in mind is almost a guaranteed invitation for this to happen. When we know how many barrels we need, how much we will lose to evaporation, and how long we need to keep the distillate in the barrels before bottling, we can then take those expenses into account, add them to the packaging cost and the operational overhead and have a realistic production cost. Adding the distributor markup and the retailer markup then gives us the final retail price. This cost analysis MUST be done before investing in aging to make sure that the numbers will be sustainable. Look at the environmental conditions inside and outside the cellar:

Temperature range (lowest and highest), hot spots: The sun provides

heat during the day, this is a given. The key is knowing how much it provides at different times and identifying “hot spots” in the warehouse where the barrels will be warmer than those in different areas. These hotter barrels will evaporate alcohol faster,

resulting in more losses, but also in higher levels of wood extractives and esterification. Understanding this allows the cellar master to select product from different barrels, knowing how to make these samples representative of the entire lot.

Relative humidity inside the cellar: Another factor affecting how

much volume will evaporate from inside the barrels is the relative humidity of the air in the warehouse. The lower the relative humidity, the more the volumetric loss in spirits. This can be remedied by increasing the humidity level through different means. In the past two and a half decades of consulting for the industry I have seen everything from soaker hoses, water fountains and misting systems. What to implement depends greatly on the budget, risk factors (flooding, electric shock) and food-grade compliance.

Location of doors, windows, air currents: Just like temperature

and relative humidity, air currents can play an important role in the amount of evaporation, oxygenation and esterification of barrels. Typically, barrels near doors will evaporate more than those farthest away, and the same is true with those close to windows or other sources of fresh air.

Clearly identify each barrel and track its progress: Aging is only “by the book” if it has traceability. As such,

cellar masters must be able to prove that the spirits in their barrels have met the aging requirements for each of the products that leave their facilities. Clearly labeled and identified barrels are essential to this task as they allow for controlling fill and empty dates, as well as providing historical account of uses, repairs, refinishes, etc. The identification of barrels can be as simple as numbers/codes painted on the faces or sides, as long as the paint is food grade and safe in contact with alcohol. There are other, more modern ways to identify barrels, such as barcodes and other fixed assets tags. The key is good record keeping and good discipline every time a barrel is touched or manipulated.

Develop a methodology that encourages blending success:

Everyone can put something in a barrel and take it out after some time to offer that product for retail. It takes a great deal of planning and execution to be able to offer consistency in that product despite changes in fermentation, distillation, barrels and climate. The more control exerted during all the aforementioned phases, the higher the likelihood of success. Cheers!

Luis Ayala is an international rum consultant and broker of specialty aged rums. He is founder of The Rum University, Rum Central and Got Rum? magazine. Visit www.gotrum.com or email luis@gotrum.com for more information.

YOUR SOURCE FOR PREMIUM BRANDED DISTILLERY PRODUCTS “ELEVATE YOUR BRAND”

VISIT US AT

DISTILLERYPRODUCTS.COM 844-837-1515

WWW.ARTISANSPIRITMAG.COM

District Distilling of

WASHINGTON, D.C.

WRITTEN BY CHRIS LOZIER /// PHOTOGRAPHED BY BRIAN CHRISTENSEN

natural fit for the lively U Street corridor in Washington, D.C., District Distilling is a combination distillery, bar, and restaurant which has become a favorite destination since opening in August 2016. Guided by Matthew Strickland, District has plans to release nearly 15 products by the end of the year. Strickland says D.C. consumers drink more cocktails per capita than consumers in any other city in the U.S., so the choice to operate as a destination distillery, rather than as a strictly production facility, has paid off. “Our bar is standing room only on a Friday night,” says Strickland. “It’s a lot of fun.” One of the most popular spirit categories at the distillery and bar is gin. Strickland says that D.C. is the birthplace of the gin rickey cocktail, and every year many local bartenders compete in a

gin rickey competition. Partially due to the local thirst for gin, and partly due to District’s owners’ curiosity about using unique junipers in the spirit, District offers several different gin varieties and they are experimenting to create others. Part of that experimentation relies on the nuanced flavors that different varieties of juniper offer. “You have the common juniper, but there are all these other species that you can get if you know where to look for them,” Strickland explains. “They actually have a pretty pronounced effect on the flavors of gin.” One of their gins is called Checkerbark Gin because they use Checkerbark Juniper berries, and another offering, WildJune, is made with Red Berry Juniper. One of the owners of District Distilling harvests the juniper berries in the West Texas mountains. Beyond variety-focused clear gins, they are also working on some WWW.ARTISANSPIRITMAG.COM

barrel-aged versions. In addition to their gins, District makes vodka, a grappa, a panela-based rum, and several whiskeys. One of Strickland’s favorite projects is their rye whiskey, which is a blend of Pennsylvania-style and Maryland-style rye whiskeys. “My understanding has always been Pennsylvania-style rye is primarily rye and barley, that’s it,” tells Strickland. “Marylandstyle ryes, however, use a little bit of corn. And the Pennsylvania ryes, typically they seem to be aged a little bit heavier, too, so the oak character is just bigger. They’re big chewy whiskeys, whereas the Maryland-style ryes are a little bit lighter, a little bit sweeter.” Since Strickland has never tasted pre-Prohibition Pennsylvaniaor Maryland-style rye whiskeys, he says he’s just interpreting what he’s read and using that knowledge to guide his production of the two styles of rye. Some whiskey enthusiasts see the line between the two styles as a strict border, but he’s looking forward to seeing what happens when they are blended after maturing separately. He expects to develop nuanced complexities through the marriage, a theme that guides District’s entire spirits program. “Every whiskey we do here has to have more than one mash bill,” Strickland continues. “I want some complexity and I want things that I can kind of play with and blend together and do all sorts of different stuff. I play with a lot of different yeast strains and I’m constantly tweaking the recipes.” Besides the blended rye whiskey, District is also making a

wheat whiskey with two mash bills, a smoked whiskey with two mash bills, and a bourbon with three mash bills, all in an effort to create complexity. That philosophy reaches beyond whiskey, too. District is also making an apple brandy out of cider from a local orchard, which Strickland is fermenting separately in four different tanks, using a separate yeast strain in each tank. Later when the four expressions are blended together, Strickland hopes the differences in the fermentation will create an intriguing and layered flavor profile. Strickland is also utilizing different barrel sizes for District’s aging program. Some of their releases will be blends of spirits aged in different sizes of cooperage, a tactic that Strickland says can produce quality spirits when planned and executed with care. He sees barrels as a tool, not an ingredient, and he believes quality spirits can be created in other ways than just putting new make spirit in a 53-gallon barrel and letting it sit for years. “I don’t like a lot of heavy aging, I just like well-rounded spirits,” Strickland says. “I think that people focus so much on age at the cost of just basically making an over-oaked thing.” Strickland says there are some wonderful young whiskeys on the market today that, in his opinion, taste better than many older whiskeys. He thinks the industry relies too heavily on age statements, which insinuate that the older the whiskey the better the flavor, and he says that’s not always true. By planning and WWW.ART ISANSP IRITMAG.COM

developing complexity through varied barrel sizes, mash bills, yeast strains, and distillation and blending techniques, Strickland is designing District’s spirits to be complex and enjoyable at a young age. The actual distillery portion of District Distilling occupies the street level of the space on U Street, and Strickland says there’s enough space to sustain a sizeable production schedule. One floor above the distillery is the bar, and the vodka column actually extends up into this space where customers can watch the vodka run while having a cocktail. On the next floor up, the kitchen has a very popular brunch program and an ingredient-focused menu. Each level of the space is its own operation, but they all work together. Strickland will consult with the bartenders when designing and planning spirits, and he often works with the general manager of the restaurant, who he says is very well connected in the D.C. bar and restaurant community. In fact, that manager connected Strickland with Boxwood Estate Winery in Northern Virginia, who

supplied the grape pomace for District’s grappa which the businesses are co-branding and marketing together. Though he understood the process, Strickland had never made grappa before, but he says the first batch was a success. “I’ve always wanted to do grappa, and the equipment I figured was set up for it,” he says. “Turns out our drains weren’t, but I figured that out after awhile.” Strickland says there are about eight distilleries in D.C., and most of them are within walking distance of each other. But even though District isn’t located in the same part of town, he says they work together well and support one another. “I wasn’t sure how they would feel with a new distillery coming into town, but everybody was super friendly, very collaborative,” tells Strickland. “I count these people as my friends.”

District Distilling is located in Washington, D.C. For more information visit www.district-distilling.com or call (202) 629-3787.

WWW.ARTISANSPIRITMAG.COM

TOASTING MY SPIRITS

Maillard and the incredible reactions he uncovered in 1912 PA R T 2 – T H E M A I L L A R D R E A C T I O N A N D DISTILLE D SPIRITS PRODUCTION W R I T T E N

G A RY

S P E D D I N G,

P H . D.

The first part of this two-part treatise introduced the very important cooking process known as non-enzymatic browning, and then covered the chemistry of the intimately related and complex “Maillard reaction.” The article covered the fact that not one but rather an incredible cascading series of reactions take place during cooking of food and beverage raw materials production, preparation, and use. These chemical processes ultimately lead to the production of thousands of components, providing complexity to overall flavor profiles and the color of beverages. While keeping the chemistry to a minimum we provided the chemical details of these fascinating reactions. In part two we now demonstrate where, when, and how Maillard chemicals affect your distilled spirits.

n part one (Artisan Spirit Spring 2017) we discussed the chemistry involved in forming many flavorful and highly colored chemical components in extended non-enzymatic cooking or “browning” reactions. As well as the chemistry, a little history of the discovery on the Maillard reaction was also presented. In this the second and final segment, we now show where Maillard

SUGAR H 4

CH2OH O

H OH

chemistry plays a role in distilled spirits production. Figure 1 serves as a reminder that the Maillard reaction is initiated via interaction of sugars and amino acids (see part 1 for the details). Following the initial condensation step of the Maillard reaction, a series of complex degradations, rearrangements, and other reactions lead to the generation of many compounds which

VALINE

LYSINE

GLUTAMINE

H OH

COMMON FORMS

HISTIDINE

H N

AMINO ACIDS

H H

C R

O C

PROLINE

FIGURE 1 — The Maillard reaction is initiated via the condensation of sugars and amino acids. WWW.ARTISANSPIRITMAG.COM

TABLE 1

SELECTED EXAMPLES of AMINO ACIDS, STRECKER ALDEHYDES and their ASSOCIATED ODORS

influence both the color and flavor of foods and beverages. The additional reactions lead to many important classes of flavor compounds including aldehydes and heterocyclic molecules including furans, pyrazines, pyrroles, oxazoles, thiophenes, thiazoles, and other heterocyclic compounds. These components and more play AMINO ACID a big role in distilled spirits production and were Valine introduced in part 1. The intermediate stage of the Maillard reaction Leucine involves well-known Strecker degradation reactions. Strecker degradation is primarily a Isoleucine major pathway for the conversion of amino acids Phenylalanine into structurally related aldehydes of significant flavor value; low concentration and very low Methionine detection threshold equating to potent odor and flavor impact! A summary of several amino Proline acid conversions to their corresponding Strecker aldehydes and the odors associated with such Cysteine compounds is shown in Table 1. As seen in Table 1, a veritable profile of fruity, floral, grainy, sweet, roasted, vegetable, and bready and meaty flavors are associated with compounds of the chemical class known as aldehydes. Note also that the cyclic (ring-containing) imino acid proline does not degrade to a Strecker aldehyde. Proline instead forms other ring-containing molecules including the cyclic secondary amine tetrahydropyrrole (aka

O O PYRANONES maple-like vanillin-like warm, spicy fruity, jam-like

ODOR DESCRIPTION

2-Methylpropanal

Green, overripe fruit

3-Methylbutanal

Malty, fruity, toasted bread

2-Methylbutanal

Fruity, sweet, roasted

Phenylacetaldehyde

Green, floral, hyacinths

Methional, methanethiol, 2-propenal

Vegetable-like aromas

Pyrrolidine, 1-pyrroline NO STRECKER ALDEHYDE

Important intermediates for bread-like aromas

Mercaptoacetaldehyde, acetaldehyde, H2S, ammonia

Important intermediates for meat-like aromas

pyrrolidine). The sulfur containing amino acid cysteine degrades into potent compounds including ammonia and hydrogen sulfide (rotten egg-like). Remember there are many other amino acids thus increasing the number of flavors which may be produced. The second group of interesting flavor components are the heterocycles. Through reductone and dehydroreductone

REDUCTONES AND DEHYDROREDUCTONES

NH3 H2S Furanones Pyranones Pyrroles Thiophenes

FURANONES sweet caramel burnt

→ STRECKER ALDEHYDES

amino acid Strecker reaction

PYRROLES cereal-like nutty

ACYLPYRIDINES cracker-like cereal

FURANS meaty burnt caramel-like

acetoin

ALKYLPYRIDINES bitter burnt astringent

heterocyclization Pyridines Pyrazines Oxazoles

N O

THIAZOLES nutty

Aldehydes + aminoketones

THIOPHENES meaty roasted

Thiazoles Pyrroles Imidazoles

N N PYRAZINES cooked roasted toasted

PYRROLES cereal-like nutty

N OXAZOLES green nutty sweet

N O

IMIDAZOLES chocolate nutty bitter

FIGURE 2 — A simplified schematic of the processes involved in the formation of heterocyclic compounds via Maillard chemistry. WWW.ARTISANSPIRITMAG.COM

H3C CH3

CH3

N N

O CH3

H3C N

2-ethyl-3,6-dimethyl-pyrazine Hazelnut

2-ethoxy-3-methylpyrazine Roasted walnut

N O

HC CH33 O

Pyrazinecarbaldehyde or formylpyrazine Toasted aroma

N 2-ethyl-3-methoxypyrazine Potatoes

H N N

2-ethyl-2,3-dimethyl-1,2-dihydropyrazine Roasted almond

FIGURE 3 — Pyrazines – structure and associated flavor notes. chemistry, and their resultant product interactions with ammonia (NH3) and hydrogen sulfide (H2S), the heterocyclic compounds, furanones (oxygen in the ring structure), pyranones (containing oxygen), pyrroles (containing nitrogen), and thiophenes (containing sulfur) are produced, see Figure 2. Figure 2 also shows a few more details of the Strecker degradation reaction scheme. Interactions of aldehydes and aminoketones with a compound called acetoin (a ketone) can lead to formation of pyrazines (dual nitrogen atom ring heterocycles), pyridines (containing nitrogen), oxazoles (with oxygen), imidazoles (dual nitrogen), and thiazoles (sulfur) base and substituted heterocycles. Furans (five membered oxygen-containing ring heterocycles) are also illustrated in Figure 2; they arise from rearranged sugars. The important point to note here is the cluster of flavor descriptors associated with each class of heterocycle and the nuances of flavors generated. Many chemical substituents are possible with each class of heterocycle making for another very complex mix of components. A few key and classic flavor notes associated with one class of heterocycle—the pyrazines (see Figure 2) are shown in Figure 3.

DISTILLED SPIRITS PRODUCTION AND THE GENERATION AND ROLE OF MAILLARD COMPOUNDS From raw materials and from start to finish, in processing of distilled spirits, the Maillard reaction is likely to be involved. Brief details of the origin of important flavor notes and the impact of the Maillard reaction during spirits production follow.

WWW.ARTISANSPIRITMAG.COM

Malting/kilning — For cereal-based spirits, the malts and other grains used for many brown spirits provide the initial input of Maillard reaction components—the sugars (from starch degradation) and amino acids (from proteolysis). Amino acids in green malt are transformed, in a pH dependent manner, to corresponding Strecker aldehydes (see Table 1). Model Maillard reactions in the laboratory have also revealed the classic cereal, corny, and bready-like flavors that originate through the complex cascade of Maillard reactions. We note that distillers’ malts are not cured like ale malts and an understanding of base malts and a discussion with a malt supplier can guide the distiller in the correct choice and use of cereal grains for desired flavor characteristics as well as saccharification power. Brewer’s malts are often produced through variable high temperature kilning and roasting which leads to many specialty grains with a wide range of flavor compounds (including caramel, roasted, nutty, burnt, coffee, and chocolate). The distiller wishing to experiment today thus has a choice of dozens of specialty malts and many other cereal grains. The full complexity of Maillard chemistry and grain production is far from being completely understood, especially in relation to a set of high molecular weight color and flavor compounds called melanoidins, but even so the flavor possibilities for spirits seem to be endless—however, only if they pass through to final spirit (see below for more on this). A final note here pertains to milling of the grains. Over-milling can lead to lipid release from grains which may ultimately lead to a cloudy wash and, as recent research shows, lipid materials can participate in and add to the complexity of Maillard reactions. 67

TA B LE 2

FLAVORS PRODUCED via MAILLARD REACTIONS between wash amino acids and sugars during distillation (ADAPTED FROM JACK, ET AL., 2008)

Cooking and mashing — Different cooking systems are available to distillers, depending upon the need to gelatinize starches in non-barley malt grains and adjunct cereals. These cooking steps are of course run at high temperature. In addition to Maillard color and flavor compound formation, degradation or consumption of fermentable carbohydrates and amino acids occurs which may impact spirit yield. Fermentable sugars are reduced in concentration—perhaps not in a huge way— but free amino nitrogen (FAN) concentration is also reduced which may impact fermentation and thus alcohol production. Heavy adjunct sugar use will increase one of the two main reactants at the expense of nitrogen and here the FAN concentration may be too low for subsequent fermentation. Mashing operations may also produce Maillard compounds and impact ethanol yields for similar reasons noted above.

Aldehydic

Cooked potatoes

Grassy/green

Sweetcorn

Biscuity

Cooked vegetables

Malty

Sour

Burnt

Damp wool

Meaty

Stale

Buttery

Dead roses

Metallic

Sulfury

Cereal

Fecal/manure

Musty

Sweaty

Cheesy

Farmyard

Nutty

Sweet

Chlorine

Floral

Oily

Toasty

Chocolatey

Fruity

Rubbery

Toffee

Distilling — One of the most complex and heat-dependent steps of spirits production is of course distillation. With many different still systems available, recent trends have been towards changing distillation temperature protocols with a view to saving energy. Older systems with direct firing could lead to hot spots and overcooking or burning of mash or wash. Thus, indirect heating systems with more uniform heat distribution are used today. Different extents of the Maillard reaction would be involved with direct versus indirect heating. Decreasing still operation time is sometimes considered with higher temperature and increased distillation rates for increased efficiency. The insulation of stills also leads to changes in temperature profiles through the distillation process and, consequently, to the extent of Maillard reactions. And an elegant series of experiments were performed by Jack, et al., (2008) at the Scotch Whisky Research Institute to evaluate distillation operations and the Maillard reaction under variable temperature conditions. The team set up a scaled-down operation whereby they mimicked still surface temperatures. They heated wash at 60, 80, 100, and 120°C and held this mock system under reflux conditions for one hour. Then the heated wash batches were vacuum distilled at 57°C to prevent further thermal stress on the system (reducing further Maillard chemistry). The results were quite interesting; sensory evaluation noted that for each 20°C rise in temperature a significant change in aroma occurred with panelists noting heavy cereal and sulfury notes. Chemical determinations identified several Maillard compounds: 2-Acetyl-pyrroline (with cereal, white bread, jasmine and basmati rice, and hot buttered popcorn descriptors); Tri-methyl pyrazine (nutty, peanut, potato) and 2,5-dimethyl pyrazine (nutty, roasted nuts, meaty, roast beef, potato chips, woody, and grassy descriptors). Further to this, a whole set of sensory notes were determined from Maillard components generated from wash amino acids and

sugars. These are described in Table 2. With such a vast potential for Maillard compound formation from the raw materials and the processes described above the big question becomes “But will they distill over?” The Scotch Whisky Research Institute test results clearly showed that Maillard compounds do distill over under reduced vacuum conditions, and we know that several types of distilled spirits are defined as tasting of the raw materials used to make them. Corn-based, wheat, barley, and rye spirits show distinctly different flavor profiles; though we would like to see more examples where the same yeast strain(s) were used to ferment different mash bills, and under similar conditions, to eliminate other variables impacting flavor production. It is also known or suspected that grain notes will carry over with lower proof distillations. As we have noted, heat, time, and pH (and raw material amino acid and sugar compositions and concentrations) will all influence Maillard product formation. Boiling points of compounds produced then dictate their fractionation during distillation. Just noting the basic (simplest) heterocycles and their pure compound boiling points we can see that some may indeed come over depending upon the conditions of the distillation system.

Furan – Boiling Point: 31.3°C (88.3°F) Oxazole – Boiling Point: 69.5°C (157.1°F) Pyridine (alkylpyridine) – Boiling Point: 128-130°C (262.4-266.0°F)

Pyrazine – Boiling Point: 115°C (239°F) Pyrrolle – Boiling Point: 129°C (264.2°F) Thiophenes – Boiling Point: 84°C (183.2°F) So, certain furans, oxazoles, and thiophenes could be prime candidates. Interestingly some spirits show a notable pungency or WWW.ARTISANSPIRITMAG.COM

“heat” that appears not to be from alcohol but could be sulfurcompound related; more research needs to be undertaken here. Different compounding pressures and entrainment issues within a still may cause all sorts of different congeners and flavors to come over the still at different points in time. This would only apply to pot still and not by refluxing with a dephlegmator—again much more research is needed. And distillers need to be aware of all controlling factors with respect to their own stills.

BEYOND THE STILL — maillard and spent grain drying and casks and barrels Distillers' dried grains with solubles are often given to or sold to farmers as a rich nutrient source for animals. If, however, too much heat is added while drying the grains, amino acids combine with sugars and these nutrients are rendered indigestible with resultant amino acid deficiencies in livestock. Finally, a major lack of research leads to a less than satisfactory description of the possible role of the Maillard reaction in casks and barrels. Toasting and charring of oak will lead to more caramelization than Maillard chemistry, though several Maillard generated compounds have been detected in toasted oak extracts. Other than to urge much more research into cask production and Maillard reactions we will leave this section and topic now and wrap up with some concluding remarks.

WWW.ARTISANSPIRITMAG.COM

CONCLUDING REMARKS A neat, though complex, chemistry known as the Maillard reaction has been covered in this two-part paper. This chemistry applies through raw materials production and selection and to all stages of distillation. While distillers may be stuck with preexisting equipment, cookers, stills etc., it is as true as ever that a key understanding of flavor origins and changes can allow ultimate control of spirit quality. It started with a yellow-brown colored product and a French chemist back in 1912. Now it is up to the reader to see what browning (and Maillard flavor production) can and does do for them. Let the cooking begin!

Gary Spedding, Ph.D. is a brewing analytical chemist/sensory specialist and managing owner of Brewing and Distilling Analytical Services, LLC. The team also includes Amber Weygandt, B.Sc. lead chemist, Matthew Linske, B.Sc. lead microbiologist, and Philip Gennette, B.Sc. analytical technician. For more information visit www.alcbevtesting.com or call (859) 278-2533.

REFERENCES Nursten, H. (2005). The Maillard Reaction: Chemistry, Biochemistry and Implications. The Royal Society of Chemistry. Jack, F.R., Brosnan, J.M., Campbell, K.A., Fagnen, O., Fotheringham, R.N. and Goodall, I.C. (2008). Sensory implications of modifying distillation practice in Scotch malt whisky production. In: Distilled Spirits Production, Technology and Innovation. (J.H. Bryce, J.R. Piggott and G.G. Stewart, Editors). Nottingham University Press.

SO YOU WANT TO BUILD A DISTILLERY? WRITTEN BY SHANNON O’NEAL

ho knows exactly where the idea came from? Maybe it was a vacation pitstop at a craft brewery or an overheard tale from a friend who knew a guy who quit his day job to follow his calling. Or maybe you’ve already turned your passion into a successful upstart, but you want to grow your dreams with new products and higher production volume. However you arrived at the idea of launching or expanding your distillery business, the fire has been lit, the wind is at your back, and you’re ready to set sail on this new adventure. Problems? You’ll just figure them out along the way. Anthony White, division leader for beer, wine and spirits at Haskell, wants to remind you of one thing: Christopher Columbus had the same philosophy when he set his course for India and wound up somewhere in the Caribbean Islands. Sure, he has his own holiday now, but would you really deem his journey a success? “All it takes is a little miscalculation—10 degrees, maybe 20 degrees—and suddenly you’re off course,” says White. “Add in winds, currents, and sea monsters that you didn’t account for and suddenly you’re looking a lot less like Christopher Columbus and a lot more like Gilligan and the crew of the SS Minnow.” Sailing metaphors aside, the point is there are a lot of moving parts that have to come together in unison to create a successful distillery. If you enter into the business without a solid plan that accounts for the massive scope of such a project, your chances of failure are astronomically higher. At their recent presentation in Nashville, Tennessee for the American Craft Spirits Association conference, White and his colleagues from Haskell detailed their Project Delivery Model, which is a simple framework which new and growing distillers can use to plot a successful future.

STEP ONE:

DEFINE THE OPPORTUNITY

(CREATE THE PLAN & CONCEPT DEVELOPMENT) “You gotta know what you want to make,” says Rob Masters, a long time distiller and distillery consultant for The Epic Distilling Company. “And then you have to identify how much of it you want to make.” New craft distilleries pop up in new locations every day with different specialties and different ingredients that are used to create a wide variety of spirits. How will your product set itself apart from the competition? Will you make specialty barrelaged whiskey or flavor-enriched vodka? Botanical-infused gin or smooth spiced rum? Each spirit requires a completely different production process, which means different equipment, different energy needs, and different facility requirements. In the early planning stages, a block diagram can help you visualize each step in the process and subsequently make important choices about what raw materials you will need, what types of yeast and fermentation equipment you will utilize, whether your spirit will be batched or continuous distillation, and how you will eventually mature your product, proof it, and prep it for bottling. Once your block diagram is completed, that technical document will become the foundation for all other plans to come. It will also help you start to devise a feasible production schedule. For clear spirits, process times are shorter and the product can be bottled within days of distilling. But for darker spirits that require a longer aging process, you have to know how much you

WWW.ART ISANSPI RI TMAG.CO M

PROJECT DELIVERY MODEL CREATE THE PLAN

TECHNICAL

PROJECT MANAGEMENT

COMMERCIAL & OPERATIONS

BUSINESS PLANNING

EXECUTE THE PLAN

DEMONSTRATE COMPLETION

PREPARE RECIPIENTS

VALIDATION

CLOSEOUT

Performance qualification Live production

Continuing operations & maintenance

Assets transferred to operations Project team released

CONCEPT DEVELOPMENT

PROJECT DEFINITION

Define opportunity Identify products

Project objectives & KPl's Preliminary production & distribution estimates Site alternatives defined

Secure full project funding Final production and distribution estimates Resource plan

Update resource plan Training plan Quality plan Spare parts list

Stakeholder management Develop training materials

Operations participation in start-up Review & approval of acceptance documentation

Build project team Define timeline goals Define cost boundaries

Stakeholder buy-in Milestone schedule ROM/comparative estimates

Risk assessment Detailed scope of work Critical path schedule Appropriation grade estimate Cost control plan Communication plan

Procurement plan Installation plan Start-up plan Detailed schedule Safety plan Equipment acceptance criteria

Purchase equipment Secure permits Hire building & installation subcontractors Ongoing management of the plans created earlier Construct facility Install equipment

Operating procedures Maintenance procedures

Receive/ stock spare parts

Performance tests As-built documentation

Block diagram Preliminary mass/energy balance Technical assessment of feasibility

Process flow diagram Mass/energy balance Preliminary utility requirements Preliminary equipments layout Preliminary code analysis Preliminary control philosophy/system architecture

Basis of design Equipment list Instrumentation list Equipment specs/ data-sheets Preliminary P&IDs Equipment layout Hazardous area classification

3D model Installation drawings Install specifications Permit documents development Finalize P&IDs Final equipment selection

Equipment factory acceptance test Vendor coordination Authority having jurisdiction reviews Start-up plan Submittal reviews RFIs Field support O&M manuals

Installation Qualification Install checklists Field support

Operational qualification Field support Training

Performance demonstration Field support Record drawings

DETAILED DESIGN

need to distill your first year to fulfill your sales goals three to four years from now. Knowing the total proof gallons needed will determine the size of the system you need to build for distillation. “If you’re talking about running the distillery on one shift, five days a week, you can plan for about 240 working days in the year,” says Masters. “That accounts for holidays, weekends and downtime for maintenance.” With a more focused idea of the size and scope of your project, you should start to identify a shortlist of potential locations—but don’t plunk down any money just yet. “One of the biggest mistakes we see people make is to select a building without first defining their process,” says Tina Sanchez, senior engineering manager for Haskell. “Then you wind up wasting excess funds to adapt a building to fit the needs of your process.” Instead of jumping into a building that might not have the right bones for a great distillery, carefully examine how your production needs will fit into your proposed building prior to making a final commitment. Taking a little extra time on this step will help avoid unforeseen issues down the road that could negatively impact your goals.

WWW.ART ISANSP IRITMAG.COM

EXECUTION

VERIFICATION

HASKELL'S PROJECT DELIVERY MODEL HELPS NEW AND GROWING DISTILLERS PLOT A SUCCESSFUL FUTURE.

Instead of jumping into a building that might not have the right bones for a great distillery, carefully examine how your production needs will fit into your proposed building prior to making a final commitment.

STEP TWO:

GET SOME HELP

(BUILD THE TEAM) No, we don’t mean the psychiatric variety of help. You need to enlist some savvy subject matter experts for your team long before you make a critical mistake and actually need professional mental counseling. “Most distillers are great at making product, but they don’t necessarily have experience in all the details of executing a CapEx project,” says Alisha Moss, director of business development and procurement for Haskell. “There are a lot of work streams and thought processes to take into account and you have to do your due diligence with each one.” From legal experts who can help

VENDOR SCORECARD WOODEN FERMENTER VENDORS

COMPANY A NON WEIGHTED SCORE

WEIGHTING

CRITERIA

COMPANY B NON WEIGHTED SCORE

COMPANY C NON WEIGHTED SCORE

0 = LOW, 3 = HI

WEIGHTED SCORE

AVG SCORE

0 = LOW, 3 = HI

WEIGHTED SCORE

AVG SCORE

0 = LOW, 3 = HI

WEIGHTED SCORE

AVG SCORE

Prior experience w/ similar equipment

2.9

58.0

96.7%

3.0

60.0

100.0%

3.0

60.0

100.0%

Financial Health/Capacity

2.5

25.0

83.3%

3.0

30.0

100.0%

2.8

28.0

93.3%

Scope of work adherence

2.7

27.0

90.0%

2.0

20.0

66.7%

1.5

15.0

50.0%

Jobsite safety

3.0

60.0

100.0%

3.0

60.0

100.0%

3.0

60.0

100.0%

Schedule adherence

3.0

45.0

100.0%

2.5

37.5

83.3%

2.5

37.5

83.3%

Service support

3.0

15.0

100.0%

2.5

12.5

83.3%

3.0

15.0

100.0%

Contract flexibility

3.0

15.0

100.0%

2.5

12.5

83.3%

2.0

10.0

66.7%

Total cost versus capital budget

3.0

15.0

100.0%

3.0

15.0

100.0%

3.0

15.0

100.0%

Availability of resources for duration

3.0

30.0

100.0%

3.0

30.0

100.0%

3.0

30.0

100.0%

Total Weighted Score

96.7%

Total Weighted Score

92.5%

Total Weighted Score

90.2%

COMMENTS:

HASKELL'S ALISHA MOSS USES THIS VENDOR SCORECARD TO ASSESS MARKETPLACE OPTIONS AND MAKE THE RIGHT PURCHASE.

with contracts, to engineers who can design plumbing and electrical systems, to marketing There are a gurus who will make sure your product moves number of off the shelves, there are a number of areas where outsourcing consultants even in the areas where early planning stages will make your business outsourcing stronger. Even if you can’t put a warm body into consultants each subject area right away, just being able even in to sit down and think about your plan from each of those perspectives will allow you the early to see potential risks down the road. Every planning decision has the potential to compromise safety, damage the quality of your product, stages will lose your funding or destroy your reputation. make your “Sometimes you have to be really honest with yourself and know that even if you have business the skills to mitigate a risk, you don’t have enough hours in the day to get it done,” says stronger. Moss. It’s also critical at this stage to make sure you have a communications plan that will keep all members of your team informed. From financial investors to production staff, you should set expectations for when and how team members can expect to receive information and updates as your plan comes to fruition. You should also take the time to designate key decision makers in the project. Who is empowered to make spending decisions? Who will decide what is critical and what is not? Who will set priorities between cost, quality and effectiveness? Knowing who holds the power to make these choices will help you stay on track and avoid major disruptions.

STEP THREE:

DIVE INTO THE DETAILS (PROJECT DEFINITION)

“If the block flow diagram is the seed going into the earth, then the process flow diagram is the stalk growing out before flowering,” says Masters. Now is the time to expand on the technical outline in your block diagram to include all the critical details in a process flow diagram (PFD). What energy sources will your fermentation process require? Will you utilize automation? How will you store your product before and after bottling? What paths will forklifts use to move between equipment and transport product? “This is the evolution of the process,” says Chris Dryer, senior process engineer for Haskell. “You have to know the ins and outs of your utility requirements. Where do you need hot water? Cold water? Compressed air? All of these need to be accounted for so you can start allocating the space you have for equipment and support systems.” Planning for code requirements is also a necessary hurdle at this stage. Every state and municipality will have its own set of codes that must be met for permits to be pulled, so it’s critical to consult with experts in these areas. “It’s very important to involve the engineers at this point to look at things like the National Fire Protection Association’s requirements,” says Sanchez. When meeting with your local code enforcement officials, a detailed PFD and Basis of Design will show that you have planned and accounted for safety. Having a written plan will also help when it comes time to meet with engineers, installation technicians, and other outside vendors who don’t know the goals and objectives of your business.

WWW.ART ISANSPI RI TMAG.CO M

“Distilleries are like icebergs,” says White, who has an obvious penchant for ship-related analogies. “People only see the pieces at the top, they don’t know what’s going on down below. You will deal with a lot of people who don’t know your business as well as you do. So you have to make sure the guy who’s installing the pipes has all the relevant information he needs to execute that job as it fits into your overall plan and design.” As you identify each piece of your distillery plan, you need to begin nailing your ideas to a timeline. Determine which items are your “float” activities— the steps that need to get done before the process is complete, but that won’t impact other stages. What are the “critical” activities that must be accomplished before you can advance? Along your timeline, create key performance indicators (KPIs) that will act as metric milestones to keep you on time and on budget throughout the process. With a thorough plan that details what you’re making, how you’re making it, what equipment and resources you will need to make it, and a timeline with key points to keep your progress in check, you should be able to calculate your cost projections to within 5-10 percent of the actual amount. Once your financing is secured, it’s finally time to execute your plan.

Knowing whether or not a vendor has the production capabilities to meet your target deadlines or if they will have the flexibility to accept your contract terms is critical.

STEP FOUR:

MAKE IT HAPPEN Now that you know your equipment needs and you’ve consulted with engineers about the layout and space allocation within your facility, you need to choose a location and start building your distillery. As you begin procuring equipment, Moss has a unique tool to help assess the endless choices available in today’s marketplace and make the right purchase for your business. “I actually started using my vendor scorecard when I was looking into hiring,” says Moss. “You can weight the categories based on your values, but essentially you want to look at criteria like a vendor’s experience, financial health, safety record and the total cost of ownership for their equipment.” Knowing whether or not a vendor has the production capabilities to meet your target deadlines or if they will have the flexibility to accept your contract terms is critical. It’s also helpful to ask a vendor if you can see a piece of their equipment in the field so you can assess for yourself its functionality, durability and fit for your needs. White has another savvy suggestion for equipment procurement: spare parts. “If you know from your PFD that you have a piece of equipment that could take down your whole operation, look into purchasing spare parts upfront when you buy the equipment,” says White. “You can also build a network of peers in the industry so that if

3D MODEL COURTESY HASKELL

WWW.ART ISANSP IRITMAG.COM

↗ Let us do you a FLAVOR

Specializing in flavor and prototype development for the alcohol industry.

800.849.1277 www.mothermurphys.com

Captivating Capsules

you have a critical malfunction and need a part that has a fourmonth lead time, you might be able to find that spare part in someone else’s inventory so you can get back up and running.” Along with the procurement of critical assets, you’ll want to have detailed installation plans that minimize potential damage to your equipment from the moment the piece is delivered until it is up and running in your production line. Another helpful tool to use during the execution phase is 3D modeling technology. Engineers can produce functional models of your production line and run simulated trials to identify potential problem spots long before installation, saving you time and money on future change orders and service calls. “You might think 3D modeling is expensive, but I’ve used it enough to know it saves you so much in the long run,” says Masters. Once you've got your plumbing and electrical systems in place and your equipment installed, don't send your project team away just yet. It's crucial to demonstrate the completion of your project by validating the functions of your equipment and the products they will make before declaring your new facility or existing expansion complete. Your operations and technical teams should plan and execute a series of tests that will ensure each piece of equipment is operating as expected and that it has all the functionality promised by your vendor. You don't want to get a year down the road and discover you're missing a key component for a specialty product or have a major equipment failure that could have been prevented. Once the startup and testing process is completed, it's time to check the final box in your Project Delivery Model.

STEP FIVE:

ENJOY THE (FERMENTED) FRUITS OF YOUR LABOR

Top off your spirit package with a capsule worthy of your brand

While starting or growing a distillery facility is a massive undertaking, when translated into detailed, step-by-step plans that can be executed by a team of experts, it is an achievable business enterprise. The more you know up front, the more you can lay out a detailed strategy that will keep your ship on course for its intended port. If things start to veer off in another direction, your KPI milestones will alert you to the dangers of deadly currents, shifting winds and sea monsters with plenty of time to right the ship. Ramondin USA Napa CA 707.944.2277 ramondin.com

SAMPLES OR QUOTATIONS : sales@ramondinusa.com

Anthony White leads the Beer, Wine & Spirits division at Haskell which is dedicated to engineering and installing world-class manufacturing systems and facilities for clients in the Beer, Wine & Spirits Markets. Anthony graduated from the University of Florida’s Hough Graduate School of Business with a Master of Business Administration and from the University of Florida with a Bachelors in Construction Management, and is a Certified General Contractor. WWW.ART ISANSPI RI TMAG.CO M

↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ W EN B ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘R↗I T↘T↗ ↗↗↗↗↗↗↗ U R↗ T↘ N E Y↘ ↘ ↘ ↘ ↘ ↘ ↘↗Y↘C↗O↘ KEE ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘M↗C↘ ↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ year’s profit and ↗ loss statement and breaking been ↗↘↗↘↗↘ecently, ↗↘↗↘I’ve↗↘ ↗ frustrated ↗ ↗↘by↗money. ↗↘↗↘↗ ↗↘↗↘↗↘↗ ↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘it↗apart ↘↗by↘↗ ↘ ↘unit: business Spirits ↘ production More specifically,↘ I’ve↘ been frustrated ↗↘↗↘by↗↘ ↗↘↗↘ ↗↘↗ ↗↘↗ ↗↘ ↗↘being ↗↘one, ↗↘tasting ↗↘↗room ↗as↘the ↗↘ ↗↘↗↘↗ sales other. watching money come↗ in ↗ the door and ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ and ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ This wasn’t a difficult task for us. For several wondering where the hell it all goes. It’s led So if we’re turning ↗↘↗↘me ↗on↘↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗↘we’ve ↗↘↗been ↗↘↗↘↗↘↗↘↗ years the Quickbooks a journey as a business owner. A journey ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ a↘profit, ↘ ↘ ↘where ↘ ↘ ↘ ↘ ↘now ↘↗using ↘↗↘ “Class” allocate yet↗ but has some ↗↘↗↘that ↗↘isn’t ↗↘over↗↘ ↗↘provided ↗↘↗↘ ↗↘really ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ ↗↘↗feature ↗↘to↗↘ ↗↘↗all↘↗income ↗↘and ↗↘↗↘↗ ↘ ↘ ↘ expense to one or the other of those business valuable insights which I’m excited to share ↗↘↗↘with ↗↘you, ↗↘both ↗↘now↗↘and↗in↘↗ ↗↘↗↘↗↘↗↘↗the ↗↘heck ↗↘↗↘is↗↘it?” ↗↘↗↘↗↘units. ↗↘↗They’re ↗↘almost ↗↘↗↘ ↗↘↗businesses, ↗↘↗↘↗↘↗ separate the future. ↘ ↘ ↘ ↘ of which needs↗to ↗ be independently runs like ↗ most↗ small ↗↘↗↘distilleries. ↗Our↘↗distillery ↗money ↗↘↗ ↗↘↗↘some ↗↘↗ ↗↘↗↘profitable ↗↘↗↘in↗our↘mind ↗↘each ↗ ↗↘ ↗↘↗ ↘↗ ↘producing ↘ ↘products, ↘ ↘ ↘↗↘↗↘↗↘↗↘↗ to ↘ be successful. We↘ put ↘ into of ↘ which ↗↘↗↘require ↗↘↗aging, ↗↘some ↗↘of↗which ↗↘ ↗↘ ↗products, ↗↘↗pay ↗our↘↗↘↗ ↗↘↗at↘the↗net ↗profit ↗for↘↗ ↗↘↗that↘↗ ↗2016, ↗↘↗↘↗ We looked each ↗ and found yes, in do↗ not. ↗ We sell our ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ each independently made a profit. Good start. But it didn’t answer vendors and our expenses and are generally left with a ↗↘↗↘people, ↗ bit↗our ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗↘↗↘ ↗↘the ↗↘hell↗↘ ↗of↗our↘cash? ↗↘↗↘↗↘↗↘↗↘↗ Where is all↘ little↘ left over. On paper at least. More and more, lately, we find ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘the↗larger ↘↗↘question: We deepened research. total ↗ spreadsheet nerds, where ↗↘↗↘ourselves ↗↘↗↘asking ↗↘↗the↘question, ↗↘↗↘“So ↗↘if↗we’re ↗turning ↗↘a↗profit, ↗↘ ↗↘↗↘↗ ↗↘↗↘our↗↘ ↗↘↗As↘↗ ↗↘↗↘ ↗↘John ↗↘and ↗↗↗ ↘ ↘ ↘ ↘ ↘ ↘ I were happy to dig further and decided that the next question was↘ ↘ the heck is it?” ↗↘↗↘↗This ↗led↘↗ ↗↘↗↘ ↗↘and↗↘I to↗↘ ↗↘↗↘↗exercise. ↗↘↗↘determining ↗↘↗↘↗whether ↗↘or↗not ↗each ↗of↘our↗↘ ↗↘was↗↘profitable. ↗↘↗↘That ↗↘↗↘↗ units my husband John try↗ an interesting ↘ ↘ ↘ ↘ ↘ ↘ ↘ was a more challenging question for us to answer. to understand if our spirits production and ↗↘↗↘Specifically ↗↘↗↘side ↗we↘wanted ↗the↗business ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗↘↗↘In↗↘ ↗↘↗↘room ↗↘we↗↘ ↗sales ↗↘↗↘↗ Let’s our tasting track↘ wholesale of ↘ and our tasting room were each ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘↗ ↘↗start ↘↗with ↘↗the↘cocktails. ↗↘↗↘making ↗↘↗a↘profit, ↗↘↗ ↗the ↗other ↗perhaps—unbeknownst ↗↘↗↘of↗each ↗↘↗but ↗↘have ↗↘↗ ↗↘↗↘↗ a per-cocktail or if ↗ or ↘allone↘ ↘profit. ↘↗Wewas ↘started ↘↗by↘↗ ↘↗↘ ↘↗cocktail ↘↗(COGS) ↘we↗↘produce ↘↗wemeans ↘don’t ↘↗the ↘↗data ↘cost of goods sold value. This we don’t have to us—sucking away of our looking at last ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗to↘↗↘↗ ↗↘↗↘In↗August ↗↘Spirits ↗↘↗↘ ↗↘↗↘↗is↘hosting ↗↘↗↘ ↗↘↗of↘Master’s ↗↘↗↘↗ ↗↘↗↘↗ ↗↘↗↘↗↘↗ Association a series Classes, two days ↘↗↘↗2017, ↘↗American ↘↗↘↗↘Craft ↘↗↘including ↘↗ ↘↗of↘financial accounting principles The class to all ACSA members and ↗ be headlined ↗↘↗↘management ↗↘↗↘↗↘and ↗best ↗↘practice ↗↘↗↘ ↗↘↗↘↗ ↗↘↗in↘Denver. ↗↘↗↘ ↗↘ ↗↘is↗open ↗↘ ↗↘↗ ↗↘↗ ↗↘ ↗↘↗↘↗↘↗ ↘↗ ↘opportunity ↘will↘ by Steve LeFever,↘ founder of a program called↘ Profit Mastery. I encourage each of ↘ you to make an for the person ↗↘↗↘or↗people ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗↘↗↘↗ who↘ are↘ your↘ internal business managers to attend this↘ class. We’re using it as↘ an opportunity not to focus on basics ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ on↗ problem solving, like above:↗ Great, we’re profitable, so ↗↘↗↘but ↗↘to↗educate ↗ our ↗ourselves ↗↘↗ ↗↘best ↗↘the ↗↘one ↗↘I’ve ↗↘outlined ↗↘↗for ↘ ↘cash? ↘ also ↘↗learn ↘↗↘ ↘↗businesses ↘ ↘↗↘like↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ where’s all of↘ We’ll about practice accounting ↗↘↗↘ours ↗↘and ↗↘help ↗↘those ↗↘↗folks ↗who ↗got ↗wrangled ↗↘↗into ↗keeping ↗↘↗the↘↗ ↗“level ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ books ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ skills. ↗↘↗↘up” ↗↘their ↗↘financial ↗↘↗↘management ↗↘↗↘↗↘ninja ↗↘↗ ↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ 75↘↗↘↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗

T I F O PR & LOS S

WWW.ART ISANSP IRITMAG.COM

“

CRAFTED BY HAND & CHARRED TO PERFECTION Our

family

tradition

www.barrel53cooperage.com

660.456.7610

DDM 2911 PLUS Density Meter 0.01% Alcohol Determination

Adding Precision to the Art of Craft Distilling. TTB Approved Easy to Use Easy to Validate Windows 7TM Embedded OS Precision Built-in Electronic Temperature Control 3 year Warranty 20 year service guarantee

Ask about a free on-site Demo of the DDM 2911 PLUS

Leasing is available

Rudolph Research Analytical

www.rudolphresearch.com – 973-584-1558 – info@rudolphresearch.com

↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ say which are our most profitable cocktails and which are our least ↗↘↗ ↗look↗↘ ↗↘↗in↘aggregate, ↗↘↗↘↗ ↗ what ↗↘↗↘↗↘ profitable. we↘ can ↘ at them so ↘ that’s↘ ↘↗↘↗But↘↗ we did. We looked at value cocktails sold ↗ ↗ ↗↘↗ ↗the ↗of our ↗ revenue ↗↘↗for↘↗ ↗↘↗ ↘↗↘the↗tasting ↘↗↘room ↘for↗↘ ↘↘↘ through 2016↘ and↘ divided that by ↘ the number ↗↘↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ of cocktails sold in 2016. Then we looked at the total COGS— ↗ ↗ ↘ ↘the↘expense ↘ ↘of the↘spirits ↘ themselves—for ↘ ↘ ↘ ↘the tasting ↘↘↘↘ including ↗↘↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗↘↗↘↗↘ room that ↘ by the of cocktails ↘ for↘2016↘and↘divided ↘↘ ↘number ↘↘ ↘ ↘sold, ↗↘↗ ↗us↘↗ ↗↘per-cocktail ↗↘↗↘↗expense. ↗↘↗ ↗↘all↗↘ giving a rough Next,↗ we took of↗ the ↗ ↗ ↘ ↘ ↘ ↘ ↘ ↘↘↘ expenses of running the tasting room in 2016—wages, insurance, ↗↘↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗↘↗↘ rent, utilities, marketing expense and ↘ more—and divided that by ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ the number this because wanted ↗↘↗ ↗↘↗of↘cocktails ↗↘↗↘sold. ↗↘We↗did ↗ ↗↘↗↘we↗really ↗↘↗↘↗↘ ↘ ↘running ↘↗↘room, to ↘ understand if we were making money the tasting ↗↘↗ ↗out ↗we↘are. ↗↘Even ↗↘after ↗↘all↗↘ ↗↘↗was↘↗ ↗in,↘↗↘↗↘ and it↗ turns the↗ overhead added ↘ ↘ ↘ ↘ ↘ as long as we were selling each cocktail for more than X, each was ↗↘↗ profitable. ↘↗↘↗Good ↘↗news. ↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ We↗ repeated the model sales↗ side ↗ and ↗ ↗ ↗↘↗↘ ↗↘↗ ↗↘↗with ↗our↘production ↗↘↗↘↗and↘↗ ↘ ↘ ↘ ↘ ↘ ↘↘↘ faced some challenges there. Montana is a closed (government↗↘↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗↘↗↘ controlled liquor sales) state. Our state liquor warehouse allows ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ us to↗ ship↗ them product which they↗ will↗ warehouse ↗↘↗ ↗it to↗ ↗for↘↗usus↘atfor↗no↘ ↗↘↗↘ ↘ ↘They ↘will↗↘ ↘↗↘liquor ↘ stores ↘↗↘ charge. ship ↘ agency and pay it ↗↘↗ ↗↘↗ ↗↘↗↘↗ ↗great. ↗↘But↗↘we↗aren’t ↗↘really ↗↘good ↗↘↗↘↗↘ following that shipment. That’s ↘ ↘ ↘ ↘ ↘ at tracking the difference between what we’ve shipped to them ↗↘↗ ↗↘↗ ↗↘↗ ↗↘↗↘to↗pay↘↗ ↗↘↗ship↘↗ and they an↘ obligation us ↘ for. We them ↘what ↘have ↘↗10↘↗↘↗↘ pallets of ↗ product, for↗ such. ↗↘↗ ↗↘ ↗↘along ↗↘↗with ↗an↘invoice ↗↘↗↘ ↗The ↗invoice ↘ ↘ ↘ ↘ ↘ ↘↗We↘↗↘↗↘ ensures that we know the value of the product we shipped. ↗↘↗ ↗↘on↗wood) ↗↘that↗↘the↗product ↗↘↗ ↗↘eventually ↗↘↗↘↗↘↗↘ also ↗ know↗ (knock will sell ↘ ↘ ↘ ↘ ↘ ↘ and that invoice↗ allows us to simply the ↗↘↗ ↗receive ↗payment ↗ artificially ↗for↘what ↗↘↗↘↗↘ sells The bummer is ↘ that ↘ we’re↘ ↘↗when ↘↗it↘sells. ↘↗ ↘↗ ↘↗↘there ↘↗ ↗↘↗ ↗↘an↗↘ ↗↘↗↘ ↗↘↗↘item ↗↘for↗↘ ↗↘ ↗↘↗of↘↗↘↗↘ creating accounts receivable tens of↗ thousands ↘ ↘ dollars which we may not actually see for months. I wish I could ↗↘↗ ↗↘↗developed ↗↘↗↘ ↗↘↗↘↗ ↗↘to↗correct ↗↘ ↗↘↗but↘↗↘↗↘ say↘ we have a procedural change for that ↘ ↘ ↘ as of↗ right↗ now ↗ we haven’t. ↗↘↗ ↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ ↘ ↘ ↘ ↘↗↘ So we had to make some↘ assumptions and chose to work just ↗↘↗ ↗ ↗ ↗ ↗↘↗of↘Montana ↗↘↗↘ ↗↘rather ↗↘↗↘↗↘ with ↗ the depletions from ↗ the State for↗ 2016, ↘ ↘ ↘ ↘ ↘ ↘ ↘ than what we shipped (and invoiced) to them. And, once again, ↗↘↗ ↗ ↗ above ↗↘↗ ↗answer, ↗↘↗from ↗↘↗↘↗↘ we↘ used↘the↘ framework and ↘ ↘↗↘↗to↘ask↗↘ ↘↗a↘COGS standpoint, we profitable products? Yes, we↗ are, ↗ ↗ ↗↘↗ ↗↘↗are ↗of our↗↘ ↗ ↗↘ ↗↘ ↘after ↘↗ ↘↗account ↘↗↘onall↗each ↘ ↘↘↘ but taking into of our↘ overhead,↘ divided also by ↗↘↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗↘↗↘ number of units sold, are we↘ still↘ profitable? Answer: Yes and no. ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ As ↗ it turns out, some of our products are ↗ profitable in some ↗↘↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗↘↗↘↗↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ markets and some of our products are not if we use that↘ basic ↗↘↗ ↗↘ ↗↘ ↗↘ ↗↘expense ↗↘↗divided ↗↘↗ ↗↘↗of↘↗↘↗↘ metric of ↗ total↗ COGS plus total by number ↘ ↘ ↘ ↘ ↘ units sold. Now we’ll begin to unpack how that information can be ↗↘↗ ↗↘↗ ↗ strategies ↗↘↗↘in↗different used to↘ inform Headframe’s sales↘ markets. ↘↗ ↘↗↘↗↘ ↘↗↘↗ ↘↗↘↗↘↗↘ was far as I’d made it ↗ in our research it ↗ was ↗ ↗ ↗↘↗This ↗as↘↗ ↗↘↗when ↘↗ ↘↗ ↘I↗was↘↗ ↘ at↘the↗↘2017 ↘↗↘Craft ↘↘↘ time to ↘ prepare the talk giving American ↗↘↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ Spirits Association (ACSA) conference. We’d made great strides ↗ ↗ ↘↘↘↘ ↘↘↘ ↘ was ↘ the↘meat↘of ↘ ↘I ↘ ↘ in understanding our↗ challenges and that↗ what ↗↘↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ shared. ↘ ↘Afterwards, ↘ ↘the↘feedback ↘ ↘was consistent: ↘ ↘ ↘distilleries ↘ ↘want↘↗↘↗↘ ↗↘↗ ↗↘more ↗↘answers, ↗↘↗↘more ↗↘↗ ↗↘↗↘↗↘ more.↗ data, suggestions ↘ More ↘↗↘ ↘↗↘↗about ↘↗↘basic things like best practice in setting up a chart of accounts. How to ↗↘↗ ↗inventory ↗↘↗ ↗↘↗ ↗and ↗make ↗adjustments ↗↘↗↘accurately ↗↘↗↘↗↘↗↘ track as ↘ well as COGS ↘ ↘ ↘ ↘ ↘ ↘ for such. What’s the right level of attention and detail to pay to ↗↘↗ ↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ WWW.ART ISANSPI RI TMAG.CO M

↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ the un-sexy, non-revenue-generating financial side of running a ↗↘↗↘↗business. ↗↘↗of↘ACSA’s ↗↘↗↘ ↗↘↗↘committee ↗↘↗↘and ↗↘a↗↘ member education ↘↗↘↗As↘↗a ↘ spanking new ACSA member, the feedback ↗↘↗↘↗brand ↗↘ ↗↘board ↗↘↗ ↗ I↗heard ↘↗have ↘↗been ↘↗↘ ↘↗↘↗ ↘↗↘to↗↘ and working diligently in↘the↘ intervening months ↗↘↗↘↗help ↗understand ↗↘↗↘and ↗↘answer ↗↘↗these ↗questions ↗↘↗both ↗to↘↗ ↗↘ benefit the↗ ↘ ↘ ↘ ↘ ↘ ↘ ↘ business I run as well as the↗ businesses our↗ peers run. If you’ve ↗↘↗↘↗ever ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ me open I’m in just see ↘ heard ↘↘ ↘ my↘mouth, ↘ ↘you know ↘↘ ↘it not↘to↘ ↘↘ ↗↘↗↘↗Headframe ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ win, but to see all↗ of us win,↗ together. To that end, my↗ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ continues. ↗↘↗↘↗work ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ challenge, and ↘ many↘ others faced ↘But↘this ↘ ↘ask ↘ ↘we’ve ↘Namely, ↘ recently, ↘all in↘all,have ↘ ↘ encouraged us to some tough questions. are↗ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ we doing things the right way, both according to GAAP accounting ↘ ↗↘↗↘↗practices ↗↘↗as↘well ↗↘as↗to↘↗ ↗↘internal ↗↘↗↘ ↗↘↗ ↗↘ meet ↗ our own needs? One of the↗ ↘ ↘ ↘ ↘ ↘ principles of Headframe Spirits is that we always ↗↘↗↘↗foundational ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ treat ourselves as a ↘ larger↘ company are. ↘ When↘ we ↘ say ↘ ↘↘ ↘↘ ↘ ↘than↘we ↘ we↗ mean↗ that↗ we don’t just aim to↗ do things “good enough,” ↗↘↗↘↗that, ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ rather we aim to bring excellence. So policies and procedures ↗↘↗↘↗exist ↗for↘↗much ↗of↘what ↗↘↗ ↗↘↗use↘↗ ↗select ↗↘ ↗↘↗and ↗↘ we↘ do. We tools, facilities ↘ ↘ ↘ ↘ ↘ our↗ brand identity that of a much larger↗ company. That↗ ↗↘↗↘↗build ↗↘↗islike↘designed ↗ ↗↘↗ ↘↗of↘decision ↘↗↘making ↘↗↘ ↘ ↘↗↘that↗↘ type to support the notion we ↘ ↗↘↗↘↗aren’t ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ going to create artificial bottlenecks to our own growth. Five↗ ↘ ↘ ↘↘↘↘↘↘↘↘↘↘↘↘ years in, we’ve done a good job there. Not an amazing job, but a ↗↘↗↘↗decent ↗ ↗ ↗↘↗ ↗↘↗to↘make ↗↘↗ good thinking initial ↘ ↘one.↘We’re ↘↗about ↘↗using ↘↗↘that↗↘ ↘↗↘ but↗I don’t as ↗ strong in ↗ using↗ that↗ ↗↘↗↘↗decisions, ↗↘↗↘ ↗↘think ↗↘↗we’ve ↗been ↗↘ ↗↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘↘ to examine systems in use over time. ↗↘↗↘↗principle ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ One of the takeaways from our current set of challenges is↗ ↘ ↘ ↘ we’re ↘ not ↘ working ↘ ↘with↘the↘right↘outside ↘↘ ↘↘ that↗ perhaps partners. ↗↘↗↘↗That’s ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ same↘ standard ↘ ↘another ↘ principle ↘ ↘ we↘hold: ↘ We↘set↘the ↘ ↘ ↘for↗↘ ↗↘↗↘↗excellence ↗↘↗↘in↗our↘↗vendor ↗↘and↗↘professional ↗↘↗↘↗relationships ↗↘↗↘as↗↘ we↗ ↘ ↘ ↘ ↘ set for our employees. If you work with us, you are part of Team ↗↘↗↘↗Headframe ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ Team↘ Headframe deal.↘ Vendors ↘ ↘ ↘andhave ↘ ↘as much ↘is aabout ↘big damn ↘our ↘ ↘weand ↘↘ professionals to care business as ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘do.↗↘ I’ll spare the story but this thinking led us to fire our attorney ↗↘↗↘↗and ↗replace ↗↘him ↗↘with ↗↘someone ↗↘↗↘ ↗↘↗↘It↗led↘↗ responsive. us to ↗ find ↗ a new↗ ↘ ↘ ↘ ↘ ↘↘ agency better suited to our needs. Now it has led us to ↗↘↗↘↗insurance ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ exploring new ↘ accounting ↘ ↘ a↘potential ↘ ↘relationship ↘ ↘with↘a ↘ ↘ ↘firm,↘a↗↘ thinks running business same we↗ ↗↘↗↘↗company ↗which ↗↘about ↗↘↗ ↗a↗ ↗ the ↗↘ ↗↘way↗↘ ↘↗So↘we’re ↘↗ ↘ do. interviewing firms↘ right↘ now↘ and↘ we are excited to ↘ ↗↘↗↘↗think ↗↘ ↗↘↗ ↗found ↗a↘company ↗↘↗↘which ↗↘can ↗↘help ↗↘us↗get↘↗ ↗↘ we may have better ↘ ↘ ↘ ↘ the we don’t know enough about to↗ solve↗ on our own. ↗↘↗↘↗at↘And ↗↘things ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ of↗↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ as I lead Headframe on this journey, I’m cognizant↘ ↗↘↗↘↗the ↗fact↘↗that↘↗many ↗of↘us↗↘ ↗↘same ↗↘boat. ↗↘↗We↘didn’t ↗↘↗start ↗↘ are↗ in the ↘ ↘ ↘ ↘ because we like the complexity of maintaining records ↗↘↗↘↗distilleries ↗ ↗ ↗↘spirits. ↗↘↗↘ and accounts. ↘ ↘ ↘↗We↘↗did↘it↗because ↘↗↘↗we’re ↘↗passionate ↘↗↘↗↘about books are↗ an afterthought I’m↗ committed ↗↘↗↘↗The ↗↘ ↗↘↗and ↗↘↗to↘creating ↗↘↗↘as↗↘ ↘↗↘ ↘for↗us↘around ↘↗un-sexy ↘ ↘side much knowledge that of our businesses ↗↘↗↘↗as↘I↗can. ↗So↘as↗I↘continue ↗↘↗↘to↗deepen ↗↘my↗knowledge, ↗↘↗↘I’ll↗continue ↗↘↗↘ ↘ ↘ ↘ ↘ to put that data in↗ front↗ of as↗ many distillers as possible with the↗ ↗↘↗↘↗hope ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ that we continue together. ↘↘ ↘can↘all ↘ ↘ to↘level↘up ↘ ↘↘↘↘↘ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ is ↗ CEO↗ of Headframe Spirits Spirits ↗↘↗↘↗Courtney ↗↘↗McKee ↗and ↗ ↗Board ↗of↘Directors. ↗&↘Headframe ↗↘For↗more ↗info ↗↘ Manufacturing, sits↘ on the ACSA ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ www.headframespirits.com or call (406) 299-2886. ↗↘↗↘↗visit ↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗ ↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ ↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘↗↘ WWW.ART ISANSP IRITMAG.COM

NOW PROVIDING DISTILLING EQUIPMENT FOR ALL SIZE PRODUCTION FACILITIES. PLEASE CALL TODAY FOR MORE DETAILS AND PRICING ON EQUIPMENT.

Corporate Office West Coast North Northwest Canada British Columbia Pleasantville, NY Windsor, CA Geneva, NY McMinnville, OR Montreal, QC Kelowna, BC

THOMAS & SONS DISTILLERY

BROTHER FROM ANOTHER KOMBUCHA MOTHER

W R I TT E N BY M A R GA R E TT WAT E R B U RY

P H O T O S P R OV I D E D BY T H O M A S & S O N S D I S T I L L E RY

any distilleries have mascots, but Thomas & Sons Distillery in Portland, Oregon might be the only distillery to rally behind a sloth. “We love Otis,” says Rob Nollenberger, head of marketing, as he gestures towards a well-executed oil portrait of a sloth dressed in a blue collared shirt, beige blazer, and neatly knotted tie. “Because we’re kind of like sloths: We don’t do anything fast, but when we do something, we do it right.” Otis is just the beginning of Thomas & Sons’ quirkiness. The distillery is part of Townshend’s Tea, a Portland-based tea company that also makes Brew Dr. Kombucha, one of the nation’s leading kombucha brands. And a few years back, Brew Dr. had a problem. Its kombucha, a live-culture soft drink made by fermenting sweetened tea with a symbiotic culture of bacteria and yeast (SCOBY, for short), was developing too much of an unwanted component: alcohol. They weren’t the only kombucha makers with the problem. In 2010, another major brand was temporarily removed from store shelves after testing unexpectedly high in alcohol. Since then, kombucha makers across the country have been acutely aware of the need to minimize their products’ alcohol content. “Kombucha will naturally make alcohol,” says Ray Nagler, operations manager. “But kombucha is also a health product. Our consumers are kids, pregnant women, people who are taking medication, recovering alcoholics. And if you’re not expecting it, at 1.5 percent alcohol, you can get a bit of a rush.” Other kombucha brewers were using one of two strategies. Either they’d arrest

WWW.ARTISANSPIRITMAG.COM

fermentation prematurely, before a substantial quantity of alcohol had been produced, by pasteurizing the kombucha, or, they’d cut the kombucha with juice or unfermented tea, diluting the alcohol content down to an acceptable level. But Brew Dr. Kombucha had another idea. What if that excess alcohol wasn’t a problem at all, but an opportunity? Was there a way to recover it without destroying the kombucha? So in 2014, they began laying the groundwork for a new affiliate company, Thomas & Sons Distillery, to pursue the idea. It was clear from the beginning that a traditional pot or column still was not an option: Prolonged exposure to high heat kills the live cultures in kombucha, eliminating one of its core perceived benefits for consumers. Eventually, they hit on the idea of using a vacuum still, a very gentle method of distillation often used for products that are too volatile or too delicate to be exposed to high heat. Under normal conditions, ethanol boils at 173.1 degrees Fahrenheit. By reducing the atmospheric pressure inside the column, vacuum stills allow alcohol to boil at a much lower temperature, minimizing the impact on the feedstock and creating a very soft, delicate spirit. Thomas & Sons’ vacuum still operates under pressure about equivalent to the atmospheric pressure on the moon, which allows them to boil alcohol at just below 100 degrees Fahrenheit and preserve the kombucha’s distinctive cultures. Residence time inside the still is also very short, much less than a minute. “It’s the equivalent of leaving your kombucha in the back of your car on a hot day for 15 seconds,” says Seth O’Malley, head distiller. The process is so successful that 100 percent of Brew Dr. Kombucha is now run through the still. Thomas & Sons’ vacuum still works a bit differently than other stills. Inside, the column is equipped with pairs of conical plates.

WWW.ART ISANSP IRITMAG.COM

The bottom plate of each pair is fitted with a fin, which agitates the kombucha and creates a very thin layer of solution on the upper cone. Steam is directed up through the plates, causing the film to release its ethanol. By adjusting the quantity of steam, O’Malley can modify the still’s output. “From a technology standpoint, it accomplished everything I needed,” says O’Malley. The first pass produces a spirit around 11 percent alcohol by volume. Because of the way kombucha is produced, it’s naturally high in acetic acid, which can transform into volatile ethyl acetate. “Acetic acid is fun in mezcal or wild ferments,” says Seth, “but we’re not taking that angle.” To neutralize it, he adds baking soda to the low wines before the second distillation, which typically finishes around 50 percent to 60 percent ABV. While Thomas & Son’s distillation equipment is quite precise, it’s not so precise that it captures only pure ethanol—and that’s a very good thing. Brew Dr. Kombucha produces 11 different flavors of kombucha, each featuring a different blend of teas, herbs, and spices. Those flavors come through in the distillate, producing a range of different flavor profiles in the spirit, from spicy and earthy to delicate and floral. With nearly a dozen different “base spirits,” it quickly became clear that Thomas & Sons was a playground for product development. “I was not interested in opening a distillery making products that people here were already making,” says O’Malley. “Especially in Portland, where we have so many distilleries making great products.” Instead, inspired by the range of flavors they had to work with, Thomas & Sons created a portfolio of unique, tea-inspired liqueurs, amari, and spirits, many featuring a strong botanical influence. “It was fun to take tea as a starting point, because it yielded

Unlimited Possibilities

Discriminating craft distillers choose the finest quality barrels from Barrels Unlimited. Hand-crafted from American Oak to the most stringent standards and shipped direct. Available in 5, 10, 15, 20, 30, and 59 gallon sizes.

www.barrelsunlimited.com | 1-800-875-1558 80

a very unusual suite of products, but ones that really stand out,” says O’Malley. Their first releases included Sweet Tea, a liqueur flavored with Ceylon tea; Spice Tea, a Yunan black tea liqueur flavored with warm spices like ginger, cinnamon, and allspice; Smoke Tea, a liqueur flavored with smoky lapsang souchong tea; Bluebird Alpine Liqueur, a European-inspired liqueur flavored with fennel, angelica, and other spices; Bitter Tea, a spiced amaro that fuses Italian and Indian traditions (recently rebranded as Kashmiri Amaro); and White Rose, an 80 proof white tea and rose spirit that can be used as a base spirit in gin- or vodka-based cocktails. Oregonians responded with enthusiasm, and today, Thomas & Sons is distributed in Oregon, Washington, and California. Thomas & Sons isn’t done experimenting. Last year they released a fernet, using a recipe that took them two years to develop. It contains about 30 botanicals, including many inspired by their Northwest surroundings like birch, Douglas fir, and hops, as well as more traditional ingredients like eucalyptus and gentian. The result is earthy, woodsy, and fresh, the kind of thing that would be right at home tucked into a hiking backpack yet still stand out in craft cocktails. It’s now one of their best-selling products. “Portland has been pretty hungry for it,” says Nagler. Most recently, they launched a gin—and predictably, it’s not a London dry. Soft, floral, and botanical, Townshend’s Gin includes jasmine green tea, chamomile, lavender, and a gentle suggestion of juniper, placing it squarely in the American gin category. According to O’Malley, Thomas & Sons has been very intentional about choosing to make only products that would showcase the qualities that make their spirits unique. “We could have done a vodka, but it was important to us and our values to not do something generic,” he says. While unique products like the fernet are great for getting industry buzz, they have found the gin to be helpful introducing the brand to more mainstream customers. “Being out in the world selling liqueurs and amari is great and all,” laughs Nollenberger, “but everybody knows what gin is.” Up next, Thomas & Sons is planning to release a tasting-room exclusive series called “Idle Hands,” which will include an aquavit, a genepi, and a rum. Ultimately, their goal is to design a different product for each of the 11 kombucha flavors they distill. In the world of craft distilling, it can sometimes feel like there’s nothing new under the sun, yet Thomas & Sons has managed to cover truly fresh ground. According to Nollenberger, there’s only one other kombucha-based distillery in the country, and they got started with help from Thomas & Sons. For a traditional distiller, there’s not much to recognize in Thomas & Sons’ process. There’s no grain, no mashing, no barrels, and a still that looks like something from a nearby neighboring dimension. Thanks to a project that began as a problem, Thomas & Sons has managed to invent an entirely new model for distillery operations—quirks and all.

Thomas & Sons Distillery is located in Portland, OR. For more info visit www.thomasandsonsdistillery.com or call (503) 477-6137.

WWW.ARTISANSPIRITMAG.COM

grain life WRITTEN BY BRETT GLICK

The plants that produce the grain used in many spirits accomplish a remarkable feat in their short growing seasons. For example, given good conditions, each corn seed planted can produce up to 600 kernels from one ear of corn at harvestâ&#x20AC;&#x201D;that is a 600 percent increase in the amount of delicious, nutrient-dense kernels produced in as little as six months. Corn is the most common grain used for spirits in America, and it can also produce the most volume per acre. A corn plant starts out its life in early spring. Farmers wait until the soil in a field becomes warm enough to plant the seed so it is able to germinate. At this point, from what appears to be a lifeless kernel, a small root will venture out and begin to absorb nutrients and moisture. Shortly after the root begins growing, a leaf, rolled and looking like a spike, will begin its journey out of the soil and toward the sun. Regardless of how the seed is positioned in the ground the root will always grow deeper into the soil and the first leaf will always work its way out of the soil to begin collecting sunlight. In suitable circumstances its roots will take hold within 10 days and the leaf starts to absorb sunlight. The plant is then in a race to grow and produce as much grain as possible in the limited time it is given. Underground a fibrous mass of roots spreads out in all directions in search of moisture and nutrients while supporting and anchoring the plantâ&#x20AC;&#x2122;s growth above ground. Once the first tightly rolled leaf unfurls the plant begins growing upward. From the base of the unfurled leaf another rolled leaf will be pushed upward by the growing stalk. This process of a new leaf and stalk elongating from the most recent leaf will continue until the plant has reached its mature height in 10 weeks. At this point the plant will switch from putting energy it has collected toward vegetative growth and direct that energy toward creating more seeds (grains). Corn does this, like all plants, by flowering. A unique characteristic of the corn plant is that the flower is divided, which means that the pollen-producing stamen is in a separate location on the plant from the pollen-receiving pistil. At the very top of the corn plant above all the leaves is the stamen, known as the tassel, which produces all the pollen. If you have ever seen a mature corn plant the starkly yellow portion on the top is the tassel. The tassel will produce an overabundance of pollen and allow it to be blown away by the wind so that it may by chance fall on a pistil. The ear of the corn plant contains the pistil. When pollination time arrives the tassel will release its pollen over a weeklong period and the ear will grow long translucent tubes called silk to catch pollen that is passing on the wind. Once a speck of WWW.ART ISANSP IRITMAG.COM â&#x20AC;

THE GLENCAIRN GLASS COLLECTION ÂŽ

N O W AVA I L A B L E A T B O E L T E R

VISIT US! tap.beercup.com/artisan

(800) BEER CUP | BEERCUP. COM

82â&#x20AC;

pollen has landed on the tip of the silk it will travel all the way down the tube and fertilize a kernel of grain. Pollination will finish two weeks after the plant has reached its mature height. With all of its kernels fertilized the plant works to add mass to them. At the beginning, they will be size of a pen tip; at maturity, the kernel will be the size of a fingernail. During kernel development the plant continues to collect nutrients from the soil and energy from the sun. After another 10 weeks the kernels will begin reaching maturity. At this time the kernels will start to lose moisture and the plant will turn brown and dry as fall approaches. Once the kernels reach 15 percent moisture a farmer will harvest the plant, removing the kernels and placing them in storage to be used at a later date. The other most common grains used in spirits are barley, wheat, and rye, which often start their lives in the fall of the year. These three grains are used in different ways and accomplish different things when distilling, but their life cycles are very similar to each other. Barley, wheat, and rye are most often planted in the fall in a field where a spring planted crop, such as corn or soybeans, has already been harvested. The seed will then sprout quickly in the warm soil. Like corn, a tender start of a fibrous root system will emerge first, quickly followed by a sprouting leaf that works its way towards the sun. In the limited growing season provided by the fall, above ground a small plant roughly the size of your palm and four to six inches tall will develop. Farmers aspire to plant barley, wheat, and rye after the first frosty night, but six weeks before continuously freezing nights which cause plants to enter into hibernation. Once hibernation-inducing weather arrives, the vegetative growth will stop until spring. However, below ground the plants develop a large fibrous root system that grows throughout the winter. By the time spring comes, the roots may be 30 inches deep, even though above ground the plant may still only be six inches tall. These roots will provide the wheat plant with the necessary nutrients and moisture to grow at a feverish pace once warm weather returns in the spring. Initially the plants will develop more leaves so as to collect more sunlight. Once an adequate amount of energy has been collected, plants will shift to growing tall erect stalks. There will be roughly four weeks from the time plants exit hibernation until they begin growing the grain-bearing stalks. Each plant originating from a single seed will produce between two and six stalks, depending on how good the growing conditions are. The stalks of the barley, wheat, or rye plants will grow to their final height of roughly 36 inches in four to six weeks. At the top of the stalks will be a leaf called the flag leaf. The stalk grows beyond the leaf where the grain head is developed. The flag leaf is important for determining the final yield of the plant. If it is lost to hail, insects or disease WWW.ARTISANSPIRITMAG.COM

the plant will yield 30 percent less grain. Once the head has fully emerged from the stalk it will enlarge and open up the location of future kernels. In each of these locations a flower is located with both the stamen to produce pollen and the pistil to receive it. Pollination is achieved by wind blowing pollen from one grain head to another. Barley, wheat, and rye plants then begin the process of developing all the kernels on their heads, which takes about six weeks. Through this process the plants will mature from a vibrant green color to a bright yellow or amber color. Before being harvested and stored, the kernels will need to dry down to 13 percent moisture. When possible it is common for farmers to plant another crop, such as soybeans, in the harvested fields so that they may grow in those fields for the remainder of the summer. This allows farmers to harvest two crops from one field in a single calendar year. Throughout the plantâ&#x20AC;&#x2122;s lifecycle farmers will work to help it produce as much high quality grain as possible. These efforts begin before the seed is planted and continue after it has been harvested. Before the seed is planted fertilizer is placed where the plant will use it most efficiently and the soil will be prepared to help the seed germinate quickly. While the plant is growing, the objective is to eliminate competition from weeds and minimize diseases from damaging the plant or its grains. Weeds are eliminated by mechanical processes or by applying herbicides. Minimizing diseases is accomplished by spraying the plants with fungicides so that diseases never enter where they could diminish the plant or grain quality. Herbicides and fungicides are only applied by licensed professionals following strict EPA guidelines. After harvest the grain is stored in cool dry conditions so that the quality does not diminish. There are many different variations of how corn, barley, wheat, and rye plants are grown. In northern areas it is common for barley, wheat, and rye to be planted in the spring and harvested later that year. The amount of time that plants take to mature will be affected by how much energy they receive from the sun. There are also many different varieties of each type of grain. The most common varieties from all of these grains have been chosen and bred to produce an abundance of the kind of kernels that the markets demand. The other varieties of these grains have a specific useâ&#x20AC;&#x201D;for example popcorn is produced to be used in a specialized way. Any of these variations of the grains can be used to produce excellent spirits. The distiller will have to decide which one is best suited for what they are attempting to produce, and what best represents the spirit of their business.

Brett Glick is a farmer and business owner from Columbus, Indiana. He and his brother, Trevor, operate their family farm. They also own and operate their private seed company, L&M Glick Seed, which sells corn, soybean, and wheat seed directly to customers and to the wholesale market WWW.ARTISANSPIRITMAG.COM â&#x20AC;

MALICIOUS METHANOL WRITTEN BY PAUL HUGHES, PH.D.

TO REDUCE THE RISK OF METHANOLRELATED TOXICITY, IT IS IMPORTANT TO KNOW WHERE IT COMES FROM.

percent (v/v) is also s any chemist will know, the term “alcohol” is technically equivalent to 3500 ml/hl. ambiguous, representing a homologous series of compounds These units are based on a that bear the –OH functional group. Of course, for spirits producers ratio of volumes, but sometimes the main focus is on ethanol, so we tend to use the word alcohol the quantity of methanol is as a direct synonym for ethanol. However other alcohols are very expressed by weight, such as g/ common, if not ubiquitous, in spirits, being derived variously lpa. As the density of methanol from raw materials and during fermentation. is 0.792 g/ml, a concentration Ethanol bears two carbon atoms, C2 H5 OH, and in terms of say, 1 ml/lpa ≃ 0.8 g/lpa. It is of human health it is relatively benign. However its smaller therefore essential that the units are relation, methanol (CH3 OH) is altogether a different story. stated unambiguously when quoting Also known as methyl alcohol or wood alcohol, methanol methanol concentrations. For the is infamous for its toxicity. Indeed there seem to be purposes of this article I will generally keep with the units of an increasing number of methanol poisoning cases, with the World ml/lpa. Health Organization (WHO) citing outbreaks across Africa, Europe To reduce the risk of methanol-related toxicity, it is important and Asia with between 20 – 800 victims, and in some cases fatality to know where it comes from. The traditional hardware store rates of over 30 percent. It is not all that easy to spot methanol solvent methylated spirit, or meths, is mainly composed of ethanol toxicity either, having initial symptoms that closely mimic ethanol to which methanol (typically around 5 percent (v/v) or 50 ml/lpa) intoxication. However, the subsequent oxidation of methanol has been added. This is to make the ethanol (or “spirit”) unfit for first to formaldehyde and then to formic acid can have severe human consumption and exempt it from excise duty. Occasionally health consequences. The list of potential symptoms is diverse, though, there are reports of consumption of methylated spirit, either including temporary loss of vision, blindness, unconsciousness, by accident or due to it being used by unscrupulous individuals to headache, weakness, dizziness, breathing difficulties, produce low-cost counterfeit products. This can be immensely damaging abdominal pains, nausea, diarrhea and vomiting. Treatment to a brand. For instance, if someone drinks a product that is ostensibly a of suspected methanol poisoning is by administering either famous global spirit brand and finds themselves in the hospital (or worse) ethanol or a drug known as fomepizole (4-methylpyrazole). after even modest consumption, the brand is at risk, even if it is clear that Both slow or inhibit the conversion of methanol into what was consumed was not the real spirit. By way of example, it is worth oxidized toxic metabolites, allowing methanol to be noting that the Scotch Whisky Association takes the issue of counterfeiting cleared by the liver. very seriously and employ a full-time legal team to chase down potential The concentration of methanol in ethanol (or other cases of counterfeiting and other illegal activities that affect the global Scotch liquids) can be presented with a bewildering array of whisky market. units. For instance in the U.S., the FDA set a limit of However, methanol is also a natural product of fermentation, arising naturally 0.35 percent (v/v), which is equivalent to 3.5 ml/liter from the yeast, fungal or bacterial fermentation of a wide range of substrates, of pure alcohol (lpa), but often the volume of reference including most if not all fruits, as well as potatoes and agave. The main culprit is not a liter but a hectoliter (hl; 100 liters), so 0.35

WWW.ARTISANSPIRITMAG.COM

is pectin, a complex polysaccharide that is found in terrestrial plants. Critically, pectin drink considered (Table 1). bears methyl ester functional groups. Hydrolysis of these methyl ester functions releases The situation in the EU is relatively methanol. This reaction is facilitated by various enzymes such as pectinase, pectin complex, with grape- and fruit-based methyl esterase and more broadly active esterases. Not all micro-organisms, though, spirits having more relaxed limits defined. can generate methanol from pectin. For instance a study on the Brazilian spirit Presumably this is a reflection of the high cachaça found that the required yeast for fermentation, Saccharomyces cerevisiae, pectin levels in the raw materials and the common use of pot stills, which are less effective did not generate any methanol, whilst contaminating yeasts, specifically Pichia at separating methanol from ethanol. A rule-ofspp., generated 5 ml methanol/lpa. Clearly then good hygiene is an important thumb is that it is difficult to completely separate consideration for the management of methanol in final spirit. liquids that have boiling points within 55°F of each It is worth noting that alcoholic beverages are not the only dietary source other in a single-stage distillation, whereas methanol of methanol. Fruit juices, such as orange and grapefruit juices, and drinks (bp 148.5°F) and ethanol (173.1°F) have much sweetened with aspartame, contribute significant levels of methanol to the diet. closer boiling points. For spirits that yield appreciable Canning can also elevate methanol levels, and the consumption of fruits and levels of methanol a specific column, a demethylizer vegetables generally can lead to the consumption of up to 1 ml methanol per is typically employed. This is a packed column, and the day. Smokers will have increased exposure to methanol as it is formed during packing essentially adds additional capacity to improve tobacco combustion. the resolution of methanol from ethanol. An indication So it is clear that we do not want consumers to put themselves at of the volumes of spirits that can be safely consumed (in unnecessary risk of avoidable health issues, such as methanol-related the EPA context) is shown in the third column of Table malaise. But how much is too much? It seems that there is a wide tolerance 1. Based on the assumptions here, the limits set by the range to ingested methanol. As little as 10 ml of pure methanol when U.S. and Vietnamese legislature seem rather sensible, whilst consumed can cause permanent blindness by destruction of the optic the Nigerian limit is perhaps overly stringent from a methanol nerve, while 15 ml is potentially fatal. The median lethal dose though perspective. seems to be around 100 ml (3.4 fl oz or 1 - 2 ml/kg body weight of So we have seen that methanol is a largely undesirable pure methanol). In the U.S., the EPA set maximum acceptable oral component in a distilled spirit. The levels can vary substantially doses for toxic substances, defined as a level that will have minimal dependent on raw materials employed, fermentation hygiene and impacts on health over a lifetime. For methanol the EPA has set this the distilling plant configuration used. The analysis of methanol to be 2 mg/kg body weight/day. in ethanol The measurement of methanol in ethanol is requires relatively best performed using gas chromatographic TABLE 1: sophisticated (GC) analysis, a mature technique that applies analysis, using GC, distillation theory to separate compounds in although there are the vapor phase and then enables detection some other potential after separation. Whilst most if not all largedevelopments in the scale distillers will own GC equipment SAFE VOLUME MAXIMUM METHANOL d pipeline that may lead and have personnel competent to run COUNTRY OF SPIRIT/ML VALUE (G/LPA) to a low-cost sensor and maintain the instrumentation, there Australia/New Zealand 8 50 technology. The hope, are also laboratory subcontracting if not expectation, is that options available to check spirits for 100 Brazil 5a this would give distillers methanol in cases of concern. In better access to methanolour laboratory we are working to EU 2 - 15 b 27 - 200 detection technology and develop a low-cost methanol sensor Mexico 0.3 - 3 c 130 - 1300 help to reduce the incidences for making the monitoring of of methanol toxicity worldwide. methanol in the presence of high Nigeria 0.005 80000 As a consumer, the safest advice ethanol concentrations more with regard to methanol avoidance straightforward for the growing Thailand 0.24 1700 is to know the provenance of what spirits industry. USA 3.5 a 140 you are consuming. The regulatory limits for methanol in drinks depends Vietnam 3 160 on the country. In many Paul Hughes, Ph.D. is assistant professor a countries the legislation Maximum methanol levels defined by volume (v/v), i.e., ml/lpa of food science and technology at Oregon b is straightforward, but in EU levels dependent on spirit classification State University in Corvallis, OR. For c Mexico sets both minimum and maximum methanol levels for tequila Europe the EU legislation more info visit www.oregonstate.edu or call d Based on 2 mg/kg body weight of methanol/day, an average body weight of (541) 737-4595. varies depending on the

examples of

METHANOL LEGISLATION in distilled spirits

80 kg and a spirit of 40% ABV

WWW.ARTISANSPIRITMAG.COM

Romancing REVIEWER the

Wr i t t e n b y M a r g a r e t t Wa t e r b u r y

ou’ve finally done it. After years of planning, countless hours of work, thousands of dollars invested, you’re ready to release your greatest batch of whiskey and you want to tell the world about it. You send out review samples to your favorite spirits websites, blast out a press release, and then … crickets. Or maybe a review surfaces—months later—and the writer leads off with the dreaded, “I couldn’t find out too much about this one …” It doesn’t have to be this way. There are some specific things you can do to help media outlets of all types, large and small, more effectively and accurately cover your business. As the managing editor of The Whiskey Wash, as well as the managing editor of Edible Portland, I’m in contact with drinks brands and their publicists on a regular basis. Along the way, I’ve learned a few things about what works—and what doesn’t—when it comes to working with the media.

Secure YOUR ASSETS

It’s hard to overstate how dramatically the media landscape has changed in the past 20 years. Unfortunately, the days of most publications having a dedicated photographer on staff are behind us. Many of today’s online and small-outlet stories run accompanied by photos taken by the writer (to varying results), or with images supplied by the subject of the story. This is why it’s so important to have high-quality photographs of your products, distillery, and people. While professional photography can be expensive—expect to pay $100 to $300 per image with full rights across all mediums—the results are worth it. Not only will the images look terrific on your website and give you tons of fodder for future social media posts, they will also let you improve the appearance of media coverage of your business. Editors will be delighted to have attractive, high-quality images to work with, and you’ll be happy that readers will see an image of your distillery looking its best, rather than a blurry iPhone photo taken by a person who’s much more comfortable in the world of text. Most media outlets will contact you for photos, but some online outlets will pull product shots directly from your website to accompany news stories or reviews. If you put product photography on your website, make those photos easy to download and reuse in another context—no text overlays, please. Images also shouldn’t be

too small—portrait orientation shots should be at least 350 pixels wide, and landscape orientation shots should be at least 700 pixels wide. For other kinds of photos, like action shots, pictures of your distillery process, and pictures of your people, editors will contact you to request images that have appropriate rights and to obtain captions and other information. If you have an image library, I suggest keeping it in Dropbox or another file sharing platform. That way it’s simple and easy to share with a journalist or editor, and they’re free to choose the images that best fit their story. Don’t forget to include any relevant captioning and image credit information in the photo filename, or in a separate text document in the file.

Polish YOUR PRESS RELEASES

The much-maligned press release can be a valuable tool when done right. For writers and editors, a good press release is complete, accurate, and helpful, with as much information provided right up front as possible. “You can’t give me too much information,” says Christopher Null, editor in chief at Drinkhacker. Nino Marchetti, editor in chief at The Whiskey Wash, echoes the sentiment. “A good press release makes it so a journalist need not pick up the phone or send an email for more information unless it is absolutely necessary,” he says. Katie Burnett, a spirits publicist and former marketer at Imbibe Magazine, tells her clients to put themselves in the writer’s position. “Leave no questions unturned. Does it answer all the basic questions? Who are you? What are you? What makes your spirit unique? Where does it fit in the category you’re in? Is there a trend happening here?” Making it easy for writers to get in touch is also essential. “All you need to do is put a phone number or email address at the bottom of the press release, and that solves so many problems,” says Null. Remember that writers and editors (at least in theory) are people who pay attention to the nuances of language. Press releases tend to have a somewhat breathless quality about them—everything is “innovative,” “disruptive,” “best-in-class,” “award-winning,” and “outstanding”—and when writers and editors receive dozens of press releases a week, they become inured to that kind of hyperbolic language. Do everything you can to make your press release stand WWW.ARTISANSPIRITMAG.COM

out, but try not to strain the limits of credulity or make writers cringe with overblown prose. When composing press releases, also consider how your end reader will use and store them. Clay Whittaker, a writer who covers spirits for magazines like Esquire and Men’s Journal, recommends optimizing your email press releases with relevant keywords, since journalists receive a lot of communications and finding past messages can be a challenge. “All the information you send me is searchable,” says Whittaker, “so if the Packers win the Super Bowl next year and I want to do a story on Wisconsin whiskeys, I’m not going to remember getting your email necessarily, but I’ll definitely find it if you say ‘Wisconsin’ in the email.”

Rally REVIEWERS

Not much feels better than reading a glowing review of the product you slaved over, but there are a few things to know before leaping headfirst into the scrum. First, be sure you’re ready to send out review samples. Does your product taste the way you want it to? Can consumers in more than one or two states buy it? Is your website optimized to give a flush of new visitors the information they’re looking for? If the answer to those questions is yes, then consider your timing. In publishing—especially online publishing—being among the first to cover something is a big deal. This holds special significance for reviews. If you’re planning to launch a product in the near future, distribute any review samples a few weeks beforehand, and be sure to include information about when the product will hit shelves. “I’m much more likely to prioritize a product that’s about to hit shelves than something that has been out for a day or two,” says Whittaker. “If someone else’s whiskey arrived WWW.ARTISANSPIRITMAG.COM

the same day and comes out the following week, they’re going to get written up first.” Next, make a list of the outlets you want to send reviews to. While seeing your product reviewed in a major national magazine may be gratifying to the ego, it’s also unlikely—and even if it were to happen, if you are only distributed in Ohio and Indiana, it won’t do you any good. Burnett says picking the right outlets goes back to your goals for media coverage. “Do clients want to see their product on paper, or do they want click-through ability that will drive traffic to their website?” she says. “The highest-profile place might not be where you need to start. Having a local groundswell of press is the best way to build a national campaign.” If you’re intimidated by the cost of sending dozens of full-sized bottles around the country, know that it’s perfectly acceptable to send a 50ml or 100ml sample bottle. However, if you send a small bottle, be sure to make photography for your full-sized bottles easily available, or your review may end up accompanied by a photo of a tiny bottle decorated with nothing but an illegible sharpie scrawl—not the image you want consumers to associate with your product. When sending review samples, include a onepager. Always include basic information like the product category, proof, suggested retail pricing, and distribution, but it’s good to go beyond that, too. Reviewers want to know the nitty-gritty details that you might not tell a customer who walks into your tasting room, such as the mash bill, botanical program, or the type of barrel it was aged in. They’re also constantly looking for ways to add narrative to their reviews. Is your product part of a series? Does it represent a culmination of some effort—your shift to purchasing local grain, for instance, or the first product released under a new head distiller? If you don’t share that information,

Checklist

FOR SENDING REVIEW SAMPLES

✓✓Does your product taste good? Are you proud of it?

✓✓Can it be purchased online, or is it widely distributed in many states?

✓✓Is product information easy to find on your website? Is it accurate?

✓✓Do you have a sharable, high-resolution photograph of your product easily accessible for press?

✓✓Have you written

a one-pager about your product? If so, is it complete and accurate, and does it contain your contact information and access or directions to high-resolution photographs?

✓✓Are you, or another

representative from your company, available for interviews and follow-up questions? 87

they may not discover it, and the review will be weaker. Another way to make your review sample stand out is to give it a custom touch. “You don’t have to go allout and get a velvet-lined box with gold flakes,” says Rob Theakston, editor at large at Drinkhacker. “It can be a little thing, like a handwritten note that says, ‘Hope you dig! If not, we’re still cool.’ Something to let the reviewer know this isn’t just an assembly line of samples.” Burnett also says customization is key. “I never like to blind send people anything,” she says. And several reviewers I’ve spoken to report receiving small samples of not-yet-released or in-progress products, not to review, but to provide feedback—a gesture that goes a long way in building goodwill and solid relationships, a key to long-term success with media. Finally, know that not all media outlets that receive samples will publish a review. Some choose not to run negative reviews, so if they didn’t care for your product it may never see the light of publication. Others are simply grappling with an onslaught of review samples, and yours may not be at the top of the list. And still others may rarely publish reviews at all, and confine their reviews to major international brands that everybody can find at their local liquor store. Don’t take it personally.

TELL IT WITH Tact

No matter how great your website and press releases are, at some point, a journalist will want to actually talk to you. This is a great thing! It gives you an opportunity to tell your company’s story and put a human face on your business. Before the interview, think about what messages you most want to communicate, and how you want to communicate them. Then, during the interview, if you aren’t asked about those messages directly, volunteer them—the end of the interview is usually a good time to add any last thoughts. Even if a writer is working on a story related to one small part of your business,

you never know what they may write about in the future. Knowing that you’ve got a Jamaican-style rum in the works just might be that last push they need to pitch that high-ester rum story they’ve been thinking about for the past month. Remember that most spirits journalists are not out to “gotcha” you—they’re probably excited about your product, which is why they’re writing the story in the first place. However, part of journalism is a willingness to ask probing questions. Anticipate this, and think about what you’ll say if an interviewer asks you a question you aren’t excited—or able—to answer, like, “Do you source any of your products? From who?” The key to answering tough questions is to tell the truth; nothing rubs a writer the wrong way quite like outright falsehoods (“Yes, of course, we make our 95 percent rye/5 percent malted barley five-year-old rye whiskey in-house, in the brand-new distillery we finished constructing last month”). It’s OK to say you can’t disclose some proprietary component of your process, but don’t lie, because it could come back to bite you. Finally, remember this: Nobody becomes a spirits writer because they don’t like spirits. At the end of the day, the people behind the scenes of your favorite spirits blogs, magazines, and websites are excited to learn more about your company and your products, and they are rooting for you to make the best possible products you can. While working with the media can seem daunting at first, being accessible and transparent can go a long way in building strong, long-term, mutually beneficial relationships with writers and editors. Now, go forth and tell your company’s story!

Margarett Waterbury is the managing editor of The Whiskey Wash and Edible Portland, and regularly contributes to other publications about food, drink, and agriculture. She was named the 2017 Alan Lodge Young Drinks Writer of the Year by Spirits Business Magazine. www.margarettwaterbury.com

LOGGERHEAD DECO, INC. 1640 LA DAWN DR. PORTAGE, WI 53901 630.206.3747 www.loggerheaddeco.com info@loggerheaddeco.com

WWW.ARTISANSPIRITMAG.COM

rado

Montanya Distillers of Crested Butte, Colo

? M U R Y H W DO RA LO CO E, TT BU D TE ES CR OF RS LE IL MONTANYA DIST

CARRIE DOW WRITTEN & PHOTOGRAPHED BY

hen the idea of opening a distillery occurred to Montanya Distillers founder and distiller Karen Hoskin, there was no question what spirit she would make. “I’ve been a rum fanatic for 27 years,” she laughs. Hoskin’s love of rum began as a young traveler in the 1980s, and like most people that age, she spent occasional evenings drinking with friends. “I had my first real rum in India in 1988,” she says. “This rum, called Old Monk, was a vestige of the British Raj Empire, an Old Navy style. It’s not the most fabulous rum, but it had some interesting qualities. That was the beginning.” As the idea of her rum distillery took shape, she made a fateful trip to Guatemala in April 2008 and hiked the highlands of Quetzaltenango to see where Ron Zacapa rums are aged. “Ron Zacapa takes their barrels up 7,000 feet,” says Hoskin recalling that journey. “I could understand that mountain water was good. But it was really that mountain tradition that cemented my philosophy that there was a huge benefit to rum being distilled and aged at elevation.” Founding Montanya in the mountains of Silverton, CO in 2008, Hoskin then moved the distillery to Crested Butte in 2011. Crested Butte’s elevation is 8,900 feet, and Hoskins

WWW.ARTISANSPIRITMAG.COM

feels the lower temperatures and oxygen levels have a greater effect on the rum inside the barrels. Unfortunately, others she talked to about distilling rum weren’t interested. “People were so convinced it wasn’t gonna’ work,” laughs the affable Hoskin. “Rum in Colorado? That’s never gonna fly!” But for Hoskin, rum just makes sense—dollars and cents. “Rum is ascending in the marketplace, especially good craft rums which are growing 30 percent,” she tells. Since opening the distillery, Hoskin says they have experienced double digit growth every year. However, with so much competition, especially from large corporate distilleries, how can Montanya compete? “Because we are very serious about rum,” she says. “There are quite a few companies making rum, but it’s usually on their way to a whiskey or in some way related to having a cash flow product. I wish I had a million dollars for every distiller who said to me, ‘Rum is much harder to make than I thought.’ They think it’s gonna’ be the easy in-between product between when they start their company and when they release their whiskey in year two. They really can’t compete with what we’re doing.”

There are only four ingredients in her award-winning rums—water, sugarcane, yeast and a touch of Rocky Mountain honey. The rum is aged in Colorado whiskey barrels from Laws Whiskey House of Denver. There are only three products: Platino (platinum), a white rum that is aged one year and then filtered by coconut husk carbon filtration to remove the color; Oro (gold), which is also aged for one year in fresh wet whiskey barrels; and Montanya’s premium rum, Exclusiva, is aged for a total of three years—two and half years in whiskey barrels and then the last six months in French oak barrels that previously held cabernet sauvignon and port from Sutcliffe Vineyards in Southwestern Colorado. Hoskin adds that she does not use the solera method at Montanya, a process where the spirit in the barrels is replaced with newer batches as it evaporates. “I think one of the challenges in the rum category is that is it not as regulated as the whiskey industry,” tells Hoskin. “Historically if you bought a bottle of rum, let’s say for example Ron Zapaca 23, it indicates that there is 23-year-old rum in that bottle and there is, but for every bit of rum that evaporates from the barrel, they add new, younger rum to it. Most people see that number, and if you see that on a Scotch, that would mean something. That’s not really true in the rum industry.” Hoskin ensures that her most vital ingredients, water and sugarcane, are the best she can obtain. The water comes from a mountain aquifer 350 feet below their aging and bottling warehouse just outside of town. “Water is essential to any spirit because it’s 60 percent of what’s in the bottle,” she points out. “To be able to know that the water coming out of there has already done its natural filtration through the ground makes it so much better than using surface water. With surface water, we would have issues with mineralization and have to go through layers of filtration.”

The sugarcane turned out to be more difficult to find than the water. She turned down organic sugarcane because of the difficulties of shipping it from South America. “I decided to go with Hawaiian sugarcane. However, we had to buy it from the commodity market. I wanted to certify our sugarcane was American-grown, but [the company] wouldn’t do that, because once the sugar enters the commodity market, they could no longer commit to where the cane was coming from. That was a sad heads up for me.” Then fate intervened. “About four years ago a couple walked into Montanya. One of our staff members knew I was stressing out about the process of finding a new sugarcane supplier, so she mentioned it to the couple. They said, ‘We’re sugar growers in Louisiana.’ They took my business card back to the Lula Sugar Mill Co-op, a group of families that are growing sugarcane in a 50-square-mile region of Louisiana. They gave my card to the manager and he reached out to me. Now we’re all best friends. They come out here with their families and ski. We went out there during harvest. So we were able to more than certify that it was American-grown.” The idea of knowing where her ingredients come from and having a personal connection to the product permeates every aspect of the company. “I often use the words ‘Human Scale,’” tells Hoskin. “Every step of our process is happening with a human being attached. Nothing is left up to a column or a computer to decide. We’re measuring our own alcohols by looking at a thermometer. We’re measuring the ABV by looking at a hydrometer. We’re making those types of cuts—decisions—ourselves.”

Montanya Distillers is located in Crested Butte, CO. For more information visit www.montanyarum.com or call (970) 799-3206.

WWW.ARTISANSPIRITMAG.COM

ach spirit that eventually makes it to market has its own mountains to climb, obstacles to overcome, and story to tell. Shay de Jaray, head distiller and owner of Deep Cove Brewers and Distillers in North Vancouver, British Columbia, knows a bit about about facing a daunting challenge. His beverage journey began in Medford, Oregon, well known for its wine industry, but no one was paying much attention to an untapped resource—Bartlett pears. “There were all these awesome pears just hanging there waiting for me,” de Jaray notes. Through his vision the pears made their transition into cider, and then a thought dawned on de Jaray: Why not make a brandy with the pear cider? The brandy was distilled, barreled in fresh pinot noir barrels and left to rest. At this point de Jaray took the next step on his personal journey, traveling to Vancouver, BC to found Deep Cove Brewers and Distillers—a micro-craft distillery and brewery that would produce beers, ciders, vodka, gin, and akvavit. The pear brandy came along for the ride and settled in its new home in the back rooms of Deep Cove. Three barrels alone, and almost forgotten. As Deep Cove developed from concept to reality the time came to officially establish and license the business as a BC Craft Distillery. However, in order to receive the BC craft license, along with the accompanying 100 percent state spirits tax reduction, all products must be crafted from 100 percent BC ingredients and fermented on-premise. Even a single product created from non-BC ingredients w o u l d invalidate t h e license— and that pear brandy didn’t qualify. De Jaray was honest with the BC Spirits Authority about the existence of the pear brandy (along with two other small batch products) as they worked on licensing. He requested that the products be grandfathered in, but the regulators would not allow it. The product had to leave the premises or be destroyed. “We either had to give it away or get rid of it,” explains de Jaray. “The product was so good—it was unacceptable for them to force this stuff down the drain.” WWW.ARTISANSPIRITMAG.COM

BC Spirit Rescue What happened when three barrels of pear brandy threatened to invalidate a craft distillery license. WRITTEN BY AMBER G. CHRISTENSEN-SMITH PHOTOS PROVIDED BY DEEP COVE BREWERS AND DISTILLERS

Deep Cove could not bottle or sell the product, nor could any other distillery in BC with the same craft license. However, BC has one other licensing option predating the introduction of the craft license which has no fermentation or ingredient limitation. What was needed was a rescue mission. Luckily, members of the spirits industry do not often sit idle when their peers are in need. Charles Tremewen, distiller and cofounder of Long Table Distillery in Vancouver, BC just happened to operate with a non-craft license. Long Table also held the distinction of being Vancouver’s first micro-distillery, so Tremewen seemed a natural choice to approach for a hail mary rescue operation. Tremewen knew firsthand the hard work and effort it takes to make an aged spirit. He jumped at the chance to help a fellow distiller and save a five-year brandy. “We’re just a couple guys here trying to do our thing,” de Jaray says of the situation. “What has come from this is nothing but support and an awesome marketing piece … and not just Charles and I get to enjoy the product.” In fact, the release was very well attended. “It was a very successful launch—there was a lineup around the door prior to opening,” says Tremewen. “Brandies are more accepted in a European market, but people see the value in this. It was worth the rescue in our opinion.” Both de Jaray and Tremewen enjoyed cooperating for the pear brandy launch, and they became friends through the partnership. However, Tremewen is not content. The rescue mission highlights an ongoing conflict within the BC spirits world. Tremewen notes that the two BC licenses are not created equal. It’s the markup that hits those “non-craft” distilleries hard. While Tremewen uses 100 percent Canadian ingredients, not all are from

BC. Long Table wanted to maintain the freedom to create any spirit they wanted, and utilize the traditional gin process of sourcing GNS. This choice means Long Table does not qualify for the craft license, which makes their products more expensive, and constricts their margins. “We are just livid because we’ve lost a lot of great revenue just because we want to make a great gin,” Tremewen shares. He continues to explain that not using a neutral base may affect the consistency of the spirit—something consumers and bartenders rely on. “Consumers do not tolerate change in a product they like.” Currently Tremewen and other small non-craft distillers are working to get the government to see that they would be considered craft distillers in other provinces or areas of the world. He notes that it is important to keep the dialogue going and to work towards a fair situation for small producers. “They’ve created a disparity among small producers,” Tremewen says. “We are working with the ministry to have them recognize that this policy is unfair for producers within the same production limits.” Tremewen hopes to make legislation fair for all small batch distilleries in BC. He knows it will be an uphill fight, though: “We’re definitely taxed and there’s definitely a money opportunity for the government. They are not going to give it up easily.” As for the collaboration between Deep Cove and Long Table, the brandy has been a success, friendships were formed, and new ideas surfaced. Tremewen and de Jaray plan to work together again to continue reaping the benefits of an industry united.

Deep Cove Brewers and Distillers is located in North Vancouver, BC Canada. For more information visit www.deepcovecraft.com or call (604) 770-1136. Long Table Distillery is located in Vancouver, BC Canada. For more information visit www.longtabledistillery.com or call (604) 266-0177.

Family-owned & operated whiskey barrel cooperage & stave manufacturer

OUR

FAMILY TREE

MISSOURI WHITE OAK www.barrel53cooperage.com 92

660.456.7610 WWW.ARTISANSPIRITMAG.COM

R O T I S I V Y R E L L I T DIS E C N E I R E P EX PART 2L

DESIGNIN

RIEN E P X E R UME

ONS

RY C E L L I T S I G THE D

NITT TIM K Y B N ITTE

Visitors aren’t guests—they’re customers. A properly designed experience should build loyalty and sell bottles. Don’t just wing it, design it for maximum return.

A consumer visit is your greatest opportunity to communicate your brand identity and build customer loyalty. But achieving business value requires thoughtfully designing an engaging and compelling experience. While a distillery visit might look like a hybrid between having guests into your home and a factory tour, an experience isn’t either of those. Rather, an experience is a series of engaging and educational moments which tells your brand story and builds to a conclusion which encourages the participants to take action.

EXPERIENCE IS THE NEW MARKETING “Experiential Marketing” runs under a slew of names, but the basic premise behind them is the same: When people deeply engage in entertaining sensory and educational experiences with your brand, they are more likely to become customers and brand enthusiasts. A quality experience is engineered—so much so that there is an entire industry devoted to experience design. One of the larger distilleries even outsources full management of their visitor program, not to a guest services company, but to an experience design firm. Since a visitor experience is an element of your marketing strategy, before you can develop the experience itself you must have a fully developed brand identity and flavor messages for all your products. You’re designing the answer to the question, “How can consumers experience my brand?”

THE ELEMENTS OF AN EXPERIENCE To be fully effective an experience must temporarily take consumers out of their daily lives and transport them wholly into an exotic domain. Unlike at any other time or in any other setting, during a visit you have complete control over every aspect, from the environment to the timing to the activities and message. But before you can exert that control you must determine what elements the

WWW.ARTISANSPIRITMAG.COM

experience should have and how it should unfold. An experience consists of five elements: Sensation + Action + Location + Education + Story. The key to each element is uniqueness. What can someone see/ smell/hear/touch/taste and do at your distillery that they can’t do elsewhere? What’s special about where your distillery is— geographically, historically and locally? What can you communicate that’s different than any other distillery and how can you communicate differently? And finally, how does all that uniqueness reinforce your brand’s story?

SENSORY ENGAGEMENT Humans are sensory creatures always seeking new and novel sensations. Physical sensations also engage emotions and solidify memories making them a key to long-term engagement. A distillery environment is a sensory wonderland. Look for sensory opportunities that are outside of visitors’ daily experiences and, preferably, unique to you. Some basic ideas:

»»Look high up at a tall column still or out across a field of grain. »»Smell malting, fermentation, distillation or a maturation warehouse.

»»Hear the pounding of a mill or a bung being hammered in. »»Hold a freshly filled bottle or feel the heat coming off a still. »»Taste heirloom grains, botanicals for gin, limestone water or new spirit.

It’s valuable to tell visitors when to notice a sensation. For example, have them place their hands over a bubbling fermentation to feel the heat rising from it or smell the air next to a still and explain how far along the run is by naming the specific aromas. Also consider the negative impact the environment can have. Can visitors see wrappers from lunch lying about or spiderwebs in the corners? Are there cleaning products, cigarette smoke or scented candles which might mask the aromas of your spirits? Can employees on break be heard by visitors?

visitors and production separated by an arm’s length if not a wall of glass. (But for the same reason that big boys are so hesitant, be sure to consider safety with any visitor activity.)

THE AUTHENTIC HISTORY OF WHERE YOU ARE

Across all distilleries, the sensations and actions will tend to be more similar than different. But what can strongly set you apart is your location and your history. Tourism today is shifting away from the artificiality of theme parks and resort hotels and toward the authenticity and history While finding sensory engagement in a distillery is easy, activities found in specific geographic areas. People are passing on 5-star are harder. Activities transform an experience from passive to hotel restaurants in favor of $5 tacos from just the right food active. An explanatory tour (“And over here we have ...”) is fairly truck on just the right street in just the right city. The KY Bourbon passive. Even more passive would be sitting watching a video; Trail® program (evidenced even by just its name) provides a prime there’s absolutely no reason to put visitors through one of those. example of this change. Consider what you can let visitors do. As weird as it sounds, Your location has a story. How that story intersects with your most of your visitors spend their lives so removed from company’s history and brand identity will be unique. But it’s crafting anything that they’ll likely be delighted by the important to keep your story authentic. Don’t fake a story YOUR opportunity to participate in the work of your distillery. BRAND & about your grandpa’s pre-Prohibition moonshine recipe. PRODUCTS Can visitors: Consumers are wise to such falsehoods.

EXPERIENCE IS A VERB

»»Press a button or throw a switch to start or stop a process?

»»Check

YOUR SPIRIT CATEGORY/CATEGORIES

proof on a still run or during batching?

»»Hammer a bung in or pop one out? »»Make a log entry? This is a huge advantage craft distilleries have over the corporateowned big boys who tend to keep

DISTILLED SPIRITS IN GENERAL

BEVERAGE ALCOHOL

THE EDUCATION PYRAMID Understanding what makes your brands and products unique requires a foundation of knowledge. Think of education as a pyramid, like the one seen on the left. Getting visitors to the top requires starting at the bottom. This is

WWW.ARTISANSPIRITMAG.COM

sometimes called “learning from first principles.” Be sure to touch on production, regulation, and history of your spirit categories. For example, if you produce a genever-style spirit infused with wild-harvest botanicals, your structure might be: yeast ferment sugars into alcohol if the sugar comes from grains, that’s beer repeated distillation makes spirit infusing the spirit with juniper makes it gin optional blending with neutral spirit (Oude, Jonge, Korenwijn), optional barrel maturation your wild-harvest botanicals and exclusive recipe makes your product unique. Use the same structure for telling the unique stories of your location and the history of your company, including anyone involved from days gone by to today.

→

THE TASTING IS THE CLOSE As a distillery, your business is to sell spirits. Every element of a visitor experience builds up to the tasting of your products. Part 1 of this series covers how to lead a tasting, but in brief, your tasting should reinforce your unique brand message and be the climax of both your story and the visitor experience.

ADDITIONAL CONSIDERATIONS Remember that the experience doesn’t start and end at your doors—visitors will need assistance to find you and plan their visit. Also, gathering email addresses allows you to maintain contact after the visitors depart. Distillery experiences are marketing expenses to be sure, but

that doesn’t mean they should always be free—participants might associate more enjoyability with an associated expense. Finally, not all visitors are equal: trade (distributors, reps, bartenders, liquor store owners, etc.) and enthusiast groups will need less foundation and more details; VIPs (business and community leaders, politicians) will often want exclusive experiences over education; and barrel selection groups will certainly need something different. Visitor experiences are a tool for your field reps, too, so be sure to maintain communication about their group's needs and desired outcomes.

DELIVERING EXPERIENCES & CONFIRMING VALUE Delivery of an experience requires a guide. The next part in this series will cover staff training, and then in part 4 we’ll look at metrics and analysis for your visitor program.

SUMMARY The keys to making consumer visits a success for your business are:

»»Engage your visitors uniquely. »»Tell a unique, compelling story. »»Reinforce your unique brand message. »»Close with your goals: a guided tasting which leads to bottle sales and social media relationships.

Tim Knittel is a bourbon educator, writer and event specialist in Lexington, Kentucky. He formerly managed the culinary and VIP hospitality programs for the Woodford Reserve Distillery. He now runs Distilled Living which provides private bourbon education, brand representation and distillery consulting services. He holds the title Executive Bourbon Steward through the Distilled Spirits Epicenter.

WWW.ARTISANSPIRITMAG.COM

SNAKE BILE WINE

W R I T T E N B Y H A R RY H A L L E R I L L U S T R AT E D B Y F R A N C E S C A C O S A N T I

or every gin and tonic or whiskey

sour, there is always something a bit more unique in the world of spirits. Or in the case of this edition’s installment of “drinks from around the world series,” something downright bizarre. While we can’t bring ourselves to recommend actually trying this one, for health and ethical reasons, we can enjoy sharing some interesting cultural traditions from across the globe.

WWW.ARTISANSPIRITMAG.COM

Although you won't find it in any bars or restaurants, snake bile wine is far more commonplace than you'd expect. Until recently, specialty shops and curbside vendors selling the cocktail could be easily spotted throughout Hong Kong and other Chinese cities. It only has two ingredients: Mao Tai, the most popular liquor in China, and a gall bladder freshly cut from a living cobra. It is said to be an aphrodisiac, which is not all that farfetched. Scientific studies of snake venom have revealed a vast number of uses—from treating high blood pressure to arthritis to cancer—and, from personal experience, having a shot of snake bile wine is transformative. I spent a good five hours in a state I can only describe as feral. If there were a full moon I am sure I would have howled.

DISCLAIMER — PLEASE DO NOT TRY THIS YOURSELF, COBRAS BITE BACK.

SNAKE BILE WINE RECIPE

MAKE THE BEST CHOICE FOR YOUR SPIRIT! THE OBVIOUS CHOICE FOR BEVERAGE FERMENTATION

owered by Lesaffre, one of the world’s largest yeast and yeast derivatives manufacturer, we offer you the highest quality standard of products for spirit manufacturing. Through a dedicated range of active dry yeasts, we deliver innovative solutions to give you the ability to create the spirit you dream about. So, select the right choice from the SafSpirit lineup to create the ideal spirit!

www.fermentis.com

INGREDIENTS Mao Tai Live Cobra Shot Glass Sharp Knife Glove—ideally something thick like a welder's glove

INSTRUCTIONS 1. Put on the glove. Grab the cobra by the head. 2. Take the knife and make a tiny incision near the gallbladder. 3. With your free hand, squeeze the side of the snake until the gallbladder appears. Remove the gallbladder. 4. Place the cobra in a safe container. 5. Squeeze the contents of the gallbladder into the shot glass. 6. Add two parts Mao Tai. 7. Drink immediately.

Harry Haller is an independent consultant focused on working with sugarcane-based distilleries. He can be reached at 00harryhaller@ gmail.com or (310) 933-6430. WWW.ARTISANSPIRITMAG.COM

AQUAVIT W R I T T E N B Y M A R G A R E T T WA T E R B U R Y I L L U S T R A T I O N S B Y L A N E T T E FA U L K I N B E R R Y

verybody loves a good upset—and this year, attendees at the American Craft Spirits Association’s annual convention got one. Among hundreds of entries submitted by the top craft distilleries from around the country, the spirit selected as the best in show wasn’t an aged whiskey or a 50-ingredient amaro: It was an unaged aquavit from Long Road Distillers in Grand Rapids, Michigan. Long Road Distillers opened just two years ago, but their timing was impeccable. While aquavit is still a tiny portion of the American liquor industry, interest is skyrocketing, driven primarily by craft bartenders searching for unique, delicious additions to their cocktails. “Detroit has one of the best cocktail scenes in the country,” says Jon O’Connor, owner and co-founder of Long Road Distillers. “And there’s an aquavit cocktail on the menu at almost every great cocktail bar in Detroit right now.” For creative distillers, few other products offer the same breadth of experimental opportunities that aquavit does—and now may be the category’s time to shine. Originally made and consumed in Scandinavia, aquavit’s signature flavor is caraway, just as gin’s signature flavor is juniper. (O’Connor describes aquavit to unfamiliar consumers as “the Scandinavian cousin to gin.”) But while caraway is mandatory, distillers are free to introduce other botanicals as well. Popular additions include dill (seeds as well as the fresh herb), anise, pepper, cumin, and orange peel. In Europe, the choice of botanicals is sometimes guided by the distiller’s location; different countries are known for distinct aquavit styles. Swedish aquavits prominently feature the unique savory anise flavor of fennel while aquavits from Denmark often employ dill seed. Most of the European aquavits imported to the United States are unaged, clear spirits, referred to as taffel. These are produced with a neutral base, similar to gin, but aquavit can be made from a range of base spirits, including distillate made from grain, potato (particularly in Norway), or even fruit.

WWW.ARTISANSPIRITMAG.COM

Norwegian-style aquavits are also barrel aged, adding another layer of complexity and more opportunities for experimentation. Linie, a popular Norwegian brand, sells a range of barrel-aged aquavits. Their standard expression is aged in oloroso sherry casks aboard boats that actually sail the open ocean, ostensibly replicating historic shipping routes. Two additional special releases (available in Europe only) are aged in port casks and madeira wine casks. Holiday special releases are also common in Scandinavia, many featuring warm spices like clove and cinnamon and packaged in bottles festooned with seasonal cheer. American aquavit began to grow about 10 years ago. Two distilleries—House Spirits in Portland, Oregon, and 45th Parallel Distillery in New Richmond, Wisconsin— stand out as early pioneers in the category, and both were inspired to develop aquavits after their founders struggled to buy it for their own personal consumption. Christian Krogstad, House Spirits’ coowner and founder, was introduced to aquavit at a young age. “My family is Norwegian,” he says, “and I grew up eating pickled herring and smoked cod roe and drinking aquavit. It’s part of Norwegian culture, especially at Christmastime or on special occasions and celebrations.” In 2006, he noticed that the two major European brands that were typically in the Oregon Market—Linie and Alborg—had suddenly disappeared from shelves. “I was in a little bit of a panic about where I was going to get my aquavit,” Krogstad says. “But then we realized, what the hell, we have a distillery, we can make aquavit.” So he began to experiment, making a few small batches for personal consumption only. “We never intended to bottle it,” says Krogstad, but after pouring a few samples for visiting bartenders and other industry professionals, the feedback was overwhelmingly positive, and Krogstad Aquavit was introduced to the Oregon market in the spring of 2007. Today, it’s the most widely distributed American aquavit, currently on the market in 27 states, and House Spirits is now plotting

an expansion to Scandinavia. Krogstad takes inspiration from Swedish aquavits, which often feature licorice flavors. Instead of licorice, however, they opted to use star anise, giving the spirit a complex, layered flavor and gentle sweetness. House currently sells two different aquavit expressions: Festlig, an unaged aquavit; and Gamle, an aged version of Festlig that spends a year in Oregon pinot noir casks. Just this spring, they’ve launched a third product in the series, a liqueur flavored with dried plums that uses aquavit as the base. In Wisconsin, Mike McCarron was going through similar struggles. As a ski instructor, he lived in Iceland in the early 2000s, where a neighbor introduced him to dill aquavit at a celebratory Easter Smorgasbord. The experience was magical. “We had a fantastic afternoon,” says McCarron, “all kinds of herring and cheese and sausage washed down with aquavit. When I tottered back to my apartment I said to myself, I should do this with my friends and family back home.” The trouble was, when he returned to the United States in 2005, he couldn’t find any dill aquavit in his local liquor stores. In 2011, after losing his job in IT, he decided it was time to change that, so he partnered with nearby 45th Parallel Distillery to produce his aquavit under contract. He knew he wanted dill’s flavor to lead: “There are all kinds of sweet versions of drinks—flavored whiskeys and vodkas and other liqueurs— but the savory side was a wide open space,” he explains. It took them a year to develop their

recipe, which uses an astounding amount of dill: about 300 pounds of fresh, locally grown dill per 1,000 liters of product. “It was probably one of the most difficult things we’ve ever made,” says Paul Werni, owner of 45th Parallel Distillery. “Dry dill did not work. In the winter, we tried importing dill from California, but that didn’t work. We could only use locally harvested dill, and it has to be used within about 24 hours. It goes immediately from harvest to our facility.” Those two early aquavits couldn’t have been more distinct in style—yet both have their charms. For those interested in consuming aquavit the traditional Scandinavian way—ice-cold, sipped straight from small stemmed glasses after a skål, or silent toast—crisp, light-bodied aquavits like Gamle Ode’s dill aquavit are just right. But bartenders appreciate the robust flavor of anise-forward aquavit as well. “I’ll mix the shit out of Krogstad,” says Jacob Grier, founder of Aquavit Week, author, and longtime bartender. “Those anise flavors really shine through in cocktails.” Long Road Distillery’s prize-winning aquavit lives someplace between those two poles. It’s flavored with caraway, dill seed, fresh dill, cumin, and fennel, with just a touch of star anise for a hint of sweetness. Long Road also makes its own base spirit, a neutral distillate produced from 100 percent red winter wheat and distilled on a 500-liter Mueller still equipped with 18 plates. According to O’Connor, that gives their aquavit a soft mouthfeel and distinctive viscosity. “I really love savory food and flavors,” says O’Connor, “so the first time I tasted Linie, I was like, ‘Holy cow, that’s like nothing else I’ve ever tasted. We should do that, and we should do it our way.’” Long Road’s aquavit takes several days to make, and includes in-spirit botanical macerations as well as additional gin basket infusions. After winning at ASCA, they introduced a barrel-aged version that saw time in rye and wheat whiskey barrels. O’Connor says he was surprised at how many of his tasting room guests were familiar with aquavit. “A lot of people have no idea what aquavit is, but many have a connection to it. They have Scandinavian heritage, or their uncle lived overseas, or their parents drank it when they were kids. It’s really growing.” Grier echoes that sentiment. “This will be an interesting year for aquavit,” he says. “There’s a lot of interest, and for the first time, there’s money behind promotions.” He’s referring to a recent effort from major European brands like Linie and Brennevin to expand into the American market, including a major push to target cocktail bars. While some might worry about increasing competition, in such a small category any growth may be good growth. Consumers introduced to one of the international aquavit brands at a bar might be more likely to seek out local craft producers, and bartenders who develop a taste for aquavit tend to be proactive about seeking out new brands. For now, aquavit still offers distillers and drinkers a sense of discovery matched by few other spirits—they simply need to stumble upon it.

100

WWW.ARTISANSPIRITMAG.COM

MAKING IT SOUND AS GOOD AS IT TASTES Noise Reverberation Reduction in a Micro-Distillery Tasting Room

W R I T T E N B Y A N D R E W J O H N S H E E H Y, D A N A U T E N R I ET H , J U L I E H A RT, A N D S C OT T R I S S E R

Noise reverberation in micro-distillery tasting rooms can interfere with speech communication and negatively impact the acoustic quality of live music. Noise reverberation was characterized in a tasting room in Butte, MT by calculated and quantified methods. Sound-absorbing baffles were then installed in an effort to reduce reverberation and improve room acoustics. The overall reverberation time and speech interference level were decreased by a statistically significant margin that corresponded with an increase in overall absorption in the space. Reverberation time decreased from 0.85 seconds to 0.49 seconds on average. As illustrated by a customer survey administered pre- and post-installation, the customer ratings of speech intelligibility and music quality were also improved by a statistically significant margin. Other distilleries or breweries may benefit by applying similar sound reverberation assessment and control methods in spaces where customers frequent.

asting rooms and brewery taprooms are popular social gathering locations in early evenings and weekends. Many of these facilities also function as live music venues. Current design trends in these spaces are open-concept with numerous windows and hardwood or tile flooring. Without carpeting, drapery, and tablecloths that traditionally dampen noise in lounges and bars, modern spaces have generally become more reflective to sound waves which then makes conversation and music less audibly appealing. Noise reverberation is defined as the overall collection of reflected sounds in a room. Sound reflective surfaces increase the time for generated sound waves to decay in a space, resulting in an echo that can interfere with speech communication and create music â&#x20AC;&#x153;blendingâ&#x20AC;? issues. The tasting room for Headframe Spirits has become a social center for uptown Butte, MT. The tasting room is used as a music venue four nights a week and can accommodate over 100 patrons when at capacity. Acoustic problems have been a source of customer complaints to the management and staff since the tasting room opened in 2012. The complaints have included speech communication interferences and background noise that detracts from live music WWW.ART ISANSP IRITMAG.COM â&#x20AC;

(Rosenleif, 2015). The walls, floors, and ceiling of this tasting room are composed of multiple materials that are generally considered non-porous and reflective to sound such as ceramic tile, plaster on lathe, and glass mirrors. If there is sufficient reverberation in a space, an echo is produced and the echo of the original sound can overlap subsequent sounds, resulting in conversation interference, music distortion, and other acoustical issues. Studies have shown a statistical relationship between noise reverberation and decreased intelligibility of conversation or instruction (Klatte et. al, 2010). Blending of reverberant sound waves can be desirable in certain venues such as orchestra halls or churches where choirs perform. In the case of smaller rooms, such as the tasting room, reverberant noise is viewed as an annoyance and as an obstruction to conversation (Rosenleif, 2015). Beyond a simple annoyance, The State of American Dining in 2015 survey by Zagat showed that noise was consistently among the top two complaints of customers when rating satisfaction with restaurants (Zagat, 2015). Noise rated higher than the categories of unreasonable prices and crowds in this survey with 24 percent of the respondents listing noise as their

Beyond a simple annoyance, The State of American Dining in 2015 survey by Zagat showed that noise was consistently among the top two complaints of customers when rating satisfaction with restaurants. 101

largest complaint. Only bad service was ranked higher with 26 percent of those surveyed. The ability of a surface material to absorb sound waves and thus reduce the reverberant noise in a room is a function of that material’s absorption coefficient. The absorption coefficient is the portion of total sound pressure absorbed by the material. Total absorption, denoted in sabins, is the absorption property of all room surfaces (Berger, 2003). Materials with high absorptive coefficients include thick carpeting, padded cushions, and specialty materials such as sound-absorbing panels or baffles. Conversely, low absorptive materials include tile, glass, or concrete. A common treatment for reverberant rooms is to add materials with high absorption coefficients. Ceilings, walls, and floors may be covered with absorptive materials in order to increase total absorption and thereby decrease reverberation. Baffles may also be hung from the ceiling, absorbing the sound waves in a similar fashion to sound panels hung on a wall. After four years in the tasting room and distillation business, the owners at Headframe Spirits decided it was time to address the sound reverberation of the space and explore the feasibility of implementing engineering controls to minimize the reflection of sound waves.

Methods: Estimating and measuring room absorption, RT60, and Speech Interference Level The overall sound levels and reverberation in the space were measured before and after sound-absorbing baffles were installed. The average sound level of common speaking frequencies, called the speech interference level (SIL), was also measured before and after the baffles were installed. Additionally, a survey was given to tasting room patrons to see if the customer experience was improved by adding a soundabsorbing solution to the space. The reverberant properties of the tasting room were initially estimated and later measured. This was accomplished by two methods. Total absorption was estimated by calculating the surface area of the room and determining the absorption coefficient for each surface, taken from published surface material values. These values were then converted to the total absorption value through established processes in accordance with academic and industry standards (Anna, 2011). Surfaces in the Headframe tasting room included tile flooring, carpeting on concrete, painted concrete, glass windows, and others. The absorption coefficients for the various surfaces of the tasting room ranged from 0.01 for 102

mirrors and concrete to 0.65 for carpeting. The total absorption for the room was then plotted against the total volume of that space to estimate the reflective qualities. The second method of characterizing room acoustics was through direct measurement of reverberation time (RT60) in the space. The RT60 is the time, in seconds, for a sound to decrease by 60 decibels. The higher the RT60, the more echoic the space. To measure RT60, a loud sound is generated and the time it takes for the sound to drop by 60 dB is measured. A “desirable” RT60 varies with the intended use for the space. Higher reverberation times tend to blend music and work best in choir halls and orchestral venues. On the other hand, lower reverberation times are best for conversation and are desirable for courtrooms or classrooms (Nave, 2005). It was decided that the tasting room space lies somewhere between these two extremes; it is used as both a conversation space and a music venue. Thus, the goal for the tasting room was to decrease the reverberation from a high RT60 value to a moderate RT60. The RT60 was measured with a 3M Quest Sound Level Pro Meter equipped with 3M RT60 measurement software. The RT60 was measured at hearing height in the center of the room using a pulse of sound created by bursting a full 10 inch diameter balloon with a thumbtack. Past studies have shown that some pulse sources, such as a starting pistol, create too narrow a frequency of sound, whereas the balloon creates a broad frequency pulse (Norby, 2012). In order to quantify the degree of speech intelligibility in the tasting room prior to and after the implementation of the room treatment solution, the SIL was also measured. The SIL is a measure of how loud a noise is at three critical frequencies for understanding speech (500, 1000, and 2000 Hz). An SIL over 75 indicates difficulty hearing at distances greater than four feet. Once the SIL is over 90, speech will be virtually impossible to understand regardless of the distance between the speaker and listener. Using the same Quest sound level meter, measurement at these frequencies was performed at the east end of the bar, mid bar, and on the west end of the bar on an evening when most of the tables were filled with patrons, but when no live music was playing. In addition to the initial tasting room reverberation assessment, a voluntary survey was offered to the customers in order to gather data on the subjective noise experience of customers in the tasting room space. This short survey was offered to patrons by the tasting room staff, and it specifically asked: “How would you rate your satisfaction with the following noise level components in the tasting room? A. general noise levels; B. speech intelligibility; C. music listening quality.” Each of these three items was assigned a rating from

FIGURE 1: Sound baffles post-installation.

WWW.ARTISANSPIRITMAG.COM

very dissatisfied (1) to very satisfied (5). The customers were allowed to comment on the sound quality of the tasting room as well. The survey was provided to patrons both before and after the installation of sound-absorbing baffles. All measurements (RT60, SIL, and customer survey) were repeated after sound-absorbing baffles were installed in the tasting room. The measurements pre- and post-installation were compared statistically to verify the effectiveness of the sound baffles. Data were collected at the same points in the tasting room before and after the installation.

TA B L E 1

calculated and measured TASTING ROOM REVERBERATION values pre- and post-treatment with sound-absorbing baffles Total Absorption (sabins)

Calculated RT60 (seconds)

Measured RT60 (seconds)

Speech Interference Level

Pre-treatment

44.6

1.64

0.85

79.8 dB

Post-treatment

80.6

0.86

0.49

67.2 dB

Results: Improvements in RT60, SIL, and Customer Experience The results of the initial reverberation assessment are presented in Table 1, row 2 as “pre-treatment” values. The average total absorption in the tasting room was 46.2 sabins with a total room volume of 395.6 cubic meters. Prior to the installation of the sound baffles, the range of absorption was 26 sabins to 68 sabins depending on the frequency. The pre-treatment calculated RT60 value was 1.64 seconds on average across 250-4000 Hz. The mean measured RT60 time before any treatments were applied had an average of 0.85 seconds across the same frequencies. The average SIL was 80.4 dB on the west end of the bar, 80.2 dB midbar, and 78.9 dB on the east end of the bar prior to the installation of sound baffles, for an average SIL of 79.8 dB. These levels indicated high difficulty in hearing normal conversation levels at greater than two feet between speaker and listener. The customer survey was taken by 38 individuals prior to the installation in the tasting room space. The average values for the three categories of overall noise level satisfaction, satisfaction with intelligibility of speech, and satisfaction with music quality were roughly neutral at 3.2-3.5 pre-treatment. Some customers provided additional feedback. Many of the comments before sound baffles were installed were negative, including, “There are very limited opportunities to enjoy a conversation,” and, “Too much noise competing in the area.” To address the problems of high reverberation, speech interference, and customer complaints, sound-absorbing baffles were installed in the tasting room. The baffles chosen for the tasting room space were designed to be mounted on the ceiling. Each baffle measured two feet tall by four feet wide and two inches thick. These were selected based on the absorption qualities, pleasing aesthetics, ease of installation, and to avoid interference with an existing fire suppression system mounted on the ceiling. The specific baffles chosen were Audimute Soundproofing eco-C-tex baffles with a matte black finish. The installed sound baffles are shown in Figure 1. Fifty sound-absorbing baffles were mounted on the ceiling in the tasting room as illustrated in Figure 1. The baffles were hung vertically, WWW.ARTISANSPIRITMAG.COM

perpendicular to the ceiling. The installed baffles only covered 37 square meters of ceiling, which was less than originally planned because of the need to provide adequate space around the room’s fire suppression system. The baffles were installed in April, 2016 by Headframe Spirits staff. Post-installation assessments were performed the following weekend. Using the same methodologies as the pre-treatment evaluation, a post-assessment was conducted; those results are also presented in Table 1, row 3 as “post-treatment.” The very high absorption coefficients of the baffles, a rating of 0.4-1.0 across various frequencies, added 36 sabins of added absorption at higher frequencies to the tasting room. The total absorption in the tasting room was 1.81 times the initial absorption after the baffle installation. The RT60 time calculated using the room size and total absorption prior to any absorptive baffles were installed was 1.64 seconds, which falls in the 1.5-2.0 range for music venues, but well outside of the ranges for ideal levels for a conversational space of 0.4 seconds to 1.0 seconds (Nave, 2005). The average measured pre-installation RT60 time was 0.85 seconds. The measured RT60 time post-installation was 0.49 seconds. We observed a statistically significant reduction in reverberation time after treating the room, (p=0.05) when assessed using a Wilcoxen Signed Rank test. Additionally, this significant decrease was subjectively noticeable to staff and customers as evidenced by the customer satisfaction survey. The SIL averages were lower in all three locations when measured after the sound-absorbing baffles were installed. The average SIL decreased from 79.8 to 67.2. We observed a statistically significant reduction in SIL after treating the room, (p=0.05) using a paired t-test. This reduction brought the tasting room SIL down to levels considered acceptable for normal conversations. The reductions that were measured may have been a direct result of the room treatment, but may have also been coincidental since the ambient noise levels were not controlled and the measurements were taken during approximately similar evenings as opposed to being measured with a controlled sound source. Therefore, there are limitations to using SIL reduction values to assess the effectiveness of the control measure. Eighteen customers completed the same survey after the soundabsorbing baffles were installed. The average rating for each item 103

increased considerably, from 3.2-3.5 up to 4.2-4.5, indicating muchimproved customer satisfaction. We observed a statistically significant increase in customer ratings of speech intelligibility and music quality after treating the room, (p=0.05) which was assessed using a Wilcoxen Rank-Sum test. Although a mean difference in customer survey pre- and post- in overall noise ratings was observed, there was no statistically significant difference observed. It was also observed that specific customer feedback became more positive after treatment with comments including, “I could actually engage in conversation because I could hear the people around me.” At the end of the project, we had to ask ourselves several questions: Were the acoustics improved? Was any improvement worth the money invested? Are the customers happy with how the baffles look and the sound levels and reverberation in the room? The reverberation time was significantly reduced following the installation of sound-absorbing baffles, which was a primary objective of our project. Additionally, speech interference was reduced and customer satisfaction increased. The cost was just over $3,200 for the baffles and on-site labor was used for the installation. So, one would have to weigh the benefits versus cost for other spaces, but in our case the baffles were well worth the investment. It is fair to say that the customers are enjoying the new tasting room improvements and many have even commented positively on the appearance of the baffles. All involved parties are pleased with the installation and this treatment ended up serving both purposes of improving the acoustics in our tasting room while also increasing the aesthetic appeal of the space.

REFERENCES 1. Anna, D. (2011). Noise, Vibration, and Ultrasound. In The Occupational Environment: Its Evaluation, Control, and Management (3RD ed., Vol. 2). American Industrial Hygiene Association, figures 695, 689-697, 699. 2. Audimute Soundproofing. (2015). Acoustic Sheets and Sound Panels. http://www.audimutesoundproofing.com/. I N F O @ S P I R I T S C O N S U LT I N G .C O M

2 1 2 .2 92 .8 1 93

S PI R I T S CO N S U LT I N G .CO M

BUILDING NEW BRANDS & BUSINESSES PRODUCT & BRAND DEVELOPMENT STRATEGY & FINANCIAL PLANNING PRODUCT LAUNCH SALES & MARKETING EXECUTION

3. Berger, E. (2003). Noise control engineering. In The Noise Manual (5th ed.). Fairfax, VA: American Industrial Hygiene Association, 338-349. 4. Distilled Spirits Council. (2010). Economic Contributions of the Distilled Spirits Industry. Retrieved March 12, 2015, from http://www.discus.org/economics/. 5. Klatte, M., Lachmann, T., & Meis, M. (2010). Effects of noise and reverberation on speech perception and listening comprehension of children and adults in a classroom-like setting. Noise and Health, 12 (49), 270-282. Retrieved February 15, 2015. 6. Nave, R. (2005). What is a desirable reverberation time? Retrieved February 18, 2015, from http://hyperphysics.phy-astr.gsu.edu/hbase/acoustic/revtim.html#c3. 7. Norby, Josiah. 2012. Assessment of reverberant noise at a Montana school system gymnasium. Montana Tech of The University of Montana, ProQuest, UMI Dissertations Publishing. 1532344. 8. Occupational Safety and Health Administration. (2013). Section 3: Chapter 5: Subsection V: Hazard Abatement and Control. In OSHA Technical Manual. 9. Rosenleif, Heidi. 2015. Personal interview with tasting room manager conducted on 2/15/15. 10. Zagat Staff. 2015. The State of American Dining in 2015. Retrieved April 18, 2016, from https://www.zagat.com/b/the-state-of-american-dining-in-2015. 11. Wróblewski, M., Lewis, D., Valente, D., & Stelmachowicz, P. (2012). Effects of Reverberation on Speech Recognition in Stationary and Modulated Noise by School-Aged Children and Young Adults. Ear and Hearing, 731-744.

104

WWW.ARTISANSPIRITMAG.COM

THREE SIMPLE RULES A SHORT COURSE ON MARKETING AND ADVERTISING YOUR SPIRITS WRITTEN BY BRIAN B. DEFOE

t is hard enough to make good spirits, but if you’re going to meet with commercial success you can’t afford to stop at simply producing the stuff. You must also find a way to get people to buy it (hopefully more than once). That means you’re going to be marketing that wonderful elixir coming off the still. So how do you do that and stay out of trouble? In the U.S., the regulation of the marketing and advertising of alcoholic beverages (like the regulation of alcoholic beverages generally) is a bit of a hodgepodge. Producers need to be mindful of the requirements of both federal and state authorities, as well as the views and strong suggestions of industry groups. While this can seem daunting, most of these constraints can be described as falling within three basic rules, each of which can be readily understood. Those rules are as follows: (i) be truthful; (ii) don’t encourage irresponsible consumption; and (iii) don’t be a jerk. Before we get into a discussion of the nuances within those three general rules, it is important to keep in mind what we actually mean when we talk about the advertising of spirits. The first point of contact for answering that question is a familiar one for spirits producers: the Alcohol and Tobacco Tax and Trade Bureau (TTB). For purposes of TTB regulations, “advertisement” is defined to include any written or verbal statement, illustration or

RULE NUMBER 1:

BE TRUTHFUL.

We hear a lot in the media about truth in advertising. While most of that discussion isn’t focused specifically on the spirits industry, the issues around truthfulness WWW.ART ISANSP IRITMAG.COM

depiction which is in—or calculated to induce sales in—interstate or foreign commerce, or is disseminated by mail. At this point, you might be excused for thinking that because your distillery doesn’t engage in traditional advertising campaigns like television or radio spots, or placing ads in your local newspaper, you don’t need to worry about this definition. You would be mistaken. This definition—and the surrounding interpretations of it—mean that your distillery’s social media and other internet-based activities are probably “advertisements” for purposes of the TTB. Sorry to break it to you, but the bad news doesn’t stop there. Your social media campaigns are probably also advertisements— and therefore worthy of careful scrutiny—for purposes of state liquor control agencies, the Federal Trade Commission and the U.S. Food and Drug Administration. Undoubtedly, they are also “advertisements” for purposes of the Code of Responsible Practices for Beverage Alcohol Advertising and Marketing (the “Code”— described in detail below) adopted by the Distilled Spirits Council. With that many cooks in the kitchen, what’s a small distillery to do—simply close the doors? Not a chance. That stuff you’ve got in the barrel is too good to pour down the drain; just stick within the guardrails of these three main rules and—in most cases—you’ll be fine.

are the same. The statements in your advertisements must be truthful and must not mislead (or have the potential to mislead) the consumer. In most cases, making sure your statement is truthful means having the facts to back up whatever you’ve said. For the purposes of the TTB, our shorthand of

“truthful” needs to be unpacked just a bit. The applicable regulations can be found in 27 CFR 5.65. Specifically, the regulations prohibit:

»» Any statement that is false or untrue

in any meaningful way, or that, irrespective of falsity, directly, or by

105

ambiguity, omission, or inference, or by the addition of irrelevant, scientific or technical matter tends to create a misleading impression.

»» Any statement, design, device, or representation of or relating to

analyses, standards or tests, or relating to any guarantee, in each case irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer.

»» Any

statement that the spirits are distilled, blended, made, bottled or sold under or in accordance with any municipal, state, federal or foreign authorization, any reference to the spirits being “bottled in bond” (or similar descriptions) or any reference to age unless the statement or reference would be permitted on the label.

»» Any use of the word “pure” unless it is part of the bona fide name

of a relevant party or it refers to a particular ingredient used in the spirits and is a truthful representation about the ingredient.

»» Any

use of the words “double distilled” or “triple distilled” unless it is a truthful statement of fact and the spirit is one for which double distillation or triple distillation is not a necessary part of the production process.

»» Any statement regarding an association between the consumption

of spirits and any health benefit, unless the statement is truthful and adequately substantiated by scientific or medical evidence.

»» Any

representation that the spirits were manufactured in or imported from a place or country other than that of their actual origin, or were produced or processed by one who was not in fact the actual producer or processor.

»» Any use of the American flag or any emblem, seal, insignia or

decoration associated with the American flag, armed forces or any family or organization, or any representation likely to mislead the consumer to think that the product is in some way associated with such party.

In addition to these prohibitions, TTB rules also state that you cannot advertise two or more brands simultaneously if (i) the resulting advertisement makes it appear that the statements about the first brand are applicable to the second brand and (ii) you couldn’t actually say those things about the second brand without violating these prohibitions. The rules also provide a general catch-all that you can’t say something in an advertisement for a distilled spirits product that is in conflict with what you put on the label. Obviously, a few of these requirements go beyond what your parents might have meant when they told you to “tell the truth.” Nevertheless, when the prohibitions are distilled down (pun intended) they all ultimately derive from the requirement that the advertising of spirits must not mislead consumers in any meaningful way. As a starting point, when you’re considering your advertising or social media campaigns, consider asking yourself, “Could anyone be misled by what we are saying?” That will go a long way toward satisfying these requirements. If the answer to your question is “Yes” then you’d be well advised to make some changes.

106

RULE NUMBER 2:

DON’T ENCOURAGE IRRESPONSIBLE CONSUMPTION. One of my favorite hooch-related quotes is by Noah Sweat—delivered in 1952 as part of a speech while he was a Mississippi state legislator and was asked about prohibition—then the law of the state. The quote (slightly abbreviated) is as follows:

If when you say whiskey you mean the devil’s brew, the poison scourge, the bloody monster, that defiles innocence, dethrones reason, destroys the home, creates misery and poverty, yea, literally takes the bread from the mouths of little children. . . . then certainly I am against it. But, if when you say whiskey you mean the oil of conversation, the philosophic wine, the ale that is consumed when good fellows get together, that puts a song in their hearts and laughter on their lips, and the warm glow of contentment in their eyes; . . .if you mean the stimulating drink that puts the spring in the old gentleman’s step on a frosty, crispy morning; if you mean the drink which enables a man to magnify his joy, and his happiness, and to forget, if only for a little while life’s great tragedies . . . if you mean that drink, the sale of which pours into our treasuries untold millions of dollars, which are used to provide tender care for our little crippled children, our blind, our deaf, our dumb, our pitiful aged and infirm; to build highways and hospitals and schools, then certainly I am for it. This is my stand. I will not retreat from it. I will not compromise. Sweat faced the critical challenge of considering whether to permit the sale of alcohol—a substance that can rightfully be considered both a benefit to and a scourge of society. Those of us who wish to market alcohol face the same predicament. We wish to encourage its responsible purchase and consumption, while simultaneously discouraging problematic consumption. This is quite a conundrum. Thankfully, we’re not the only ones who have spent some time thinking about the issue. While both state liquor control agencies and the TTB have enacted some regulations around responsible marketing, the area remains one for which the industry has (so far) managed a fair amount of self-regulation. Specifically, the majority of larger producers (representing approximately 70 percent of the spirits sold in the U.S.) strive to adhere to the Distilled Spirits Council Code.

WWW.ART ISANSPI RI TMAG.CO M

As part of the Code, the Council requires its members to adhere to general principles concerning the responsible placement of alcohol advertising and marketing materials, as well as principles related to the responsible content of those materials. For example, the Code states that beverage alcohol advertising and marketing should be placed into a particular media stream only when at least 71.6 percent of the audience for that stream is expected to be of legal purchase age. Similarly, adherence to the Code requires that the Council members’ products not be advertised or marketed in college or university newspapers, or on college or university campuses, except for licensed retail establishments located on such campuses. This is the crux of the Council’s approach to responsible placement: advertisements and marketing efforts should be directed into environments where the substantial majority of the likely audience are of legal purchase age. With respect to the actual content of those marketing efforts, the Code is a bit more prescriptive. Specifically, the Code contains numerous requirements ranging from a prohibition on the marketing of alcohol in a manner “associated with the attainment of adulthood” to requiring age-affirming gateways for Council members’ websites, to prohibiting the use of “sexual prowess or sexual success as a selling point for the brand.” The Council’s approach in the Code—while voluntary and only enforceable against the Council’s members—is consistent with the actual legal requirements imposed with respect to the content of alcohol marketing by both the TTB and many state liquor control agencies. For example, the TTB and the Code both prohibit advertisements that are obscene or indecent. Similarly, both the Code and the laws of several states prohibit advertisements that depict or appear to condone driving while intoxicated. Producers should also be mindful that there remain legal obligations imposed by the TTB or state liquor control agencies that go beyond the specific requirements of the Code with respect to the appropriate content of alcohol marketing materials. For example, the TTB prohibits any health-related directional statement (i.e., a statement that directs consumers to a third party or other source of information regarding the effects on health of distilled spirits or alcohol consumption) unless the direction is to a neutral third party and the statement contains the specific disclaimer “[t]his statement should not encourage you to drink or to increase your alcohol consumption for health reasons” (or a similar disclaimer approved by a TTB officer). WWW.ART ISANSP IRITMAG.COM

RULE NUMBER 3:

DON’T BE A JERK. As the final leg of our advertising and marketing best practices triangle, I offer some advice that most of us likely received from our parents but is sometimes forgotten in the context of business: don’t be a jerk. This is obviously somewhat subjective, but once again the TTB, the Council and various state liquor control agencies have provided us with some helpful context and guidance. For example, the TTB prohibits advertisements that utilize subliminal messaging or are “disparaging of a competitor’s product.” Similarly, the Code states that beverage alcohol advertising and marketing materials should “reflect generally accepted contemporary standards of good taste.” Furthermore, the laws of many states provide additional requirements relative

to advertising that arguably fall within the don’t be a jerk rule. Pennsylvania, for example, prohibits the advertisement of alcoholic beverages by a licensee if the licensee does not actually have a sufficient supply of the beverage on hand to meet normally expected demands. While Washington state prohibits advertising alcohol by use of sound trucks, I submit that driving a truck down a street using a loudspeaker to advertise liquor that you don’t have would fall within even the most restrictive definition of jerk-like behavior. Note that these examples are not exhaustive and you need to consult the rules of the TTB and your state (and perhaps even the Code) for guidance as to any new marketing campaign you might wish to undertake. Be careful. If you think your new campaign is hip and edgy, there is a decent chance that someone else might think you’re being a jerk.

PUTTING IT ALL TOGETHER.

With our three rules established, let’s consider how to put them into practice. Suppose, for example, you make a phenomenal vodka. Being appropriately proud of your spirit, you want your advertising campaign to convince the world that your vodka is—in fact—phenomenal and worth buying. You come up with a few possible alternatives:

1. You launch a national marketing campaign with the slogan: “Tastes better than Smirnoff.”

2. You pursue an internet-based campaign focused on college campuses in which you use the slogan: “The only thing sexier than what’s in the bottle is the person drinking it.”

3. You create a series of television ads featuring an attractive nurse purring the line: “A shot a day keeps the doctor away.”

4. You include the phrase “the world’s best tasting vodka” on all your marketing materials.

5. You create a series of print ads using the phrase “[brand] vodka—better than a [insert medical malady].” Which, if any, of these should you choose? Alternatively, which might be problematic? Let’s examine each of them in turn.

107

CAMPAIGN #1: COMPARISONS.

Do we have data to suggest that our statement is true? How can we demonstrate that our product tastes better than Smirnoff (or any other brand)? Being able to substantiate this claim (e.g., by being able to show the results of blind taste tests) is going to be critical if we’re going to pass our obligation to be truthful. Nevertheless, even if the ad is truthful, are we being a jerk? The ad is derogatory of a competitor’s product—a violation of TTB rules. Furthermore, a huge multi-national conglomerate with an army of lawyers owns the competitor we’re targeting. Do we want that fight? It’s probably not the best choice for our marketing resources.

CAMPAIGN #2: BIG MAN ON CAMPUS. Sex sells—we see that every day in our media. Few among us have not found ourselves being targeted (perhaps even tempted) by ads suggesting that by using a particular product, we will become irresistible to the objects of our sexual desires. This campaign fits right into that model. But, is it appropriate? By marketing exclusively on college campuses, we are likely running afoul of the Code—as well as the laws of those states that prohibit the on-campus advertisement of spirits. Not to mention, the suggestion that by drinking our product we will achieve our sexual aims is fairly overt, meaning we’re probably violating our rule to abstain from encouraging irresponsible consumption.

CAMPAIGN #3: HELLO, NURSE. There is nothing particularly graphic, indecent or obscene about the ad campaign—so if we can convince ourselves that the ads comply with general standards of good taste perhaps we can convince ourselves we’re not being a jerk by running them. Having what appears to be a medical professional endorse our product? That’s problematic. And the tagline itself—although tongue-in-cheek—nevertheless appears to suggest a correlation between drinking our vodka and better health, which probably violates both the rule to be truthful as well as the rule not to encourage irresponsible consumption. This one isn’t going to work.

CAMPAIGN #4: “THE WORLD’S BEST TASTING VODKA.” This line has a certain amount of appeal. While it might be dismissed as simple puffery or opinion, the boast could be substantiated (and the line viewed as truthful) if your vodka has received a gold medal or two in international competitions. There’s nothing in the tagline (or the way you intend to use it) that seems to encourage irresponsible

108

consumption. It also isn’t overtly derogatory to any competitor because it doesn’t mention any by name, so it might just pass the don’t be a jerk test. Unfortunately, it really doesn’t pass that test, though. Because part of not being a jerk means ensuring you’re not stealing someone else’s good idea. The good folks at Grey Goose (owned by Bacardi Global Brands since 2004) registered the tagline as a trademark in 2007. So, while hitching your marketing wagon to this particular line means you’ll be in good company, it also means you’re likely to get sued for trademark infringement.

CAMPAIGN #5: BLUNT TRAUMA.

By all objective measures, consumption of your vodka (in reasonable amounts) is indeed probably better than most medical maladies. So, if you were to advertise your vodka as, for example, “better than a punch in the gut,” or “better than a kick in the head,” it will probably pass the test of being truthful. Assuming that the print ads you plan to run will be in magazines with an audience that is predominantly of legal-purchase age, this one also probably passes the test of not encouraging irresponsible consumption. However, note that you’ll want to avoid versions of the tagline that seem to suggest that your vodka is a treatment for whatever medical malady you might pick. “Better than a migraine” could be interpreted to mean that you’re suggesting the use of your product as a treatment—probably best to stay away from that. The campaign isn’t derogatory of competitors, doesn’t appear to violate principles of good taste, isn’t gratuitously sexual or obscene and generally doesn’t appear to violate our prohibition on jerk-like behavior. It appears to meet our three rules. This one—with each individual installment carefully vetted—might actually meet our tests. Now, we just have to see whether it sells your product.

Brian B. DeFoe is a business lawyer at Lane Powell, where he focuses his practice on helping companies in the customer-facing industries of hospitality and retail. Brian can be reached at defoeb@lanepowell.com, via phone at (206) 223-7948, or on Twitter @BrianBDeFoe. Visit www.hoochlaw.com for more thoughts on spirits and the laws that govern them. This is intended to be a source of general information, not an opinion or legal advice on any specific situation, and does not create an attorneyclient relationship with our readers.

WWW.ARTISANSPIRITMAG.COM

a consultation in WRITTEN BY TYLER GOMEZ-BASAURI

gin

n the alcohol industry it is relatively well known that the development and consultation of gin can be difficult to find and put into practice. A lot of consultants do not want to touch gin development, and the reason is not that gin is “difficult” to make, but that the capabilities and infrastructure to efficiently and effectively develop a gin are hard to come by. Without those elements, the difficulty jumps from maybe getting some semblance of a product in a couple days, to months of effort. Developing a gin is an intensive and arduous process when tackling it alone and with no experience, all because of what makes gin, gin. According to the standards of identity within CFR 27 Ch. 1:

“Gin” is a product obtained by original distillation from mash, or by re-distillation of distilled spirits, or by mixing neutral spirits, with or over juniper berries and other aromatics, or with or over extracts derived from infusions, percolations, or maceration of such materials, and includes mixtures of gin and neutral spirits.

Juniper is the only botanical or adjunct that must be present in gin. Other than that, the sky's the limit. WWW.ARTISANSPIRITMAG.COM

The definition is immensely broad and gray with only one true requirement: juniper. Juniper is the only botanical or adjunct that must be present in gin. Other than that, the sky's the limit. All other botanicals are fair game, assuming that they are GRAS (generally recognized as safe by the FDA), but that is a separate issue. All of this, of course, adds to the complexity of gin development. It is hard to pin down what exactly you want in your gin when you have never tried grains of paradise or angelica root. Maybe you want those in your gin; maybe you don’t. Not having access to a plethora of botanicals leads to stalls in the development process. Should an individual or a distillery wish to start developing their own gin, creating botanical distillates is step one. The first step of the process is to try and get within the ballpark of how you would like your gin to taste. Ask yourself, “What type of gin are you?” As there are so many different styles of gin, none of which are defined in the CFR, there is a lot of room for interpretation. The most common styles are London dry, old tom, genever, contemporary or American, and aged gin. London dry has the common attributes of being juniper-heavy with a lot of pepper characteristics, e.g., grains of paradise or cubeb. Old tom has sugar added and is most commonly described as sweet, full-bodied and viscous. Genever is Dutch in origin and produced from a malt mash which is then infused with the flavors commonly attributed to gin. Contemporary or American is much more botanical and root-forward than its other gin brethren. Lastly, aged gin is not recognized by the TTB, and you must have another designation. If you are someone who has no idea where to begin, the first thing you should do is conduct a sensory analysis of each style. Depending on

109

your palate, goals, and message, a similar style to the previously mentioned may be chosen, or a combination of two or more. From there you can delve right into the development. By having access to a library of single botanical distillates you created, you can begin by compounding a gin based off of those individual distillates. Now is where some fun begins—you become an alchemist, mixing and matching all sorts of different botanical combinations that will inch you ever closer to your gin. A general rule of thumb would be to start compounding gins at the 10 ml scale with a starting juniper usage of around five or six ml. By doing this you generally can yield positive results in a single morning. In my opinion, this is the most fun because you get instant results. You easily can make about 30 vastly different styles of gin in a relatively short amount of time. The compounding process gets you one step closer to your goal of having an effective prototype. By taking the winning compounded gin that you created, it is possible to reverse calculate about how much of each botanical should go into the gin. By equipping yourself with three or four lab distillers, you will be able to make it to the next step of gin development. Tabletop distillation is the second step of the three-step gin development process. Typically, each of the tabletop stills have the capability of having either a vapor infusion for the botanicals or a maceration. The reverse engineered recipe off of the compounded gin will get us into the ballpark to start on the tabletop distillations. You should expect to see three to

110

The fact that gin has such a loose definition is what makes it so alluring.

four rounds of tabletop distillation based off of the compounded gin—roughly 12-16 different tabletop gins. Hopefully by the end of the tabletop distillation you have tweaked the recipe enough to where it tastes like how you envisioned it. This leads to our final step—scale-up distillation. Assuming you have a pot still, the final step can now take place. A vapor basket that is properly sized for your still should be available. The tabletop distillations will get you into the ballpark of the scale-up distillation. Sometimes the scale-up creates a winning gin on the first attempt, other times it may only need one more adjustment. Taking all of this into consideration illustrates why many distilled spirits consultants won’t touch a gin development. These types of projects are exciting to work on because of how difficult it can be, and at the end of the day we get a completely unique product. The fact that gin has such a loose definition is what makes it so alluring. Gin truly is a spirit that, during the development process, you place yourself as a person and as a distiller into the bottle. As a class of spirit, gin allows distillers to really show off their creativity and personality.

Tyler Gomez-Basauri graduated from University of Rochester with a degree in chemistry. He got his start in the beverage alcohol industry at Alltech’s Lexington Brewing and Distilling Company. After that, he caught the fermentation bug and found a position at Moonshine University, an education distillery located in Louisville, Kentucky. At Moonshine University Tyler runs the distillery, manages various distilling experiments, and helps distilleries develop their mash bills and unique spirits.

WWW.ARTISANSPIRITMAG.COM

MIXING UP SUCCESS with

MASTER BLENDERS WRITTEN BY GABE TOTH

istilling creates whiskey. When a whiskey earns praise, it is often the distiller in the spotlight. Heck, countless places include “distilling” or “distillery” in their name. But often, blending is the secret sauce. An expert blender can elevate a spirit with the right touch, or take a barrel of stock that’s not up to snuff, pair it with the right complements, and produce a high quality product. The blender may be the distiller, selecting individual barrels for a blend of 5, 10 or 20 barrels. On the other hand, the blender may instead be a specialist considering lot years with known profiles and calculating blends of hundreds of barrels at a time. Blending can be used to maintain product consistency from batch to batch. Some distillers have a specific profile that their spirit needs to meet, and they choose barrels based on hitting specific flavor notes which are key components of their whiskey. They may use a formula, or just a rough guideline, knowing that a specific number of barrels with specific profiles will put them in range of their target. Blending can also be used to create novel flavors that couldn’t otherwise be achieved. The flavor profile of a light, fruity whiskey aged in port casks and blended with a peated whiskey aged in bourbon casks could never be achieved by distilling and aging a single spirit. We asked two highly acclaimed blenders, operating at widely varying scales, to share some of their thoughts and considerations on the art and science of blending.

WWW.ARTISANSPIRITMAG.COM

RANDY HUDSON Randy Hudson is the owner and distiller at Triple Eight Distillery in Nantucket, Mass. His 12-year Notch single malt whiskey is one of the most awarded American whiskeys, earning top prizes at the World Whiskies Awards, the San Francisco World Spirits Competition, the American Craft Spirits Association, and the American Distilling Institute, to name a few. “I think what guides me most is not looking for a formula or a consistency in the actual product, but a consistency in the quality of the product,” says Hudson. “We’re a tiny distillery, and we’re doing a lot of 8-12 (year), I have some 15-year-old barrels. I’m just trying to put out as good a whiskey as I possibly can with what I have.” While not being dogmatic about trying to match the exact same profile every batch, he does have certain notes that he wants to hit. Triple Eight has a good stock of sherry casks, as well as new oak, used bourbon, and other types of barrels to draw from. “You do what you can when you’re a small distillery like us without much buying power. We’ve been really lucky to get some great sherry casks,” he says. “I’m a little bit of a sherry nut, but I like it only so far. I want it balanced.” Balancing the darker dried fruit notes from some of his older whiskies is inevitably a little bit of spice, but he also looks for barrels that have a little bit of sweetness. “I’m always looking for barrels that will add a juiciness to the

111

“I THINK WHAT GUIDES ME MOST IS NOT LOOKING FOR A FORMULA OR A CONSISTENCY IN THE ACTUAL PRODUCT, BUT A CONSISTENCY IN THE QUALITY OF THE PRODUCT.” RANDY HUDSON

triple eight distillery

overall blend. Those are definitely harder to find,” Hudson says. “It’s almost a tactile thing. it makes the salivary glands start cranking. It makes my mouth water. That doesn’t happen with all whiskey.” When tasting through whiskey barrels, he said they’ll sometimes flag barrels that aren’t aging as desired, vat them, and put the resulting spirit into different casks. “There’s obviously something with those casks that’s not up to snuff,” he said. It effectively weeds out underperforming barrels and turns so-so spirit into the product he’s looking for. At times, if he has a large batch, he’ll also put some of a new blend back into barrels. Because his bottling tank is 550 gallons, he may end up with 500 gallons of blended spirit that needs to be proofed down. “I’ll actually rebarrel something that’s up-to-snuff. That rebarreled cask strength will be included in the next blend,” he tells. It serves as a bridge from one batch to another, improving consistency. As part of a company that also includes a brewery and a winery, Hudson was keen on making use of their used wine barrels, but has experienced some roadblocks. “We never had good results with them,” he says. “We abandoned that. After five or six years of aging in ex-merlot casks, we decided we didn’t like how it was aging. We started using a lot of them for sour beer projects instead.” Last summer, Hudson pulled apart some red wine casks and refired them. Now that he is using them the results are not what he expected. “It sort of caramelizes those wine elements. It’s a different animal—really intense, toasty and dried fruit.” He’s also experimenting with peat malt, more as a subtle touch than a dominant part of a spirit. “I feel like peat, if it’s used in a more reserved way, can really elevate the entire blend,” he explains. “I’m still learning, I’m an experimenter. My guiding principle is basically to try to hew to the way that has worked for us in the past, but also to jaunt off into la-la land a little bit.” After installing new equipment and ramping up production over the last year, he’s now focusing heavily on data collection and gas chromatograph analysis. “What I’m trying to do is just gather a lot of data about what our spirit does with different barrels.”

He said their 10-year expression may become an eight-year with more bourbon inflection, while their 12-year will retain it’s more sherry-forward character. “We’re still trying to develop what it is that we want from our different iterations,” Hudson says. “I’m still learning. Seventeen years we’ve been putting whiskey together, and I’m still looking for better ways, looking for new expressions.” Overall, Hudson says he’s striving to make products that are balanced. “I think that’s got to be what most people are trying to do, rather than a rote formula, especially small places like us.” More than anything else, he adds, the goal is to find a combination of barrels that creates synergy, a spirit greater than the sum of its parts. “I want to take one and one and one, and make it four.”

BRENDAN COYLE Brendan Coyle is the master distiller at High West Distillery in Park City, Utah, and holds a master’s in Brewing and Distilling Sciences from Heriot-Watt University in Edinburgh, Scotland. Under his watch, High West—which was acquired last year by Constellation Brands—has consistently earned plaudits from the ACSA, the Whisky Advocate Awards, the Whiskies of the World Awards, and others. At High West, blending has always been a major focus, both for consistency and to create new flavors. They have also been very forthcoming about sourcing spirits they don’t have handy, including them in many of their flagship products. “That’s how we formulated our business from the get-go,” Coyle says, noting how Rendezvous Rye has evolved over the years. “It’s actually a pretty complicated blend. We started off with two products in the blend, now there are upwards of 10 to 15, going as young as five years to as old as 19,” he shares. “It’s based on the general idea that if you want to create the flavor of a six-year rye, you can blend 50 percent five-year and 50 percent seven-year. In theory, you can go high and you can go low, (but) it doesn’t always work that easily.” He starts off by knowing what his base components are going to be, making up the bulk of the spirit, then starts bringing in some of the more intense “seasoning” components, which pack a lot of flavor and are used sparingly in the blend.

“THAT’S SOMETHING WE’RE REALLY CONSCIOUS ABOUT, FLAVOR DRIFT.” BRENDAN COYLE

112

high west distillery

WWW.ARTISANSPIRITMAG.COM

“We try to get the base pretty close first, then we try to get the seasoning components dialed in,” he says. The major base components go into tanks of up to 30,000 gallons, while the smaller components can be fractions of a percent. “We go from the very small to the very large. We literally will go as small as two or three barrels blended together (for some components),” Coyle tells. Campfire, a whiskey that incorporates rye, bourbon and peated single-malt, was an extremely complex blend to formulate the first time around. “You’re dealing with a lot of different flavors and components. We wanted to have a very rounded product with three distinct parts to it,” says Coyle. “We were actually tweaking that peated part of the blend by one-quarter of a percent by the end, and it was making all the difference.” Much of his blending, at least on the large components, is based on data. Because of the size of their lots, the variance in quality from barrel to barrel averages out, and they get a more homogenous product. However, variations will inevitably exist and have to be adjusted for. “Last year’s six-year-old might have been more or less spiritous or have more or less maturation character. There can be variations in the grain,” Coyle says. “It’s really mathematically driven. You have your inventory, flavor components, projections.” They’ll do triangle tests to tweak components up or down, tasting alongside the current blend and product from the first year or two, to keep things consistent over a longer timeline. “That’s something

we’re really conscious about, flavor drift.” Coyle says that some blends take as little as two to four weeks to complete, while others have taken almost six months. The big components will generally sit for months and homogenize, while small ones might get added in just days before bottling. “The hardest part is those small components,” he says. “My goal is to start putting (the final spirit) together at the beginning of the year, and slowly sip out of it over 12 to 18 months.” At times, he’ll also blend to highlight certain characteristics of their spirit, like the young rye character in their Double Rye. They are able to highlight a fresh rye character while using a small percentage of much older, sourced rye to add some more barrel and aged notes. Coyle said he spends 10-15 percent of his time in the lab, thinking about releases two to three years out. He makes sure to have barrels with a variety of character available—sweet, smokey, grainy, tannic—and an extensive library of samples. “I really strive to have a lot of different things in our inventory,” says Coyle. “You have more versatility.” Distilling may get the lion's share of the consumer and industry attention, but it's blending that holds the keys to opening up a whole new world of potential flavors and products.

Gabe Toth is the head brewer at Twisted Pine Brewing Co. An experienced craft brewer and distiller, his passion for fermentation also extends to pickling, cheesemaking and meat curing. He can be reached at gabetoth@hotmail.com.

LOOKS WILL ONLY GET YOU SO FAR.

So you’ve crafted the perfect product. And dressed it up in the most creative branding. But if you’re out of sight, you’re out of mind. Join the full craft beverage industry—wine, beer, spirits, cider and mead—for a fresh look at alternative distribution, e-commerce, content marketing, digital marketing and in-house marketing to be seen. Get ready for your close-up.

Save $100!

WWW.ARTISANSPIRITMAG.COM

113

K E N T U C KY ’ S F I R S T

MODERN

M A L T I N G O P E R A T I O N WRITTEN BY TRIPP STIMSON

n Kentucky, making bourbon has long been a way of life, one that has allowed for craftsmen to create many different and unique products. These differences often come in the way of a grain bill or yeast strain, or different cooperage or bourbon blends. As a distiller and a craftsman, I too wanted to do things a little different and create unique products that would set us apart. While at the helm of Kentucky Artisan Distillery’s operations I began creating bourbon and rye grain bills consisting of locally grown grains. These grains were not just Kentucky grown, but grown right here in Oldham County just a mile down the road at Waldeck Farms. For a couple of years we made hundreds of barrels of bourbon and rye whiskey utilizing all locally grown grain except for a small percentage of grain that was the backbone of the fermentation process—malt. In traditional bourbon grain bills, malted barley is typically the smallest percentage of grain, yet it has arguably the greatest impact. Malted barley contains enzymes that are important in ensuring that the long chain starch molecules are converted into the smaller, easier to handle fermentable sugars. Without these enzymes, the yield will be low, there will be lots of waste, and the final product will suffer. Malted barley, as well as other grains, is made in huge quantities by large commercial companies who have invested large sums of money in equipment that creates a highly modified malted grain

114

with a high consistency. The highly modified, consistent malted grains ensure that with each seed used there is a maximum amount of enzyme available. Consistently achieving this high level of modification while avoiding all of the potential pitfalls is what makes malting such a difficult and tedious craft. While making bourbon and rye whiskey day in and day out at the distillery I am constantly thinking of innovative ways to set us apart from all of the other players in the game. Since all of our raw materials, other than the malt, were already coming from Oldham County, Kentucky, malting my own grain was the logical next step. Having done plenty of research on malting at this point, I was well aware of the difficulties in creating a highly modified, consistent malted grain. However, I have always liked a good challenge. So, well aware of the challenge in front of me, we planted five acres of barley and off I went putting together a plan to build Kentucky’s first modern malting operation, hopefully before harvest. History tells us that the traditional maltsters used a floor malting process which required someone turning grain by hand with a rake or shovel. Historically, this has been a very effective method, yet one that is very physically demanding. With an innovative attempt to do things a little differently I began looking into all of the ways people were malting and found that there are many ways to effectively malt grains. Companies were using towers, saladin boxes, drums, WWW.ARTISANSPIRITMAG.COM

I HAVE ALWAYS LIKED A GOOD CHALLENGE.

wanderhaufen, lausmann, and GKV, which is a germination and kilning unit in one. At first, I really liked the drum malting system which seemed to help with consistency and require less physical labor. I tested the drum malting system by creating a micro malting system using a rotisserie cooker and a paint can. This setup actually worked very well and while it did help with the direct labor requirements, the cost to scale it up would have been tremendous even if I were to build it myself. The majority of the other options were all either more labor intensive than I was hoping for or were not going to be cost effective. So, that left me with the saladin box, which I thought was a good place to land. After deciding that the saladin box was the way to go, I started in on the design phase. The biggest question I had was what to use for a germination floor. Having just put a grain bin in the back of the distillery, I thought why not just use grain bin flooring, so off I went to Clayton Lambert to dig through the scrap pile. The folks there were more than helpful with my project and I managed to find grain bin sides and flooring that would work perfectly. An interesting side note to this venture is that the huge press that now makes perforated grain bin flooring was originally commissioned to stamp out body panels for some of the earliest Ford model vehicles available to the public. Being a car guy and history buff I thought that was really cool. With my custom saladin box designed and built, the biggest hurdle is fast approaching. I now had to design a method that would create the highly modified and consistent malted grains that I was looking for. Even with all of the reading and research I had done, I still had questions on the biochemical process and what exactly is going on inside the seed. In order to create the most effective method, it pays to understand the process right down to the individual building blocks. Unfortunately, besides a periodic malting class at Hartwick College’s Center for Craft Food and Beverage, there are no educational programs in the United States, and going to Scotland, as much as I would have liked to, was just not in the budget. After scouring the internet I came across Dr. Yushu Li with the Canadian Malted Barley Technical Center (CMBTC). Dr. Li is highly regarded in the malting world and is the “go to” person when it

comes to learning how to properly malt grains. After several phone conversations with Dr. Li I was off to Winnipeg, Manitoba, Canada to spend a week with him and his team to learn as much as possible about best practices, biochemical pathways, and how to avoid the many pitfalls that can cause problems in the finished product. After an extremely intensive and very beneficial course and a few pointers on my design, it was back to Crestwood, Kentucky, to put all of my newfound knowledge to use. One of the more important pieces of information that I learned from Dr. Li was how important temperature control was to the process. Without starting from scratch on a new building, the next best thing I thought would be a walk-in freezer. This would allow me to control the ambient temperature with ease and it could be turned off when kilning. The walk-in freezer “malt room” was assembled and steep tanks and the modified saladin box were all included in the space. The cooling units and the heating units were both wired and tested. All engines were go for the inaugural run of Kentucky’s first modern malting operation. The system was designed around the operational capacity of the distillery following our ongoing distillery expansion, which means the working capacity of the malting operation would need to be between 1500 – 2000 pounds per batch. It would not need to run at capacity all of the time, but it would need to have the capability. Our inaugural run had 200 pounds of locally grown barley from Waldeck Farms. The barley was cleaned, steeped to 45 percent moisture, allowed to germinate for a few days, and then the kilning process stopped the germination in order to preserve the ever-important enzymes that were created in this tedious process. Moisture content, chitt counts, viability, and other quality tests were performed throughout the process to ensure that the process moved along according to plan. Our first batch of Kentucky malted barley had 99 percent modification and it was used in our first bourbon production. Not only does the Kentucky Artisan Distillery have the first modern malting operation in Kentucky, it is also the first modern distillery in Kentucky to malt its own grains.

Kentucky Artisan Distillery is located in Crestwood, KY. For more info visit www.kentuckyartisandistillery.com or call (502) 241 -3070.

QUALITY BARRELS SHIPPING NOW

MINNESOTA-MADE WHITE OAK WOODEN BARRELS AND PATENTED HONEYCOMB® BARREL ALTERNATIVE FOR DISTILLERS & BREWERS • FROM 5 TO 53 GALLONS

BLACKSWANBARRELS.COM • 218-237-2020 • PARK RAPIDS, MINNESOTA WWW.ARTISANSPIRITMAG.COM

115

THE

GREEN RUSH

DISTILLERS ARE NOW HITTING HEMP WRITTEN BY RYAN MALKIN

“HEMP IS HAVING A MOMENT,” says Michael Bronstein, co-founder of the American Trade Association for Cannabis and Hemp. “I’ve seen executives of more than a few major spirit companies make their way through hemp facilities in Kentucky and Colorado.” Major suppliers may be considering hemp, but craft distillers are the ones currently producing hemp-based spirits. Five hemp labels have been approved by the Alcohol Tobacco Tax and Trade Bureau (TTB) so far this year, all from smaller producers, while the same amount were approved the previous two years combined. Hemp’s “moment” is no doubt tied to the legalization in many states of its infamous relative: marijuana. Hemp and marijuana both come from the Cannabis Sativa L. plant, though they are sourced from different parts. Marijuana is, of course, grown for its psychoactive, Tetrahydrocannibinol (THC) filled buds, whereas hemp is generally grown for its industrial uses. Hemp contains only trace amounts of THC (less than .3 percent for industrial sale). However, it is high in cannabidiols (CBD), and currently used in numerous nonTHC products for far more than just getting high.

116

WWW.ART ISANSPI RI TMAG.CO M

Recently, the Drug Enforcement Agency (DEA) took the position that any cannabinoid extracted from the Cannabis Sativa L. plant is a “marijuana extract,” regardless of whether it contains THC, and is therefore in the same DEA schedule as marijuana, according to Bob Hoban, managing partner of the Hoban Law Group. Hoban, on behalf of his clients, is challenging the DEA’s rulemaking authority regarding the non-THC parts of the plant. “DEA defines the entire cannabis plant as being unlawful, not just the leaves,” says Hoban. The DEA, explains Hoban, “conclusively determines that cannabidiols are illegal per se, which is against the controlled substances act.” For distillers, the TTB’s 2000 Hemp Policy currently controls. There are no pending changes, according to TTB’s media relations director Thomas Hogue. All alcoholic beverages produced using hemp must receive formula approval. In summary, the TTB Hemp Policy requires the following:

»»Submit a lab analysis of the hemp component (oil, seeds,

etc.) that will be used in your product, conducted at the direction of the foreign producer/supplier by a qualified laboratory that specifically addresses the detection of THC. The lab report must:

• Specify the amount of THC detected, or state that none was detected.

• Specify the lowest level of THC that could be detected by that particular laboratory.

»»Submit a lab analysis of the hemp component (oil, seeds,

etc.) conducted by a laboratory that specifically addresses the detection of THC. The lab report must:

• Specify the amount of THC detected, or state that none was detected.

• Specify the lowest level of THC that could be detected by that particular laboratory.

»»Submit a detailed description of the method of analysis utilized by the U.S. lab to test the hemp component.

Peter Caciola, president of Colorado Gold Distillery, couldn’t

help but see the wave of news regarding hemp and marijuana and wanted to take advantage of the trend. “We started trying to source the hemp locally, but ended up sourcing it in Canada because it was less expensive to import it than to buy it locally,” Caciola says, who notes domestic hemp is becoming more widely available. Meanwhile, Abe Stevens, founder and distiller at Humboldt Distillery in California came to hemp because of the consumer demand. After all, Humboldt County is world renowned for its marijuana. Buyers and consumers would joke with Stevens about including some “local flavor” in his spirit. Stevens began sourcing hemp here in the United States and recently won a double gold at the San Francisco World Spirits Competition for his Humboldt’s Finest vodka. Distillers are also utilizing hemp differently. For instance, Colorado Gold breaks down the hemp and uses it in the distillate. “It has a wash base with lower sugar content but pretty heavy distillation so it doesn’t taste leafy,” explains Caciola. The result is a vodka with a slightly nutty sweetness on the backend. Meanwhile, Humboldt and Old Imperial Mystic, for instance, infuse vodka with hemp. Like with any product, though moreso with hemp, plan ahead when submitting to TTB. “It was a year and a half of formula and label approval,” explains Caciola. Don’t plan to label your product with marijuana leaves or bongs either. According to TTB’s Hemp Policy, it’s prohibited to use “depictions, graphics, designs, devices, puffery, statement, slang, representations, etc. implying or referencing the presence of hemp, marijuana, any other controlled substance; or any psychoactive effects.” Also be certain to keep your required records. Colorado Gold, for instance, had a visit from TTB within its first month. TTB reviewed the distillery’s records and took samples of the raw hemp and finished product. The distillery was compliant and sales have increased 300 percent since last year. Once product is in the market, consumer education will no doubt be necessary. Be prepared for questions like, “Will it get me high?” and “Will I fail my drug test?” It won’t get you high, and you won’t fail your drug test, jokes Caciola, “at least not from my vodka.”

Ryan Malkin is principal attorney at Malkin Law, P.A., a law firm serving the alcohol beverage industry. For more information, visit malkin.law. Ryan is also of-counsel to the Hoban Law Group. Nothing in this article is intended to be and should not be construed as specific legal advice.

Three generations of raising premium grains for distilleries of all sizes. distillinggrains.com TOBY BLAKE

WWW.ARTISANSPIRITMAG.COM

574-904-7617

BRETT GLICK

812-371-5532

brett@glickseed.com 117

The Hyper-Focus Repercussion. WRITTEN BY COLIN BLAKE

t’s not news that the distilling industry is growing as fast as a Tennessee wildfire. New distilleries are opening up, guilds are being formed, and areas are starting to find their focus. But sometimes that focus might be too myopic for that region’s (or the whole industry’s) own good. Sometimes a hyper-focus on one thing might not be as beneficial as everyone thinks. First let’s take a look at the term craft and how focused everyone seems to be on defining it. I’m a little surprised industry members are still arguing over what craft is, when the real question is: Who cares about what craft is? Turns out that most of the people who care about the definition of craft are involved in the industry in one way or another, whereas the vast majority of consumers care very little, if at all. I think what we should be focusing on, other than how to educate a huge number of consumers to care about the term craft, is working with policy makers to give craft distilleries the same latitude with taxes, sales opportunities, and ease of opening as craft breweries and wineries. The first thing to understand is a drink is a drink is a drink when it comes to common serving sizes. On average, 12 ounces of beer, five ounces of wine, and one and a half ounces of spirits contain the same amount of alcohol. So, if a drink is a drink is a drink, then why are they all taxed so differently? Wineries and breweries have a much cheaper tax rate for the same quantity of alcohol produced. In New York state, not accounting for local or federal taxes, spirits are taxed at six times the rate of beer

118

or wine. Beer is only taxed at $0.14 per gallon ($1.12 if you adjust the amount of alcohol to be the same as spirits), wine is taxed at $0.30 per gallon ($1.00 with adjustment), and spirits are taxed at $6.43 per gallon. Also, wineries and breweries can often sell a larger volume of product than distilleries can at their tasting rooms (in most states), and they can also ship direct to consumers, which you can’t do with spirits. Further, the permits and inspections required to open a brewery or winery are much less stringent and demanding than those required to open a distillery. The distilling industry is so busy looking at a shiny object that we don’t realize that we’re not being given the same opportunities as our cousins in the alcohol world. It’s time we stop focusing on what the chimney cap should look like when we’ve got a questionable foundation beneath us.

The Napa Valley of Bourbon The other thing I find people in the industry a little preoccupied by is a hyper-focus on one spirit. Recently there has been a lot of talk, discussion, and hubbub about distilling tourism in Kentucky. While there seems to be a consensus that we need to have a focused brand and experience based around our distilling heritage to bring tourism dollars into Kentucky, there isn’t a clear view on how to do that. Some chalk it up to identity, others on messaging. WWW.ARTISANSPIRITMAG.COM

While I leave those heavy branding concepts to the big thinkers, I would like to point out one thing. Everyone wants to make Kentucky "The Napa Valley of Bourbon.” But if you look at Napa Valley they’re not just hanging their hat on chardonnay—that region represents a plethora of wines. That region has thrived not only because it’s beautiful, fun, and anyone can go on endless tours and tastings, but because they have something for everyone who likes wine. Not every wine drinker likes every type of wine, and some despise specific types of wines. As Miles, Paul Giamatti’s character in the movie “Sideways” said, “If anyone orders Merlot, I'm leaving. I am NOT drinking any fucking Merlot!” What if Napa Valley was just Merlot Valley? It wouldn’t draw in nearly the amount of people as it does by offering so many wines. So why are we just representing one spirit? I know that bourbon is what Kentucky is known for and that represents a huge percent of what is being made in the state. I know that bourbon is hot right now and that’s what people are coming to the state to experience. But I also know most of the heritage distilleries are part of larger companies that represent a large portfolio of brands. I also know that a lot of spirits drinkers don’t like bourbon. You might call me crazy but it’s hard to dismiss vodka’s 60 percent share of spirits consumed in the U.S. each year. There is so much opportunity to have companies showcase all their brands and diversify the experience here in the state, which I think would bring in more people overall.

With the craft boom happening in Kentucky, more than just whiskey is being produced. But for distilleries to benefit from all the marketing and promotion from things like the Kentucky Bourbon Trail (which I love and am not speaking ill of at all), they have to make some bourbon. Copper & Kings is kicking ass making great brandy, gin, and other spirits. Why do they have to make three barrels of whiskey a year in order to be included? It should be celebrated that they’re doing something different. The point is, if we want to draw in the largest amount of people we can we need to be able to offer more diverse spirits experiences. The reality is companies are spending tens of millions of dollars on visitor experiences right now, and nearly all of that money is focused on one spirit that has gone through a rollercoaster ride of popularity throughout history. That’s a lot of expensive eggs in one basket. But if the state represented all spirits, no matter what’s popular, the tourism dollars will keep rolling in. Now, all that being said it’s not a glass of vodka that I’ll be drinking tonight. It might be a good thing for all of us in the industry to take a step back every once in awhile and ask ourselves: “Why are we so focused on this one thing/term?” “Will this help the industry through good times and bad?”

Colin Blake is the Director of Spirits Education & Creative Services for Moonshine University. For more info visit www.moonshineuniversity.com or call (502)-301-8130.

CALL FOR ENTRIES

9S A NTDHI E G O AS P N N U A L IRIT S FES TIVAL AUGUST 26-27 | PORT PAVILION BROADWAY PIER SANDIEGOSPIRITSFES TIVAL.COM

THERE IS NO GREATER HONOR THAN THE RECOGNITION OF EXCELLENCE IN SPIRITS WITH A MEDAL FROM THE SAN DIEGO SPIRITS FESTIVAL. THE INTEGRITY OF THE SAN DIEGO SPIRITS FESTIVAL INTERNATIONAL SPIRITS COMPETITION STARTS WITH THE QUALITY AND EXPERTISE OF OUR ESTEEMED JUDGES • OVER 70 ALCOHOL BRANDS • TOP RESTAURANTS AND CHEFS • LIVELY ENTERTAINMENT • BURLESQUE; SAMBA; AERIALISTS • SECRET SPEAKEASY • BEER LOUNGE

• AFTER PARTY W/FASHION WEEK RUNWAY SHOW • VIP AREAS • FOOD TRUCKS • VINTAGE CAR SHOWCASE

AND MUCH MUCH MORE…

Port Pavilion on Broadway Pier|1000 N. Harbor Drive

LIZ@SANDIEGOSPIRIT SFESTIVAL.COM | 858.551.1605

WWW.ARTISANSPIRITMAG.COM

119

PARADISE FOUND: TIKI’S CARIBBEAN ORIGINS WRITTEN BY RENEE CEBULA

120

In 1945, a wave of American servicemen began coming home from the Pacific Theater, having defeated the Empire of Japan in some of the most brutal combat of the Second World War. These sailors, flyboys, and marines— people from the cornfields of Iowa to city slickers from New York—had seen parts of the world that only a handful of Americans had known before. Sand beaches, palms trees, exotic cultures, and beautiful island women made a deep impression on many. Back home, some would try to recreate the better part of their wartime experience by embracing Tiki, a uniquely American popular cultural movement that appropriated Polynesian culture to create distinctive new commercial architecture, food, and drinks. This movement, however, was really a rebranding of a much older tradition. The Tiki drinks of mid-century post-war America originated with American imperialism in the Caribbean and Central America in the late 1800s. When not busy digging the Panama Canal, American engineers, military personnel, and laborers experienced both the tropical environs and exotic drinks. Word of drinks such as the cocoyage, bird of paradise fizz, and the ubiquitous daiquiri spread, palates developed, and rituals were created around these rum concoctions. Prohibition gave the tropical rum craze a boost. Tourists from the states flooded places such as Havana and Jamaica, drinking daiquiris and swizzles. Meanwhile, bootlegger’s boats loaded with rum made midnight rendezvous up and down the East Coast supplying speakeasies. These clandestine establishments were soon looking for the latest drink recipes to utilize all that smuggled Caribbean gold. Havana became the center of this new drinking tradition. Commercial cruise lines advertised drinking vacations to the Caribbean, and the development of rail and air transportation enabled Americans to get to that daiquiri faster. American bartenders went abroad and staffed the swanky new hotels that were rising along Havana’s Paseo del Prado. Multilingual bartenders such as José Abeal Y Otero (aka Sloppy Joe, widely considered to be the finest barman in the world) made Havana home. Winter- and Prohibition-weary middle class Americans soaked up sun whilst sipping drinks adorned with pineapple slices and citrus wedges. Lingering effects from the First WWW.ARTISANSPIRITMAG.COM

World War continued the disruption of wealthy Americans vacationing in the French Riviera, and Cuba came to the rescue, rebranding itself as “the Paris of The Antilles.” In 1928, an American journalist published “It’s Cocktail Time in Cuba,” implying that Cuba was the cocktail center of the universe. This tradition of rum drinks found a new home in the Southern California of the 1930s. Ernest Raymond Beaumont Gantt was a sort of early beatnik and a 1930s American picker. Travelling to tropical destinations like Jamaica and French Polynesia, he acquired all sorts of flotsam mixed in with some colorful artifacts and lugged them back to Los Angeles where his Hollywood friends sometimes used his collection in films. In 1932 Gantt opened a small Hollywood Boulevard bar called Don the Beachcomber. It was so successful that within five years he changed his legal name to Donn Beach. When WWII broke out Donn enlisted. While he was away, his exwife built the business. When Beach arrived home, Don the Beachcomber had grown into a small chain of restaurants. He headed to Hawaii to open a Don the Beachcomber in a new resort called Waikiki Beach. In 1959, a quarter of a million tourists came to Hawaii, and Tiki was the vogue. Travel journalist Wayne Curtis wrote that the Tiki movement was “more Hawaiian than Hawaii itself.” Competitors quickly jumped into the Tiki craze. Vic Bergeron created the Trader Vic chain based on a cocktail field study to New Orleans, Trinidad and Havana. By the 1950s there were 25 Trader Vics worldwide and nearly as many Don the Beachcombers. You could order a mai tai or queen’s park swizzle served in a mug styled after an Easter Island Moai statue beneath the glow of tiki torches in Kansas City, Missouri, or St. Paul, Minnesota. Many of the drinks at these Tiki temples were based on the traditional Caribbean “Holy Trinity” of rum, lime and sugar. Though rum is the common denominator spirit in the tiki/ tropical drink lexicon, it takes more than simply rum to stir or shake up a round of tropical drinks. Gin, vodka, and whiskey also have a place in tropical drinks. As many cocktailians remind us, the Holy Trinity of Caribbean drinks are cousins to the whiskey sour, smash, and julep, all concocted for their cooling effects. Cocktail modifiers such as orange curacao, falernum, and pernod/absinthe give that exotic flavor taste profile. Additionally, a small but well-thought-out collection of bitters and syrups to complement your spirits along with recipes is just what your customers could use for some summer imbibing. Donn Beach proclaimed, “if you can’t get to paradise, I’ll bring it to you.” Help your customers and clients enjoy a bit of paradise at home this summer.

Renee Cebula is a cocktail historian. She is the owner and curator of Raising the Bar: Vintage & Badass Barware. FB: Raising the Bar Northwest, Insta/Twitter: badassbarware, raisingthebarbarware.com. WWW.ARTISANSPIRITMAG.COM

Brooks Grain Improving the quality of life with grain. www.brooksgrain.com

PROVIDING RYE

to the distilling industry for over 50 years.

800.672.8119 BRUSHES

fast & secure online ordering!

STAINLESS STEEL TOOLS

SHOVELS & SCOOPS

WASH-DOWN NOZZLES & SQUEEGEES

With all due respect,

GET YOUR OWN. WANT COPIES OF ARTISAN SPIRIT MAGAZINE TO SELL IN YOUR TASTING ROOM?

NEED MORE COPIES IN YOUR DISTILLERY?

BUY IN BULK AND SAVE. SIGN UP OR LEARN MORE: WWW.ARTISANSPIRITMAG.COM/MEMBERSHIP 121

ADVERTISER index BARRELS Barrel 53 Cooperage

CREAM LIQUEURS 76 & 92

The Barrel Mill

GRAINS

Creamy Creation

Barrels Unlimited

Black Swan Cooperage

115

Canton Cooperage

Independent Stave Co.

Thousand Oaks Barrel Co.

Boelter

Distillery Products

CF Napa Brand Design Flowdesign

Loggerhead Deco

BOTTLE MANUFACTURERS & SUPPLIERS Anchor Hocking

104

Bruni Glass a Berlin Packaging Company

Imperial-Packaging Corporation

O-I

7&9

Phoenix Packaging

Saverglass

124

Vetroelite

CLEANING & HANDLING TOOLS Union Jack

121

COMPLIANCE & BACK OFFICE MANAGEMENT American Spirits Exchange Ltd.

CONSULTANTS

Corson Distilling Systems

HBS Copper Stills

Prospero Equipment Corporation

Spirits Consulting Group

GUILD ORGANIZATIONS American Craft Spirits Assoc.

INGREDIENTS 6 & 15

4 & 77

Briess Malt & Ingredients Co. BSG Distilling

19 6 & 10

LABELS

Fort Dearborn

Specific Mechanical Systems

Impact Print Solutions

Vendome Copper & Brass Works

Multicolor Corp Global Solutions

Wright Global Graphics

American Distilling Institute Moonshine University

39 7 & 24

ENZYMES & YEAST Ferm Solutions

110

Fermentis

Lallemand

5&7

White Star Yeast by Winemakeri Inc.

104

FILLING EQUIPMENT InLine Filling Systems, LLC

FINANCING Live Oak Bank

FLAVORING

The Booze Stylist

117

6 & 17

EDUCATION 29

Brad-Pak Enterprises

2&6

DISTILLING EQUIPMENT

Rudolph Research Analytical

BOTTLE & GLASS DECORATING

121

L&M Glick Grains

DESIGN, BRANDING & MERCHANDISING

Artisan Still Design

BARWARE

Brooks Grain

Mother Murphy's

104

GLASSWARE

CORKS & CLOSURES

Distillery Products

Bruni Glass a Berlin Packaging Company

Cork Supply

PACKAGING Gamer Packaging

Liquor Bottle Packaging

PUMPS & HOSES McFinn Technologies

REFRIGERATION & CHILLERS G&D Chillers

6 & 20

RETAILER Total Wine & More

Paulson Supply

108

MGP Ingredients

Ramondin, USA

Pharmco-Aaper

Supercap

Rum Central

Tapi USA

7 & 123

Ultra Pure

7 & 13

SPIRITS COMPETITIONS San Diego Spirits Festival

119

TOTES & TANKS Custom Metalcraft

6 & 38

Spokane Industries

TRADE EXPOS Craft Beverage Expo

GNS & BULK SPIRITS SUPPLIERS

100

Mid America Beverage Expo

113 44

100

ARTISAN SPIRIT sponsors 122â&#x20AC;

WWW.ART ISANSPI RI TMAG.CO M

PA S S I O N F O R C LO S U R E S

T. 1 (8 66 ) 4 92 - 7 50 1

inf o@ t a p iusa .c om

www.t a p iusa .c om

PIONEER IN CRAFT DYNAMITE! AN EXPLOSIVE DESIGN TO MAKE YOUR BOTTLE WANTED

SAVERGLASS INC. Napa (CA): (707) 259-2930 East Coast (NJ): (201) 825-7100 Pacific North West (OR): (707) 337-1479 Mid West (KY): (859) 308-7130