Craft Spirits Magazine October 2019

VOL. 1, ISSUE 2 | OCTOBER 2019

CRAFT SPIRITS THE ART, SCIENCE AND BUSINESS OF DISTILLING

EAU DE VIE

AMERICAN DISTILLERS GO OLD WORLD PACKAGING

THE DYNAMICS OF LABEL DESIGN

THE BRANDY ISSUE

FROM THE VINEYARD TO THE ORCHARD AND BEYOND

Dan Farber of Osocalis Distillery

A PUBLICATION OF THE AMERICAN CR AF T SPIRITS ASSOCIATION

CONTENTS 38

OCTOBER 2019

FEATURES 38

Still (Kinda, Sorta, Maybe) the Next Big Thing Potential abounds in the American brandy category.

BY JEFF CIOLETTI

44

Fruitful Awakening How Jรถrg Rupf founded St. George Spirits.

BY JON PAGE

46 46

Distilling in Harmony Music inspires creativity at Copper & Kings American Brandy Co.

BY JON PAGE

48

Pommes et Raisins Can Calvados and Armagnac steal the spotlight from Cognac?

BY JEFF CIOLETTI

52

An Ode to Eau de Vie European traditions look for a footing in U.S.

BY JEFF CIOLETTI

48

56

The Slow but Steady Rise of Canadian Brandy Looking beyond whisky in the Great White North.

BY DAVIN DE KERGOMMEAUX

Cover photo by Hillary Jeanne Photography

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DEPARTMENTS 12

8

Editor’s Note

10

Contributors

NEW SPIRITS 12

Recent releases from Rogue Spirits, Lonerider Spirits and more

IMBIBER’S BOOKSHELF 16

The Complete Whiskey Course How to Drink Like a Mobster

INDUSTRY UPDATE 17

68

The show must (and does) go on for L.A.’s Lost Spirits.

Lew’s bottom shelf 26

Small Farms, Big Opportunities The beauty of farm-distillery cooperation

BY LEW BRYSON

what’s stirring 28

Flavorful concoctions from St. George Spirits, AFT Distillery and Catoctin Creek Distilling Co.

ACSA AFFAIRS 30

80

Snapshots

Bar Convent Berlin, Indie Spirits Expo and Virginia Spirits Month in pictures.

34

Beverage alcohol coalition launches “Day of Action” in support of CBMTRA

36

Beverage Alcohol Industry Urges End to Trade Tariffs U.S. action ensnarls the distilled spirits industry in a trade dispute.

BY JEFF CIOLETTI

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DISTILLING DESTINATIONS 60

LEGAL CORNER 76

Distillers use local crops to their advantage in the Badger State.

Regulatory hurdles around alcoholic beverages with CBD

Spirits in Wisconsin

Hemp and Alcohol: A Rocket Awaiting Takeoff?

BY JOHN HOLL

BY RYAN MALKIN AND GARRETT O. GRAFF

SALES & MARKETING 64

BUSINESS SENSE 78

The dos and don’ts of working with social media influencers

Exploring the challenges of raising capital for your distillery.

Under the Influence

BY JON PAGE

SUPPLIER SHOWCASE 66 Still Buyers Guide

World-class distilling equipment for producers of all sizes

TECHNICALly speaking 68 How Much Oak is Okay?

When aging brandy, don’t treat it like whiskey.

BY JEFF CIOLETTI

HUMAN RESOURCES 71

a family tradition of expert copper-smithing with innovative engineering for batch & continuous distilleries

Capitalizing Your Dreams

BY DAVID LARGE

retail: ON-PREMISE 80

150 years in the fine art of distilling technology

Creating a Well-Rounded Bar Program Constructing a truly great spirits list

BY JOHN HOLL

retail: OFF-PREMISE 82 A Matter of Taste

Examining the importance and intricacies of running an in-store tasting

BY JON PAGE

Paying it Forward

Tips and advice for starting an employee benefit program

BY JON PAGE

PACKAGING 72

Shelf Appeal Bold label designs help distillers stand out from the crowd.

BY ANDREW KAPLAN

DISTRIBUTION 84

When to Sign on the Dotted Line The pros and cons of entering formal distribution agreements

BY ANDREW KAPLAN

CLOSING TIME 87

Retail Performance Spotlight: Off-Premise Channels Agave spirits overtake rum as the No. 3 spirit in terms of dollar sales in U.S.

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putting you in the best of spirits -- since 1869 215.242.6806

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CRAFT SPIRITS MAGAZINE C EO, A M E R I C A N C R A F T S P I R I T S A S S O C I AT I O N | Margie A.S. Lehrman, margie@americancraftspirits.org E D I TO R I N C H I E F | Jeff Cioletti, jeff@americancraftspirits.org AS S I S TA N T E D I TO R | Jon Page, jon@americancraftspirits.org ACCO U N T M A N AG E R | Todd Cusumano, todd@americancraftspirits.org A RT D I R EC TO R | Michelle Villas CO N T R I B U TO R S | Lew Bryson, Davin deKergommeaux, Garrett O. Graff, John Holl, Andrew Kaplan, David Large and Ryan Malkin AMERICAN CRAFT SPIRITS ASSOCIATION O P E R AT I O N S A D M I N I S T R ATO R | Teresa McDaniel, teresa@americancraftspirits.org E D U C AT I O N CO O R D I N ATO R | Kirstin Brooks, kirstin@americancraftspirits.org M E M BE R S E RV I C E S A N D S O C I A L M E D I A CO O R D I N ATO R | Carason Lehmann, carason@americancraftspirits.org ACSA ADVISORS M E E T I N G S A N D LO G I S T I C S | Stephanie Sadri, HelmsBriscoe S T R AT EG I C CO M M U N I C AT I O N S | Alexandra S. Clough, GATHER PR L EG A L | Ryan Malkin, Malkin Law, P.A. P U B L I C P O L I C Y | Jim Hyland, The Pennsylvania Avenue Group ACSA BOARD OF DIRECTORS, 2019-2020 P R E S I D E N T | Chris Montana, Du Nord Craft Spirits (MN) V I C E P R E S I D E N T | Maggie Campbell, Privateer Rum (MA) S EC R E TA RY/ T R E A S U R E R | Colin Keegan, Santa Fe Spirits (NM) EAST Maggie Campbell, Privateer Rum (MA) Ryan Christiansen, Caledonia Spirits (VT) James Montero, Dogfish Head Distilling (DE) Becky Harris, Catoctin Creek (VA)

CENTRAL & MOUNTAIN Colin Keegan, Santa Fe Spirits (NM) Courtney McKee, Headframe Spirits (MT) Chris Montana, Du Nord Craft Spirits (MN) P.T. Wood, Wood’s High Mountain Distillery (CO) Amber Pollock, Backwards Distilling Company (WY) Colton Weinstein, Corsair Artisan Distillery (TN) Thomas Mote, Balcones Distillery (TX)

PACIFIC Jeff Kanof, Copperworks Distilling Company (WA) Molly Troupe, Freeland Spirits (OR) Dan Farber, Osocalis Distillery (CA) Jake Holshue, Old Trestle Distillery (CA)

EX OFFICIO Thomas Jensen, New Liberty Distillery (PA) ACSA PAC Stephen Johnson, Vermont Spirits (VT) ACSA PAST PRESIDENTS 2 0 1 7-2 0 1 8 | Mark Shilling, Treaty Oak Brewing and Distilling Co. 2 0 1 6 -2 0 1 7 | Paul Hletko, FEW Spirits 2 0 1 4 -2 0 1 6 | Tom Mooney, House Spirits CRAFT SPIRITS MAGAZINE EDITORIAL BOARD Eli Aguilera, Lew Bryson, Alexandra Clough, Sly Cosmopoulos, Dan Gasper, Dr. Dawn Maskell For advertising inquiries, please contact Todd Cusumano at todd@americancraftspirits.org.

For editorial inquiries or to send a news release, e-mail news@americancraftspirits.org P.O. Box 701414, Louisville, KY 40270 • 502.807.4249 © 2019 Craft Spirits Magazine is a publication of the American Craft Spirits Association.

Where Science Meets Art Yeasts, Nutrients, and Process Aids

At Lallemand Craft Distilling, our single source philosophy provides the highest quality ingredients, tailored technical service and education, and industry leading experience to support your needs. Your spirits are our passion, your needs are our motivation.

Contact us to learn more today. www.lallemandcraftdistilling.com

Š 2019

Editor’s Note

THREE DAYS IN A CONVENT Welcome to the second, action-packed issue of Craft Spirits magazine! In this edition, we’re all (well, mostly) about brandy and eau de vie in their many forms. Speaking of which, you know what country has a vast and venerable fruit distilling tradition? Germany, in whose capital city I was this month for Bar Convent Berlin (BCB), Europe’s largest trade show for the bar and drinks industry. And I want to talk about that because you have the whole rest of the issue to read about brandy (how’s that for a segue?).

The BCB experience likely will inform coverage for the next several issues, but I have a few preliminary observations that I’d like to share from the three-day overseas event.

Gin Is Way In It wasn’t much of a surprise that a spirit that’s had a massive renaissance across Europe would be highly visible at a European trade fair. What’s most interesting though is how far beyond the continent the gin boom has spread.

It seems to be the next category that Japan’s poised to conquer, as there was a surge this year in the number of Japanese gins being poured. And even though international interest in American spirits has largely been whiskeycentric, the number of American craft producers showing off their botanical spirits to the gin-savvy audience at BCB bodes well for the category back home.

So is Rum for That Matter Rum’s another category that continues to gain momentum and the enhanced presence of sugarcane/molasses-based spirits enjoyed at BCB was evidence of that. For the first time, the event devoted an entire conference stage to the category, focusing on all-rum-all-the-time programming in one of the education rooms for all three days.

This Next Item Probably Has Something to Do With That It’s no wonder that rum is trending. The very American tiki tradition, of which cane-based spirits are a major component, has now emerged as a global phenomenon. Tiki bars have popped up in many major cities across all inhabited continents and it was a key marketing aesthetic for a number of brands at BCB. I was quite surprised to run into a familiar face from the U.S. tiki scene, grass-skirt-and-leiclad King Kukulele, who was hired to strum his uke, sing and ham it up at one brand’s booth.

tors marketing their products as alcohol-free “spirits,” and I’ve got mixed emotions about that. While I fully embrace low- or no-ABV imbibing for a variety of reasons—pregnancy, designated driving, sobriety and personal choice not to drink—I feel that some of the products offered as alcohol alternatives have a certain “Emperor’s New Clothes” vibe about them. I’d be a bigger fan if some of them would stop calling themselves spirits when they seem more like flavored or botanically infused water.

Sustainability Sustains Itself Previously, when it came to spirits, environmental sensitivity usually took the form of energy-efficient, low-waste processes and recyclable packaging. But now it’s gone a bit further, conquering the accessories with which consumers imbibe. Plastic straws have virtually disappeared from many industry events and environmentally conscious bars, but many haven’t been fans of their paper replacements.

A few vendors at BCB showcased some alternatives. My favorite among those was a dishwasher-safe, practically unbreakable glass straw (the marketing team demo’d it for me by slamming it against the table). Things seem to be moving toward the “reuse” component of the three Rs. Trade Wars Are Good for No One And Not Easy to Win The news wasn’t all warm and fuzzy. The anxiety over trade tariffs, especially among exporting U.S. craft spirits producers, was palpable at BCB. (Read more about this on page 36). Retaliatory tariffs have made it very difficult for many distillers to maintain a foothold in international markets and a number of those exhibiting at the trade fair lamented a significant loss in revenue from the ongoing, unnecessary economic war. Enough is enough.

That’s it for now. If you want BCB-related eye candy, head on over to Snapshots on page 30.

Jeff Cioletti Editor in Chief

No-Alcohol ‘Spirits’ Are Probably Here to Stay There definitely was an increase in the number of exhibi-

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Thank You, Sponsors!

The American Craft Spirits Association would like to thank all of our annual sponsors and our key supporters of education. We are grateful for all of your support throughout the year. Cheers!

Contributors

Lew Bryson has been writing about beer and spirits full-time since 1995. He was the managing editor of Whisky Advocate from 1996 through 2015, where he also wrote the American Spirits column, and reviewed whiskeys. He is currently a Senior Drinks Writer for the Daily Beast, and also writes for WhiskeyWash.com, American Whiskey and Bourbon+. He is the author of “Tasting Whiskey” (Storey Publishing, 2014), a broad survey of the whiskeys of the world, their history and manufacture. He has also written four regional brewery guidebooks.

Andrew Kaplan is a freelance writer based in New York City. He was Managing Editor of Beverage World magazine for 14 years and has worked for a variety of other food and beverage-related publications, and also newspapers. Follow him on Twitter @andrewkap.

Hillary Jeanne is a lifestyle photographer based in San Francisco, who shot this month’s cover photo. She left her 9-5 sales job in the tech industry to pursue her passion full-time and hasn’t looked back since. Hillary loves connecting with people and telling their stories with her camera. Her work has been described as authentic and refreshing. When she’s not taking photos for clients, she enjoys traveling, exploring local restaurants, and creating personal work.

Davin de Kergommeaux is an independent spirits expert who has been writing about spirits for over two decades. He is the author of the book, “Canadian Whisky: The New Portable Edition, second edition.”

His new book, The “Definitive Guide to Canadian Distilleries,” will be published in March 2020. He is the founder and chairperson of the Canadian Whisky Awards, and publishes comprehensive notes about Canadian whiskies on canadianwhisky.org.

He lives in Canada and writes full time.

Find him on social media @Davindek.

John Holl is a journalist covering the beer industry. He’s the author of several books including “Drink Beer, Think Beer: Getting to the Bottom of Every Pint” and “The American Craft Beer Cookbook.” He is the co-host of Steal This Beer, a podcast and his work has appeared in the New York Times, Washington Post, Wine Enthusiast and more. John has lectured on the culture and history of beer and judged beer competitions around the world.

David Large is the director of Thoroughbred Spirits Group. Having been in the spirits business for more than a decade, David has been involved with dynamic startups as well as large Wall Street firms.

David has been a partner in a successful spirits company and currently works with client brands at Thoroughbred Spirits focusing on increasing shareholder value by launching new offerings, opening new channels, enhancing brand equity, and providing guidance for capital raises and exit strategies.

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Garrett O. Graff is a managing attorney at Denver-based Hoban Law Group, specializing in the representation of both the marijuana and industrial hemp industries.

His practice involves corporate and M&A, real estate, regulatory/compliance, FDA/ FTC compliance, intellectual property protection, and more. Graff counsels clients regarding corporate formation and structuring, M&A and business and real property assets, various corporate agreements, regulatory compliance as well as resolving and/or litigating commercial disputes.

Michelle Villas is an art director with more than 20 years experience in publication design. After spending 16 years working on magazines in New York for a variety of titles, incuding Beverage World, Michelle headed out to California where she now calls the South Bay home. She is the Senior Art Director on a range of lifestyle publications for The Golden State Company. A true typophile, she carries her obsession with fonts into every project.

Ryan Malkin is an attorney focusing on alcohol beverage and cannabis law. He has extensive experience providing guidance to suppliers, wholesalers, retailers, agencies, and third parties within these regulated industries. Ryan’s passion for the alcohol industry began as a staff writer for SmartMoney, and his articles have also appeared in Artisan Spirit magazine, Beverage Media, Liquor.com, The Wall Street Journal, New York Post, DJTimes, and Esquire to name a few. Ryan is also counsel to the American Craft Spirits Association.

Fruitful Endeavors: The State of the U.S. Brandy Market Register for our Webinar on Oct. 24 A panel of American brandy producers will share their stories and offer their insights on the state of the American brandy market—and what lies ahead for the category.

When: Thursday, Oct. 24, 3-4 p.m.

Where: Online Webinar Who: Lisa Laird of Laird & Co. and Joe Heron of Copper & Kings American Brandy Co.

Sign up at americancraftspirits.org/education/webinars/ C R AF TSPIR ITSMAG.COM

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New Spirits

North Carolina’s Lonerider Spirits, sister craft distillery of Lonerider Brewing Co., released a cask finish bourbon whiskey that is a collaboration between the two companies. Lonerider Spirits’ first beer-barrel finished spirit, “Deadwood” Cask Finish Straight Bourbon Whiskey is a 90-proof high rye bourbon whiskey with a mash bill of 60% corn, 36% rye and 4% malted barley (all non-GMO).

This straight bourbon is finished in ex-bourbon barrels that contained “Deadwood”—an award-winning barrel aged Russian nitro stout created by Lonerider Brewing Co.

In August, Tennessee’s Chattanooga Whiskey announced the release of its new signature expressions—91-proof Chattanooga Whiskey 91 and 111-proof Chattanooga Whiskey CASK 111. The signature recipe—known as “Barrel 91”— for Chattanooga Whiskey 91 was selected by head distiller Grant McCracken from the first 100 experimental barrels created at the Chattanooga Whiskey Experimental Distillery.

Chattanooga Whiskey 91 has a taste profile of dried apricot, sweet tea, and honeyed toast, with a lingering, malty-sweet finish. Releasing as a partner offering, Chattanooga Whiskey CASK 111 is the unfiltered, barrel strength expression of Tennessee High Malt.

Copperwing Distillery of St. Louis Park, Minnesota, recently released FRESAS, a 71-proof strawberry flavored gin. This new gin uses local grains to create the base spirit and is then macerated with botanicals including juniper and coriander. After infusing for five days, the spirit is re-distilled and vapor-infused with more juniper.

Finally the gin is blended with real strawberries. The versatile spirit can be enjoyed straight out of the bottle as a cocktail or served with soda water.

Apologue Spirited Liqueurs of Chicago introduced Saffron, a 70-proof spiced liqueur featuring the world’s most expensive spice. Inspired largely by Apologue cofounder Ziyad Asrar’s South Asian heritage, the liqueur also presents aromas of cardamom and coriander, in addition to saffron. The distillery recommends pairing Saffron with ginger beer, gin, vodka, rums, cognac, or pouring it neat or over ice. Apologue is working with Rumi Spice, a fellow Chicago-based Certified B Corp, to source its saffron.

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Rogue Spirits launched its first sparkling canned cocktail line, featuring three 7.5% ABV, gluten-free cocktails made with ingredients from the Oregon-based company.

Cucumber Lime Gin Fizz is inspired by cucumbers grown on Rogue Farms; Rogue Spirits Bayfront Vodka forms the base of Cranberry Elderflower Vodka Soda; and Ginger Lime Vodka Mule is inspired by a favorite cocktail at the Rogue Pub in Newport. The cocktails are packaged in four packs of 12-ounce slim cans, and are currently available in Oregon, Washington, Idaho, Florida and Michigan. A nationwide launch is scheduled for January.

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New Spirits

McClintock Distilling and The Baltimore Spirits Company (BSC) announced that they are separately releasing two limited-edition gins as a collaborative endeavor. The project between the two Maryland distilleries uses rye whiskey mash infused with signature botanicals to create a genever-style gin made in the traditional Dutch fashion.

McClintock Distilling used mash from BSC’s Epoch Rye for its Frederick Series Gin. And BSC used mash from McClintock’s Bootjack Rye Whiskey for its 100-proof Singularity No. 3 Gin. While BSC has undertaken collaborative projects before, such as with their neighbor Union Brewing, this is the first collaboration of its kind between two Maryland distilleries. The project comes after almost two years of planning and will highlight Maryland’s rich tradition in rye-based spirits as well as the ingenuity the companies are known for.

Watershed Distillery of Columbus, Ohio, recently announced that a barrel-finished version will now replace its original Nocino offering and distribution will be expanded beyond the distillery’s local distribution channels. This version is reminiscent of the original 43.4-proof version, but the spirit spends seven months in one of the distillery’s spent bourbon barrels.

It is made from Ohio black walnuts, cut when fresh and left to soak for a few months in house-distilled vodka.

Then the signature blend of sugar and spice is added to transform the spirit into Nocino.

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Central Standard Craft Distillery of Milwaukee introduced Hard20, a 5% ABV handcrafted still-vodka water. Each 12-ounce can contains 40 calories, no sugar and no carbohydrates. The gluten-free beverage is available in Berry, Mango, Citrus and Dragonfruit-Pear flavors.

Hard20 is initially available in Wisconsin and will launch nationally in 2020.

Tamworth Distilling & Mercantile of Tamworth, New Hampshire, recently released a limited-edition whiskey with a chilling ingredient. Graverobber Unholy Rye is a 90-proof three-year-old rye whiskey infused with maple syrup tapped from graveside maple trees. The spirit takes on a layered profile full of charred oak and burnt sugar. Blended with sinister cemetery syrup, with aromas of cinnamon and dried orange peel, the exhale is followed by the sensation of rye cracker.

Dogfish Head Distilling Co. of Milton, Delaware, recently released the 90-proof Alternate Takes: Volume 2, Whiskey Finished in Palo Santo Marron Ale Barrels. After being batch-distilled using a grain bill of malted barley, applewood-smoked malt, coffee-kilned malt and crystal malt, Alternate Takes: Volume 2, Whiskey Finished in Palo Santo Marron Ale Barrels was fermented with Dogfish Head’s proprietary Doggie Ale yeast. It was then aged in American oak barrels before being finished in casks that previously held the brewery’s iconic Palo Santo Marron.

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New Spirits

Cardinal Spirits of Bloomington, Indiana, this fall debuted La Boite American Amaro, crafted in collaboration with the New York City spice shop La Boite. The herbaceous 40-proof amaro with hints of citrus and smoke incorporates a special blend of 15 of the shop’s proprietary spices, including star anise, licorice, orange and green cardamom.

It’s designed to be an easy-drinking, less bitter amaro whose occasions extend beyond the traditional aperitif and digestif. It pairs well with the meal itself.

To commemorate the entry of 10th generation into the family business, Laird & Co. has unveiled Laird’s 10th Generation Apple Brandy, a 100-proof, 5-year-old Bottled in Bond release, distilled at Laird’s Virginia distillery and aged at the company’s Scobeyville, New Jersey, headquarters.

It’s been nearly 240 years since the Laird family released its first commercial apple brandy (though the family’s non-commercial distilling activity dates back to 1698.)

The Family Jones Distillery of Colorado recently released the 94-proof Atticus Jones, Colorado Straight Rye Whiskey.

This is the first straight whiskey produced grain to glass by The Family Jones. Head distiller Rob Masters worked directly with local farmers at Colorado Stock and Grain, Root Shoot Malting and the Whiskey Sisters to craft a rye whiskey using all Colorado grains. The mash bill is 75% rye, 15% corn and 10% malted barley.

Pennsylvania Pure Distilleries recently announced the release of its newest product line of ready-to-drink cocktails. Boyd & Blair Lemon & Lavender and Boyd & Blair Iced Tea & Lemonade are each available in 1-L bottles and 200-mL flasks. The 40-proof Lemon & Lavender is made with Boyd & Blair Potato Vodka and dried lavender florets. The 36-proof Iced Tea & Lemonade includes Earl Grey tea and house-made lemonade.

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It’s a match made in Grunge heaven. FEW Spirits of Evanston, Illinois, and Warner Music Artist Services announced the release of All Secrets Known, a new, limited-release bourbon that FEW master distiller Paul Hletko distilled in collaboration with legendary rock band Alice in Chains.

Named after the opening track of the band’s 2009 release, “Black Gives Way to Blue,” All Secrets Known has a secret of its own: It’s finished for six months in tequila barrels. Bottled at 101 proof, All Secrets Known retails for $75.

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Imbiber’s Bookshelf

The Complete Whiskey Course: A Comprehensive Tasting School in Ten Classes Author: Robin Robinson Publisher: Sterling Epicure Release Date: Oct. 1 Renowned whiskey educator Robin Robinson demystifies the “water of life” in a definitive, heavily illustrated tome designed to take readers on a global tour of the ever-expanding world of whiskey.

Across 10 robust “classes,” Robinson explains whiskey history, how it defined the way whiskey is made in different countries and regions, the myriad styles, how aging and finishing works, and the basics of “nosing” and tasting whiskey. In chapters dedicated to American whiskey (including bourbon, Tennessee whiskey, and rye), American Craft whiskey, Scotch, Irish, Canadian, Japanese, and world whiskies, Robinson presents the best offerings from new and historic producers, how to choose among them, and how to build a collection of your own.

How to Drink Like a Mobster: Prohibition-Style Cocktails Author: Albert W. A. Schmid Publisher: Red Lightning Books Release Date: Sept. 1 From John Dillinger’s Gin Fizz to Al Capone’s Templeton Rye, mobsters loved their liquor―as well as the millions that bootlegging and speakeasies made them during the Prohibition. In a time when any giggle juice could land you in the hoosegow, mobsters had their own ways of making sure the gin mill never ran dry and the drinks kept flowing.

And big screen blockbusters like The Godfather, GoodFellas, and Scarface and small screen hits like The Sopranos and Boardwalk Empire ensure that our obsession with mobsters won’t run dry, either.

Mixology expert Albert W. A. Schmid shows how you can recreate the allure of the gangster bar life with step-by-step instructions on how to set up the best Prohibition-style bar and pour the drinks to match.

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Author Spotlight: Robin Robinson Before he started teaching classes on whiskey more than a decade ago, Robin Robinson was an actor and a salesman. In each arena, he has used humor to demystify complicated subjects, which he also aims to do in his new book, “The Complete Whiskey Course.” We recently caught up with Robinson to chat about the book and more.

Who do you see as the target audience for the book?

Robin Robinson: This is the new- to intermediate-whiskey drinker. Whiskey nerds will find some good info in there (that many of them don’t know, but will absolutely not admit to it), but I’m interested in this being the book they recommend to their friends who want to know more.

The book offers a comprehensive look at styles of whiskey all over the world. What is one (or a few) of your personal favorite styles?

I cut my teeth on Scotch whisky back in the 1980s and so that style informs my palate. I’m surprised how much I love rye these days, and I think, being from Pittsburgh, I have an emotional/historical affinity to it.

With the American craft segment continuing to grow, how long do you think it will be before you’ll need to write a second version of the book?

Ha! It’s already out of date and it just got released! I specifically pushed the editors to include American Craft as a separate segment. About 15 years ago, I realized it was going to be the real game-changer, an actual disruptor (without the hyperbole) in spirits drinking. It hasn’t disappointed. My approach was to give the overview of what’s going on in the sector and then use specific examples of distillers to highlight what I saw as the completely personalized ethos behind it. As I say in the book, its filled with “entrepreurs, disillusioned professionals and anyone with the capital investment to make a go of it”. We’re a country with a heritage of making things, and this cohort harkens back to that time.

You also serve as a consultant to small brands. What are some of the first questions you ask before starting to work with a new client?

Why do you want to do this? Are you out of your mind?

Prove to me you’re going to last more than three years and have the money to spend in deficit without any expectation of return on investment. What exactly is in this bottle?

If you say ”grain to glass” one more time I’m hanging up.

Simple things like that.

You also have a one-man show called The Story of Whisk(e)y. What can people expect when they see it?

I bill it as “60 minutes of bad stand up comedy punctuated by drinking” so that tends to perk people’s ears up. Then I deliver on both and there’s some terrible puns in it that I’m quite proud of.

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Industry Update

THE SHOW MUST (AND DOES) GO ON FOR L.A.’S LOST SPIRITS

BY JEFF CIOLETTI

After a fire last January shut down its original downtown Los Angeles facility for half a year, the theme-park-like Lost Spirits Distillery has reopened for tours with enhanced attractions at a new site. Well, make that two sites. “[The fire] took our lab, middle room, storage area and offices upstairs—it pretty much took our whole middle swath,” co-founder Bryan Davis told Craft Spirits magazine during a private tour of the new digs. “It didn’t mess with production, but made it impossible to do the usual schtick.”

That “schtick,” which included a Pirates of the Caribbean-like boat ride and other shenanigans that evoke a strange combination of Jules Verne and David Lynch, had made the tour a hot ticket, even for jaded Angelenos.

“In order to get your insurance settlement, you’ve got to do things one of two ways,” Davis continued. “You either have to operate hobbled and get a partial settlement, or, if you want your whole insurance [payment], you have to close the whole thing, so we closed the whole thing.”

Problem was, it would take about 18 months for that site to get re-permitted. So Davis and co-founder Joanne Haruta had to come up with a back-up plan. “After the fire we basically went through, gutted [the facility] and grabbed everything we could use,” Davis recalled. “We already had another distillery offsite, that we had been building for two

years that was meant to be back-end production that nobody was meant to see. So, we figured, we have this licensed building while [the original] one is going to take 18 months to re-open.”

The catch was that the second production facility was located several miles outside of L.A. proper, raising the question of how the distillery would get visitors there. The solution: open in a new, sprawling space in downtown L.A.’s trendy, urban-chic Arts District, featuring many of the accoutrements of the original distillery—plus a number of entirely new enhancements—and then shuttle folks to the production site to see the spirits being made.

The 10-to-15-minute ride (depending on traffic) sounds like it would be a drag, but the distillery worked to make sure it would be anything but. Lost Spirits repurposed some old buses and redesigned their interiors into themed, mobile tasting rooms. One sports a Captain Nemo, steampunk-ish vibe, while another has more of a New Orleans burlesque kind of aesthetic. And, visitors get to sip their samples “under water.” The shuttles are designed as faux submarines, complete with portholes that fill up with blue water as they “submerge.”

The ride begins after guests find their way through a botanical maze and take the signature boat ride. The difference now, though, is

Lost Spirits repurposed some old buses and redesigned their interiors into themed, mobile tasting rooms. riders are no longer (literally) in the dark.

“Part of the fun of the old tour was that you could never know how far the boat actually went because you traveled in the dark,” Davis noted. “We thought it would be really entertaining this time to let people see actually how far the boat trip really was. So we rebuilt the exact same canal.”

Now outdoors, the boat is no longer powered by a fan blowing wind into the sail, as there’s now real, unpredictable wind, competing with that. So, now, foot-power, a la Fred Flintstone, propels the vessel.

Before it even opened the original visitor experience, the distillery attracted attention for its patented rapid-aging technique designed to replicate the effects of years of maturation in just a couple of days. The technology has its share of both fans and detractors. But there’s one thing most can agree on: Lost Spirits still knows how to put on a show.

Bryan Davis of Lost Spirits Distillery

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Industry Update

VIRGINIA DISTILLERY CO., SCOTCH WHISKY ASSOCIATION REACH RESOLUTION In a joint statement released in August, the Virginia Distillery Co. and the Scotch Whisky Association announced that they had reached an amicable resolution of the lawsuit between the parties related to product labelling.

While they had always endeavored to ensure that their Virginia-Highland Whisky series was labelled in accordance with Federal Regulations, the Virginia Distillery Co. said it will cease using “Highland” after it sells remaining stock. The distillery will, however, continue to label all products using ‘whisky’ which is allowed under U.S. law.

“We stand behind the quality of the Virginia-Highland Whisky products and the awards and general recognition they have received the past three-plus years, but are happy to work with the Scotch Whisky Association to ensure that there is no chance of confusion about our products,” explained Gareth Moore, Virginia Distillery Co. CEO.

“From the start, Virginia Distillery Company has been transparent about the nature of our products, which have been recognized for their quality, and we are committed to growing and championing the American Single Malt Whisky category.”

Lindesay Low, deputy director of legal affairs at the SWA, added: “We welcome Virginia Distillery Co.’s willingness to work with us to protect the integrity of Scotch Whisky.

With the company’s commitment to remove all references to ‘Highland’ and other Scottish indicators from their products over a phased period, we are pleased to cease the pending legal proceedings.

“We appreciate the prompt and positive attitude shown by the Virginia Distillery Co. team in bringing the issue to resolution, removing the need for action in the courts to protect the intellectual property of Scotch Whisky.”

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C R AF T S PI R I T S MAG .CO M

Industry Update

PHOTOGRAPH: ALAIN HAIN

GARDINER LIQUID MERCANTILE COMMISSIONS MOBILE STILL When Gable Erenzo, the owner of Gardiner Liquid Mercantile in New York, purchased a used 1,000-liter pot still, he was amazed at the cost of building a stand and jacket for the still. Since he leases distilling space at a nearby farm, he was hesitant to invest in a permanent foundation. “The quotes were coming in at $3,000 to $4,000 and I was like, this is crazy,” Erenzo recalls. “If I’m going to spend that in a small space that I don’t own—I’ve got a great relationship with [the farm], but who knows what could happen.”

The former chief distiller at Tuthilltown Spirits Distillery opted for a more expensive but mobile solution. The propane-powered still, which he purchased from California’s Sonoma Distilling Co., is now fitted to a trailer, and Erenzo will use it to distill brandy and eau de vie.

“It’s fully mobile and I can run it here on site,” says Erenzo. “But if I ever decide to move or decide to build out a new building … I’ve got this business on a trailer, no matter where I end up. I’ve always got this golden goose that I can tow behind my truck.”

Thanks to a state law that makes it relatively easy for a farm to add a distillery license, Erenzo is pondering the prospect of partnering with local wineries who want to branch out into distilling. “I could go to local wineries and say, ‘We’ll help you add on the farm distillery to your license. You’ll use this still on your trailer in the application. It doesn’t have to be there all the time.

I can come by several times a year, whenever you need me. I just have to have water.’”

For now, Erenzo is focusing on filling barrels for his own venture.

Open daily in downtown Gardiner, his farm bar offers tastes of his spirits, cocktails, food and more beverages from around New York state. —Jon Page Gable Erenzo of Gardiner Liquid Mercantile

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Industry Update

BARR HILL GIN WINS BEST OF SHOW IN HONEY SPIRITS COMPETITION Barr Hill Gin from Montpelier, Vermont-based Caledonia Spirits, took home Best of Show honors at the National Honey Board’s second annual Honey Spirits Competition. Ninety made-with-honey entrants from distilleries throughout North America were scored, with seven garnering Gold Medal awards. Those included a vodka, specialty spirits, brandy and spirits distilled from honey. Additionally, Tenth Ward Distilling Co.’s Honeyjack took home the gold medal in the design/packaging category.

Barr Hill Gin, an ode to the bees of the Northeast, is distilled in Caledonia Spirits’ custom-build botanical extraction still. The corn-based spirit is made with juniper and honey, and has a crisp, creamy, floral and balanced taste. It is 90 proof, gluten-free and kosher.

The Honey Spirits Competition was judged by nine judges from North America and featured 11 made-with-honey categories. The submitted spirits were judged in flights based on their aroma, appearance, flavor, mouthfeel and the role honey played in the spirit. New to

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this year’s competition was the design/packaging category.

“In only our second year of hosting the Honey Spirits Competition, we’re thrilled to see the growth of entries in all categories and more Gold Medal winners this year,” says Catherine Barry, National Honey Board’s director of marketing. “It’s exciting to see how honey is being used in versatile ways in the spirits industry, adding flavor, floral aromatics and more to the likes of gin, vodka, rum, bourbon, brandy and specialty liqueurs.”

Newport Beach, CA Gold Medal: Sweet Sting Honey Spirit — Westslope Distillery, Hamilton, MT Gold Medal: Limoncello — Hatch Distilling Co., Egg Harbor, WI

Gold Medal Winners of the 2019 Honey Beer Competition Best in Show: Barr Hill Gin — Caledonia Spirits, Montpelier, VT Gold Medal: Glass Nectar Vodka — Glass Distillery, Seattle, WA Gold Medal: Krupnikas Spiced Honey Liqueur — Brothers Vilgalys Spirits, Durham, NC Gold Medal: Cold Brew Coffee Liqueur — Honey House Distillery, Durango, CO Gold Medal: Bohemia Honey — R. Jelinek,

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Industry Update

EIGHT OAKS ANNOUNCES NAME CHANGE The distillery founded as Eight Oaks Craft Distillers recently announced it has changed its name to Eight Oaks Farm Distillery.

Chad Butters, the founder and CEO of the distillery in New Tripoli, Pennsylvania, said the new name helps better educate the community about the distillery.

“One of the things we really appreciate is the agricultural component of what we do,” Butters said in a video announcing the name change. “We really are, truly a farm, and the farm represents more than just growing grains. It represents your interaction with your community. And that’s what makes us who we are.”

HAPPY RAPTOR DISTILLING TO LAUNCH IN NEW ORLEANS Happy Raptor Distilling of New Orleans will soon begin producing craft spirits at a site that was once a graffiti-covered storage facility.

The distillery’s location at 1512 Robert C. Blakes Sr. Drive (a two-block stretch of Carondelet Street) is nestled in a high-traffic but often overlooked area. Playing a role in the revitalization of the neighborhood, the distillery will feature a 2,000 square-foot production space and tasting room with an adjacent back patio.

Started by three friends and former next-door neighbors (including a professional mental health counselor, a public relations specialist and a mechanical engineer working with NASA), Happy Raptor plans to specialize in infused rums made in the Caribbean tradition. The inaugural products are 504 Hibiscus and 504 Bananas Foster.

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Industry Update

VIRGINIA LAUNCHES SPIRITS TRAIL Coinciding with September Virginia Spirits Month, the Virginia Tourism Corporation (VTC) launched the Virginia Spirits Trail and Passport Program.

In addition to sharing the history of Virginia’s distilled spirits, the Virginia Spirits Trail provides tourists with a map detailing the locations of the 28 participating Virginia distilleries.

A passport program encourages multiple visits and gives spirited travelers a free trail T-shirt once they visit 10 distilleries. Consumers can download a digital copy of the trail or request the printed version by visiting VirginiaSpirits. org. The trail is also made possible through support from Virginia Hop On Tours.

Governor Ralph Northam joined more than 20 Virginia distilleries at George Washington’s Mount Vernon Distillery to toast the Trail. The fourth annual campaign to support sales and education for Virginia’s craft spirits industry also celebrates the 400th anniversary of distilled spirits production in the United States.

“Virginia is the birthplace of American

Spirits, and our distilleries continue to represent one of the fastest growing sectors of our booming beverage industry,” said Governor Northam. “I am proud to celebrate

Virginia Spirits Month and the important contributions of our high-quality distilled spirits to the Commonwealth’s rich history and thriving economy.”

ARGLASS YAMAMURA TO BUILD FIRST U.S. GLASS PLANT IN GEORGIA Georgia Gov. Brian P. Kemp recently announced that Arglass Yamamura, LLC, a glass container manufacturing company, will create more than 150 jobs and invest $123 million to build its first U.S. glass container manufacturing plant in Valdosta, Lowndes County.

“With our highly-trained workforce, unmatched logistics network, and pro-business climate, the Peach State has solidified its reputation as a top competitor for manufacturing investment in recent years. Without question, this announcement is a great addition to our success story,” said Gov. Kemp. “This new facility will generate exciting opportunities for hardworking Georgians throughout the region, and we are grateful that Arglass Yamamura chose to begin operations here in Georgia.”

Arglass Yamamura noted Valdosta’s highly-skilled workforce, affordability, educational infrastructure and close proximity to markets along the East Coast as determining factors for its specialty manufacturing operations.

“Georgia, specifically the Valdosta region, will allow us to run a very flexible, efficient, and cost-effective manufacturing operation, while remaining close to our customer base in the South and eastern parts of the United States,” said José de Diego-Arozamena, CEO of Arglass Yamamura. “We wish to thank local and state officials who have been instrumental in the site selection process and look forward to working with local businesses as we become an active member of the Valdosta community.”

The Valdosta facility will serve as the company’s first U.S. plant, creating glass products based on the company’s founding principles of flexibility, efficiency, and sustainability.

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Industry Update

COLORADO’S THE FAMILY JONES OPENS NEW TASTING ROOM The Family Jones opened a new tasting room within its distillery in Loveland, Colorado, this September.

The Family Jones’ distillery opened in Loveland in late 2016 and it began selling spirits in conjunction with the opening of The Family Jones Spirit House, a small-batch distillery and tasting room in Denver’s Lower Highland neighborhood, in November 2017.

The Loveland distillery tasting room will offer a spirits list featuring the premium spirits line, including Annika Jones Vodka, Juniper Jones Gin, Mo Jones Rum, Automatic Jones Rock & Rye, Stopgap Bourbon and Atticus Jones Colorado Straight Rye, as well as The Jones House line of well spirits, including Jones House Gin and Jones House Vodka.

Guests may enjoy the spirits individually, in a flight, or crafted into one of six to eight seasonal, rotating cocktails. The cocktail menu will feature some of The Spirit House’s standbys, such as the Family Jewels Old Fashioned and the Second Divorce Martini, as well as cocktails unique to the Loveland location, such as The Barricuda Lemondrop and

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Hair of the Dog Bloody Mary. Like The Spirit House, the Loveland tasting room will operate a truly scratch bar; custom modifiers such as

housemade crème de violet, crème de cacao, Colorado pine Amaretto and more will grace the shelves of the back bar.

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If you attend only

one industry convention next year, take part in...

SAVE THE DATE

7TH ANNUAL ACSA DISTILLERS’ CONVENTION & VENDOR TRADE SHOW

MARCH 29-31, 2020 PORTLAND, OREGON

THIS IS THE ONLY TRADE SHOW CREATED

BY AND FOR CRAFT DISTILLERS

Journey to Craftlandia with us March 29-31 at the Oregon Convention Center.

• Network with fellow craft spirits producers, leading suppliers, and industry experts.

• Accelerate growth with insights drawn from 30+ hours of education sessions.

• Kick-start a new business concept by learning from peer best practices.

• Participate and taste our industry’s best spirits at the Annual Spirits Awards dinner and tasting.

Walk away energized and inspired as we celebrate the craft spirits community. Stroll away with new knowledge on market access!

Sprint away confident on how to grow your business!

For more information, visit

americancraftspirits.org/ programs/convention/

lew's bottom shelf

SMALL FARMS, BIG OPPORTUNITIES

BY LEW BRYSON

I grew up in farm country, in Lancaster County, Pennsylvania. There was a cornfield beyond our back fence (usually corn, sometimes alfalfa). I made money in the summer baling hay and harvesting tobacco, drinking water by the gallon and eating the farmer’s home-cured ham sandwiches for lunch.

But te best part was the truck, as it was called, the vegetables grown in the large gardens on the farms, usually by the mothers and kids on the Amish and Mennonite farms.

We’d go to one stand for ripe, bulging, yellow and red tomatoes, then another for sweet corn picked that morning, with the dew still on it. Radishes, cucumbers, onions, peaches, apple, and all kinds of good things (honey, maple syrup, home-made root beer!) were spread out in white-painted, shallow wooden bins, which had probably also been made right there on the farm.

I still see those stands when I visit my mother, and it’s hard to drive by them without stopping. I have tomatoes back at home that I bought at a store, but I still get the farm ones. They’re probably more expensive, and they might not look perfect. But they’re fresh, flavorfully ripe, and I can look the person who grew them in the eye.

There’s also the connection, the web of benefit and sustainability. When I buy their vegetables, they make the full retail price, not what the stores will pay them. They get the reward for growing something other than commodity crops. I get the great-tasting truck, and the likelihood that it’s going to be there next year.

That’s how it works with farm-distillery cooperation, too. Grain farmers are stuck in an economic system that wants them to grow corn all the time, wants them to grow the same strain of corn, barley or wheat that every other farmer grows, whether that strain produces best on their land or not. It’s about the efficiency that comes from uniformity, the

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driving force of American agribusiness.

Efficiency and uniformity are great for big businesses. They need huge amounts of identical raw materials to make the huge amounts of identical finished product to sell to huge amounts of people. The more uniform the raw material—the grain—is, the greater the efficiency that can be realized. As grain uniformity is achieved, by persuading (or coercing) more farmers to grow the same strains, grain can be processed in larger lots, in larger plants.

Bigger processing plants mean more efficiency and lower per-unit costs, and the competitive advantage that brings. Farmers have a steady demand for their crops. Consumers get consistent prices for products. It’s the supermarket side of my vegetable buying: convenient, consistent, neatly packaged.

But there’s a cost, and we’ve been paying it without even knowing it. Bigger grain processing plants—mills, maltsters—put smaller plants out of business. Jobs are lost, local choices are lost and small runs of specialty grain are less likely. There used to be thousands of mills in America; now there are about a hundred.

If farmers have a steady demand, it also means that the buyer dictates the price.

When you sell a commodity, the market sets the price, not the producer: take it or leave it, and good luck finding another customer. It means the same thing for the consumer: pay the set price or do without.

This is the economics of monoculture. A brewer—Don Feinberg, the founder of Brewery Ommegang in Cooperstown, New York— opened my eyes about monoculture 20 years ago. Take a look at what he had to say, and you’ll see why we need cooperation among small producers, small processing plants and small farmers, all making small runs of interesting stuff.

“The reason monoculture is so successful is

because it’s predictable,” Don said, “and predictability leads to efficiency, and efficiency leads to profitability, and that leads people to get involved in it. But monoculture means two things. It means a lack of diversity, sure. But the other thing: 99 times out of 100, you’re not giving me one choice because it’s better for me. It’s because it’s better for you.

“Monoculture is very powerful. But powerful and better are not always the same thing.”

Monoculture and big plants making big products are powerful indeed. They are a huge business. But trends of the past 20 years have shown that variety and local, look-’em-in-the-eye producers are a powerful idea, too. Forty years ago there were less than 100 breweries in America. Now there are more than 7,000. There already are more than 2,000 distilleries.

And there are a steady number of farmers finding that growing heirloom and specialty grains for small distilleries and micro-maltsters and craft brewers is not just good business.

It’s interesting work, and as several farmers have told me, it’s why they got into farming in the first place: to work with the land, to grow the best, most interesting crops they can.

That’s why you see farmers at craft distilling shows. They sense the partnership that’s growing among this group of small producers.

Keep growing, keep buying, keep sustaining. It’s best for everyone, not just one side or the other. ■ Lew Bryson has been writing about beer and spirits full-time since 1995. He is the author of “Tasting Whiskey.”

C R AF T S PI R I T S MAG .CO M

… there’s a cost, and we’ve been paying it without even knowing it.

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WHAT’s Stirring

DRINKS TO SAVOR FROM ACSA MEMBERS

Perfect Pear

Ingredients 1 ounce St. George All Purpose Vodka 1 ounce St. George Pear Brandy 1/2 ounce simple syrup 1/2 ounce fresh lime juice Instructions Shake all ingredients with ice, then strain into a chilled cocktail glass. Garnish with a lime twist.

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C R AF T S PI R I T S MAG .CO M

PHOTOGRAPH: JON PAGE

An exquisite concoction from St. George Spirits in Alameda, California, with a focus on the Pear Brandy— the first spirit that founder Jörg Rupf crafted when he started the distillery in 1982.

Apple-Rita This cocktail was created to express AFT Distillery’s motto—“Austrian Heritage and Texas Pride.” The recipe from the distillery in Luling, Texas, marries the Austrian staple of Edelbrand with a margarita.

Ingredients 1 1/2 ounces ALPENGOLD Edelbrand Apple Brandy 1 1/2 ounces apple juice 1/2 ounce fresh lemon juice 1 dash simple syrup Instructions Combine all ingredients with ice and shake.

Strain into a glass with ice. Garnish with apple or lemon wedge.

Pearousia Pear Brandy Old Fashioned Catoctin Creek Distilling Co. was looking for a cocktail that highlighted its pear brandy without losing the delicate taste of the pear to other ingredients. The distillery finally decided that simpler is better, and the simplicity of this cocktail belies the fact that it is surprisingly sophisticated.

Ingredients 1 ounce Catoctin Creek Pearousia Pear Brandy 1/2 ounce simple syrup Dash of rhubarb bitters Instructions Mix all three ingredients in a rocks glass with ice and garnish with an orange wedge.

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Snapshots

Bar Convent Berlin Europe’s largest trade fair for the bar and drinks industry returned to STATION Berlin in October for three days of spirits sampling and education.

The Samson & Surrey portfolio

Halm’s virtually unbreakable glass straws

Catoctin Creek’s Edward Harris

The team from Blinking Owl Distillery of Santa Ana, California

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Japanese gin brand 135o East

C R AF T S PI R I T S MAG .CO M

Snapshots

ACSA CEO Margie A.S. Lehrman moderates a panel on distillery tasting room experiences.

Gerard Dunn, 10th generation of the Laird’s Applejack family

Belmont Farm Distillery

Golden Moon’s Steve Gould and Westward Whiskey’s Thomas Mooney talk U.S. whiskey

A gin produced with water from Icelandic glaciers

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American tiki personality King Kukulele

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Snapshots

Chicago Indie Spirits Expo American craft spirits and artisanal imports breeze through the Windy City.

FEW’s Paul Hletko

Barbara Sweetman with Sierra Norte Oaxacan whiskey

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C R AF T S PI R I T S MAG .CO M

Snapshots

Virginia Spirits Trail September was Virginia Spirits Month. It also marked the official launch of the Virginia Spirits Trail. The Commonwealth’s distillers celebrated at George Washington’s Mount Vernon.

Catoctin Creek’s Scott Harris and Virginia Governor Ralph Northam

George Washington’s Distillery

The governor talks spirits.

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ACSA Affairs

BEVERAGE ALCOHOL COALITION LAUNCHES “DAY OF ACTION” IN SUPPORT OF CBMTRA Nearly 2,000 individuals affiliated with the beverage alcohol sector contacted their members of Congress on Oct. 15 to urge passage of the bipartisan Craft Beverage Modernization and Tax Reform Act (CBMTRA; H.R.1175/S. 362) as part of a “Day of Action” supported by a broad coalition of beverage alcohol trade associations.

Participants from every state in the country called on Congress to prioritize the passage of the legislation, which makes permanent the two-year federal excise tax reduction on distilled spirits, wine, beer and cider products. The daylong push resulted in more than 6,000 engagements with congressional offices through emails, phone calls and social media channels.

“Craft beverage producers are found in every corner of the country and are active members of their communities, spurring billions of dollars in economic development and tourism,” the coalition said. “In less than three

months, the tax reduction that has enabled countless producers to reinvest in their businesses and communities will expire. This critical piece of legislation has broad bipartisan support with 288 cosponsors in the House and 70 in the Senate. Congress must act now to pass the Craft Beverage Modernization and Tax Reform Act.” Absent congressional action, beverage alcohol producers will face an increase in their federal excise taxes starting Jan. 1. For some small producers, the tax hike could be as high as 400%. The threat of such a steep spike in costs already has created great uncertainty for small craft producers and will further compound the strain on companies, small and large, being burdened by tariffs from unrelated trade disputes.

The coalition supporting the “Day of Action” included the American Craft Spirits Association (ACSA), Brewers Association, Beer

Institute, Distilled Spirits Council of the United States, Wine Institute, WineAmerica and the United States Association of Cider Makers.

CONGRESSIONAL STAFFERS GET CRASH COURSE IN RUM AT COTTON & REED DISTILLERY In September, a coalition of craft beverage producers and trade groups, including the ACSA, welcomed nearly two-dozen bi-partisan Congressional staffers at Washington, D.C.’s Cotton & Reed Distillery for a tour, tasting and primer on distilling, as well as an update on the status of the CBMTRA. ACSA joined the Wine Institute, Distilled Spirits Council (DISCUS) and the DC Brewers Guild, as well as local craft beverage producers for last Friday’s event dubbed Cane to Cask.

“This industry is really unique,” ACSA CEO Margie A.S. Lehrman told the gathering. “I

don’t think we see other business sectors in the U.S. that combine so many different crops, from the farmers who are planting grain, cane, grapes, hops … apples, pears. So, we’re talking about the farmer who is so intertwined with what’s happening in the American soil, and from there we go on to labels, we go on to the other manufacturing of glass and closures, of the people who are designing it.”

And then, of course, there are the other stake holders on the other side of the supply chain, the distributors and retailers.

The CBMTRA reduced the Federal Excise

Reed Walker

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Tax (FET) on all craft beverage producers, including distillers, whose tax bill dropped from $13.50 to $2.70 per gallon on the first 100,000 proof gallons when the law went into effect January 1, 2018. The FET reduction is set to expire on Dec. 31, and craft producers have been fighting to make the cut permanent.

“I think it’s also unique that you have all of these different categories of alcohol beverage united on this particular piece of legislation,” Lehrman continued. “Because it truly does help live the American dream. It brings back Main Street.”

Before co-founder Reed Walker demonstrated for the audience how rum is made and poured samples of the distiller’s White, Mellow Gold and Dry Spiced Rums, he noted how FET relief has been critical for his business. The distillery opened about three years ago and much of its success can be attributed to CBMTRA. “A large part of our growth has been due to this tax relief that’s about to expire,” Walker said. We’re able to buy new equipment, which allowed us to triple our output capacity.”

The FET reduction also enabled Cotton & Reed to hire a new distilling team, as well as a salesperson.

“We are fighting very hard for continuation and permanency of this tax bill so we can continue to grow our business,” Walker added.

C R AF T S PI R I T S MAG .CO M

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@craftspiritsus

BEVERAGE ALCOHOL INDUSTRY URGES END TO TRADE TARIFFS Lingering trade dispute between U.S. and EU creates challenges for distilled spirits industry.

BY JEFF CIOLETTI

U.S. alcohol trade groups, including the American Craft Spirits Association (ACSA) recently urged an end to tariffs on European Union distilled spirits and wine following the United States decision announced in early October to impose tariffs of 25% on imports of Scotch whisky, liqueurs and cordials, and wine from certain EU countries in connection with the World Trade Organization (WTO) civil aviation subsidies dispute.

The U.S. action further ensnarls the distilled spirits industry in a trade dispute that began last year when the EU imposed a 25% retaliatory tariff on American whiskey in response to U.S. steel and aluminum tariffs. The EU is considering imposing more tariffs on additional U.S. spirits and could raise them against U.S. wine as part of a separate WTO civil aviation subsidies dispute.

“Even if there’s a political solution, it isn’t clear whether the damage is temporary or permanent.”

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“On behalf of our nation’s growing community of nearly 2,000 craft spirits producers, the American Craft Spirits Association urges the Administration to work collaboratively with the EU to ensure all American businesses, including craft spirits, prosper,” says ACSA CEO Margie A.S. Lehrman. “The threat of additional retaliatory tariffs from the EU on American rum, vodka and brandy imports from the U.S. will further limit our market access, directly affecting not just our distillers and their families—who collectively make up a workforce of more than 20,000 employees across the U.S.—but the farmers and agricultural partners who supply their grains, the manufacturing industry that has helped support our community as they grow, and the broader hospitality industry.”

Since the EU’s 25% retaliatory tariff on American whiskey was imposed last year, exports have declined 21%. Additionally, China is imposing a 54% retaliatory tariff on U.S. wine imports, which is contributing to a 57% decline in trade with China since the beginning of 2019. These new tariffs on EU spirits and wine will have numerous unintended negative consequences on U.S. jobs, U.S. consumers and the many U.S. companies that include EU wine and spirits such as Scotch whisky and liqueurs and cordials in their portfolios.

Paul Hletko, founder and distiller of FEW Spirits in Evanston, Illinois, notes that any time there’s an artificial change to pricing, “it’s going to hurt.”

“Certainly, we’re seeing people in the tariff[affected] countries swap our products for alternatives,” Hletko says. “You can see people outside the U.S. swapping bourbon and using Scotch, Irish, Japanese or other easily swappable products for bourbon and other American products. There’s now been enough time that even for the larger companies that have been able to front-load inventory, that inventory’s been burned through.”

As consumers in international markets are scared off by higher prices on U.S. brands, those brands lose shelf space, which Hletko adds, is difficult to regain.

“Even if there’s a political solution, it isn’t clear whether the damage is temporary or permanent,” he says.

Craft Spirits magazine caught up with some other exporting U.S. distillers at this month’s Bar Convent Berlin (BCB) to gauge the impact that the retaliatory tariffs have had on their businesses.

Among those was Steve Gould, proprietor and distiller of Golden Moon Distillery in Golden, Colorado, who notes that his export activity has taken a sizeable hit.

“I went from doing hundreds of thousands of dollars in exports to Europe to this year, [when] we did $6,900,” Gould reveals. “Our revenue is off by almost 40% because of our loss of the export market.”

Gould also pointed to a disparity in the enthusiasm level of BCB attendees at U.S. producers’ versus non-U.S. producers’ booths. “All you need to do is look at the

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environment today, at the number of people at the American spirits pavilion,” he explains.

“They’re not there. They’re not there, not necessarily because of the tariffs themselves, but because of the ongoing rhetoric, which spreads uncertainty.”

Such rhetoric from U.S. leaders has made potential European trading partners more risk-averse, Gould says. “The [importers] we already have relationships with don’t want to take the risk, even if the tariffs aren’t there,” he says. “And new importers are saying, ‘You know, not only do we not want to take the risk, but the demand for American products, the demand for Americana—and whiskey, sure as heck, is Americana—[is lower].’ Even talking to some of the big brands here, their sales have all been off. My sales have been decimated.”

Also at BCB was Thomas Mooney, CEO of Westward Whiskey, who says he’s been

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trying to remain optimistic for a resolution to the trade war. “Europe and the U.S. have been commercial partners for way too long for something that is driven by specific personalities to become what defines our relationships,” Mooney asserts. “I don’t think it’s going to get better next week—it’s more likely to get worse than better next week.”

Mooney adds that at this point his company has been absorbing the costs of the tariffs and not passing them on to consumers.

“What has been most challenging for us,” Mooney says, “is not that there are tariffs, but that there is so much uncertainty around what’s going to be different next week and next month because we rely on people taking inventory positions on product. And if, between the time they ordered it and the time it showed up, the cost changed or the environment changed, they’re going to be

much more cautious about what they bring in and how much [of it] they bring in. But I would say, up to now, it’s been our burden that we’ve carried and we would be delighted to stop carrying it.”

According to an analysis by the Distilled Spirits Council, these U.S. retaliatory tariffs on Scotch whisky, liqueurs and cordials, and wine could impact nearly $3.4 billion in imports and could lead to a loss of approximately 13,000 U.S. jobs, including truckers, farmers, and bartenders and servers in the hospitality industry.

The U.S. and EU have a long history of tariff-free trade in distilled spirits dating back to 1994, when an agreement was reached to eliminate tariffs on the vast majority of distilled spirits.

“Nobody wins in a trade war,” Gould says.

“And we sure as hell aren’t winning this one.” ■

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Still

(Kinda, Sorta, Maybe)

the Next Big Thing The American brandy category has so much potential, but potential requires patience.

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veryone loves a comeback story. It’s true in Hollywood and it’s true in distilling. But humans also are an impatient lot, and we have the tendency to rush the narrative rather than allow it to unfold organically, on its own terms. And that’s the story of American brandy.

The buzz among many mainstream media outlets and some industry pundits in recent years was that the U.S. was on the cusp of a major American brandy renaissance—akin to what’s happened with bourbon and other American whiskeys over the past two decades. And while it’s true that there are plenty of craft producers doing amazing things with fruit distillates, the category is a bit too complicated to paint in such broad strokes.

The overall American-produced brandy category was little better than flat in 2018,

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growing 0.2%, according to market research company IWSR. Its compound annual growth rate (CAGR) from 2013 to 2018 was a bit better, at +2.3% and IWSR forecasts a CAGR of 0.6% through 2023 (including calendar year 2018). That may seem to be a far cry from the mid-to-high-single-digit year-on-year increases that juggernauts like whiskey and agave spirits have been enjoying, but that’s, at least in part, due to the fact that American brandy brings with it its own unique set of baggage. It largely has the major, high-volume brands to thank for the category’s relatively mediocre performance.

And that contrasts significantly with the trajectory of non-U.S.-made brandy, particularly Cognac, which continues to show significant growth. Volume for Cognac imports in the U.S. was, according to IWSR, up 6.4%

in 2018, with a CAGR of +11.3% from 2013 to 2018 and a forecasted CAGR of +4.0% through 2023 “Brandy, in general is making a comeback through premium products, but this is still a small segment for the overall category,” says Adam Rogers, research director at IWSR Drinks Market Analysis. “Lower-priced brandy volumes are in decline, making it difficult for the entire category to post significant volume increases.”

So, craft brandies—whether they be aged grape-based or apple-based brown spirits or a wide range of white and brown fruit distillates—are definitely connecting with consumers, but they’re such a niche within a niche that any significant volume gains are barely putting a dent in the numbers representing the vast American brandy universe.

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PHOTOGRAPH: HILLARY JEANNE

BY JEFF CIOLETTI

“The downside is that it takes so long to get up and going, but the upside is that it has the potential to age so long. I see that as a plus, not a minus.”

—Dan Farber of Osocalis Distillery

Dan Farber of Osocalis Distillery

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“I think it would be difficult to differentiate yourself with a grape brandy and just getting people to understand that. Whereas, with apple brandy, there just aren’t as many of them and there aren’t the inexpensive mass [apple] brandies either.”

—Jon Kreidler of Tattersall Distilling

The craft cocktail movement is reinvigorating the brandy category.

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Dan Farber, founder and distiller of Osocalis Distillery in Soquel, California, is a bit more blunt about it.

“In general, the craft spirits movement …

I guess it has been a game changer at some level, compared to when I started 30 years ago,” Farber offers. “But … it just hasn’t had an impact on consumers on a wide scale. There have been some successes, some limited successes, but generally speaking craft spirits haven’t changed the world or consumers yet.”

However, what has had an impact on consumer trends, Farber observes, is the cocktail movement, which has renewed—or even created—interest in drinks made with traditional ingredients. And brandy definitely has been among those.

But, as a category, consumers’ knowledge of brandy is mostly linked to high-volume megabrands that have been more about quantity than quality, which have tainted overall perception of American-produced versions of the spirits. Those products certainly have not been well-regarded in the context of more prestigious international traditions like Cognac, Armagnac or Calvados. It’s not unlike the perception of American beer on the world stage prior to the craft brewing movement.

“In the brandy industry today, there’s a big, big gap,” Farber says. “There are the giant producers with millions of bottles a year of extremely low-quality product that’s not really what most people around the world think of when they think of brandy. Those are flavored, sweetened, artificially colored things. And then there are the very few producers in the United States who make traditional spirits, but they’re so few and so unique and so rare that the consumer just doesn’t have a lot of interest in that.”

However, with brandy-geek bartenders winning hearts and minds one drink at a time, large, household-name producers (who are largely responsible for U.S. brandy’s negative perception in the first place) introducing higher-end, craft-emulating spirits, and bona fide craft producers garnering substantial (if occasional) media attention for injecting new life into the category, the thirst for Americanmade grape and other fruit distillates could be gradually increasing. It’s really just a matter of how patient the market—one that’s conditioned to follow the hype for the next big thing and things that go “boom”—is willing to be for incremental, rather than explosive, growth.

Beyond the rather steep consumer learning curve, one of the biggest challenges producers face is the expensive, time-sensitive and often-unpredictable nature of brandy

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production itself—even relative to whiskey.

“When any whiskey producer is bemoaning how they’re not making any money yet, any producer in Scotland worth their salt will tell you that one ton of barley yields 100 gallons of pure alcohol,” Farber says. “And a ton of barley is going to cost you, what, let’s say 400 bucks maybe. A ton of grapes, a cheap ton of grapes is going to cost you, say 400 bucks.

And that’s a really cheap ton of grapes, that’s half the price I pay.”

Even if a distiller is able to procure grapes at the same price-per-ton that they would grain, the yield is going to be significantly lower—about 30 gallons of alcohol, or less than a third of the barley’s yield. And, if they’re using higher-quality grapes like Farber (and no one should be cutting corners), the price tag will be even heftier.

“So your costs are about six times as much before you start anything,” he explains.

And let’s not forget just how fleeting raw materials are. “Fruit is seasonal,” Andy Garrison, head distiller at Stone Barn Brandyworks in Portland, Oregon, reminds us. “If you make a bad batch of whiskey, you can say, ‘Next time, we’re going to change this, adjust that, make it hotter, make it colder.’ If you make a bad batch of brandy, [you’ll say] ‘I have 11 months and 29 days to think about it’ before you’re able to do it again.”

That’s all before it even sees a barrel, assuming you’re making brandy proper and not a white eau de vie (which, traditionally, actually is aged for months, often years, in stainless steel or glass. See the article on page 52).

And if you want to be ultra-traditional and authentic about it, you’re going to be waiting a long time.

“Unfortunately, the other part about brandy is that brandy is the longest-lived of any of the brown spirits,” Farber notes, adding that the brandies considered the “greatest of the greatest”—usually those with a French accent—are often decades old. Fruit spirits reach peak maturity much later than grain spirits, he says. “The downside is that it takes so long to get up and going, but the upside is that it has the potential to age so long,” he adds. “I see that as a plus, not a minus.”

Some grape brandies can be, as Farber, says “precocious,” beginning to soften and come together after three years. Apple brandy, on the other hand, can still be too bold after that same period of time.

Despite such refusal to reach maturity in a timely manner, apple brandy, Farber and other producers believe, has much greater market potential in the U.S. Apples, after all, can be grown in a much wider geographic range than grapes (though Farber laments the dearth of cider apples in the U.S. and the abundance of culinary ones. The former are still widely used in traditional European distilleries). And there may be more opportunities for a distiller to shine with the orchard-grown fruit.

“I think it would be difficult to differentiate yourself with a grape brandy and just getting people to understand that,” says Jon Kreidler, co-founder of Tattersall Distilling in Minneapolis, which produces an apple brandy with apples sourced from Minnesota orchards and aged in virgin American white oak. “Whereas, with apple brandy, there just aren’t as many of them and there aren’t the inexpensive mass [apple] brandies either.”

And it’s about as American as American brandies get—revered non-U.S. traditions like

Copper & Kings American Brandy Co. in Louisville, Kentucky

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Calvados notwithstanding—since it’s been part of this country’s distilling tradition since before it was even a country.

No one knows that better than Scobeyville, New Jersey-based Laird & Co., now in its tenth generation in the apple distilling business. The Laird family has produced apple brandy since 1698, with the first commercial transaction recorded in 1780, and now offers a portfolio of products that includes Blended Applejack (a combination of apple brandy and neutral grain spirit), Straight Applejack 86 (as in 86 proof), Straight Apple Brandy Bottled in Bond, Laird’s Apple Brandy, Single Cask Selection, Laird’s Old Apple Brandy 7-1/2 (the number of years it’s aged), 12 Year Old Rare Apple Brandy and its clear, unaged Jersey Lightning. The company still ages the spirits at its headquarters in the Garden State, but it sources its apples, ferments and distills them at its location in Virginia’s Shenandoah Valley (home to a wealth of orchards that New Jersey no longer has).

Over the course of the past 240 years, Laird’s Applejack has endured many market cycles (not to mention a little something called Prohibition). The cocktail world definitely has played a role in its new level of visibility, as it’s a favorite of many a mixologist.

“The craft cocktail movement is the number one reason you’re seeing growth in brandies overall,” says Lisa Laird Dunn, vice president and ninth-generation of the Applejack-making Laird family (her son, Gerard Dunn, recently entered the business as the tenth and this year the company launched 10th Generation Apple Brandy to commemorate that milestone). “We’re also hitting a saturation point with bourbon. Bourbon will always have a following, as will other wellused, well-consumed spirits. And then you have those consumers who really are enthusiasts and always wanting to try new items and expanding [their drink options].”

She cautions, however, that even though Applejack and other apple-based brandies are growing robustly, it’s still a niche category, comparatively speaking.

“You’re finding more authentic apple brandy cocktails on menus and there’s been an increase in sales, not as much as you see in the media—they’re hyping up brandy a bit,” Laird Dunn says. “For the past 10 to 15 years there’s been double-digit growth, but you’ve got to keep in mind that it’s a small base. But it’s definitely growing, we’re seeing more awareness—not just in the top cocktail bars but we’re also seeing interest in smaller cities.”

She also points out that as much as more

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in-the-know cocktail and drinks enthusiasts have gravitated to it, there’s still a great deal of confusion in the market.

“Unfortunately you’re finding these flavored products and they’re being called ‘apple brandy,’” she explains. “I’m even seeing it on some cocktail lists as ‘apple brandy,’ which, unfortunately has been happening for years and years. … It kills me when I see it on a drinks list as ‘apple brandy.’ Are you kidding me? This is not apple brandy, this is an appleflavored spirit. And it doesn’t have apple in it

“Brandy, in general is making a comeback through premium products, but this is still a small segment for the overall category.”

—Adam Rogers of IWSR because it’s an artificial flavor.”

Much of the responsibility to get consumers to unlearn what they think they have learned about the category is going to fall on those same elite bartenders who are driving its quasi-renaissance. They’re the ones who get the most face time with potential converts and are always looking to share their passions. “Bartenders are always on the front lines,” says Kreidler. “But I think the masses are just getting used to what a real cocktail is. The biggest key is to get people to taste it on its own and get a better understanding of what it is. To pay $40 for an apple brandy— people just aren’t going to do it, unless it’s someone who really understands spirits.”

Jillian Vose, beverage director at New York City’s world-famous cocktail bar, The Dead Rabbit, is just the sort of person who’s likely to tip the scales. She’s a big brandy fan herself and believes that the market has been teetering on the edge of a full-fledged renaissance for quite some time. Her biggest piece of advice for consumers: “Get away from your comfort zone and what you think you know.

Be open-minded and talk to your bartender.”

To that end, there are a number of key

talking points that Vose feels should be a part of any interaction between bartender and drinker. “[Tell consumers] that it’s essentially a fruit distillate that has a lot of versatility based on how it’s aged, how long it’s aged, and that it’s really beautiful on its own and great in a cocktail,” she says. “And really look at it: There’s such a wide variety within the category. You’re looking at production, types of fruits and varietals of those fruits that they’re all being made from and you’re looking at where it’s being made.”

“Where it’s being made” is likely to take on greater importance down the road, as American craft brandy production expands.

Regions known for particular types of fruit— think peaches in the Southeast or indigenous cherries and berries in the Pacific Northwest—could harness the local bounty to give their spirits a true sense of place. And it would be difficult for producers outside those regions to replicate what they’re doing because fruit is so seasonal and doesn’t like to travel long distances.

“If we were in Georgia and we could get our hands on peaches, you’d better believe we’d be making peach brandy,” says Kreidler. Still, he feels very fortunate having quality fruit in his own state and Tattersall’s not shy about promoting the fact that its spirit is made with Minnesota apples.

“Local” has been the raison d’être for Stone Barn Brandyworks, as well, with the words “Oregon” and “Northwest” recurring in the names of its fruit distillates.

And then, of course, there’s the whole notion of terroir. While there’s much debate over whether grains actually have terroir, there’s no disputing that fruits, especially grapes, do. Farber soon will open a new distillery in New York State’s Hudson Valley. “We’re going to have to grow completely different types of grapes than I grow in California because of our location,” he says.

That will, ultimately, make the New Yorkproduced brandy hyper-local—and he wouldn’t want it any other way.

Having a “sense of place,” however, doesn’t mean distillers have to be tethered to local traditions. In fact, we’re still at a point in time where most American traditions have yet to be written. Just ask the guy who started a brandy distillery in the heart of bourbon country.

“I think the future of American brandy will revolve around what I call ‘brandy liberated,’” says Joe Heron, co-founder of Copper & Kings American Brandy Co. in Louisville, Kentucky, known for its rock ‘n’ roll ethos (and literal rock ‘n’ roll, through its process of pulsing

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Three generations of the Laird family: (l to r) Gerard Dunn, Larrie Laird and Lisa Laird Dunn

a bass note through the barrels to enhance the maturation process) and its innovative range of grape and apple brandies. “You’re not shackled and constrained by the dogma of geography, like a provincial geography like Cognac and Armagnac. You’ve got continental diversity. You can go from California to Texas, Texas to Michigan and over to New York and down to Louisville.”

It’s that sort of untapped potential for the category that has many of its devotees in the

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industry jazzed for its future.

“The beauty of that is that we have these American distilleries that are doing all these cool, innovative expressions within brandy in general,” The Dead Rabbit’s Vose says. “I know a lot of passionate bartenders who really love brandy, again because there’s such a wide variety. You’re not just talking grapes, you’re not just talking apples, we’re talking apricots, pears, so many different things. We’re not the bored, same old category.” ■

“The craft cocktail movement is the number one reason you’re seeing growth in brandies overall.”

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Fruitful Awakening How St. George Spirits founder Jörg Rupf started making eau de vie and helped kickstart the craft distilling movement

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n 1976, a young German lawyer began a postdoctoral fellowship at the University of California at Berkeley. It was intended to be a short leave of absence from government work, but Jörg Rupf found a permanent new calling in the San Francisco Bay Area.

“I fell in love with a way of life here,” says Rupf. “When I came here, the expectation of life was different for people. It was not what you have been trained to be or do that defined who you were, but you defined who you were and you chose what to do with it.”

What Rupf ultimately chose was a career removed from legal theory, rooted in manual labor and personal interaction. Long before the term craft spirits was in vogue, Rupf chose to make small batches of eau de vie, and in 1982 he established St. George Spirits, the first small distillery in America since Prohibition. Nearly four decades later, Rupf’s fingerprints remain on the craft distilling movement.

“I think he means nearly everything to distilling in America, at least to the craft segment, because he was crazy enough to start this off,” says Lance Winters, who assumed majority ownership of St. George when Rupf retired in 2010. “And then beyond starting it off, he actually went the extra mile to help out a lot of other people who wanted to get into distillation.”

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The path to success and profitability was long and laborious. When the Judgement of Paris in 1976 proved that Californian wines could best French counterparts, Rupf assumed equally wonderful brandies were being produced throughout the state. “I was looking around,” Rupf recalls, “and I only found people saying, ‘No, there’s no such thing. We’ve never heard of this.’” Undaunted by an absence of demand, Rupf’s determination was buoyed by the Golden State’s climate and bounty of Bartlett pears. “It became clear to me why the quality of everything was so good here,” Rupf says. “The summers never had any rain and the weather was always nice, so [there was] no problem with harvesting and rain.”

Rupf was no stranger to alcohol production.

His mom’s family owned a brewery and he remembers distilling plums at home in Germany’s Black Forest region at the age of 15, so he was confident he could craft an excellent eau de vie in the U.S. He bought his first still for $30 from a restaurant supply store in Oakland, and began distilling test batches at home.

When he officially started St. George inside a winery in Emeryville (operations later moved to Alameda), he admittedly lacked a business plan. In the distillery’s first few years, Rupf sold most of his eaux de vie to Germany.

Slowly, he saw the interest in craft spirits

begin to grow in America, and not just among consumers. Would-be distillers started seeking advice from Rupf, and while he discouraged some, he provided guidance to several start-up distilleries, including Clear Creek Distillery and Westford Hill Distillers.

“He’s been called by some people the godfather of artisan distilling or craft distilling in this country, and I don’t think that it’s an overstatement,” says Winters. “Anyone can be first, but to be first and help other people get into it, that’s a big deal, instead of just being protectionists.”

Of course, Rupf received a little help, too. Ruedi Kobelt, who would later return to Switzerland to run the family cider mill, was an early resource. In 1984, Bill Mannshardt joined St. George as a volunteer and later became Rupf’s first hire. And in 1996, Winters arrived at Rupf’s doorstep carrying a bottle of homemade whiskey as his résumé. In a story that has been retold countless times, Rupf proclaimed the whiskey “inoffensive.”

However, in a recent interview, Rupf said “my memory is a little more pleasant now” and he called the whiskey “really quite good.”

In the years after Winters arrived, a deep bond grew between the master distiller and the apprentice. “Over the years he has been incredibly generous with me,” says Winters.

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PHOTOGRAPH: (THIS PAGE) BEN KRANTZ

BY JON PAGE

“He’s given me more life advice than he’s given me distilling advice, and because of that has been more of a father.”

Several years after Winters started working at St. George, he told Rupf that he would eventually like to become a partner in the business. Rupf discouraged him, telling Winters that St. George didn’t make money, that there was no point in being a partner.

Years later, soon after St. George released its Hangar One line of vodkas, Winters recalls an emotional occasion. “Jörg comes to me one day and says, ‘Here’s a check. It’s a check for more money than you’ve ever seen in your life.’ Which is true. ‘You can cash this check, and that’ll be great. Or, you can countersign it over to me and you own 25% of St. George Spirits.’ I didn’t hesitate for a second. I wanted to be a partner in the business.”

When St. George sold Hangar One to Proximo Spirits in 2010, Rupf retired and told Winters that their father-son-like relationship would be better if Winters assumed full control and didn’t have Rupf looking over his shoulder. “He really needed that for himself, to blossom, to have that feeling of ‘I’m now owning this place and controlling everything,’” says Rupf. “I think it was a good thing because he’s doing such a great job.”

Although gin is now St. George’s best-sell-

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“The best feeling that I have from the whole distilling part of my life is that we still have a family of people there who love what they do and produce great products.”

—Jörg Rupf ing spirit, the distillery continues to produce pear and raspberry brandies. And although eau de vie has yet to demand the audience he once imagined, Rupf continues to be amazed and fulfilled by the company he established.

“The best feeling that I have from the whole distilling part of my life is that we still have

a family of people there who love what they do and produce great products,” says Rupf.

“It still lives after 36, 37 years. … It’s really a proud example of sticking to your theme, and our theme was always bring out the best of the raw material. Show what this can do in a distilled spirit in the best way possible.” ■

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ACSA Member Spotlight

Distilling in Harmony Musical appreciation inspires creativity and an innovative approach to crafting brandy and more spirits at Copper & Kings American Brandy Co.

BY JON PAGE

Spirits never rest in the cellar at Copper & Kings American Brandy Co. Twenty-four hours a day, an eclectic mix of music echoes through the basement at the distillery in the Butchertown neighborhood of Louisville, Kentucky. Thanks to five subwoofers and a Spotify playlist that rotates daily (recent artists include Phish, T-Pain and Nick Cave), pulsing bass notes force alcohol molecules to collide with the barrel walls, thus enhancing maturation of the distillery’s aging brandies.

While Copper & Kings co-founder Joe Heron and master distiller Brandon O’Daniel agree that this sonic aging is more of a fun conversation piece than a scientifically proven method of speeding up time in a barrel, the inherent message is loud and clear: music plays an instrumental role at Copper & Kings.

“We’re not a manufacturing facility. We’re a distillery where you distill creativity and art and music, but you also have your heart and soul in it,” says Heron, who founded Copper & Kings with his wife, Lesley, in 2014. “We’ve said often that we’re like a band. You might not like all the songs, but we really want you to like the music.”

The musical ties start with the distillery’s name, which is meant to sound like a band (a la Kings of Leon, Band of Horses and Iron & Wine). The distillery’s greatest hit, so to speak, is its best-selling 90-proof American Craft Brandy. Other products have an explicit connection to music (like The Ninth. A Symphony in Orange Gin) and the cocktails at the Copper & Kings bar are grouped by musical styles (Classics, Covers, Indies, etc.).

Then there are the copper pot stills, all of them named after women in Bob Dylan songs.

The first three, Sara (50 gallons), Magdalena (750 gallons) and Isis (1,000 gallons) are mentioned in Dylan’s album “Desire.” The

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latest addition, Rose Marie is a 2,000-gallon pot installed this summer. “They are just absolutely gorgeous to look at and they are so much fun to work,” says O’Daniel. “Everything is done by hand. There’s nothing mechanical on them.”

Fittingly, a love of music helped O’Daniel and the Herons hit it off. Before joining Copper & Kings, O’Daniel was a winemaker in northern Kentucky. The Herons—who had previously founded and sold Nutrisoda and Crispin Cider—tracked down O’Daniel to help them make pilot batches of brandy distilled from native American grapes. The Herons interviewed numerous whiskey distillers who told them they wouldn’t be able to make good tasting brandy that was unadulterated, with no boisé. O’Daniel saw things differently. “He was really interested, as a winemaker, in the fruit,” says Heron. “Because that’s the first conversation about brandy: fruit. It always is.

And then you’ll talk about fermentation.”

O’Daniel, who has a master’s degree in horticulture management from the University of Kentucky, was awestruck when he officially interviewed for the job at Copper & Kings.

“I fell in love with the pot stills as soon as I saw them,” says O’Daniel. “And I was small enough to climb into the tanks and fill them, and I got hired. I’ve been here ever since and I have not looked back.”

Today, the distillery’s product lineup includes gins, Destillaré liqueurs, absinthe, cocktail bitters and garnished cherries, but the focus remains on what Heron frequently describes as American Brandy, with a capital A and a capital B. Before opening Copper & Kings, the Herons saw a large gap between what they call “cheap and sweet California brandy” and more expensive brands of Cognac. There was no $35 “trade-up vehicle” with an American focus.

“No one had stood up for an American ethos, philosophy, attitude and process for making brandy,” says Heron. “That was when we really felt like, this is interesting, American brandy at a small-batch bourbon price point, that sounds like an opportunity.”

Beyond the flagship American Craft Brandy, the distillery’s brandy portfolio includes the 100-proof Floodwall American Craft Apple Brandy, 90-proof Immature Brandy, 124-proof Butchertown Brandy and the recently released 92-proof American Craft Apple Brandy Aged in Kentucky Bourbon and New American Oak Barrels. Limited releases are announced on what seems like a monthly basis, with recent examples including Way Up West American Brandy and Riding With The King.

Those limited releases are years in the making, and they start with informal conversations among O’Daniel, the Herons and creative director Ron Jasin. “You have to build it from the ground up,” says Joe Heron. “It’s not something that you pull out of the ether quickly. There’s a whole production process and regulatory process where the creative process lives inside of.”

The 108-proof Riding With The King was aged in Kentucky bourbon barrels for 32 months and an additional 29 months in King Estate Grenache, Syrah and Mourvèdre French oak barrels. As the release neared, Joe Heron and Jasin worked closely to develop a label. Lesley Heron was drawn to a plush red velvet chair in photos of a private jet once owned by Elvis Presley, so Jasin commissioned a local artist to reimagine those chairs.

Jasin is also in charge of programming the daily Spotify playlist that serenades the barrels in the cellar. Copper & Kings, however, is not motivated by music alone. Environmental protection and sustainability are important

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Brandon O’Daniel

Copper & Kings has four copper pot stills named after women in Bob Dylan songs.

to the distillery, evidenced by the repurposed shipping containers and butterfly garden welcoming visitors.

For O’Daniel, the words that best represent the distillery are family and passion.

“You walk into this place and you can feel it on the tour, you can feel it on the production floor, you can feel it on the second floor where the offices are—everybody wants to be here,” O’Daniel says. “There’s nobody who works for Copper & Kings who does not want to be part of this. The day that they don’t want to be part of this is the day we ask them to leave.

“You’ve got to love being here. You’ve got to love the spirit, the job, the industry. I honestly think it shows in our products.” ■

“No one had stood up for an American ethos, philosophy, attitude and process for making brandy.”

Joe and Lesley Heron The distillery has a wide range of products, but the focus remains on crafting American brandy.

—Joe Heron C R AF TSPIR ITSMAG.COM

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Pommes et Raisins Will Cognac stop hogging the French brandy spotlight to enable Calvados and Armagnac to shine?

BY JEFF CIOLETTI

F

or nearly as long as commercial distilling has existed, France has boasted an iconic brandy-making tradition. However, on the international scene, the market has always been lopsided toward the one bona fide household name among French fruit-based spirits: Cognac. But there are so many other stories to tell and marketers of two of those—Calvados and Armagnac—are hoping to eventually have their respective moments.

U.S. Calvados import volume growth was flat in 2018 versus the prior year and had a compound annual growth rate (CAGR) of a modest +0.4% from 2013 to 2018, according to IWSR Drinks Market Analysis. The market research firm forecasts a CAGR of +1.7% through 2023.

Armagnac has performed a bit better in recent years, with volume growth of 4% in 2018 and a CAGR of +6.4% for the 2013-2018 period. But the forecast for the category is a bit more conservative, with a projected CAGR of 1.5% through 2023.

IWSR paints a less rosy picture of both categories internationally. Global Calvados volume was down 5.1% in 2018 and the CAGR between 2013 and 2018 was -4%. The researcher expects the short-term CAGR through 2023 to be -3.3%. Armagnac’s worldwide volume was up 1.2% last year, with a CAGR of -1.3% from 2013 to 2018. IWSR projects that global Armagnac volume will experience a CAGR of -0.8% through 2023.

“The prospect for the Calvados and Armagnac categories is dependent upon reaching and connecting with U.S. consumers,” says

Claque-Pepin Calvados owner Benoit Louvet

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Adam Rogers, research director at IWSR Drinks Market Analysis. “The overall number of products entering the U.S. market is increasing year-over-year so attention is being drawn to ‘what’s new’ in all categories. Given the provenance and artisan nature of many smaller Calvados and Armagnac brands, it’s important that brand heritage is at the forefront of messaging—U.S. consumers are drawn to ‘sense of place.’”

Heavenly Spirits in West Wareham, Massachusetts, imports both categories (as well as other French spirits across categories) and says the market for Calvados and Armagnac have been a bit of a mixed bag—especially the former.

“The Calvados market in the U.S. is very up and down and very finicky—and very hard to follow, to be honest,” says Heavenly Spirits co-founder Christine Cooney.

She notes that in 2016 and 2017 there was a major drop in Calvados exports to the U.S. “It was very surprising because we all thought that we would be benefiting from the cider trend, but it didn’t really happen,” she says.

However, it might have been a slightly delayed reaction because the Calvados decline ceased in 2018. Heavenly Spirits’s Calvados portfolio, which includes Chauffe Coeur and Claque-Pepin, grew 23% in 2018—though it’s a small part of a very small category in this country. “We’ve been off to a good start in 2019, already beyond what we did last year,” Cooney notes. “The stats as of June are still showing a positive increase.”

One of the key narratives within the cider market has been that few mainstream consumers even know what the beverage is, just that it has something to do with apples. Even fewer are aware of its French, apple-based, distilled cousin. A large part of importer sales is education-based to at least get Calvados into beverage-alcohol consumers’ vocabulary.

“Everywhere we introduce Calvados and educate people, people get excited,” Cooney reports. “For our part, we sell a lot of the entry-level Calvados, which goes into cocktails.

And that’s what’s been driving our trend.”

Heavenly’s Calvados business also has been buoyed by the fact that the company sells organic Calvados—a rarity in the U.S. Armagnac is slightly better known on these shores, though not nearly to the extent that a certain other French grape-based brandy is.

Cooney, whose Armagnac portfolio includes products from Artez, Dartigalongue, Delord and other producers. typically leads a series of Armagnac versus Cognac seminars to help the market understand what sets

the former apart from its much more famous sister spirit—aside from the obvious fact that Armagnac is produced in Armagnac and Cognac is made in Cognac. Among the distinctions: Cognac is typically distilled twice, while Armagnac usually is single-distilled. The grapes used tend to differ as well. The vast majority of Cognacs are made with the Ugni Blanc varietal. Armagnac producers use Ugni Blanc grapes as well, but they also regularly

“The prospect for the Calvados and Armagnac categories is dependent upon reaching and connecting with U.S. consumers.”

—Adam Rogers, research director at IWSR Drinks Market Analysis employ Baco, Colombard and Folle Blanche.

Cognac producers use Limousin oak almost exclusively, but Armagnac houses will also age in the region’s Gascon oak.

Flavor- and aroma-wise, floral and citrus notes frequently dominate Cognac; leather, spice and jammy notes more express themselves in Armagnac.

“Everybody knows Cognac, even if they don’t know how it’s made,” Cooney points out.

“The majority of people don’t know Armagnac or what it is. And even if they do know, they say ‘Armagnac is expensive’ and ‘it’s always vintage.’ But it’s not always a vintage and it’s not always expensive.”

She usually dispels that misconception by sampling fine examples of inexpensive, non-vintage Armagnacs that hold their own against pricey Cognacs.

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Armagnac Delord

“The answer is always the same: education, education, education,” Cooney says.

Those in New York City looking to get educated on Calvados and Armagnac know to look no further than one famous Tribeca venue, the more-than-aptly named Brandy Library. The bar’s expansive list—which is not limited to fruit distillates—features about 140 different Armagnacs to choose from, as well as 43 Calvados labels.

“For a lot of people, these categories are still a bit misunderstood,” says Dan Nicolaescu, beverage director at the Brandy Library and its sister site on the city’s Lower East Side, Copper and Oak. “These, very much so, are hand-sell. If [guests] want to try something new, we try to steer them in the direction of these categories.”

IWSR’s Rogers says the continued popularity of Cognac offers a significant advantage in growing the Armagnac segment. “Armagnac, having a fuller, more complex flavor than Cognac, can be marketed similarly to how mezcal was born out of the success of tequila, since mezcal often has more complex flavor nuances compared to tequila,” he says.

When Nicolaescu introduces new consumers to Armagnac, he first explains what the spirit has in common with Cognac—the fact that they’re both from France and connected to their respective regional grape-growing and wine-making traditions. Then he diverges, talking their disparate distillation and maturation methods. “One is not necessarily better than

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the other, they are just different,” he says.

With Calvados, Nicolaescu typically talks apple varietals, fermentation methods and regional differences. The spirit boasts three official appellations within its home region of Normandy: Calvados, Calvados Pays d’Auge and Calvados Domfrontais.

“The Normandy provenance is also a key factor to highlight that Calvados is special and can only come from one region in the world,” says Rogers.

Products from Domfrontais in southern Normandy have been the most popular within the Heavenly Spirits portfolio, Cooney observes. “We find that when we do in-store tastings, training or educational seminars, 75

to 80% percent prefer Domfrontais.”

Domfrontais Calvados, she says, tends to exhibit more roundness and sweetness, which many find appealing.

As both Cooney and Nicolaescu can attest, it’s fairly easy to gain new Calvados and Armagnac converts once they’d had the chance to taste it. But the reality is that most will never get that chance. There’s just not a large enough coordinated marketing push coming from the two categories’ respective governing bodies back in France.

“We are trying to fix that this year,” Cooney reveals, noting that Heavenly Spirits has been in close contact with the Bureau National Interprofessionnel de l’Armagnac (BNIA), the

The cellar at Armagnac distillery Artez

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“Everywhere we introduce Calvados and educate people, people get excited.”

—Christine Cooney, co-founder of Heavenly Spirits board that oversees Armagnac. The BNIA has an ambassador in New York City and Cooney hopes there will soon be an ambassador on the West Coast, as well as Chicago.

That’s not the case with the Bureau National Interprofessionnel du Calvados et Eauxde-Vie de Cidre et de Poire (BNICEVCP). The Calvados board has very little presence here.

“There’s very little press in the U.S. on Calvados—a few articles here and there but nothing that really comes to the front page of big media,” Cooney says.

Nicolaescu hopes to see a bigger effort from both organizations.

“Mind you, these are very small categories,” he says. “I think the total sales of Armagnac was about 150,000 bottles in the U.S. It has potential, but a lot of customer education needs to be done.” ■

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Armagnac house Dartigalongue

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An Ode to Eau de Vie European traditions like schnaps, eau de vie, pálinka and slivovitz are looking for a footing among American craft producers.

BY JEFF CIOLETTI

T

he American cocktail renaissance has played no small part in introducing a new generation of consumers to the brandy category.

Many of the country’s top bartenders have fallen in love with grape- and apple-based spirits and they want drinkers to become enamored of them as well—which frequently happens once they’ve had the chance to try them. But the fruit-based spirits they’re enjoying are usually in the cocktail context and when Americans do opt to sip something neat, more often than not those spirits will be of the brown variety.

On the one hand, U.S. cocktail culture is emulated the world over, which is driving

“The average person coming in has heard of grappa and is intrigued by it, but they have no idea how it’s made or what it tastes like.”

—Brian McKenzie, Harvest time at Finger Lakes Distilling (this page) and grape pomace that will become grappa (right)

global volume across spirits categories. But on the other, America’s lack of any significant aperitif or digestif traditions means consumers have been missing out on the sort of clear, complex fruit distillates that have been part of the local heritage.

Many U.S. craft distillers have been hoping to gradually change that, producing fruit and pomace brandies that evoke centuries-old European spirits-making traditions—many relatively obscure and many others just plain misunderstood. And they’re hoping that American consumers will be along for the ride.

Grappa has been a challenging spirit for many to love, particularly because many American consumers’ experience with it—

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president and owner of Finger Lakes Distilling

particularly those of Italian descent—has been limited to some rather, shall we say, rough examples of it that their grandparents may have had stashed away in their liquor cabinets. But with the traditional Italian grape pomace brandy, those versions often prove to be the exception and not the rule.

And producers like Finger Lakes Distilling in Burdett, New York, have been showing consumers that there’s a real craft behind the often unfairly dismissed spirit. And it’s probably the right place to do it, as it sits among a vast expanse of vineyards throughout Upstate New York’s well-regarded Finger Lakes wine region.

“We have some very educated people

coming in and knowing what [grappa’s] about,” says Brian McKenzie, president and owner of Finger Lakes Distilling. “The average person coming in has heard of grappa and is intrigued by it, but they have no idea how it’s made or what it tastes like. [They say] ‘I want to try this but I really have no idea what I’m getting myself into.’”

McKenzie reveals that grappa was actually the first spirit he’d ever consumed.

“My mom’s side of the family is Italian,” he explains. “It’s really shocking to me how many people have heard of it and want to try it.

But it’s not for everybody.”

Finger Lakes typically uses the grape varietals for which the region is known,

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particularly Riesling, Gewürztraminer, Muscat and others. “Aromatic types of grapes make wonderful grappa,” McKenzie says. “And I think we’re in a great spot to make some wonderful grappa.”

He cautions, however, that despite the grapes’ easy translation to a world-class distillate, consumers must be prepared for the fact that grappa only vaguely, if at all, evokes the wines made with the same varietals.

“They go on the wine trail tasting Riesling all day and they see [a Riesling grappa] and say, ‘I want that,’ but I have to educate them it’s not going to taste like a Riesling wine.”

The average American of legal drinking age may have some vague inkling of what grappa is, but you really can’t say the same for a spirit like rakia. So, while you’re likely to encounter at least a handful of U.S. craft producers making grape pomace brandy, you’d have to do a lot of searching to find someone making a product that identifies itself as the Balkan answer to eau de vie. But eventually you’d run into Serbian-born Boyan Kalusevic, whose San Antonio, Texas distillery Dorćol Distilling + Brewing Co. (named after a neighborhood in Belgrade, Serbia) produces Kinsman Rakia, distilled from apricots grown in Kalusevic’s country of origin. His team actually ferments the fruit’s pulp into low wine in Serbia before shipping it to Texas for distillation. An old family friend owns the orchard from which the apricots are harvested, just outside of Belgrade.

San Antonio may seem like an odd place to be marketing a little-known spirit from Eastern Europe, but Kalusevic asserts that such incongruity is part of its appeal. “There’s something cool about obscurity and a fruit distillate in south Texas and this definitely hits on that— it’s not expected,” Kalusevic says. “For a good number of folks it’s absolutely about curiosity.

And for the bars and restaurants familiar with European eaux de vie, they’re driven by the quality. With the general drinking population, we’re still very much in the early stages.”

Rakia is a spiritual (no pun intended) cousin of other Central and Eastern European traditions like slivovitz and pálinka (and, in many cases, depending on the country, the terms often are used interchangeably).

And, like rakia, those fruit brandies also have inspired the activities of American craft producers. ChainBridge Distillery co-founder Bela Nahori harnessed his own Hungarian heritage to bring those spirits to Stateside palates. He comes from a wine-making family in the iconic Tokaj region near Hungary’s northeastern border with Slovakia. “I grew up

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with the Hungarian culture of pálinka and of course, slivovitz,” Nahori says. “The process of crafting our fruit brandies and specialty spirits is identical to the way that pálinka is made in Hungary.”

Like Dorćol, ChainBridge is producing its spirits in an unlikely market: Oakland Park, Florida, located near the southeastern coast of the state between Pompano Beach and Fort Lauderdale.

While it’s easy for consumers to fall in love with the flavor of many an eau de vie, the biggest barrier for them, collectively, remains price.

“Consumers are getting savvy enough to try our brandies, but Florida is known for the rum,” says Nahori. “Being the only distillery in Florida with a focus on fruit brandy makes it more challenging.

The Pacific Northwest is famous for a wide range of fruits, so it’s fairly logical that a number of distilleries in the region produce fruit brandies. Among the many familiar and not-so-familiar fruits that Stone Barn Brandyworks of Portland, Oregon, turns into spirits are plums, which typically provide the base for slivovitz. But head distiller Andy Garrison is reluctant to label it as such.

“I kind of tread a little carefully when talking about this,” Garrison warns. “These are traditional spirits of a lot of places in Europe that have their own cultural places for them.

If I say we’re making a slivovitz-style plum brandy, I’m not super-knowledgeable of these countries and traditions to do that—in the same way I would never say we’re making a

Calvados-style apple brandy.”

Stone Barn’s approach to plum brandy is closer to German and Austrian traditions, Garrison notes, and similar to the way the distillery works with other fruits like pears and cherries. Garrison makes a distillate from whole fruit, mashing the skins, pulp and juice into a puree-like mass, which is fed through a machine to remove the stems and seeds.

“It renders it into something like apple sauce, with a thick, pudding-y kind of consistency.

That might not be a completely traditional approach in European countries—they may leave some of the pits in stems in.”

The pits can give the distillate a nut-like flavor, but Garrison aims for a brighter, tangier flavor with a little less of the marzipan/almond character. The distillery makes the plum spirit every other year, versus annually, which underscores the main challenges associated with producing and marketing any kind of schnaps or eau de vie. It’s still mostly a niche within a niche and a relatively expensive one at that. “I’d love to say that it’s picking up steam, but we’re not really experiencing that,” Garrison concedes.

He notes that there has been some interest from the bartending community as plum and other fruit brandies work great in many cocktails. “But as far people drinking it in the way they’re appreciating mezcal or other unaged spirits, we’re not really seeing that,” he says.

He has, however, been seeing a lot of interest in peach brandy, as well as grappa, which, he says, is a natural outgrowth of growing interest in wine and different grape varietals.

While it’s easy for consumers to fall in love with the flavor of many an eau de vie, the biggest barrier for them, collectively, remains price. The rigid seasonality of most fruits, coupled with the fact that the cost to produce a proof gallon of fruit distillate costs about triple what it does to make the same volume of a grain spirit means that the casual beverage alcohol shopper who’s not quite as in-the-know as the more passionate enthusiast is likely to get sticker shock—especially from a clear product. Consumers typically perceive brown spirits as having more value and can’t always get their heads around paying high-end whiskey prices for a colorless liquor. Many understand that brown spirits are aged products and that time is money (though many, if not most eaux de vie are aged to some extent—three months or even as long as a year in glass or stainless steel to mellow them out).

Despite the fact that Finger Lakes Distilling produces a wide range of grappas, pear

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brandy and other eaux de vie, its aged grape brandy is still its biggest seller. “We sell our pear brandy for $28 for a 375-mL and it becomes a challenge to go through that kind of product,” says McKenzie.

Brandy-making veteran Dan Farber of Osocalis Distillery in Soquel, California, says that’s only going to change once the industry overcomes the very steep consumer learning curb. The dearth of education in the marketplace remains a huge obstacle.

“When you just look at [a bottle], it’s like that’s just 375 milliliters of white liquid,” Farber points out. “How can it possibly cost that much money? We need to do a lot better at getting people to understand how these spirits are made and where they fit in.”

Consumers, in general, are starting to get a better understanding of how spirits are made and as they gain more insight into the process, they’ll be more willing to pay a premium for such products, says Jennifer Solberg Katzman, co-founder of Chicago’s Rhine Hall Distillery, which produces a wide range of eaux de vie—the biggest seller of which is its Mango Brandy.

“I think consumers are starting to understand that spirits can be made from different things, and they come off the still as clear no matter what you make them with—i.e. whiskey is clear before it picks up color and flavor after being aged in barrels,” she says. “I think we can still majorly work on consumers’ understanding that eau de vie is made directly from fruit, and that is not flavored with fruit after being produced and that the natural sugar from the fruit is what ferments.”

Dorćol’s Kalusevic offers a positive sign of where the market could be headed. Demand for his Kinsman Rakia has never been higher.

“It’s doing great,” he attests. “We ended up running low on inventory to sell Stateside. We decided to close the tasting room so we can make sure that bars and restaurants that have us on the menu can maintain supply.”

The four-week tasting room hiatus also enabled Dorćol to double its production efforts, “to ensure that we can crank out enough product in two weeks,” Kalusevic says. As of right now, he has no plans to alter his supply chain, which begins in Serbian apricot orchards.

“American consumers are exploring a much more robust palate today than they were 10 years ago, and that’s a great sign for more obscure spirits,” Kalusevic says. “[We’re showing] that obscurity is not just about a bottle getting dusty on the back of a library shelf.” ■

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ChainBridge Distillery

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The Slow but Steady Rise of Canadian Brandy Canadian brandy makers are proving that there’s more to the Great White North than whisky.

BY DAVIN DE KERGOMMEAUX

T

he Nova Scotia port town of Lunenburg should be on every traveler’s bucket list. Not for its old narrow streets and colorful waterfront, but for the world-class apple brandies Ironworks Distillery makes in a historical blacksmith’s shop here.

When spirits lovers think of Canada, they usually think of whisky, but from the outset, the folks at Ironworks were determined not to mash grain, and why should they, given the abundance of fruit at hand? Nova Scotia’s Annapolis Valley is famous for its apples, so shortly after Pierre Guevremont and Lynne MacKay opened their distillery in 2009, they traveled to Normandy, France, on a Calva-

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dos reconnaissance mission. There, MacKay discovered that she preferred youthful Calvados to older ones. “The 25- to 40-year-old brandies were much more about barrel notes than the actual apples,” she recalls. “This was quite a revelation since we tend to treat barrel aging as sacred. Although that’s certainly an element of a recipe, it’s not necessarily the only solution. There are many ways to create brandy.”

Canada’s brandy regulations support MacKay’s assertion by dividing brandy into categories, each with specific legalities. Fruit brandy (not to be confused with eau de vie), must be a potable alcoholic distillate from any fruit other than grapes.

Guevremont and MacKay returned from France determined to distill Nova Scotia’s Malusian bounty into the province’s first apple brandy. Well, maybe not the very first. As far back as the 18th century, settlers here made brandy-like applejack, not by distilling, but by freezing the water out of apple cider, just as ice wine is made today. Nevertheless, Ironworks distills all its apple spirit in a 210-liter, wood-fired Mueller pot still—the same process the distillery began with a decade ago. “When it works, you don’t toy with it,” opines MacKay. After fermenting local apple juice for 10 days using German fruit yeast, Ironworks distills in a two-step process. First the distillery strips the fermented juice in batches until

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At Deep Roots Distillery in Warren Grove, Prince Edward Island, co-owner Mike Beamish makes apple brandy, among other spirits.

every drop of alcohol is collected. “That gives us enough to recharge the still for a second run to collect the hearts for barreling,” explains MacKay. “We diversify slightly in terms of our barrels but not much; we found new Hungarian oak works very well.”

Weather, harvest conditions and sugar content contribute subtle flavor differences to each batch. As well, brandy-friendly apple varieties are becoming challenging to find because lucrative red ones that don’t juice well and have other flavor nuances are replacing them in Annapolis orchards.

“We have some interesting brandies

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coming,” MacKay continues. “Hunter’s Brandy is made entirely with apples from an organic orchard planted back in the 1960s.” This three-year-old is named for Raymond Hunter, who grows the apples. Another uses an apple variety called Bishop’s Pippin, harvested on a farm rooted in Acadian spirit. French Acadian settlers made the province their home early in the 17th century, planting apple trees throughout the lush valley. Waves of Loyalists arriving from New England in 1783 displaced the French, but continued to maintain their orchards. It seems one of these Loyalists was apple aficionado Charles Inglis, North

America’s first Anglican Bishop. Inglis nurtured Bishop’s Pippin—a small hard apple prized for its high sugar content.

This Bishop’s Pippin brandy may be Canada’s first with Acadian roots, but the earliest modern-era east coast brandy traces back to Germany. The name Johnny Ziegler would look out of place on a Canadian hockey jersey, but it fits like a glove on a bottle of Canadian fruit brandy. Ziegler was a carpenter by trade and also tended an orchard in the German town of Endingen am Kaiserstuhl. In 1860, the Grand Duke of Baden granted him the right to distill, a right that has passed down through the generations to great-grandson Werner Rosswog and his wife, Roswitha.

The Rosswog family left Germany for Canada in 1983, acquiring a 300-acre retirement farm near the New Brunswick town of Baie Verte. The waste at a neighboring orchard perplexed Rosswog. Back home, fruit that fell to the ground was called “windfall.”

Distilling it converted waste into profit. But in New Brunswick, operating a still was illegal and inquiring about licensing uncovered roadblocks at every turn. Microdistilling was unknown in New Brunswick, so the province had not established rules or regulations. The Rosswogs dropped their gloves in 1990, and set out to change this.

The provincial bureaucracy resembled a treadmill with pricing and markups geared toward giant corporate distillers. But the Rosswogs were resilient and Werner slowly built his case. Finally, on December 9, 1991, the province granted him a Federal Distillery License making Winegarden Estate the first private distillery in New Brunswick. They fired up their Guertner pot still and homegrown Johnny Ziegler Apple Schnapps flowed, followed by eau de vie and brandy.

When Werner retired in 2008, his daughter Elke and her husband Steffen stepped in to run the business. Their list of Johnny Ziegler branded schnaps, eau de vie and aged brandies has grown into the most extensive selection in Canada. Meanwhile, across the Northumberland Strait from Baie Verte, Deep Roots Distillery and Matos Winery are both making brandy on Prince Edward Island.

Slowly, apple brandy is finding its feet in eastern Canada—slowly.

As tasty as these brandies are, classic European fruit brandy is not as popular in Canada as whisky and other brown spirits. However, small distillers in the heart of apple country are making inroads through education and by developing their own regional brandy identity

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rather than adopting a national style. But, doesn’t Canadian brandy need a national identity to survive? MacKay doesn’t think so.

“You couldn’t because of our geography,” she says. “Canada’s too big a place.” She has a point. In Quebec, a contingent of cideries, including Cidrerie Michel Jodoin, have branched into making their distinct style. On the west coast, British Columbia’s Okanagan Spirits Craft Distillery, Maple Leaf Spirits and Merridale Cidery & Distillery also convert fallen fruit to its noblest form.

And back on these narrow Lunenburg streets, spirits lovers are beginning to discover that in a country as large as Canada, there are many ways to make brandy. ■ Ironworks Distillery distills all its apple brandy in a 210-liter, wood-fired Mueller pot still.

The Definitive Guide to Canadian Distilleries, written by Davin de Kergommeaux and Blair Phillips will be published in March 2020.

Slowly, apple brandy is finding its feet in eastern Canada— slowly.

Johnny Ziegler branded schnaps, eau de vie and aged brandies has grown into one of the most extensive selections in Canada.

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SURETRACKPRO.COM

T R A C E A B I L I T Y To D R I N K A B I L I T Y

When knowing where it came from helps transform simple corn mash into a sipping masterpiece.

SureTrack PRO Spotlight Wood Hat Spirits New Florence, MO

Distilling Destinations

John Mleziva (right) is the founder and head distiller at State Line Distillery

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SPIRITS IN WISCONSIN: A SENSE OF PLACE In the heart of the farm belt, distillers are using local crops to their advantage.

From resurrecting heritage grains to using local fruits for brandies, there’s a lot to explore and taste in Wisconsin.

PHOTOGRAPHS: ILANA NATASHA (TOP)

BY JOHN HOLL

On Fridays the Wollersheim Winery & Distillery runs a special in its tasting room. For $5, you can get an Old Fashioned, made the Wisconsin way: with brandy. The long-time family-owned winery in Prairie du Sac added a distillery several years ago and started off making brandy, the preferred spirit in these parts. While out-of-state visitors might be confused by the fruit-derived spirit getting prominent billing in a cocktail better known for whiskey, Tom Lenerz, the distiller, says it’s Wollersheim’s bestseller by a mile and quickly creates converts.

“It’s our premium brandy and artisan bitters, that’s a custom blend from Bittercube in Milwaukee, with a splash of 7 Up on top,” says Lenerz. “It isn’t the same one you get for $4 at the corner bar in some parts of the state, but in the same spirit and we get to showcase what we’re doing here.”

The Badger State has a thriving craft distillery scene and continues to grow, and in an increasingly competitive marketplace, the state’s distillers say they have a big advantage when it comes to their products and it all centers on local, from the ingredients to the sense of pride.

From the grains, to the water, and even local sugar sources, Wisconsin distillers are finding ways to bring as much of the local flavor of their diverse state into each bottle.

“I think our state is set apart because of the sense of place and that we’re honoring the agricultural heritage we have here, as well,” says Chris Roedl, the proprietor of Hatch

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Distilling Co. in Egg Harbor. “Right now, the dairy industry is struggling so it’s a good time for farmers to consider another avenue to sell their grain, and distillers are stepping up with orders. I think farmers are, by definition, problem-solving thinkers, and when the two industries are combined, we’re getting interesting entrepreneurial-minded folks with unbelievable talents creating great products.”

In conversations with distillers from across the state, there is a shared pride that comes with supporting local ingredients and finding ways to keep farmers thriving. For some, it means planting specific barley or rye, and even heritage corn, where samples are pulled from the seed bank and revived, that will one day be turned into spirits. For others, like Roedl, it means that the 100 beehives that he keeps both on his property and on nearby farms supply the sugars for his vodka and gins.

Others take great pride in using local produce like strawberries, blueberries and botanicals that are used to garnish cocktails at their tasting rooms.

Water, arguably the most important ingredient for many of the spirits being produced, is also a source of pride for many. Curtis Basina of Copper Crow Distillery in Bayfield can see Lake Superior from his property and draws water from a well that is fed by one of the lake’s aquifers. To all who listen, he says they “are blessed with really decent water.”

In Baraboo, Renee Bemis of Driftless Glen Distillery also talks up the water angle, noting that her geographical area is where the

glaciers ended so that the water goes through about 700 feet of sand, helping to purify it.

It’s these local stories and flavors that help sell the products, Bemis says, especially with all the tourists who come through the state.

Partnerships with state and local tourism boards have been a huge boon for the relatively small distilleries.

Throughout the state you’ll find a lot of diversity. Brandy was the obvious choice for many distilleries to start with, because of the local crops, including apples. Vodka and gin are prominent, too. However, there’s Wisconsin bourbon on the way. Lenerz says his has been four years in the making, aging in native oak and it should be ready to pour this autumn. Others like John Mleziva of State Line Distillery in Madison says he’ll release his when it’s ready.

“We have farmers that come into the distillery and they see the craft that goes into it, and they start talking grain and they want to know the characteristics we’re looking for that can do the [distilling] job, and so we keep the conversations going so that we can use 100% Wisconsin grain,” he says.

Wisconsin is the perfect spot in the country for distilling because it’s in the middle of the farm belt. “It’s a younger industry than maybe we see in other areas of the country, but there is a lot of energy here and excitement about what’s happening and what people are trying to do,” says Mleziva.

These relationships are extending from the land into the classrooms as well, with the

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Distilling Destinations

Dancing Goat Distillery

University of Wisconsin­­–Madison College of Agricultural and Life Sciences. Working with students, the distillers are able to add a new generation of voices into the conversation and apply science to the craft.

There also are some spirits that seek to appeal to more than serious whiskey drink-

ers, or cocktail aficionados. Tom Maas, owner of Cambridge’s Dancing Goat Distillery (and also the Deaths Door brands) has been in the spirits business for most of his career and learned about the business from his father and grandfather.

“There’s some people who just don’t want to

drink a strong drink,” says Maas, who invented RumChata. “You need to fill a niche for people who just want to have fun, so we offer different flavors like apple pie, cherry pie and cow pie [liqueurs] to make people smile. We’re not going to be just an esoteric craft distiller with esoteric brands, we want to have something

“I think our state is set apart because of the sense of place and that we’re honoring the agricultural heritage we have here, as well.”

—Chris Roedl of Hatch Distilling Co.

Chris Roedl

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IOWA DISTILLERS ARE CHASING THEIR DREAMS For Pat Hoffman, it’s hard not to make the comparison to his 600-acre farm and what Ray Kinsella did with his in the movie “Field of Dreams.” Rather than a baseball diamond, however, Hoffman and his wife Amy have built a distillery and are hoping that people will come for a tour and samples.

“We’re a seed-to-spirt distillery here,” says Hoffman who owns Lonely Oak Distillery in Earling. “You drive through Iowa and you see millions of acres of corn and it’s all yellow No. 2, all different genetics but all of them are grown for yield, sustainability and disease resistance. We wanted to use a different corn in our bourbon so we went back and researched what corns were being used back in the day before Prohibition and that’s what we use.”

Specifically, it’s Wapsie Valley corn that goes into his bourbon, and when you visit the farm you can look out and see where it grows while you sip the end result.

Iowa still has a ways to go before it catches up with the rest of the country distilling wise, but the path to success

keeps getting better. The state passed a law two years ago allowing tastings on premises.

That encouraged Scott Bush, the founder of Foundry Distilling Co. to open “an experiential place” in Des Moines.

“We have a bar, obviously, and a tasting room, and can accommodate tours and more,” Bush says. “But we want people to come in and learn and realize that these products are being made in Iowa.”

Bush, the co-founder of Templeton Rye, believes that the business model to create a spirit brand that will become a huge international success isn’t realistic in today’s market, but success can come by focusing on a region or local area. It also comes with bridging gaps with other beverages. To wit: his distillery has partnered with a number of brewers in the Midwest to create specific and limited blends based on popular beers. Released 80 barrels at a time, “when it’s gone, it’s gone,” he says. Sounds like it’s time to go visit the Heartland.

-John Holl

Curtis and Linda Basina of Copper Crow Distillery

for everyone.”

No matter what a particular distillery is making or would like to be known for, if you spend any amount of time talking shop with owners or distillers, ultimately, the conversation keeps coming back to the word local.

And yes, while that might be a buzzword that marketers love to use to conjure up certain feelings in consumers, to talk with the Wisconsin distillers is to get the sense that it means something deeper—like tasting a gin with local botanicals grown up the road, or a rye that was possible thanks to a handshake deal with a farmer. There’s a feeling that heritage is being honored in a new way and that these distillers are not just doing what they do for the credit but because they can, and because it’s the right thing to do. ■

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Amy and Pat Hoffman

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Sales & Marketing

UNDER THE INFLUENCE The dos and don’ts of promoting your brand with the help of social media influencers

BY JON PAGE

In the world of social media, the role of influencers can be a polarizing topic. For some, it elicits images of disingenuous reality TV stars hawking vitamins and various forms of snake oil. And yet, millions of social media users view influencers as an authentic way to connect with a new product or brand.

Love them or hate them, influencers may only become more powerful in the digital age.

This summer, Facebook-owned Instagram announced it would begin allowing businesses to place influencers’ sponsored content posts as ads that would appear for a bigger audience, meaning that users would begin seeing posts from influencers they do not follow. In July, a New York Times technology columnist went so far as to write that the next generation of influencers “are going to dominate not just internet culture or the entertainment industry but society as a whole.”

While global domination may elude influencers for now, craft distillers may enjoy some benefits from influencer marketing. That is the case for Caledonia Spirits of Montpelier, Vermont, which started an influencer program earlier this year. The distillery invited a variety of social media users to create photographs and videos showcasing its Barr Hill Gin and post them on social media channels using the hashtag #BarrHillPartner. The results include beautiful photos of Barr Hill Gin and creative cocktail ideas.

“It continues to be something that feels right,” says Harry Kahn, Caledonia Spirits’s director, brand strategy & development. “Our partners on Instagram are creating content that is so inspired and creative, and it’s stuff we wouldn’t think to create ourselves. It’s this daily celebration of how Barr Hill Gin fits into people’s lives.”

Before starting the program, Kahn and his team looked at other campaigns run by makers and brands they respected in the food and beverage industry. Then they created

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a strategic plan focused on the distillery’s sales calendar, with a spotlight on September’s Bee’s Knees Week, a celebration of the Bee’s Knees cocktail, that has raised more than $30,000 for nonprofit bee and pollinator organizations since 2017. Tracking sales based on a social media campaign is difficult, but Kahn said that the distillery’s Instagram following has grown exponentially since the start of the program.

“Going into this one we kind of knew that we wouldn’t be able to track it to a T,” Kahn says. “But we do look at all of the posts and measure them in terms of their engagement and impressions … and it has far exceeded any expectations we had.”

As with any type of campaign, it’s important to define your goals before starting. Jabin Troth, who runs the popular cocktail-focused @licensed_to_distill Instagram account and serves as a social media consultant for large and small spirits brands, says that if the goal is to increase followers, brands should look for influencers with large followings and be prepared to pay for posts. But if the focus is on outstanding content, Troth recommends seeking out influencers with smaller followings.

“They’re not getting the same reach that a guy with 100,000 followers [is] getting, but sometimes their content is better,” says Troth, who has more than 1 million followers on Instagram. “They just haven’t gotten the following yet. If your goal is great content, start developing a relationship with them, they want to be featured on [your] brand’s page. … They will work so hard dumping content on your lap that is valuable.”

Depending on the campaign, it may also be important to target a specific location, and the influencer could be from outside the world of spirits. As part of its #LoveThyNeighborhood campaign, Jameson Irish Whiskey worked with San Francisco Bay Area-based Kim Schimke, who runs the beer-focused Ins-

tagram account @kimsbaybrews. During the yearlong project, Schimke posted occasional photos and stories highlighting local bars. She was quick to remind Jameson’s public relations company that she was not a whiskey connoisseur. “That’s not what [they] we’re looking for,” Schimke says. “It’s more about the place and the city and the bar. … I think the reason I was selected was not just the Bay Area. Two of their whiskies are barrels that were sent to breweries [here, so] they’re trying to branch out into that beer community.”

No matter the goal of the campaign, Troth believes the best relationships between brands and influencers start organically. “Be genuine and approach it the way you would want to make a relationship with someone you were meeting at a party or something else, not in some sort of fake, formalistic way,” he says.

“But as someone who’s like, ‘Hey, we dig your stuff. We want you to try our stuff.’”

And Kahn says it’s important to reach out to influencers who are a good fit for your brand, and to be ready to welcome their followers. “Once their followers start engaging with you, really host them,” says Kahn. “That’s the opportunity to break out your hospitality chops and make sure that you’re really providing them with a great place to land, to learn more when they click through to your page.”

However, craft distilleries would be wise not to overlook another form of influencers.

Christine Deussen of New York-based Deussen Global Communications says she has yet to see social media deliver the type of measurable sales goals she sees from traditional media.

“Media, whether it’s the anchor on the news or [a] magazine, are some of the most powerful influencers there are,” says Deussen.

“Anybody who reads [an] article must know this, because why else would they be reading it? … And in terms of reach, newspapers and magazines and websites reach millions and millions of people with every word.” ■

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Love them or hate them, influencers may only become more powerful in the digital age.

Images from Caledonia Spirits’s #BarrHillPartner campaign, courtesy of Instagram users (clockwise from bottom right) @isbeeracarb, @ diannnnneee, @kellycalvillo and @ carissa_burton C R AF TSPIR ITSMAG.COM

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Supplier Showcase

STILL BUYERS GUIDE We offer a look at some world-class distilling equipment for producers of all sizes, based in the U.S. and abroad.

Cage and Sons Distilling Systems Located in Alberta, Canada, Cage and Sons Distilling Systems combines innovation with traditional, design to craft pieces of high functioning art. Led by president, owner chief designer and head salesman Steven Cage, the company offers custom designs and several standard distilling systems. The new Type X still is available in a variety of sizes from 15-600 gallons. It features a four-plate rectification column, double boiler/steam heat agitator and integrated flow metered reflux cooling control. cageandsons.com

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Mueller Germany’s Black Forest region is known for its more than 10,000 farm distillers producing schnaps from the wide range of fruits indigenous to the idyllic area. It’s also the home base for Mueller, the manufacturer of distilling systems for producers in the region and well beyond. Its Aroma Series, known for its spherical helmet, is suitable for producing aromatic spirits from all sorts of fruits and berries (including grapes), as well as pomace. Then there’s its Destill line for a wide range of distillation applications. The steamheated Destill 300 features a central column with four new reverse action plates, a copper pot and a capacity of 300 liters. The Destill 1300, meanwhile features a central dephlegmator above a copper pot and a capacity of 1,300 liters. Both offer sight glass with illumination, agitator and a cleaning system.

Frank Deiter, who founded Okanagan Spirits Distilling in British Columbia in 2004, acts as the rep for Mueller in the North American market. muellerpotstills.com

Brewmation Based in Hopewell Junction, New York, Brewmation has been building breweries for 15 years and also offers turnkey, electrically heated or steam fired distilleries. With solutions from 150-L to 2,500-L, its stills are a perfect fit for a startup distillery or as an addition to an existing brewery, winery, restaurant, bar or tasting room. Brewmation offer the full solution, including mashing, fermenting and distilling equipment and controls. brewmation.com

Minnetonka Brewing & Equipment Minnetonka, based in the Minnesota city of the same name, made a name for itself producing equipment for the brewing industry.

Now, as more craft breweries add spiritsmaking to their operations, the company is offering solutions that help those beer producers hit the ground running with their distilling activities. Among Minnetonka’s new offerings is a system designed for cannabis and hemp distillation, as well as a hammer stone finish option for copper showpiece stills. The company also recently partnered with barrel maker Russ Karasch to develop the Squarrel Square Barrel, a permanent stainless frame with replaceable wooden staves. mtka-bec.com

Vendome Copper & Brass Works For more than 100 years, Vendome has been fabricating still and other equipment for distilleries from its home in a city that knows a thing or two about the spirits-making business: Louisville, Kentucky. The company custom designs and engineers each piece of its equipment for producers of whiskey, rum, brandy, vodka and gin. Vendome has worked with producers large and small, crafting everything from small 10-gallon pot stills, all the way up to large industrial continuous columns. vendomecopper.com

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Technically Speaking

HOW MUCH OAK IS OKAY? When aging brandy, don’t treat it like whiskey.

BY JEFF CIOLETTI

Of all of the massively consequential considerations when integrating a fruit distilling program into a mostly grain-based operation—the cost of the former versus the latter raw material being perhaps the biggest—one that’s often overlooked is how wood can interact differently when aging fruit brandy than it does whiskey.

Many fruit distillates are far more delicate than their cereal counterparts and producers must adjust accordingly before filling the cooperage. Here are a few things to keep in mind when barreling most spirits under the brandy umbrella.

Used is better than new.

If you’ve been making bourbon, you’ve obviously used a lot of new oak. But don’t be tempted to do so when you’re preparing to mature your fruit distillates. In fact, you’d be better off using barrels that previously held your bourbon.

George Washington’s Distillery at Mount Vernon, best known for its twenty-firstcentury version of the first U.S. President’s rye whiskey, also has been making peach and apple brandy—also part of the Founding Father’s arsenal—for the past six years.

According to Mount Vernon’s director of historic trades, Steve Bashore, who runs the distilling operation, used bourbon containers have been the wood of choice for those fruit-based products. The previously filled cooperage is less likely to impart flavors that overpower the spirit.

“We kind of learned the hard way,” Bashore recalls. “It wasn’t my decision—there was a different team above me that made those decisions—but the first brandy, they put it in small, new barrels. It was still good, but I think we would’ve been better off using a used cask.

I learned from those experiences.”

Since a spirit previously had been in that barrel, there’s a bit less to extract from the

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wood that might compete with and overshadow the flavor of the distillate. That’s especially important for a spirit as delicate as peach brandy, Bashore notes.

Andy Garrison, head distiller at Stone Barn Brandyworks, has found a similar dynamic at work at his company’s distillery in Portland, Oregon.

“Using second-fill barrels, using stuff that’s been re-coopered, using ex-wine casks—all that sort of stuff reduces the oak impact,” says Garrison, who has produced brandies from grapes, apples, pears, plums, cherries and some more exotic fruits.

But, he cautions, the less active the wood is, the less predictable it can be as well.

“That’s been an interesting learning aspect, I would say,” Garrison adds.

When it comes to char, less is more.

Brandon O’Daniel, head distiller at Copper & Kings American Brandy Co. in Louisville, Kentucky, suggests dialing back the char level on the wood when aging fruit-based spirits.

“I find that fruit distillates are a lot softer— they’re not nearly as bold as grain distillates,” O’Daniel says. “Grain distillates really hold up to the tannin levels and to the heavy char that you see in these barrels a lot better than brandy will.”

While char levels of 3 and above are common for bourbon and other whiskeys, Copper & Kings ages its brandies in barrels with no higher than a No. 2 char.

“I’m really trying to manage my extraction rate when I put spirit into barrels, not only how long it sits there, but how deep it actually soaks into the wood,” O’Daniel explains.

“The oak barrels will actually eat a brandy a lot faster than they will a grain spirit. So, I find that as a brandy distiller, I’m paying a lot more attention to how long I’m leaving that spirit in the barrel, how I’m treating that barrel as far as location-wise and the actual building of

that barrel.”

Garrison says that the differences in maturing fruit versus grain spirits became more apparent once Stone Barn Brandyworks added whiskey-making to its repertoire around nine years ago. Initially, the distillery had used the same techniques and specifications for aging its whiskeys that it had been for its brandies and found that the resulting product wasn’t quite right—“strange-tasting,” even.

“You can put bourbon into a brand-new heavily charred barrel for eight years and it’s probably not going to be over-oaked,” he says. “It might be a little oaky, but it’s just that the spirit is so rich and robust and heavy that it works.”

But a grape brandy aged under identical conditions for the same period of time would taste, he says, like oak extract.

Additionally, fusel alcohols tend to be more prominent in grain spirits. Therefore, you need to amp up the char to enhance the carbon’s filtering effects. It helps absorb away more of the grainy, cereal-forward elements of a young whiskey.

Fruit brandies of the clean, bright, aromatic Austrian/German style that Stone Barn makes don’t require that same level of absorption.

Garrison also has found that toasted oak works exceptionally well on the fruit spirits and not so well on the grain distillates. “It’s always a sliding scale—the good, the bad for some of these compounds,” Garrison concedes.

O’Daniel opts for a medium toast, along with the No. 2 char, on Copper & Kings’s brandy barrels. “It’s all about trying to caramelize some of those outside sugars so I get the fruitier notes of the barrel, instead of those heavier, darker tannin profiles that you see in a lot of older spirits.”

Time is of the essence, unless it’s not.

From a maturation standpoint, O’Daniel has found that for grape-based brandy the sweet

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Human Resources

George Washington’s Distillery at Mount Vernon uses previously filled cooperage for its peach and apple brandy.

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spot is between 5 and 6 years old. For apples, it’s a bit younger, between 4 and 4.5 years.

“I’m still trying to find my sweet spot for my peach and my pear,” he says.

The most recent batch of George Washington’s Apple Brandy aged for 22 months in used bourbon barrels, Bashore reveals. “It’s more based on how they’re doing as they go through, without having been in for an exact number of years or months, since there’s [no exact age] required by law.”

Garrison says Stone Barn has yet to find the ideal number for its barrel-aged brandies, but that has been more of an advantage than a liability. The distillery is able to keep it in the casks until consumers start demanding

it. “The previous batch of apple brandy we did has been in the barrel for about two and a half years,” Garrison says. “The next batch we put out will have been in the barrel for five years. And it’s not because we thought it took five years to become exceptional, it’s just that we had no market for it. So it just sits.”

The ability to bide one’s time, he adds, is one of the “wonderful things” about making barrel-aged spirits. Stone Barn recently distilled some more apple brandy, which has rested for about a year.

“And it’s just going to be in there,” he says, “until someone wants to buy it.” ■ Jon Page contributed to this article

“I find that fruit distillates are a lot softer—they’re not nearly as bold as grain distillates.”

—Brandon O’Daniel of Copper & Kings American Brandy Co.

Barrels at Copper & Kings American Brandy Co.

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Human Resources

PAYING IT FORWARD Tips and advice for starting an employee benefit program

BY JON PAGE

For some new distillery workers, the concept of employee benefits starts and ends with compensation. Such was the case when Watershed Distillery of Columbus, Ohio, was starting up in 2010, according to founder and CEO Greg Lehman.

“We wanted to be able to support a couple of families off the distillery and the benefit was a paycheck,” Lehman recalls. “It wasn’t much more than that. It was like, ‘Hey we can pay you to be here.’”

As the company grew, Watershed looked for more ways to entice would-be workers.

Today, the distillery (along with its restaurant and bar) employs more than 60 people and Watershed now offers more benefits to its employees, including maternity/paternity leave and paid time off.

Starting a benefit program may seem daunting and expensive, whether your distillery employs six or 60 workers. However, there are many resources that can help start the process, and offering benefits to employees will help show them that you are invested in their future and well being.

When Becky and Scott Harris founded Catoctin Creek Distilling Co. in Purcellville, Virginia, in 2009, Scott Harris turned to the local chamber of commerce and found that the resources for other small businesses applied to a distillery. Today, the distillery offers standard vision, dental and medical insurance to all salaried employees, as well as an option to contribute to a 401(k) plan. “I’m a firm believer in the fact that there’s not go-

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ing to be any nest eggs for Millennials when they retire, so they’ve got to take care of it on their own and build that now,” Harris says.

“I take a paternalistic view of that. … I think that’s important.”

Joe Heron, who founded Copper & Kings American Brandy Co. with his wife, Lesley, says that partnering with a payroll or insurance company to fulfill employee benefits is a no-brainer.

Offering benefits to employees will help show them that you are invested in their future and well being.

“We work through a company called Insperity,” says Heron. “They’re not the only one, but there are companies that help you manage your payroll, they help you manage your taxes. They also enable small companies to provide benefits that are similar to large companies, from healthcare to 401(k) to other investment advice.”

Heron also notes that payroll companies can help distilleries in other matters related to

human resources.

“It’s one of those behind-the-scenes things that can take a weight off your shoulders,” Heron says. “You don’t want to be screwing around in those areas where you’re not skilled.

These companies help you do that [and] they help you do it professionally and accurately.”

The cost of these services, of course, can add up quickly. Harris says you could go broke giving out everything offered. And it’s worth taking the time to review healthcare plans on an annual basis, even if it’s a painstaking process. Harris recalls recent years when healthcare plans rose by 25%, forcing the distillery to review hundreds of pages of documents to determine if it should pursue a new plan.

When it comes to paid time off, Watershed offers an excellent incentive to employees who stay with the company for three years.

“On your three-year anniversary, your vacation goes up to 15 days so you have three weeks, but you also get this additional three-week period paid that we’ll give you off,” Lehman says. “You get to schedule three weeks and go do whatever you want. We keep your job, we pay you while you’re gone, and it doesn’t count towards vacation.”

Lehman says the policy was inspired by his own love for travel and learning new things outside of the distillery.

“If you want to take that trip to Europe or go backpacking … or you just want to stay at home and work on projects, you can do it,” he says. “Then come back recharged, refreshed, ready to go.” ■

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packaging

Catoctin Creek made a wise investment in its brand’s visual identity.

SHELF APPEAL

How bold label design is helping some craft distillers stand out from the crowd.

BY ANDREW KAPLAN

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Catoctin Creek Distilling Co. had always been confident about the liquid inside its bottles.

It was what was on the outside that had the distillery a bit concerned.

“A lot of our labels—the very first ones— were designed in-house and were super barebones,” says Becky Harris, who co-founded the distillery in Purcellville, Virginia, 10 years ago with her husband, Scott. “We got to the point where we were like, ‘Okay, we learned a lot.’ For a couple of engineers without design backgrounds, when you’re selling most things out of your tasting room it’s hard to understand just how important it is that your label looks and feels as good as the spirits inside.

“And so we got to where we decided we really needed to have someone help us build a cohesive look and feel across the different

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SKUs that we were planning to sell nationwide.”

Fueling the Harrises’ urgency to revisit their labels was the simple fact of growing competition. When Catoctin Creek was founded a decade ago, there were half a dozen distilleries in all of Virginia. Today, there are 70. So the need to stand out from the crowd was growing.

“I think enough things have changed in the marketplace now that, for a prospective distiller, it’s really important to put some resources initially into brand identity—what is my label going to look like?” Harris says. “And invest some money into having a label that will catch people’s eyes and will make them want to pick it up. I think that’s a really big deal.”

Veteran label suppliers to the craft spirits industry, such as Don Wright, one of the owners of Wright Global Graphics in Thomasville, North Carolina, agree. As the craft spirits industry matures and competition continues to grow, the effectiveness of the label can make a big difference.

“I always refer to the magic tenth of a second,” Wright says. “Your brain can register in one-tenth of a second whether it wants to learn more or pass it up, a very short time frame. There’s got to be something that’s compelling there to make a customer want to learn more. If you can get them to pick it up, you got ‘em, you’re 90% there.”

Craft distillers that have been around for a while, or those just entering the scene, are in some ways lucky when it comes to labels today. Newer labeling technologies like digital printing and augmented reality are opening up new possibilities when it comes to flexibility, affordability and consumer engagement.

While at the same time, the maturity of the craft spirits industry means it is breaking out of preconceived notions of label design into some surprising new possibilities.

That Personal Touch “Designing the label was probably the most time-consuming and challenging and interactive experience of anything when putting spirits into a bottle,” says Vienna Barger, principal and co-owner of Southern Distilling Co. in Statesville, North Carolina, which introduced its first packaged spirits, a line of five bourbons, in August 2017. “We had a whole slate of different designs we looked at.”

But Barger and her team decided to have some creative fun with the process. They opened it up to consumers passing through their tasting room on tours. “We were asking people’s opinions and kind of doing minifocused group testing to see what people would like. It was a very involved and detailed

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process for us,” Barger says.

“Obviously, what’s in the bottle’s got to be good, so you’ve got to start there,” she continues. “But the billboard of your label is what’s going to tell your story to the consumer that’s shopping the shelf. And it needs to be recognizable and identify who you are and be able to tell at least that first story. Particularly in places where folks haven’t had that opportunity to sample or taste or experience the product yet. They need to be able to get a sense of what they should find when they open the bottle.”

If there’s one thing about craft distillers that sets them apart from other spirits manufacturers, it’s that their efforts are very personal. And this personal touch appears on their labels in many different ways.

For Southern Distilling, there are a variety of visual symbols built into the design that have deep meaning to Barger and her team.

For example, the red star represents the backgrounds of Barger and her husband, Pete.

“He’s a North Carolina native and we’ve got a star here on the North Carolina flag. And I’m from California, and there’s also a star on that flag,” she says.

Also, the Southern Distilling emblem, a round “SD” on the label, plays off the design of the Southern Railway logo. “We were a hub for railroads here in Statesville,” Barger explains. “So we ended up with raw materials and a lot of liquor being produced.”

Southern tapped into the talents of two designers to help them come up with their labels. Jim Horton of Horton Design in North Wilkesboro, North Carolina, has been the architect of its brand logos and graphic designs, including many of the label elements and layout structures. Additionally, they worked directly with Wright Global and their designer, Michael Truhe, who helped develop spirits label designs that make an impact on the shelf and carry the brand identity to the consumer.

At Catoctin Creek, Harris says the company was looking for a more cohesive look for its products. The new design includes a more distinctive label shape, and a larger font that stands out more. “Our old label was something that was very difficult to pick out,” Harris says.

Like Southern, the new Catoctin Creek label also contains visual cues that draw from the brand’s heritage. For example, its roundel, the circular medallion which sits atop the full logo, is meant to symbolize the role nature, specifically the land where Catoctin Creek is produced in Virginia, has in creating these spirits. It contains the state flower, the

Monkey in Paradise Vodka’s quirky design targets the millennial market.

Southern Distilling’s Southern Star label conveys heritage and a sense of place.

Don Wright of Wright Global Graphics

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Packaging

“I think some of the newer trends are craft spirits that are going modern and clean, kind of the antithesis of historic.”

—David Schuemann, owner/creative principal of CF Napa Brand Design

Zíami opted for a modern design.

David Schuemann of CF Napa Brand Design

flowering dogwood.

And the Catoctin Creek monogram contains fanciful script letters “C C D Co,” for Catoctin Creek Distilling Co., with all the letters intertwined as to become a single meaningful unit.

The distillery worked with Thoroughbred Spirits Group out of Chicago for its label redesign.

Let the Sun Shine In Earthy tones have been favored looks for many craft spirits labels, but experts say they are beginning to see this open up to more adventurous designs in the past couple of years.

The brand Zíami, of Miami, is a good example. This high-end rum company went with a much more modern and colorful design for its labels.

“I think some of the newer trends are craft spirits that are going modern and clean, kind of the antithesis of historic,” says David Schuemann, owner/creative principal of CF Napa Brand Design, which designed Ziami’s label and has offices in Napa, California, and New York. “Zíami has a bright, clean supermodern very Miami Beach vibe to it.”

The label of another Florida craft brand CF Napa designed, Monkey in Paradise, goes in a quirkier direction. “It’s aimed at millennials,” says Schuemann. “This whole idea of beach bars and spring break and fun in the sun.”

The visual cues in the brand’s labels evoke

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the local tradition of sitting with a drink and watching the tropical sun go down.

These labels show that craft brand label design is entering a new phase as the industry gains more confidence and is willing to try new things. Helping many of these craft distillers has been the emergence of digital printing. This process allows for smaller runs of labels, and also more variability. For instance, labels in the same run can be made to have slightly different graphical elements incorporated into them.

“In today’s market, you have to appeal to the individual,” says Patrick Seesholtz, business development manager for Blue Label Digital Printing in Lancaster, Ohio. “With digital printing technology every single label can be different, allowing for design and color variations within the same product, allowing brand owners to personalize or customize literally every single bottle on the shelf.”

Other new technologies, such as augmented reality (AR), are being incorporated into labels as well, allowing for new levels of consumer engagement with brands. With AR, a consumer focuses their smartphone camera on the label, revealing digital animation. This capability drew a lot of attention in the wine world when the brand 19 Crimes used it a few years ago. And Wright says both it, and similar technologies like QR codes, are good fits for today’s tech-savvy consumers.

Seesholtz says laminates that make a mate-

rial look like worn leather or feel like velvet are amongst the newer materials and finishes, along with other papers, specialty materials and foils that have different textures, characteristics and dimensions. These help a label achieve that tactile effect that make consumers want to pick the bottle off the shelf and feel it. And many craft labels continue to use embossing and debossing, hot foil stamping, and custom die cuts or shapes of the labels.

“We’re real strong proponents of adding foil stamping and embossing embellishment,” says Wright. “Many times, we see some things that just maybe need a little bit of enhancement. We’ll actually take a design that’s not a bad design that a customer has, but they may not be aware of the techniques that are available to enhance that design. So, we really specialize and encourage people to add some embellishment, be it screen print varnishes or embossing foils, or even clear foils with an emboss. What that does is add some dimension to the face of the label. It catches light and if you catch light, light attracts the eye, the eye looks at the product and you’ve made an impact.”

For Wright, spirits, and more recently craft spirits, have been a growing part of his family’s label business for 20 years—and counting. “The label helps communicate the spirit of the distillery,” he says. “It conveys their message, their vision, their dream, their passion.

It’s really important.” ■

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THEY’LL KNOW YOU BY YOUR LABEL “Wright’s cohesive team approach hit every touchpoint - from design and customer service all the way through to post-sales support and equipment recommendations. They are both a creative partner and comprehensive resource.” southern distilling co.

• High Quality Custom Printed Labels • Award Winning Design Services • Exquisite Finishing Capabilities • Embossing & Tactile Finishes • Tasting Room & In-Store Graphics • Custom Packaging & Retail Displays WRIGHT® Global Graphics 800-678-9019 • www.wrightglobalgraphics.com

legal corner

HEMP AND ALCOHOL: A ROCKET AWAITING TAKEOFF? Many regulatory hurdles remain before TTB would approve alcoholic beverages with CBD.

BY RYAN MALKIN AND GARRETT O. GRAF

This year, the Alcohol and Tobacco Tax and Trade Bureau (TTB) approved less than 20 products with hemp. Of those products, only three are formulations with distilled spirits, according to ShipCompliant results. Around the country (and world), the conversation is shifting—if not exploding—to cannabidiol (CBD), at least with respect to non-alcohol products. But, why hasn’t this explosion in CBD in the non-alcohol world yet hit the beverage alcohol business?

The answer: TTB’s formula and label approval process. Alcohol beverage manufacturers must submit formulas containing hemp derivatives—such as CBD—to TTB for approval, along with also obtaining TTB’s approval for corresponding label approval.

Unlike alcoholic beverages evaluated by TTB, those waters, juices and candy bars which contain hemp derivatives you see advertised on shelves do not generally undergo an evaluation by the Food and Drug Administration (FDA); thus, these products are generally easier to bring to market.

Whether or not the FDA conducts a premarket review of these non-alcohol products doesn’t mean hemp derivatives possess any greater clarity as a food additive, dietary ingredient or otherwise when included in those types of products like juices and eye creams. The FDA clearly maintains jurisdiction over consumer goods such as foods, dietary supplements and cosmetics, among other product types. For several years, the FDA maintained CBD is not a permissible ingredient in foods and dietary supplements for a couple reasons: the argument of preclusion due to an approved prescription drug in which CBD is the active pharmaceutical ingredient; and whether CBD has undergone the pre-

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market review as a new ingredient in foods and/or dietary supplements.

Since the enactment of the Agriculture Improvement Act of 2018 (commonly known as the 2018 Farm Bill), the FDA’s antagonistic rhetoric towards CBD has noticeably softened. The FDA has issued several warning letters to manufacturers since 2015 concerning CBD products, but these letters predominantly address impermissible disease claims made by these manufacturers—i.e. a certain CBD product may treat pain or certain cancer conditions. In doing so, the FDA established its enforcement priorities to primarily relate to impermissible disease claims—a rule applicable to any food or supplements, not just ones containing CBD—rather than the FDA honing on the issue of ingredient permissibility. The FDA convened a hearing in May 2019 to further evaluate under what distinguishing circumstances hemp-derived cannabinoids could be incorporated into consumer goods like foods and supplements versus more heavily controlled products such as prescription drugs. The FDA announced it anticipates issuing an update in late 2019.

However, given the lingering uncertainties with the FDA’s position towards hemp-derived cannabinoids and whether such cannabinoids are generally recognized as safe, TTB maintains such cannabinoids cannot be currently approved as part of beverage alcohol formulations and/or labels. To date, TTB has approved formulations and labels containing hempseed oil such as New Belgium Brewing Co.’s Hemporer HPA. Distillers can choose to use hemp in their products. However, manufacturers must follow the TTB’s hemp policy, first established in the early 2000s. It has since been updated by

TTB in an attempt to contemplate the hemp provisions of the 2018 Farm Bill and its 2014 predecessor. Until the FDA further resolves the aforementioned uncertainties, TTB will continue to require formulas to be submitted for products containing hemp, like those derived from hemp seeds or hempseed oil.

As the CBD craze and the alcohol industry continues to evolve, keep in mind, hemp is not marijuana, so skip the psychedelic labels.

Utilizing the distinctive marijuana leaf or related imagery is a red flag. Those will not be approved by TTB, though some have slipped through the cracks. Remember, per 27 CFR 5.42, your labels must not be misleading or make health claims. Referencing or suggesting that a controlled substance is in the product or that a consumer may feel health benefits should be avoided. ■

Ryan Malkin is an attorney focusing on alcohol beverage and cannabis law, and Garrett O. Graff is a managing attorney at Denver-based Hoban Law Group. Nothing in this article is intended to be and should not be construed as specific legal advice.

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Have You Looked for OSHA Courses Only to Wish They Were Specific to Distilling?

We Get It. OSHA training is tough enough without having to wonder if you’re receiving the most pertinent information to meet your needs. That is why ACSA has partnered with Industrial Safety and Training Services (ISTS) to bring you an OSHA 10 Certification Course specific to distilleries.

What else is in it for you? Well, after this course, you will: • Recognize and Prevent Health and Safety Hazards in Your DSP • Evaluate Your Facility Through the Eyes of an OSHA Inspector • Have Hands-on Auditing Practice in an Actual Distillery • Receive an OSHA 10 Card From Eastern Kentucky University • Take Home the Knowledge to Ensure a Safe Workplace and Prevent Hefty Fines for OSHA Violations

Join us at Philadelphia Distilling (PA) on Aug. 19 & 20 or Garrison Brothers Distillery (TX) on Nov. 4 & 5

REGISTER TODAY!

americancraftspirits.org/education/regional-programs/.

P.O. BOX 701414 Louisville, KY 40270 (616) 745-6373 education@americancraftspirits.org

ACSA Member: $299 Additional Member: $199 Guild Member: $349 Additional Guild Member: $249 Non-Member: $429 Additional Non-Member: $429

Business Sense

CAPITALIZING YOUR DREAMS Exploring the challenges of raising capital for your distillery.

BY DAVID LARGE

So you have a great idea for a brand. You have spent the necessary time and resources in vetting the opportunity and how your idea will fit into the craft landscape. You have modeled out solid pro forma financials, and even have a designed comp bottle and started your liquid development. Now what?

It’s time to launch into one of the toughest phases in the alcoholic beverage sector—raising capital. While there are dozens of structures and avenues open to you for attaining capital, most fall into the two primary buckets of debt or equity (sometimes a hybrid between the two).

The most successful investors will be investing first and foremost in you and your team and your abilities to execute a plan.

Let’s start with the largest source of capital—an equity capital raise—and some of the surrounding issues. There are numerous strategies in terms of sources: angel investors, crowdfunding, accelerators, incubators and professional firms like venture capitalists and other funds. Before you go out to any professionals, it is best to start going through your Rolodex and putting your feelers out to the market. Presuming this is your first round of capital, it is best to approach the Four Fs: Friends, Family, Fools and Fanatics.

Other ideal initial investors include those who

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have some direct knowledge of the alcoholic beverage industry or broader food industry such as brewers and other manufacturers, as well as service providers that work with those types of businesses, such as CPAs and legal counsel. Successful self-made entrepreneurs are also ideal investors as they often find the spirits industry very appealing because of the margins, the sexiness of spirits, and the very large typical exit multiples.

Some inherent challenges of raising equity for a spirits brand often center around the uniqueness of this business. The three-tier system is not one most investors have come across, so there is a significant education component to them truly understanding the nature of this business. It is crucial to give them a succinct view of the craft landscape.

Educate them about how cash flows work for brands and distilleries. Demonstrate the large exit multiples with data, where available, and clearly articulate your primary points of differentiation in order to answer the big question: Why will people buy your brand? Remember, most investors haven’t previously invested in this sector privately. Explain the craft spirits M&A landscape: • Large exit multiples ranging from 69-times revenue • Higher barriers to entry, both from knowledge and capital • Vast spirits world in terms of retail dollars spent yearly • Non-correlation to most other industries (of which you give up by making a public versus private investment where capital markets increase exposure to systemic risks) • Recession resistance. In downturns, there are reallocations towards more valueoriented brands and a consumer shift toward in-home entertainment, but overall consumption has followed an up-trend

That said, the most successful investors will be investing first and foremost in you and your team and your abilities to execute a plan. Seasoned investors understand the Pareto principle, or the 80-20 rule, which in simple terms shows us that there are uneven distributions both in business and the natural world around us. Economist Vilfredo Pareto noticed that 20% of the people owned 80% of the land in Italy, a pattern that can be found everywhere that a few (companies, brands, people, investments) radically outperform all others. These investors don’t seek diversification; first, they seek the 20%, the companies that can become overwhelmingly valuable.

This is a great business as a backdrop to large increases in value, and now it’s up to you to sell the intangibles—yourself.

Next, let’s touch briefly on debt. Debt, of course, is a legal obligation to another entity to be paid back in the future. Bank loans, government-guaranteed loans, credit cards, lines of credit, home equity lines of credit, leasing contracts and portfolio loan accounts are all debt structures. One advantage of debt is most importantly that you don’t give up ownership in your brand. Of course, that comes at a cost, but in most instances, interest rates are less than what many investors would require as a rate of return. Disadvantages include having to personally guarantee (with personal assets) the loan, very little flexibility, and the monthly payments can become onerous if in a cash crunch or lousy year.

One debt structure we have seen much more recently due to the explosion of the craft sector is the SBA 7(a) and the SBA 504 loans. For years banks hesitated on lending to the craft sector in general but have come around to a large number of entrants, good cash flows and margins, and success stories of exits. The SBA 7(a) can be used for equipment and build-out of a distillery, but usually

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MORE TIPS FOR SECURING CAPITAL • Keep the investor group as small as possible and avoid investors that you do not connect with morally or personally. Everybody is always friends in the beginning, but financial challenges can often bring out the worst in people.

• It’s important to understand yourself and your team—including strengths and weaknesses as individuals—and where all team members fit into their functional categories. If there are any gaps, try to fill those roles either through employees or forming an executive/advisory board with wellrespected individuals.

• Be distinct. You need to stand out from the crowd. Educate about craft spirits, but most importantly, focus on your key attributes and why that will make your brand a success.

• Be specific. Identify investors with skill sets who can help, such as leadership, financing and sales. is used more for working capital. These multi-purpose loans typically come with higher interest rates, personal guarantees, and are highly collateralized.

Given that the most significant cash outlays in the craft business is facility build-out and equipment, the SBA 504 has become an attractive program to new entrants. They have lower down payments, lower interest rates (currently) and higher loan amounts. This loan consists of three parts. First, there is a bank loan depending on your banking institution or suggestion by the SBA of approximately 50% of the loan. Second, an SBA loan from an SBA- certified development company makes up about 30-35% of the loan. Finally, there is the down payment, your capital put up to secure the loan of about 10-15% of the total.

While interest rates are highly dependent on various factors, the 504 program is in the ballpark of 5-6%, whereas the 7(a) is higher at the 8-9% range in many cases.

No matter which route you take for sourcing capital, remember that investors

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and banks put money in people more than products. Given the inherent attributes of the craft sector, it’s a great area in which to be raising money. Now it’s up to you to sell your specific idea and self.

While challenging, it’s a good time to be securing capital from either equity or debt.

Focus on your plan, get creative and don’t forget to reach out for help along the way. Make sure that you have adequately vetted the opportunity and that an investor or bank can trust that you are prepared. Go get ‘em! ■

David Large is the director of Thoroughbred Spirits Group.

Learn more at tbspirits.com.

• Be direct. Don’t set up countless lunches and worthless “show-off” meetings. Unfortunately, there are quite a few players on the capital raising circuit who like to use entrepreneurs as a social tool to inflate themselves. Tell your potential investor directly what you want to talk about, and make sure they have a legitimate interest before discussing the opportunity.

• Be honest. To yourself and your investors. If at the end of your financial plan, the numbers just don’t work, don’t pursue the venture. It is always crucial that you are realistic with yourself, and the individuals that will be trusting you.

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Retail: On-Premise

CREATING A WELL-ROUNDED BAR PROGRAM By going beyond the creativity of cocktails, bars and distillers can educate consumers to appreciate spirits on a singular level, creating a better drinks culture for all.

BY JOHN HOLL

Mark A. Vierthaler of Tenth Ward Distilling Co., which recently opened its Tenth Ward Cocktail Lab

“One thing for me, as a distiller and certainly for our sales and tasting room staff, is that conversation and education is key.”

—Mark A. Vierthaler of Tenth Ward Distilling Co. 80 |

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When it comes to creating a bar program that involves craft spirits, or reinventing a current program, creative cocktails are a must. There’s a deeper level of service, however, that can help draw in discerning customers or those seeking to further their drinks education.

“I think in this stage in craft spirits, appreciation has gotten great and the customers are open to enjoying the spirits straight, or neat, or not just in a cocktail,” says author and spirits critic Jason Wilson. “For the bar, that means having a well-curated list and a staff that is educated.”

That education, he says, means more than just memorizing a list and then reciting facts.

A truly great spirits program means being flexible and actually listening to customer preferences and then meeting them at their level and then suggesting a spirit that will actually speak to them.

“One thing for me, as a distiller and certainly for our sales and tasting room staff, is that conversation and education is key,” says Mark A. Vierthaler, the head distiller at Tenth Ward Distilling Co. in Frederick, Maryland. “A lot of people have at least a vague relationship with beer or wine where they know flavor or styles, but don’t have the same for gin, vodka or whiskey. Or if they do, it’s only in the context of cocktails.”

Vierthaler was a bartender before he was a distiller and because of that experience, he says that every spirit he has created is crafted in a way that can be enjoyed neat. He knows that the majority of the time they will be mixed and there’s education that comes with that, as well. Finding the right tonics, fruits and mixers to accent the spirits is key to creating a memorable cocktail.

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Retail: On-Premise

He uses the gin and tonic as a good example of this premise since most people are familiar with that cocktail. Tenth Ward makes a genever and so he might work with a bar to create a specialty cocktail that can be featured for a specific period of time. From there, the education would kick in where bartenders and servers could use a customer’s ordering of a “gin and tonic” as the start of a conversation to genever.

If the customer bites, er, sips, and likes it, then there’s the introduction to trying the spirit by itself. Knowing how it tasted in a cocktail and the flavors it brings, now the customer can go to a deeper level to experience the base.

“We’ve had a lot of success with that,” Vierthaler says. “What it really comes back down to is finding ways to get people who are nervous about enjoying a spirit by itself or are wary of something neat that we can find a point where we can meet and then work back from that.”

There’s a similar approach taken at the Columbia Room in Washington, D.C. Paul Taylor, the partner and beverage manager, says that they have a range of guests coming into the bar with various levels of spirits knowledge and the staff is there to meet their needs and hopefully help them leave feeling a little more solid in their understanding.

“If someone drinks daiquiris and they like the funky note, great. That’s the rum. Now let’s get them to try that on its own,” Taylor says.

“And no matter what, it needs to be a fun conversation, not a lecture.”

Conversation is achieved in the spirits setting in the same way it is everywhere else: asking questions. Taylor says he wants to engage people to know what else they like to drink, what they enjoy eating, even where they travel. When he learns about the drinker and their background he can help introduce new drinks to the dynamic.

This means, especially when offering neat pours, it is important to have a well-tailored list that can serve as a course outline for new drinkers, but also appeal to discerning customers who have a masters degree in drinking.

“I think you want to represent each category well,” Taylor says, noting that the back office at the bar is well stocked with bottles from small spirits creators that they haven’t even tried yet. When something new and interesting comes across the staff’s palate, it becomes a fun exercise to see where it might fit in on a list.

Constantly rotating selections or bringing

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Paul Taylor of the Columbia Room in Washington, D.C.

in new bottles at the expense of older ones is another way bars can stay on the cutting edge of customer service. And the Columbia Room also stocks larger brand names for the folks who just want something familiar.

“We carry the big brands to make those guests happy,” says Taylor. “If they want a Macallan we’ll have it, but we’ll see if we can’t move them into something else.”

Of course, there are risks involved with neat pours from specialty bottles: the price. There are going to be some customers that might balk at a $20 or higher price tag on a specialty pour from bottle to glass. This is where a server’s knowledge of how a particular spirit opens up over time comes in handy, to pass off

that wisdom in advance and let the customer experience it over the course of the drink.

Bar owners have a responsibility to give customers knowledge if they are spending more for a drink, Wilson says. He’s become an advocate for the neat pour and sees it as a way to give drinkers a more complete experience.

“When you give someone a neat pour you get to see what the spirit is all about in its truest form,” he says. “You can taste where it’s made and if it’s traditional. Does it have the culture and history behind it? That’s important.

And even for the committed cocktail drinker going neat every once in a while, really helps them appreciate what’s in their mixed drink. Giving them that opportunity goes a long way.” ■

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Retail: Off-Premise

A MATTER OF TASTE Examining the importance and intricacies of running an in-store tasting.

BY JON PAGE

Liquid to lips.

When asking distillers how to attract more customers, the phrase is frequently mentioned and repeated. Beyond a distillery’s tasting room or bar, one of the best ways to achieve liquid to lips is through an in-store tasting at an off-premise location. While laws and regulations vary from state to state— and there is debate about whether or not distilleries should offer mixers—the practice of hosting an in-store tasting is widely lauded by craft distillers across the United States.

“In this business, all of us craft distillers are producing slightly more expensive than normal bottles, so nobody wants to pay $50 for a bottle if they don’t have a chance to taste it first,” says Scott Harris of Catoctin Creek Distilling Co. in Purcellville, Virginia. “I think it’s pretty important for people to get liquid to lips before they are ready to buy a bottle.”

Virginia is a control state, and Harris says Catoctin Creek must schedule tastings at Alcoholic Beverage Control (ABC) stores via an online system. With more than 300 stores in the state, he says that knowing your market is key.

“Knowing which stores you want to put yourself into is important because there are stores in really bad parts of town that are only selling cheap stuff, or there are stores in some rural county where you don’t even have any customers,” Harris says. “You’ve got to know where you need to be.”

In Ohio, another control state, Watershed Distillery founder and CEO Greg Lehman says that knowing when to host a tasting is just as important as where. State law require distilleries to buy their tasting products from the store. “You’ve got to pick a time that’s busy because otherwise you’re going in there and you’re buying four of your bottles and then you’re trying to get that money back by selling it to the customer,” says Lehman, whose distillery is located in Columbus. “If they’re not walking in at a big clip, then two hours later you’re done, out the door, you bought their bottles.”

In the non-control state of California, distilleries still need to pay careful attention

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The practice of hosting an in-store tasting is widely lauded by craft distillers throughout the United States. to state regulations. Jaqueleen Cleaver, a sales and marketing specialist who manages product demonstrations at Venus Spirits, says the Santa Cruz-based distillery regularly checks the state’s ABC website and consults with advisers to ensure its tastings are compliant. “We have to be really careful with our newsletters and getting the messaging out to people about where we are and where they can find us,” says Cleaver. “Marketing laws for alcohol change often. We check frequently anytime we start a new program.”

Venus, which recently started a tasting program for its new line of ready-to-drink canned cocktails, prefers to have regular employees lead tastings, rather than partnering with outside agencies or brand ambassadors. Sometimes that’s owner and distiller Sean Venus. Other times it’s members of the bartending staff at the Venus tasting room.

“Using your own staff is, I think, hand over fist more beneficial than using outside promotional staff, especially in the beginning,” says Cleaver. “When it’s a new brand, there’s a lot to educate somebody on and people usually want to know what makes your brand different. I think using people that work at the

distillery or in the tasting room are just more capable of answering questions and delivering your brand message.”

At Sonoma Distilling Co. in Rohnert Park, owner and whiskeymaker Adam Spiegel strives to participate in higher profile tastings.

For distilleries that are just starting in-store tastings, he recommends starting small.

“People in craft get into so many different places that they can’t physically support,” Spiegel says. “Our rhyme or reason is we shouldn’t be in those markets if I can’t support them.”

Harris echoes that sentiment.

“Make sure that you’re hitting your home market first,” says Harris. “Start within a 50-mile radius of your distillery and then you can grow it to 100 miles and then grow it from there. As you get farther and farther from home it’s harder to do these, and they cost quite a bit of money.”

Spiegel notes that distillers should always be thinking about the return on investment, whether the resource is money or time.

“The biggest takeaway that I have is [to] build a plan,” Spiegel says. “Don’t just throw a bunch of spaghetti at the wall and see what sticks.” ■

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YOUR SHOT AT GLORY, GLAMOUR AND GOLD

2019 Judging of Craft Spirits Register for ACSA’s 7th Annual Judging of Craft Spirits competition October, 29-30, 2019, at Cardinal Spirits in Bloomington, Indiana.

ACSA takes great pride in conducting a rigorously professional judging program that recognizes the best craft spirits in the categories of Vodka/Grain, Gin, Brandy, Rum, Whiskey, and Specialty Spirits.

Now accepting international spirits.

(502) 807-4249 judging@americancraftspirits.org SPONSORED BY

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distribution

WHEN TO SIGN ON THE DOTTED LINE Weighing the pros and cons of entering formal distribution agreements.

BY ANDREW KAPLAN

For a craft distillery, working with a distributor can be the best of times, especially as the partnership between the two companies grows a young, nascent brand. Unfortunately, it can also be the worst of times if a challenge or disagreement erupts between the two parties and the relationship hits a bumpy road.

Distribution contracts can help prevent that from happening—and also reduce the legal, financial and emotional pain if the partnership sours.

But in the complicated landscape that is today’s alcohol industry, is a formal, written contract always necessary? Or will a simple handshake or verbal agreement suffice? In fact, is any contract necessary at all? The answers, according to experts, depend on the situation. Things like location (for example, are the parties doing business in a franchise state or an open one?) and the size of the distributor, can make a difference.

“The smaller distributors are less likely to have written contracts,” says Kate Palmer, owner of Hearts + Tales Beverage Co., a craft brand incubator operating in top markets across the U.S. “With the small wholesaler I worked for in California, I believe it was all handshakes. I never saw a single contract.

Granted, California is an open state.”

But, she is quick to add that written formal contracts are commonplace with the larger wholesalers, especially given the current competitive climate when it comes to signing with the many small brands today. “Even though it’s a small brand,” says Palmer, “these larger wholesalers think about, ‘Well, am I going to just lose this brand in a couple of years if they get purchased?’ Distributors, even the big ones, don’t like losing brands before the end of their lifespan, even if it doesn’t end up being the next big thing. They still like to hang on to stuff, just in case it pops.

“The fact of the matter is, neither brands

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or wholesalers can predict the future and its drinking trends. Contracts should exist, but for craft producers they can be short term.

Honesty, due diligence and consistent communication throughout the course of the partnership is stronger than that piece of paper and is more likely to lead to mutual success.”

Scott Harris, general manager of Catoctin Creek Distilling Co. in Purcellville, Virginia, wholeheartedly agrees with that latter point.

He prefers handshake agreements with his distributor partners. While he has signed contracts with half of his distributors, he says those were only done at the insistence of the distributors. “The best situation, for both sides, I think, is a verbal contract,” he says. “My best distributors are oral agreement distributors.”

And yet, attorneys who specialize in distribution agreements in the alcohol business point out that putting things down in writing can have its advantages for a craft distiller.

Tracy Jong, an attorney based in Rochester, New York, is realistic about the power of written contracts in this industry. “There are companies that are going to agree to anything in writing, but they are going to do what they’re going to do,” she says. “They don’t really care what the contract says.”

But, she is quick to add, that doesn’t mean a written contract should be dismissed altogether. “Unfortunately, business requires a little bit of both,” she explains. “Some people are going to abide by a contract and some aren’t. We have to use our best practices for both circumstances. Because honestly, we just don’t know what we’re getting into.”

And Ryan Malkin, an attorney based in Miami Beach, Florida (and counsel to the American Craft Spirits Association), says often the correct decision comes down to each distiller’s situation. “If you’re in a state where there’s no franchise law and you don’t have any contract, then you can leave whenever you want to,” he

explains. “So, if I’m a small brand and I’m in an open state, let’s say California or New York, then I would prefer not to have a contract at all until I’m at such a size where the distributor’s going to give me some of the things they would give to the Diageos of the world.”

At the same time, in franchise states, which make it harder for a craft distiller to leave a distributor, it can be the written contract only that offers specific escape clauses to do so.

The size of the distributor also can end up influencing the decision based on whom a contract favors. A craft distiller may be more inclined to want a formal contract with a small distributor that may be just starting out, for example, than with a large, established national one.

What to Include in a Contract For those companies entering into a written agreement, experts suggest trying to include certain terms covering circumstances unique to a craft distiller. These can include specific payment terms more agreeable to a young operation, agreed-upon performance thresholds, and sometimes funds allocated to marketing programs.

Malkin suggests payment terms should be one of the priorities for a craft spirits company. He explains that negotiating the number of days can be critical for a young distillery just starting out. “A lot of times the major distributors would say perhaps 90-day payment terms or even 60-day payment terms,” he says. “For a craft distiller, 30 or even 45 days is hugely important because they may not have the cash flow of a supplier like a Diageo or a Campari.”

A trigger to allow the craft distiller to get out of the arrangement is also very important.

“Regardless of whether or not you’re in an open state or a franchise state, the agreement tends to tie you two together, regardless of

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Attorneys who specialize in distribution agreements in the alcohol business point out that putting things down in writing can have its advantages for a craft distiller.

what the state laws may be,” Malkin says. “So, you do need to know how you’re going to get out before you’re going to get in.” The best way to do this is by establishing agreed-upon performance metrics which the distributor has to hit.

Along the same lines, agreeing to which new territories the distributor will be able to take on can be important for a growing distillery as well. “You want to try and say, ‘Well, we may give you a right to another state, but we’ll have to sort of see that on a case-bycase basis,’” Malkin says. “And we may want to give you other products.”

Among the other provisions Jong suggests are: • Label registration and price posting: “Some of them put that back onto the suppliers,” she says. “However, depending on the state that we’re going to, small craft distillers don’t have lawyers in every state. They don’t know how to comply or what the rules are in every state, whereas the distributor does these all day, every day.”

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Kate Palmer

Scott Harris

Ryan Malkin

Tracy Jong

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In the complicated landscape that is today’s alcohol industry, is a formal, written contract always necessary?

• A dispute resolution and communication channel clause: “Issues are going to come up. Do we have contact information of who we should be contacting?” she says.

• Trademark and copyright issues: “We need to be clear about who owns what,” Jong says, pointing out that especially in this social media age, it is not unusual for the brand’s logos and other trademarks to be adjusted without the owners’ consent. So, such usage should be worked out beforehand.

• Product returns and refunds: “Under what circumstances can a product be returned? And if so, do I have to give a refund and how much?” Jong says.

• Pre-existing accounts: If the craft distiller turned over accounts it created to a new distributor, does it have to pay to get those accounts back if the relationship ends?

• Marketing support: “The distributor can go out and send back huge bills to the suppliers that they weren’t expecting and can’t pay for,” says Jong.

• Reporting requirements: “I need to have regular reports to see how things are going,” says Jong. “I can’t find out a year later that there’s a problem.”

• Termination of renewal: Jong says just how the termination process should unfold should be spelled out, reducing the chance of disagreements. “It needs to be quite clear, not only the reasons that I could get out, but what are the mechanics of making it happen?” she says.

Some Additional Tips While such stipulations can lay the groundwork for a smoother relationship, Maggie

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Campbell, president of Privateer Rum in Ipswich, Massachusetts, and the vice president of ACSA, likes to offer another suggestion to young spirits companies: get some experience walking in the shoes of a distributor.

Campbell worked for a year and a half at a distributor where she learned the ins and outs of that side of the business, experience that she says has proven invaluable when it comes to having good working relationships with her distributors today.

“It was massively eye-opening,” she says, explaining that the experience left her with a better understanding of things like: “How does the rum exist in the world once it leaves the distillery? What’s valuable to the distributor rep? What is their day like? What is meaningful to them? What actually makes things easier for them? What materials can we give them that are really helpful and make their life easy? How do we connect to them in a way that’s meaningful to them? Because those things are very different than what we want to share as distillers.”

So, what was the biggest takeaway from her experience working for a distributor?

“Never promise something that you can’t do,” she says. “If you say you’re going to do it, you just have to do it. ‘Yeah, sure, I’ll get you that bottle Thursday,’—you have to do it.”

It’s also helpful to remember what it is motivating the distributor to enter into the contract, things like exclusivity and timing.

“Distributors want to be the only ones selling Brand X in their state(s) or entire region of coverage,” Palmer says. “This allows them to build a craft brand consistent with the brand’s messaging and standards. When two wholesalers compete for sales, it becomes less about the story and more about the price,

which can cause irreversible damage during brand building stages.”

And, she adds, “Brands take time to build.

Brand X may be 10 years in the making, but it’s still new to Company A and all their reps.

Education, sampling, points of distribution and the ultimate goal of volume takes time. You often have to repeat steps one through three multiple times before Brand X finally becomes a staple in the accounts and in the reps’ bags.

Company A doesn’t generally see the ROI on a new brand launch until year three.”

Why Shake On It? As a smaller craft distiller, Harris, of Catoctin Creek, says handshake agreements with his distributors just make more sense for his company—that is, when he can get them. “The problem with a written agreement is that it is so typically very one-sided,” he says. “It gives so much strength to the distributor and very little to the supplier.”

He dismisses many of the provisions of a typical written agreement as being unnecessary and overly binding in favor of the distributor. “With a handshake deal, it’s the most basic sort of old-fashioned agreement,” he sums up. “They know you can leave and you know that they can leave, so both sides have to work hard to make the relationship work.

“In our best agreements, that are all handshake agreements, it’s like, ‘Look, we’re going to make a lot of money together.’ And if we both align on that, and we’re both excited about the product, then we’re going to be very happy and grow together. And that’s almost always, in our case, structured by a handshake deal.” ■

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closing time

RETAIL PERFORMANCE SPOTLIGHT: OFF-PREMISE CHANNELS U.S. SPIRITS OFF-PREMISE PERFORMANCE

SHARE OF U.S. SPIRITS DOLLARS

BY CATEGORY

52-Week Period Ended July 2019

52-Week Period Ended July 2019 Brandy & Cognac 6.5%

Vodka $4,008.8 +2.7%

Gin 3.2%

RTD Cocktails 2.0%

Liqueurs/ Cordials 7.5%

Whiskey $5,602.6 +7.2%

Agave Spirits $1,321.3 +12.6%

Rum 8.1%

Whiskey 37.3%

Rum $1,224.5 -1.3% Agave Spirits 8.8%

Liqueurs/Cordials $1,121.9 +2.3%

Vodka 26.7%

Brandy & Cognac $958.1 +2.8%

Agave spirits have overtaken rum as the No. 3 spirit in terms of dollar sales in the U.S. Within agave-based spirits, mezcal is growing rapidly, up more than 45% in the U.S. for the 52-week period. But keep in mind, that’s off of a very small base, as mezcal accounts for only 0.1% of total U.S. spirits revenue.

Even though vodka is still the largest category by volume, higher price points on craft and super-premium whiskeys have planted the latter category at No. 1 in revenue terms. And, there’s good news on the gin front, as craft and higher-end import gins have pulled total category revenue out of its doldrums and into unabashedly positive growth territory.

Gin $484.3 +3.0%

RTD Cocktails $300.3 +10.5%

Source: Nielsen

Source: Nielsen

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