GOING for GOLD A BEHIND THE SCENES LOOK AT SPIRITS JUDGING
the WHEELS of
A BATTLE FOR TAX PARITY The RISE of U.S. SPIRITS ABROAD Notes on
WINNING the STORAGE WARS THE NEW OREGON TRAIL Good spirits. No dead oxen.
Brand Design for the Spirits, Wine and Beer Industries.
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TABLE of CONTENTS A LETTER FROM THE EDITOR
EMPLOYING THE FLAVOR OF SPIRITS
Liquor related gourmet foods and goods
CURRENTS OF SUCCESS
Spring44 Distilling of Loveland, CO
FEBRUARY, 2014: THE MONTH CRAFT DISTILLING CAME OF AGE
DOING JUSTICE TO AMERICA’S FIRST SPIRIT
American Craft Distillers Association
The mission to revive a 200 year-old rum bottle
LEGAL CONSIDERATIONS OF WAREHOUSING SPIRITS17
FOCUS BEYOND THE STILL
The basics of storing distilled spirits
BARTEND ROCHESTER, NY
An interview from the front lines of the craft cocktail scene
THE GROWING INTERNATIONAL DEMAND FOR U.S. SPIRITS24 Our popularity is rising worldwide
Thoroughbred Spirits Group
Dogfish Head Distillery of Rehoboth Beach, DE
FROM STILL COLUMNS, TO STORE FRONT
Don’t forget the retail side of the biz
AN INTERVIEW WITH O-I
Glassmaking since 1903
BRANDING: INFLUENCING SMALL BUSINESS SUCCESS
THE PROUD DISTILLING STATE OF COLORADO
Raise yourself above the noise of the competition
And it’s perks and advantages
THE OREGON DISTILLERY TRAIL31
THE FINISHING TOUCH
Stories from the Trail
CORNELIUS PASS ROADHOUSE
HOW TO SELECT A CHILLER
A McMenamins distillery In Hillsboro, OR
with G&D Chillers
LEST YE BE JUDGED40
THE WHEELS OF GOVERNMENT MOVE SLOWLY76
The Value of Spirits Judging Competitions
ROCKETING OFF TO THE FUTURE
But they do move
Seattle Distilling Company of Vashon Island, WA
from the COVER
New Deal Distillery in Portland, Oregon. Image by Amanda Joy Christensen.
Issue 6 Spring 2014
from an american manufacturer
Publisher & Editor
Amanda Joy Christensen
Amanda Joy Christensen Hannah Dolle Andrea Hutchinson Johannes Kroemer Maria Lansky Justin Williams Matt Wittmeyer
Jason Barrett Josh Bayne George Catallo Robb Christensen Amber G. Christensen-Smith Ralph J. Erenzo Pennfield Jensen Chris Lozier Jan Morris Helen Murphy Steven Seim Marc E. Sorini
Sales & Marketing
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At ARTISAN SPIRIT, we take the opportunity to enjoy many different craft spirits and adult beverages. However, it’s also our responsibility, and yours, to always drink responsibly. Know your limit, and never drink and drive. ARTISAN SPIRIT’s number one goal is to share and celebrate the art and science of artisan craft distilling. But please remember to follow all the laws, regulations, and safety procedures. Be safe, be legal and we can all be proud of the industry we love.
2014 IS STILL QUITE YOUNG, AND WE’RE EXCITED FOR ALL IT CAN BRING TO THE CRAFT DISTILLING INDUSTRY. Our office is abuzz with talk of new legislation on the horizon, the rising popularity of craft spirits overseas, and the incredible level of attention paid by our craft distillers towards developing their brands through social media. We aren’t the only ones looking forward to all 2014 has in store for our industry...
Barrel supply is a huge issue at hand, new and used. Bourbon sales have sky rocketed by 40% in the last 5 years. Places like Jim Beam increased production in one of their plants to 1250 barrels a day, a good indication of what’s going on in the Global market. If you make whiskey and need barrels then think ahead, way ahead! Treat those barrels like they were gold, because they might be worth as much in the near future. – Rich Dobbins
We at ACDA are focusing on positioning for success. That means forming strong alliances with the major associations that are the platforms for continuing strong growth in craft. We’re working on FET reduction legislation, and on setting standards and definitions that can be adopted by the TTB and other legal entities. Consumer education about craft is a major area, as are conducting advanced classes in distilling techniques and building a strong internship program. - Pennfield Jensen
The trend I’m most excited about right now in the craft distilling industry is the move toward efficiency in production. Whether it’s utilizing “night air” systems, cold water storage systems, or simply reusing hot water generated from cooling the still or mash, todays distilleries are AgraMarketing Group Brand Logo more interested than ever in creative ways to increase efficiency. Every distillery has unique demands, and I love the challenge that this brings to the design process. - Paul Johnson
There is so much to look forward to this year! There has been such tremendous growth not only with new distilleries coming on board but distilleries who have been around, their products just keep getting better and better. Roughly six new distilleries have started up in our state of Minnesota alone. We are excited about the variety of unique “outside of the box” spirits, beer, & the growing emergence of wood-aged cocktails, that continue to change our perception of the “norm.” - Heidi Karasch
Fort Dearborn Company has been working with the craft distilling market for many years. We are most excited about the growth potential for craft distillers in 2014. It’s a great experience to work with a start-up and watch them grow their brand and expand their distribution. There’s a lot of product and package innovation in the spirits market and we look forward to continuing to support this segment. - Gwen Chapdelaine
Our mission at ARTISAN SPIRIT is to share and celebrate the art and science of artisan craft Innovation and differentiation were distilling. We are humbled by the support big discussion points in our first 5-Day Distiller Course of 2014. Experimentation with of our sponsors. With their help, we new grains, flavor profiles, blending and finishing can further our common goals techniques is really pushing the boundaries of traditional of supporting creativity, distillate categories. The market is wide open, and consumers innovation, and integrity want a great product with an authentic story, and they want to know what to do with it. So the sweet spot for distillers is in the within the industry careful balance of quality, originality and application. – Colleen Rice we all love so much. At O-I, we’re excited to see the convergence among the craft distilling, beer and wine movements. These three dynamic, growing industries are coming together in places like the Craft Beverage Expo this May 6-8, 2014, in San Jose, California. We see some exciting opportunities to share ideas and best practices. From a packaging perspective, cross-pollination between categories can lead to innovative design concepts, and we look forward to exploring the possibilities with our craft spirits, beer and wine partners. – David Waldock
I am excited about the entrepreneurial nature of this industry. The upward spiral of the Craft Distillery industry is part of a natural trajectory following the well-established popularity of Organic foods and the more recent farm-to table trend in restaurants. The growing interest in small batch production of spirits is in part due to the limitless creativity afforded small craft distillers, beverage makers and tasters. Fueled by the consumer’s desire for health, purity, freshness and an up-lifting social experience, the craft distilling industry is destined for future growth and will continue to influence the American culture. – Nancy Smith
For the craft industry as a whole: it is the unanticipated and unexpected things that I look forward to the most. The chance to be quick & nimble and take advantage of new opportunities. For Rogue: I look forward to the harvest of Rogue-grown ingredients at the Rogue Farms and celebrating being named “Distillery of the Year.” It’s an honor for us to receive, but equally exciting to see a craft distiller win in general – a sign of things to come. – Mike Higgins
Recently I was looking at some statistics on Craft Distillery product pricing per 9L case and the trend continues upward and is projected upward for the foreseeable future. This indicates to me that the consumer is recognizing and willing to pay more for premium products. This is true even with the number of artisan distilleries and brands increasing. It is probable that consumers will be looking for premium packaging when they are making their buying choices. – Kevin Dunbar
The potential for more moonshines to appear! Past this, I am particularly interested to see how distributors are continuing to develop and assess their craft portfolios. We have seen some great success for both our clients and the distributor when there is a dedicated and succinct approach to this segment. - Scott Schiller
A LETTER FROM THE EDITOR: I asked some pretty dumb questions prior to my introduction to the spirits judging world...
They were basic, obvious, and
voice to the mix. Ted shared some
without a doubt a bit naive. But
of his views on DISCUS, “If you
in my own defense, that’s what I
need the hard core lobbying, you
do. I ask really dumb questions
call DISCUS. If there is an alcohol
with the hope that my subsequent
law that is hurting the distribution
questions will be a little less inane,
of spirits in the United States in
and perhaps, might even glean a
any way they are going to be there
hint or two of credible information.
to fight that fight. They helped
The only thing more educational than a string of tedious questions
Ted Huber patiently answering my litany of questions like a saint.
me in Indiana with drafting the legislation that went into effect
is rolling up ones sleeves and getting a little dirt under the nails.
last year. DISCUS understands and stays on top of all the
And that’s exactly what I had the opportunity to do at the ACDA
issues in other states, they have a sense of what the general
Judging Competition in Starlight, IN this February.
assembly is like, and they understand what is possible and what
Experiencing a judging competition first-hand provided a
robust education in a hurry. It also didn’t hurt being surrounded
Ted is also well aware that DISCUS has its main source of
by industry heavyweights like Ted Huber, Dave Pickerell,
backing from the larger distillers and he realizes that many in
Luis Ayala, Richard Wolf, and so many more. Along with a
the craft world are wary of the implications of working with an
tremendously hard working judging team I cleaned glasses,
organization that is so heavy focused on the large producers.
carried flights, listened to judging deliberations, organized
Ted understands that his role is to be the voice of craft at the
spirits, and asked my groan-inducing questions at every
DISCUS table and is prepared to take forward the questions
opportunity. My biggest takeaway? A well-conceived judging
that many artisan distillers have brought his way. Ted explains,
competition is damn–hard–work. Take a look at what we learned
“I have my questions ready for the board, and I’m up to the
and let us know what else you want to know before you decide
challenge and opportunity ahead for craft distillers.” Regardless
to part with your hard earned money and spirits in hopes of that
of the concerns the industry may have, the decision DISCUS
elusive medal. (See Pg 40)
made to invite the craft community to the table says a lot about
My only regret is that due to scheduling I was unable to mirror
the growth and future of craft as a whole.
the experience with ADI who were gracious enough to extend a
Now it’s your turn. Let us know what you think by emailing,
similar invitation. I look forward to making up for the missed
calling, texting or shouting your questions and comments to us.
opportunity on the next go around the sun.
We couldn’t do it without you.
Another positive outcome from a trip to Starlight, IN was the opportunity to sit down with Ted Huber of Starlight Distillery. It was recently announced that the Distilled Spirits Council Brian Christensen
(DISCUS) had appointed Ted as the Chairman of a small distiller affiliate which included an eight-member advisory council. Pennfield Jensen has a great write up of this recent
development. (See Pg 13)
PO Box 31494 Spokane, WA 99223
In addition to chairing this new council Ted will be invited to attend DISCUS Board meetings and add the craft distilling
jan’s corner written by Jan Morris
e do not make cinnamon whiskey. A great number whiskeys varied greatly from very sweet to actual cinnamon of customers ask if we are going to make cinnamon
flavor. Some of the cinnamon whiskeys tasted exactly like the
whiskey, and a few proclaim that their favorite
Hot Tamales. In others I could taste the underlying cinnamon.
cocktail is a double shot of cinnamon whiskey. Others quietly tell me that it is a guilty pleasure.
Various websites, including YouTube, have resources for attempting to make your own version of cinnamon whiskey from
I wondered why a distiller would add cinnamon, after all of the
Red Hots. These recipes are complete with a warning to filter out
effort and time required to create the taste of a good whiskey. I
the wax substance left by the candy before serving the cinnamon
set out to find the answer.
First, I went shopping. After two short stops, I found six
The internet also has articles about a cinnamon whiskey
different brands of cinnamon whiskey in 50 ml bottles. The
lawsuit. In 2012 Sazerac Co. Inc., the producer of FIREBALL
selection did not include cinnamon liqueurs, or other cinnamon
Cinnamon Whiskey, sued Hood River Distillers Inc., the producer
of SINFIRE Cinnamon Whiskey, for trademark, trade dress
I also made a brief stop at World Spice at the Pike St. Market in infringement (the look of the label), and unfair competition. Seattle for a selection of cinnamon spices. I had naively thought
The use of the word “sin” and “hell”, and the label colors and
I might be able to distinguish true Ceylon cinnamon from cassia
flames were the basis of Sazerac’s lawsuit. The colors on the
cinnamon in the different whiskey samples.
labels were red, orange, and black, and both labels had flames,
For an informed and fair taste test, I also bought a box of Hot as does the Hot Tamales candy box. Tamales candy. This turned out to be more relevant than the spices.
News stories showed the bottles side-by-side, and reporters wondered about the basis of the lawsuit. After all, the word “sin”
The results of the taste test were predictable and resembled the
is ubiquitous in the world of spirits. The bottle shapes were
results of the myriad comparison cinnamon whiskey taste tests
different. The label for SINFIRE had a big S on it, while the
on the web and on YouTube. I will not bore you with the details. FIREBALL label had a creature with flames. Suffice to say that in all of the samples, the finer and subtle
I have not discovered what happened to the lawsuit. The
taste sensations of whiskey disappeared. On the other hand, I court file at the Federal District Court of Oregon does not reveal was surprised at how much the taste of the cinnamon in the
anything after April 2013. However, at a recent visit to the liquor
store, the two bottles were placed next to each other. It looks like the new colors of the SINFIRE label are less bright. The orange is subdued. Something happened. Because the original FIREBALL and SINFIRE labels did not appear similar to me, I worry that it would be easy to inadvertently create a label that would appear to be similar to an existing label. As I think about our efforts to find a method and formula for our whiskey, I think of the steps forward and backward. We have tried grinding our grain differently, sparging differently, fermenting differently, and changing time, temperature and yeast. We now have a consultant for our whiskey, Mike Nicolson, who is a master distiller from Scotland, and we are taking big steps forward.
Before we met Mike, a year of experimentation had
passed, and we have batches of dubious whiskey in our storage. After the shopping expeditions and taste tests, I look at cinnamon whiskey differently and I am tempted to re-distill that dubious whiskey with a true Ceylon cinnamon. I love the smell and taste of true Ceylon cinnamon, and I do love Hot Tamales, but those Hot Tamales wonâ€™t find a home in my whiskey.
Jan Morris owns and distills at The Hardware Distillery Co. with her husband Chuck. They are located in Hoodsport, WA. For more info visit www.thehardwaredistillery.com or call (206) 300-0877.
OF LIGHT ACDA MARRIOTT CITY CENTER Denver, Colorado March 13-15th, 2014
Join us on our
to discover our 2014 New Collection
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AMERICAN CRAFT DISTILLERS ASSOCIATION
FEBRUARY, 2014: The Month Craft Distilling Came of Age BY PENNFIELD JENSEN
ebruary, 2014—what a month! Truly. It’s worth a pause from attributed to the overall emergence of craft and the lifestyle the roaring pace of our every-day tumult to reflect on what decisions that reward the exploration of new brands in search
just happened. Two transformative events, though not directly of quality and the pleasure of learning about them, how they’re linked, occurred simultaneously: The first was the creation of made, and who makes them. Yes, price is important, but if you the Small Distiller Affiliate by the Distilled Spirits Council of want something, and you know it will bring you, and your friends, the United States (DISCUS); the second was the issuing of a sense of connection and satisfaction, guess what? You make ballots for the inaugural election of the American Craft Distillers the purchase. Association’s (ACDA’s) Board of Directors.
With DISCUS, I am sure there will be points where the interests
With the advent of the Small Distiller Affiliate, a craft distiller of the mainstream and the interests of the small distillers will now sits on the Board of Directors of DISCUS, the most powerful diverge. That has not happened yet. However, the stage is set for and influential distilling lobbying group in the United States. a major increase in legislative clout as DISCUS and the Small Four years ago, anyone with any familiarity with DISCUS would Distillers group harness a constituency that includes virtually have guffawed at the notion of a craft distiller serving on the every state in the nation. DISCUS Board. That such a position could be proposed, not to
Dr. Peter H. Cressy, known familiarly as “The Admiral,” will
mention taken seriously, by an organization deeply rooted in the deliver the keynote at the ACDA conference. Members of the distilling mainstream, is testimony to the national growth and DISCUS staff and the Small Distillers group will address the issue economic impact of craft.
of tax parity and the strategies needed to achieve it. Additionally,
And mainstream has not always looked kindly upon upstart the first Board Meeting of the Small Distillers group will be held small distillers. Over the years, more than a handful of top at the ACDA Convention in Denver, a key gesture of recognition executives have expressed their feelings to me. They have for ACDA. been largely resentful, fearful of brand erosion and the loss of
Which brings us back to the magical month of February: Board
premium and ultra-premium SKUs to craft brands. Coming from elections for ACDA. “Member owned, Industry Driven,” is no the craft beer side, where the battles for shelf space and brand longer a fanciful dream. As I write these words, ACDA members recognition were often nasty, brutal and short, what I observed are casting votes within their respective regions, and ACDA’s firsthand proved the adage that “a rising tide lifts all ships.” inaugural board meeting will take place on Thursday. The election Craft brewing is winning the battle for “good beer—everywhere.” results will be announced and the new board members will be Now we’re seeing the same phenomenon at work in distilling, introduced as part of the Friday night ACDA awards dinner on where growth is occurring across the entire spectrum of spirits, March 14th, 2014. especially in the Premium and Ultra-Premium categories. As
It should surprise no one that many members of ACDA’s Interim
noted by many analysts, a large part of that growth can be Board are also members of the Small Distillers group. Proactive,
The Small Distiller group is structured around a five-member Small Distiller Membership Board appointed by DISCUS consisting of a Chairman— who sits on the Board of DISCUS—and four regional Vice Chairmen. The five chairmen elect eight other members to serve on the Membership Board.
ACDA BOARD ELECTION PROTOCOLS To initiate the election process, the Interim Board created an Elections Committee consisting of Tom Potter,
Tuthilltown, and Tom Mooney, House Spirits. Tom Potter recused himself from running for the Board to prevent
CHAIRMAN Ted Huber
VICE CHAIRMEN Steve Johnson (South) Phil Prichard
Vermont Spirits Distilling Prichard’s Distillery
Guy Rehorst Great Lakes Distillery (West) Tom Mooney House Spirits
ELECTED ADVISORY COUNCIL MEMBERS Andrew Auwerda Philadelphia Distilling John Dannerbeck Anchor Distilling Kent Fleischmann Dry Fly Distilling Dan Garrison Garrison Bros Distillery Scott Harris Catoctin Creek Distilling Wes Henderson Louisville Distilling Paul Hletko Few Spirits Lance Winters St. George Spirits
any suggestion of impropriety or manipulation. The ACDA Bylaws established three time-zone regions from each of which five board members would be elected—East Coast zone, Central and Mountain zone, and Pacific zone—for a total of 15 Board Members. The two candidates getting the most votes in each zone would serve two years, the other three per zone would serve one year. The elected Board would then internally elect the officers: President, Vice President, and Secretary/Treasurer. As with eligibility to vote, the nominees had to be paid-up members of ACDA holding Distilled Spirits Plant licenses (DSPs), and producing fewer than 100,000 proof gallons, removed from bond, annually from all sources (roughly 42,000 9-liter cases at 100 proof). Brief 150-word bios were gathered for all the candidates and three separate ballots constructed, one for each zone. Voters were restricted to voting only for those candidates in their own zone. Each eligible voting member provided an e-mail address for one-time use in
committed, with the best interests of all distillers in mind, these artist-entrepreneur-businessmen have worked hard to shape a positive environment for craft distilling in America, and in so doing have generated widespread and growing appreciation for the spirits and the passion they embody. In short, this year’s snowy, blustery February, was a month of
voting. With the Elections Committee’s support, Jeff Wuslich, President of Cardinal Spirits, structured the voting process and chose SimplyVoting.com as the host. SimplyVoting.com issued the three ballots and collected
“firsts,” wherein vital cornerstones of the craft distilling edifice
the votes. The software only allowed the provided e-mail
have been permanently placed. As Ted Huber, Chair of the
address to vote (one distillery, one vote).
DISCUS Small Distillers Group, and Interim Vice President of
The voting closed at 8 pm Eastern on Tuesday
ACDA notes, “The die has been cast, and there’s no going back.
February 18th. The results will be announced at the
Craft distilling is now a real player in America.”
inaugural Board Meeting at noon on Thursday, March
Take a moment. Celebrate these achievements. They’ve been a long time coming, and now, at last, they’ve arrived.
Pennfield Jensen is the executive director of the ACDA, visit www.americancraftdistillers.org for more info or to join.
13th, at the ACDA Convention in Denver.
Thanks to all who voted!
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LEGAL CONSIDERATIONS OF WAREHOUSING SPIRITS BY MARC E. SORINI
Marc E. Sorini is a partner in the law firm of McDermott Will & Emery LLP, based in the Firm’s Washington D.C. office. He leads the Firm’s Alcohol Regulatory & Distribution Group, where he concentrates his practice on regulatory and litigation issues faced by supplier-tier industry members. His practice includes distribution agreements, distribution counseling and litigation, product formulation, labeling, promotional compliance, compliance strategy, and federal and state tax and trade practice enforcement defense.
REMOTE STORAGE Almost all distillers recognize growth as a positive, and growth can eventually require the use
of remote storage areas separated from the original DSP location. At that point, a public warehouse down the road may provide an attractive storage area, especially where expansion
arehouses aren’t exciting or sexy. In fact, they are usually of the DSP is impossible (due to space constraints) or cost boring to look at and think about. But a surprising amount prohibitive. Here, too, the legalities require some attention.
of specialized alcohol beverage law surrounds the use of Ideally the distiller can successfully have TTB include the remote warehouses for the storage of distilled spirits. This article will warehouse in the bonded area of its DSP. TTB has a long history briefly explore some of the basics.
ON PREMISE STORAGE
of approving such “non-contiguous [separate] premises,” within reasonable bounds. As a rule of thumb, TTB will approve storage in non-contiguous premises if the storage area is within the
For start-up artisan distillers, their first “warehouse” is same political boundaries as the original DSP (i.e., no crossing usually just a space reserved for storage within their bonded state lines) and the non-contiguous premises is located within distillery, called a distilled spirits plant (DSP) in the language ten miles of the original DSP. As a rule of thumb, TTB’s tenof the federal Alcohol & Tobacco Tax & Trade Bureau (TTB). mile policy is subject to exceptions, provided that the totality of The magic of the “bonded area” is that keeping spirits within the facts persuades TTB that approval of the remote premises that area defers the payment of federal excise taxes (the bond will not present a significant risk of tax evasion. And, of course, is more formally called a “deferral bond”) until the goods are storage of non-taxpaid spirits at a non-contiguous area should “removed” from the bonded area. Few distillers are eager to pay not start until after TTB has approved an amendment to the taxes before they must, so pay attention to your bonded area distiller’s DSP registration that authorizes such use. and bond amounts. When a new storage area is built or utilized,
State law, too, requires some attention. While each state’s law
check your federal DSP registration documents to make sure that is different, most establish some type of public warehouse license the new storage area falls within the bonded area shown in your that permits the storage of distilled spirits within the warehouse, original registration filed with TTB. If it does not, amend the DSP and shipments from that location. Some states may, like TTB, registration to include the new area. Failure to do so could trigger recognize close-by warehouse spaces as part of the distiller’s earlier tax payment or, worse, excise tax assessments, interest licensed premises. Still other states authorize one or more and penalties if TTB discovers that a distiller stored un-taxpaid “satellite” storage places for use by certain in-state licensees. spirits in a non-bonded area. I have personal experience with And in many, a public warehouse can obtain a state warehouse TTB tax enforcement matters seeking millions of dollars in excise license in order to store products on behalf of other licensees, or tax payments and penalties arising from the failure to properly even non-licensees. Before signing a warehouse lease or making bond a warehouse used for alcohol beverage storage.
other substantial investments in a storage project, the prudent
distiller should check to make sure state law permits its storage plans and to obtain any required licenses and approvals.
STORING IMPORTS Ironically, the story is very different in the case of imported distilled spirits. Under the regulations and procedures of Customs
Engaging a third-party warehouse,
& Border Protection (“CBP”; formerly known as the U.S. Customs
of course, requires some attention to
Service), distillers, importers, wholesalers, warehouseman, and
the terms and conditions of storage.
others can establish a Customs Bonded Warehouse (“CBW”) to
receive and store imported goods, including distilled spirits. Like work under their own standard storage within the bonded area of a DSP (or brewery or winery), agreement that, naturally, contains storage within a CBW defers the payment of excise taxes (and terms favorable to the warehouse.
any applicable import duties) until the goods are removed from
Some will not deviate at all from
the bonded area. Moreover, relatively simple procedures permit
their standard, although – as with
the transfer of goods between CBWs. Thus, imported spirits
all contracting questions – much
can arrive at a port in, say, New Jersey and be stored on a tax-
depends on the relative bargaining
deferred basis in a CBW. The importer then can transfer the
power of the parties. Regardless of whether you are
spirits to a wholesaler in, say, Texas, which has its own CBW to receive and store the spirits on a tax-deferred basis. Only when
reviewing a warehousing agreement
the Texas wholesaler removes the spirits from its CBW for further in order to negotiate terms or simply to distribution does the excise tax become due. In this way the decide whether or not to engage, a number Internal Revenue Code provides a very real excise tax advantage of issues require your attention. »»
Who bears the risk of losses that may occur
within the warehouse? »» Are the goods insured and, if so, by who?
to imported distilled spirits.
CROSSING STATE LINES Shipping to a remote warehouse across state lines also raises more complexities under state law. Seventeen states and several
»» What right of entry and inspection does the distiller have?
counties in Maryland have enacted a “control” system in which
»» How are instructions concerning receipts and shipments
the state monopolizes the distribution of distilled spirits (at
communicated, by what procedures, and how much prior
least at the wholesale level, sometimes at the off-premise retail
notice is required?
level as well). In a control system, distilled spirits presumptively
»» And, of course, what are the costs and fees associated with the arrangement? For larger or far-flung distilleries, growth or particular needs may eventually require warehousing spirits far from the original DSP location. Not surprisingly, using remote warehouses raises additional issues. At the outset, recognize that the benefits of federal excise tax deferral are no longer available. Federally, TTB permits transfers of bulk distilled spirits between different DSP premises. Thus, moving spirits tax-free between multiple remote DSPs (e.g., to take advantage of an aging warehouse across state lines) is relatively simple, requiring only compliance with TTB’s transfer-in-bond regulations and procedures. But for bottled spirits (or canned, pouched, etc.), federal law currently does not authorize in-bond transfers between DSPs. Thus, unless a warehouse is close enough to qualify as a non-contiguous portion of the original DSP, transfer triggers the payment of federal excise taxes.
are purchased and received by the government (although some states, like Michigan, outsource logistical duties to private parties). Many control states, however, have instituted a system of “bailment warehouses,” allowing the state to shift the costs of holding inventory to a brand’s distiller or importer for as long as possible. In effect, goods held in a state’s bailment warehouse remain (nominally) the property of the supplier, with title passing to the state only when the state removes the spirits for distribution to its stores or other retail locations. While suppliers in reality have little influence over what happens to “their” goods in a state’s bailment warehouse, title and risk of loss remain with the supplier until the state removes the goods from the warehouse. Warehousing in control states can also present issues if a distiller seeks to use a control state as the location for a remote warehouse intended for use as a regional distribution center for multi-state distribution. The presumption in the laws of a control state is that goods are received only by the government (either
via a bailment warehouse or through direct purchase by the and TTB has not hesitated to assess excise taxes and penalties state). Regional distribution (where goods arrive in the state but against exporters for such failings in the past. remain in interstate commerce until the goods are sold and sent
The intersection of state alcohol law and warehousing spirits
to customers in multiple states) can present an anomaly that for import-export purposes presents a more interesting picture. the law did not anticipate. Carefully examine state law before Under the 21st Amendment, of course, states retain substantial selecting a regional distribution center to ensure that some powers to regulate and tax the traffic and consumption of alcohol mechanism permits storage in that state without triggering the within their borders. At one time many states attempted to use passage of title to the state, control system mark-ups, excise this authority to assert jurisdiction (and therefore impose threetaxes and the like.
tier requirements, state excise taxes and the like) on the in-state
Non-control (so-called “open” or “license”) states also can warehousing and storage of alcohol beverages not intended for pose problems for the operation of warehouses for regional, multi- distribution or sale to their citizens. In the landmark 1964 case of state distribution. As most readers know, many license states Hostetter v. Idlewild Bon Voyage Liquor Corp., the United States have over the years established a legally-mandated “three-tier Supreme Court examined a state’s power over the warehousing of system” for the distribution of spirits. The laws accordingly may spirits within a Customs Bonded Warehouse located in New York presume that spirits move directly from a producer or importer solely for purposes of supplying the duty-free market. The Court to the warehouse of a wholesaler, and do not contemplate the held that a state, even armed with 21st Amendment authority, storage of goods in a regional distribution center prior to their could not constitutionally tax or regulate such alcohol sales. shipment to in-state wholesalers. Again, this requires a careful Cases since that time have further minimized a state’s regulatory examination of the law to ensure that the use of a regional and tax authority over import-export activities, and the Hostetter distribution warehouse is permitted, and that storage in such a decision became the intellectual linchpin for a number of later location does not trigger, for example, a requirement to pay state Supreme Court cases limiting states’ 21st Amendment authority.
excise tax on all spirits placed in that warehouse.
WAREHOUSING FOR EXPORT
Supreme Court litigation, massive tax assessments, and complex distribution schemes – perhaps the subject of warehousing has
Prospects for growth in international markets can soon lead to some sex appeal after all. But you don’t have to go to the Supreme exports, but warehousing for international distribution presents Court to play by the rules. By deferring substantial excise tax and even more complexities. Not surprisingly, spirits exported should duty payments, permitting efficient distribution systems, and not be subject to federal excise tax. But TTB has strict rules facilitating the free flow of your products, knowing and navigating on handling and documenting the export of spirits without the law on distilled spirits storage can reap numerous benefits for payment of tax, and its regulations on the subject are so out-of- the growing artisan distiller. date that virtually all practical guidance on the subject resides in informal “Industry Circulars” from the Agency. Such policy Marc E. Sorini is a partner in the law firm of McDermott Will & Emery pronouncements teach that storage in a warehouse for too long LLP. Nothing in this article should be construed as or used as a substitute
can jeopardize the tax-exempt status of to-be-exported goods, for legal advice. For more info visit www.mwe.com/Marc-E-Sorini or
call (202) 756-8284.
PHOTOGRAPHY BY MATT WITTMEYER
artenders and bar owners are on the front lines of the craft practicing. Good Luck opened in August of 2008, and helped a revolution, spearheading the growing craft cocktail explosion great deal in bringing craft cocktails to Rochester. After four years
around the country. They also communicate with distributors, of hard-won success with Good Luck, one of my partners and I distillers, and most importantly customers on a daily basis. We opened Cure in 2012, with the desire of bringing a more focused spoke to one of these individuals, Chuck Cerankosky of Rochester and nuanced cocktail and dining experience to Rochester.
NY, and asked him to share his story, and his thoughts on craft.
ASM: How would you characterize your establishments?
Artisan Spirit Magazine: What series of events led to your current CC: Good Luck is a giant, lively, 150-seat restaurant serving position in life as a co-owner of Cure and Good Luck? predominately ‘New American’ cuisine. The beverage program Chuck Cerankosky: I moved to Rochester, NY in 1999 to study
features about 20 craft beers, 60 wines, and a carefully tuned
industrial design at the Rochester Institute of Technology. While
menu of 26 craft cocktails. Good Luck regularly turns 300 covers
in college I managed a local coffee chain which, besides helping
on weekend nights, with a bar that measures over 50 linear feet
to fund my education, introduced three important things into my
and cranks out hundreds of cocktails nightly. The cocktail menu
life: 1) A nascent love for the beverage industry, 2) a passion
is divided between ‘Classics,’ encompassing things like Aviation
for business, 3) the foundation of a relationship with one of and Paloma, and ‘Originals,’ which my bar crew and I collaborate my mentors, who I would later partner with to establish Good
on to work in ingredients and concepts such as ‘smoked coconut’
Luck. After school I returned to my ‘day-job’ of running four and something we call ‘mugicha oleo-sachrum.’ coffee shops, but after a couple years it began to hit a ceiling,
Cure is a restaurant and cocktail bar, smaller and more
and I was hungry to start a new project where I would have an
intimate than its big sister. Cure has 40 seats, with a charcuterie-
ownership stake, as well as the ability to bring something new to
based menu informed by ‘country French’ cuisine. Located in
Rochester’s historic Public Market, Cure’s beverage menu is
Good Luck was conceived in 2007 by two partners and myself. comprised by 6 beers, 12 wines, and 6 cocktails, in addition to a I took on the role of being in charge of the beverage program, bespoke cocktail menu our staff has lovingly coined ‘Booze Your and studied the craft bar scene like hell! Reading, traveling, Own Adventure.’ The idea at Cure was to offer a more intimate, researching, asking questions of everyone I came across, and
focused dining and drinking experience. The cocktail and wine
list works more to tell a personal story than to cover all bases. The cuisine challenges local sensibilities a bit (no burgers, pastas or pizzas!) and the cocktails are more spirit-focused, original compositions that hint at classics while building on their theme. Both restaurants are governed by the sensibility of craft and origin. Dan Martello, one of my partners, truly exemplifies the notion of ‘farm to table’ by roaming Finger Lakes farms every Tuesday in his truck, buying up local produce for the week. ‘Local,’ ‘seasonal,’ and ‘house-made’ are givens for us. Meat is local and grass-fed, and ground in-house. Dough and pastas are all house-made. We have two amazing, talented staffs that are hungry to learn and dedicated in applying their efforts to making food that is honest
akvavit, playing up its rye bread flavor profiles) and figuring out
and real. The same ethos goes into our drink program. We like
the path to making a delicious drink out of it (Krogstad akvavit, to focus on buying high-quality, craft-oriented products that tell Manzanilla Sherry, Alipus Mezcal, grapefruit and celery bitters, a story and come from a clearly defined origin. cracked pepper).
ASM: How would you describe the craft cocktail scene in Rochester? ASM: Based on your experience on the front lines, what are some of CC: Growing splendidly! Since Good Luck opened, many awesome the factors you attribute to the rise in popularity of craft cocktails, and by extension craft spirits? cocktail bars have sprung up in town, each with its own character and vibe. The greatest success has been that ‘craft cocktails’ in
CC: Customers want something real. This started with foodie /
Rochester have transcended the deadly ‘trend’ phase and have
locavore sensibilities, and quickly extended to encompass an
cemented themselves in the drinking-public’s consciousness as
appreciation of quality drink. The quality in product, and the
a permanent and superior way to imbibe.
showmanship in good bar tending, cannot be ignored. It’s not a
ASM: How does it compare to other places around the state of NY? CC: NYC obviously has the most vibrant cocktail scene statewide, but I know from distributors that the Western NY market (Rochester and Buffalo) is a fast-growing second. We are seeing the benefits of bartenders finding livelihoods relocating between
stretch for a bar patron to see that a Negroni beats a Jack and Coke all day long.
ASM: Craft cocktail does not always equal craft spirits. What guides you in choosing the right ingredients and spirits for your cocktails? CC: A cocktail is ‘crafted’ according to a carefully-planned recipe
Western NY and NYC and vice-versa. This brings a lot of different - back to the Negroni - equal parts gin, sweet vermouth and talents and energies down the highways, and transfers ideas about Campari. Obviously there are a multitude of ways a mixologist styles and techniques from the larger market to the secondary. can decide the best ‘craft’ or big-brand gin or seer vermouth. I am confident that the quality of several bars in Rochester is So ultimately, what determines when to use craft spirits is the comparable to some of the most exciting places opening in NYC. discovery that a certain product is superior to its mass-market counterpart, and that it is the right character to cast in the drink.
ASM: What about the craft cocktail experience captures your ASM: What kind of interaction have you had with craft distillers? imagination?
CC: I love the ability to create. As ‘mixologists’ we all cut our CC: These are some of the most passionate, interesting teeth learning the classics and the techniques that go along with
people I’ve ever met. They truly embody the American spirit of
them. Anyone can make a “drink” - and classics can be tinkered
entrepreneurship. Two of my friends in this area, Brian McKenzie
with limitlessly to create something new (none of this is bad!). and Jason Barrett, truly exemplify the ideal of retreating from What interests me is developing a drink around a presentation. ‘safe’ careers and turning to craft; that is, making something The fun lies in setting a challenge (make a cocktail out of from scratch, by hand. What about that is not admirable?
ASM: What can a craft distiller do to grab your attention as a ASM: Have you found distributors to be encouraging with craft, or bartender/owner? more reserved? CC: Tell me their story. Establish a connection that shows me
CC: Some distributors do a better job than others, namely the
that in our mutual support for one another we can share a benefit smaller guys. Craft is making a big impact across the industry as a that is unique to the local artisan / local vendor.
whole, and ultimately, it comes down to the distributors’ reps that care enough to be informed about the products they sell. Those
ASM: What are some common mistakes you see craft distillers select individuals are invaluable, as they tell the distillers’ stories. make with their products, or marketing approach? CC: I understand the economics of it, but it does get tiresome ASM: Do you think the rise in popularity of craft is here to stay? seeing moonshine or vodka as the inevitable first push by the CC: Without a doubt. The end to this process, I believe, is a distiller. The risk is that it doesn’t always make a great impression, barman or woman in every bar, able to bang out a Manhattan or unfortunately. Negroni or Margarita.
ASM: How does your relationship with distributors affect the types ASM: What are a few of your current favorite craft spirits? of spirits you bring to the bar?
CC: Krogstad Akvavit, Smooth Ambler Yearling Bourbon, Black CC: We have healthy buying-power, and I have a wide-ranging Button Vodka, McKenzie Rye, Death’s Door Gin, Osocalis XO portfolio of spirits at both restaurants. When I meet the distiller, Brandy, Root Liqueur, Pine Barrens Whiskey, Leviathan Whiskey, and the product is good, chances are it’s going on the back
Greenhook Ginsmith’s Gin, Suerte Tequila...
bar immediately. This can be so much more successful than the generic sales rep who is uninformed beyond the edict from management to ‘go sell our craft portfolio.’
Chuck Cerankosky is co-owner of Cure and Good Luck in Rochester NY. Visit www.restaurantgoodluck.com for more information.
L A N
g n i
O Sp I T .S. A U N R E D T N N A I M E D
s t i ir
ow r G
website, s a y i n g , “Together we will be a global leader in distilled
spirits with the #3 position in premium spirits and a dynamic portfolio
across key categories.”
The dynamic portfolio Shattock refers to is another
reason U.S. spirits are in such high demand. Even if another
country produces a high quality spirit, they rarely offer the wide
variety of unique spirits that American distillers offer at the same high level of quality. That high standard of quality is a central growth factor we
may take for granted. American distillers are some of the world’s best. Our distilling techniques developed from the diverse international backgrounds emigrants have brought with them since the inception of the country. Our distillers are
well educated and experienced, and trade shows, classes and
nited States spirits exports set a record in 2013 at
seminars are readily available. The U.S. distilling industry is
over $1.5 billion, growing 250 percent in the last
large, supportive and sharing, and this cooperation raises the
10 years according to the Distilled Spirits Council of the United
quality of the spirits industry-wide. Still builders, cooperages,
States (DISCUS). A number of factors are driving international
bottling companies and many other suppliers are happy to work
demand, including a global whiskey renaissance, a growing
with distillers to help them improve their products, and only the
global cocktail culture, and the simple fact that Americans make
best products at each given price point survive thanks to heavy
some of the world’s best spirits.
competition. If a spirit is a domestic standout, it will almost
Market-opening agreements have also made it more affordable
surely be an international standout, as well.
for international consumers to buy American spirits. The U.S.
We also have some of the best agricultural products in the
opened a zero for zero tariff partnership with the European Union
world, and the best spirits start with the best ingredients. Most
(EU) in 1994, and many EU countries are now leading markets. craft distillers are able to work with local farmers to produce Likewise, South Korea removed their 20 percent tariff and they the specific varieties of grains, fruits and botanicals they need. purchased almost $15 million of U.S. spirits in 2013. In 2005, Some even grow their own ingredients. While many areas of the China enacted a 10 percent tariff reduction and that market
world are known for specific agricultural products and spirits
has grown 315 percent. With many countries also experiencing
made from those products, American farmers produce almost all
expanding middle classes with more discretionary income to
of them in unique terroirs with strict quality standards.
spend, U.S. spirits are often becoming their first choice.
Taking advantage of this mountain of history, experience and
Expanding global markets are a major priority for large spirits
resources, U.S. distillers are producing top-shelf high-demand
conglomerates. Recently, Suntory Holdings Limited of Japan
spirits in all categories. DISCUS published a report using
purchased Chicago-based Beam Inc. with the goal of gaining
Census Customs data that breaks down U.S. spirits exports into
more international market share and leverage though the
eight categories: “Whiskey, Bourbon,” “Whiskey, Other,” “Rum,” acquisition of Beam’s labels. Beam Inc. President and CEO Matt “Brandy,” “Gin,” “Vodka,” “Cordials,” and “Other Distilled Shattock emphasizes their global ambitions on a press release on Spirits.” Of these eight categories, only one, “Other Distilled
Spirits,” experienced a decrease in demand in the first six months
ultra-premium American spirits from 15 states. Nine of them
of 2013 as compared to the first six months of 2012. Bourbon
were heritage brands like Baker’s Bourbon and George Dickel
remained virtually unchanged as the largest stand-alone product
Barrel Select Tennessee Whiskey. The other 30 were craft spirits,
with over 17.5 million proof gallons exported. That is over 95
featuring different expressions from multiple spirit categories
million 750 ml “fifths” of bourbon in just six months. Demand
from all around the country. Showcases like this demonstrate
for the remaining six categories grew, ranging from brandy’s 2.3
the ability of American distillers, especially craft distillers, to
percent to “Whiskey, Other,” the fastest growing category at
produce not just one excellent signature product, but many
different spirits that hold their own on a global stage.
One of the entrants in this quickly growing category is Corsair
Frank Coleman, Senior vice President of DISCUS says
Distillery’s Triple Smoke Whiskey, made with malted barley
this export promotion program started in 2005 and they are
smoked with peat, like Scotch, as well as cherry and beech
currently active in 15 countries. Demand has been particularly
woods. DISCUS and the USDA chose Triple Smoke as one of
strong in countries in Eastern Europe, Asia, and South America.
the whiskies to feature in their worldwide promotions because The program has increased international awareness and the it is not just a high quality spirit, it is also bold and unique, consequent thirst for the diverse, unique, high quality spirits something that sets American whiskey apart from the rest of the world and is currently helping to drive demand.
that American distillers offer. Currently, Canada, U.K. and Australia are the largest export
Whiskey makes up 70 percent, over $1 billion, of our total
markets by revenue at $212, $159, and $152 million (projected),
spirits exports, with more than 5.5 million proof gallons exported
respectively. In the past decade, Canadian exports have grown by
in June 2013 alone. That is over two and a half times the amount 224 percent. All ten of America’s top valued export markets grew, of all the other categories combined.
the largest growth of the ten being Netherlands at 336 percent
American whiskey is leading sales for many reasons. It
growth in 11 years. In Singapore, where DISCUS conducted U.S.
is versatile in cocktails, which are seeing a surge in global
spirits promotions, sales jumped from about $3 million in 2000
popularity. Bourbon, Tennessee and other whiskeys are also
to over $23 million in 2013, a growth of 945 percent. You could
driving a global whiskey renaissance, with consumers focusing
call that a healthy return on advertising.
on premium brands and quality.
International promotion happens at home, too. DISCUS has
Demand for American whiskey is so high that most distilleries
organized the American Whiskey Trail, starting with the restored
are building new facilities to try to keep up. For instance, Jack
George Washington Distillery in Mount Vernon, VA, and continuing
Daniel’s, America’s number one selling brand, is spending over
with stops at heritage distilleries and historic sites around
$100 million to build a new distillery, a cooperage, rick houses
the country. They routinely host journalists from international
and other related infrastructure to try to meet demand.
publications, taking them on the trail and immersing them in
While Scotch dominates the world whisky market, international demand for bourbon, rye and other American whiskies is
the rich history and high saturation of good whiskey that very few other countries can offer.
growing steadily thanks to proactive advertising and promotion
The trail, along with international promotion and advertising,
in international markets. Consumers worldwide like the storied
links American spirits to the history and culture that created
history of American whiskey, and the USDA Market Access
them. While Americans are globally unpopular in some
Program, DISCUS and large spirits corporations like Heaven Hill
regards, our culture, and the whiskey that comes with
and Brown-Forman have launched international ad campaigns
it, is very popular. Coleman of DISCUS sums
promoting whiskey as the iconic American spirit. Their ads
up the growing international demand
celebrate the bold, rugged nature of the independent and edgy
for American spirits well, saying,
culture that American whiskey represents, with its history in the “They may not like our foreign wild west, rock and roll and infamous prohibition-era outlaws. USDA and DISCUS representatives are also traveling to spirits
sure like our
expos and promotions around the world to open new markets. whiskey.” In November 2013, the two co-sponsored the American Spirits pavilion at the Falstaff Spirits Gala in Vienna, Austria. Representatives offered tastings of 39 premium and
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Bringing Artisan Beer, Wine and Spirits to Market
B R A N D I N G :
SMALL BUSINESS SUCCESS WRITTEN BY HELEN MURPHY
IS BRANDING REALLY THAT IMPORTANT TO A SMALL BUSINESS?
and products great. By consistently repeating those positives
Ask any brand and marketing expert and they’d tell you it’s
your greatness into the minds of the consumer in order to guide
over and over again, your brand then works to effectively instill
one of the most important aspects of your business (right after their purchasing choices in your favor. they’ve looked you up and down in professional horror). They may
The beverage industry is fiercely competitive (as you know)
go on to tell you that without some form of strategic brand and
and continues to grow with the explosion of innovative start-
marketing plan you’re essentially launching your products into
ups, niche distillers, craft brewers, organic specialists etc., all
the marketplace in a cardboard box and hoping that potential
competing in an arena that contains global giants who have the
customers will discover the value and long term need for what’s
potential to steal your customer’s interest with a fresh product
inside. A poorly executed brand plan will often be the driving
launch and aspirational ad campaign. As a small business, your
force behind a product’s inability to capture market interest and
brand has to work harder to connect on a much more personal
its ultimate failure to make the right impact or maintain the
level in order to capture new customers and consistently maintain
longevity it deserves. That is an unfortunate scenario when you
their loyalty to you.
look at all the effort it takes to develop an amazing product that you believe in, not to mention the financial investment to realize your entrepreneurial dream. By utilizing the power of branding you are proactively helping to raise yourself above the noise of the competition by communicating all the positive attributes you want people to associate with your company and products. To that end, the development of your brand should be considered with the same importance as the reputation of your business.
HOW DOES BRANDING WORK FOR ME?
HOW DO I BUILD MY BRAND? Knowledge is power in any business and a greater understanding of what separates you from the competition will help guide your branding decisions. It will also give you insight into the positives and negatives that already exist in the marketplace that you can either steer clear of or capitalize on in order to build a strong brand image and messaging that speaks directly to your customer. This discovery phase is an essential part of the brand building process that may be as simple as online and print media
The basic function of branding is to communicate the positive
research into your business sector, a geographically focused
characteristics and unique qualities that make your company
competitive analysis (what is the competition doing to connect
with your potential customers?), as well as an audit of intended distribution outlets (independent venues, bars, restaurants, stores and e-commerce). Ultimately, you will need to include some form of realistic budget to gain effective brand building support. Only a professional can help you sift through the marketplace to uncover the driving forces behind consumer decision-making and devise a cohesive brand development plan that aligns itself with the reality of who you are. Once complete, you will have the right insight to bring your brand to life. The design phase is the fun part, where you actually begin to create all the elements that will make up your brand. Typically, your logo and tagline will come first and act as the cornerstone to all the other pieces that will appear in your brand’s toolbox. From graphic architecture, photography style, color palette and fonts, through to the content and tone of your written message. These pieces have a specific function in the building of a strong brand image that will be unique to you. With these tools in place, your new brand elements will be utilized to create your business cards, letterhead, brochures, website, packaging, label, merchandising, promotional material,
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marketing literature, etc. Essentially everything you need to support the success of your business.
HOW DO I KNOW IF MY INVESTMENT IN BRANDING IS WORTHWHILE? All too often, many small companies leave branding at the bottom of their to-do list unaware of its true value. While your product is of course the most important aspect of your business (without it, you’d have nothing to shout about), your brand’s development should follow closely behind as a means of launching you into the marketplace in the best light possible, communicating your worth to the people who need to hear it. There are many ways you can determine what aspects of your brand are working and what may need adjustment as you monitor changes in your product sales, response to promotional activity, online analytics (traffic to your website) and your general business growth. The thing to remember is that your brand is like a living thing that needs to be nurtured, managed and adjusted on a constant basis in order to remain relevant and alive.
www.barrelsunlimited.com | 1-800-875-1558
Helen Murphy is Brand and Marketing Director for PHARMCO-AAPER, a division of GreenField Specialy Alcohol. Visit www.pharmcoaaper.com for more information.
Welcome to the New Tradition of Craft Distilling General Inquiries email@example.com Indiana firstname.lastname@example.org 317.426.6005
South Carolina email@example.com 864.320.4803 Colorado firstname.lastname@example.org 970.744.8148
Washington brian@blueﬂamespirits.com 509.778.4036 Missouri email@example.com 423.457.9809
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A E TR H T ROM F S IE TOR
OREGON DISTILLERY T R A I L WRITTEN BY CHRIS LOZIER
PHOTOGRAPHY BY AMANDA JOY CHRISTENSEN
regon is a national leader in the craft distilling and build our thriving craft spirits industry.” industry, producing some of the most popular craft
Started in 2007 as the brainchild of Lee Medoff, who co-owns
spirits nationwide and ranking in the top five states by number Portland’s Bull Run Distilling Company with Patrick Bernards, the of licensees. As of February 2014, 55 distilleries have been guild aimed to organize the growing number of Oregon distillers licensed by the Oregon Liquor Control Commission (OLCC). Each into a unified body to promote the growth of the industry. Erik one is running at capacity, trying to satisfy a local, national and Martin, co-owner with Ryan Csanky of Aria Portland Dry Gin, international demand thirsty for Oregon spirits.
said the common thread was “‘Coopetition’ - in that it is easy
Brad Irwin of Oregon Spirit Distillers in Bend, said Oregon is to think that we are all competitors, but in reality, we are all a great place for distillers, just as it has been for brewers and in this together and it serves us well to work with one another winemakers. “Certainly some of the knowledge is being passed in cooperation against the large, well financed, international on from our successful brew industry and the wine industry, and brands. As they say, the rising tide floats all boats.” I think that contributes to the quality of our spirits.”
While serving as president for the ODG, Martin authored HB
Irwin also credits Oregon agriculture. “One of the things that 4092, a bill that allows Oregon’s craft distillers to sell bottles of makes Oregon distillers’ spirits fantastic is that we have great, their product at trade shows, farmers markets and other special diverse agricultural products. We have immediate access to great events. And Christie Scott of the OLCC says another beneficial grains and fruits.”
law change allows Oregon distillers to “become Distillery Retail
Irwin said another big factor is the Oregon Distillers Guild Liquor Agents - so they can sell bottles of their own product in their (ODG). ODG’s mission is “to spread the good word that Oregon tasting rooms.” Since their inception, the guild has successfully is the premier destination for spirit aficionados, while furthering passed legislation to make Oregon a distiller-friendly state, and our post-Prohibition legislative agenda, all in order to sustain the relationship between Oregon distillers, the ODG and the
RAI T E M TH FRO
people to buy local. We don’t necessarily want them to buy just our products, we want the culture of that local scene to grow.” OLCC is one of the nation’s
Wayt says the trail helps
best models of government-
Oregon distillers build local
The guild also focuses on
relationship with Vivacity, on
promoting and marketing the
a statewide level. “It’s so neat
industry. Last year, Bernards
to see all of us collaborate on
of Bull Run came up with the
that, and to be able to give
idea of the Oregon Distillery
that out as a tool to say, ‘Hey,
you can structure a whole trip
around this, or you can take
using a rustic map to plot
a section of it and you can
the points of ODG member distilleries around the state. Currently, the trail features
Erik Martin and Ryan Csanky of Aria Portland Dry Gin
make a weekend adventure.’ I love it.” The trail champions local,
26 distilleries, with that number growing as more distilleries join craft produced spirits, which are quickly growing in popularity the guild.
alongside craft cocktails. “A significant contributor to our
The Oregon Distillery Trail organizes the distilleries into a success here in Oregon is the simultaneous and meteoric rise tangible snapshot so tourists can visit them all without having to of the culinary and craft cocktail culture. The support we see sift through internet searches and visitor’s guides trying to find from our finest bars and restaurants, where Oregon spirits are the distilleries themselves. Trail-goers can tour the whole trail or often found on cocktail menus” explains Bernards, “is huge in take it in parts, experiencing many of the diverse distilleries and promoting Oregon spirits.” spirits of one of the nation’s top craft distilling communities.
Many trail-goers are Oregonians, known for their “locavore”
The trail appeals to spirits enthusiasts around the world. Craft buying habits. “We have a culture for buying local,” says Wayt distillers have many positive impacts on their communities, of 4 Spirits. OLCC reports that 12 percent of the spirits sold in one of the foremost being tourism. “Tourism is a huge income Oregon are made by Oregon distillers, far outpacing the national producer,” says John Wilcox, head distiller at Rogue Spirits in .38 percent estimated by the American Distilling Institute’s Newport. Erik Martin of Aria says that tourism groups like Travel 2012 mid-year survey. Oregon have helped to advertise the trail with their own resources,
“I don’t think a lot of us would be here today if it weren’t for the
recognizing the trail’s ability to attract tourists to Oregon, making mentality that Oregonians have to buy local in order to support it a distilling destination.
local businesses and keep their money in our state working for
“They’re really working hard to create the Oregon Distillery Trail Oregonians,” said Bernards. “The importance of this cannot be as a brand,” says Caitlin Prueitt of Vivacity Spirits in Corvallis. overstated.” “It’s not just the ODG servicing itself as a guild. They’re really
John Wilcox, head distiller at Rogue Spirits in Newport, says
trying to promote Oregon Distillers as a brand, like a particular the trail “continues to move the idea that Oregon is a craft industry.” “For us it’s like a consolidated effort,” says Sarah Wayt at 4
producing state.” Tom Burkleau of New Deal Distillery in Portland calls the trail
Spirits Distillery, also of Corvallis. Wayt says they work closely a “very, very good idea.” He says “it’s nice that people with the with Vivacity since they are both in Corvallis, because, “We want distillery trail see that we’re all here and they support us.” But
S FR OM T HE T RAI L...
he also emphasizes that there is a lot more to the Oregon industry’s success than just being local. “You just can’t open up something, be local – you’ve got to have good products, too. Our motto from day one has been ‘Local gets you the first drink, quality gets you the second,’” a philosophy that has kept them in business while others went under. Fortunately, the trail takes visitors to many successful, quality distilleries, like House Spirits, whose Aviation Gin is one of the best selling in America. DISCUS and USDA representatives even feature Aviation in their international spirits promotions as an example of the unique, high quality spirits American distillers are producing. Another trail stop, Bendistillery in Bend, is
Tom Burkleau of New Deal Distillery
the most awarded craft distillery in America. And in Brookings, Brandy Peak’s Aged Pear
yearly dues are $365, “a dollar a day. Even the smallest in our
Brandy took the only double gold at the 6th Annual American industry can afford this and that’s the idea – make it affordable for even the smallest.” Distilling Institute Brandy Conference. Bernards expects the trail and the ODG to help the Oregon
The trail is helping to attract people to distilleries, which
industry to remain a key player in the national industry. “About Bernards says is one of the industry’s best marketing tools. half of our distillers have joined the Oregon Distillers Guild, “A large majority of our distilleries have tasting rooms, which and the Guild and its members have created consumer-facing creates additional exposure beyond just bottles in stores, bars events,” like the Great American Distiller’s Festival, the Oregon and restaurants. Our tasting rooms and tours of our facilities Distiller’s Festival, and Ryan Csanky’s invention, The Oregon really help cement the fact that Oregon is full of entrepreneurial Artisan Spirit Tasting (TOAST), which is the largest event of its artisans who are making amazing craft spirits.” kind in the nation. Bernards encourages all Oregon distillers to join the guild and To see an interactive map of the trail and their excellent promotional put their distillery on the Oregon Distillery Trail map. He says the video, visit ODG’s website, www.oregondistillerytrail.com.
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CORNELIUS PASS ROADHOUSE WRITTEN BY STEVEN SEIM
PHOTOGRAPHS BY AMANDA JOY CHRISTENSEN
PHOTO PROVIDED BY CORNELIUS PASS ROADHOUSE
he McMenamins mix of restaurants, hotels, spas, and event name, though. Besides word of mouth, they are a stop on the venues in Oregon and Washington also includes two of Oregon Distillery Trail, they provide a stamp for the McMenamins
their very own distilleries, producing spirits exclusively sold at passport program, and they participate in tastings and festivals their individual locations. The distillers at the Cornelius Pass when they can. Arthur says it is becoming more common that Roadhouse (CPR) welcomed us recently to discuss the benefits people just stop by, not associated with any official tour or of their unique business model, their organic way of gaining promotion. For now Cornelius Pass is able to accommodate droppopularity, and the reason their still is so special.
ins like this, and they enjoy the chance to give tours of their
We met with Arthur Price, who along with Bart Hance, make distillery. Arthur says they recognize their situation will probably up the distilling duo at CPR. Cornelius Pass Roadhouse opened change in the future, but right now he is enjoying the chance to in 2011, and they currently sell an unaged White Owl Whiskey, show off their facility to those who like to enjoy a fine drink or a brandy named Morning Dew, and Gables Gin. Their current are starting to wonder if they can start a distillery themselves. storage is filling up fast and they have plans to build another
Arthur commented on the Northwest’s budding craft distillery
building on the property. Their goal for most of what they have market, and he said he couldn’t be happier: “You’re starting to in barrels is to age for 3 to 5 years. Arthur also tells us they are see distillers at farmer’s markets, you’re starting to see them willing to experiment with what will eventually go in the bottle. at craft shows. They’re out getting tastes of their spirits to He mentioned the possibility of mixing different ages of whiskey people…I think it’s good they’re tying that to a craft aspect: from different batches to create their special blends as one option. local farmers, local craft makers, and the local distilleries.” Cornelius Pass Distillery has one luxury that relieves a lot
Cornelius Pass participates in several local events and loves
of pressure other distillers face: they distribute their products to get feedback from as many mouths as possible. They had specifically to the McMenamins family of venues. They sell directly a booth at the Oregon Distillery Festival in July of 2013. The at 12 locations, so their distribution is never in flux. There are feedback they receive when they are side by side with dozens still several avenues through which they grow awareness of their of other craft spirits is invaluable. Arthur says Cornelius Pass
enjoys celebrating the differences between fellow products, not competing. “Not only are people discovering spirits they never knew existed, but they get to taste them side by side with all the other spirits there. We would never say ‘this is better than that;’ we want people to try everything. We want everyone to be good.” Among other distillers, he said he loves the friendly atmosphere. According to Arthur, the market is wide open and he’s happy to share as much information as he can with other distillers. There is, however, one secret Arthur told us: every distillery is set up so differently that even if he divulged the exact step-by-step operation of Cornelius Pass, the guy down the street wouldn’t be able to duplicate it in another building. That seems to be especially true in Arthur and Bart’s case. They are operating a used Charentais Alembic pot still made before World War One. While they’re not exactly sure how much older than 100 years it is, Bart and Arthur believe it couldn’t have ended up in a better building to continue its life. After being stored in a basement for several years, McMenamins decided the Cornelius Pass Roadhouse was where the still would return to production. It has been put into place with recycled bricks from other McMenamins locations, and resides in the oldest agricultural building in Washington County. Besides a conversion to gas, the building and the still have been kept in original condition. Operating a still this classic in a building this old requires a different mindset than in many newer distilleries. Many of its valves are held in by gravity, and are made of heavy brass and hand crafted copper, so their process is very hands on. This means that each batch is more art than science, which Arthur says works for their limited retail availability. “All the cuts that we make on the final runs are all done by taste and smell.” Their consistency comes from using the recipes they developed early on, but they recognize that there will be differences, even in batches made during different seasons of the year. Between batches, any small change they make is kept track of on paper, which comes in handy when the end result is better than they expected. Arthur’s philosophy is one of partnership with the still. His motto is “What can we do together,” rather than “I want this end result, how can I force it out of the still?” He feels as if he is honoring those who have worked with the still before him, the strangers who were able to get their own product out of it in decades past. “People who worked on this still before me…I have no idea who they are or where they are, but I’m one of many.” As for what special things he has gotten out of his still, Arthur is especially excited about the gin Cornelius Pass is coming up with. While Edgefield, McMenamins’ other distillery, has their own gin recipe, Cornelius Pass is enthusiastic about the variety
“People who worked on this still before me…I have no idea who they are or where they are, but I’m one of many.”
DISTILLERY PRODUCTS BY
- Arthur Price
theirs brings to the line. Several of the botanicals in their recipe are grown in the garden on-site, which creates a completely unique end result. They are also working on their own version of a rum recipe that they hope compliments Edgefield’s recipe. The luxury of their current status is the ability to, with encouragement from McMenamins, experiment with ingredients,
DISTILLERY MERCHANDISE FOR THE GIFT SHOP & TASTING ROOM
recipes, and research. It sounds like Arthur is most excited by the prospect of what he and Bart haven’t created yet: the next great product from the great old still at Cornelius Pass Roadhouse.
Creating Brand Awareness and Brand Alliance
“YOUR SPIRITS will be REMEMBERED” INFO@LASER-ON.COM
The McMenamins Cornelius Pass Roadhouse is located in Hillsboro, OR. For more information visit www.mcmenamins.com/CPRDistillery or call (503) 640-6174.
LEST YE BE JUDGED THE VALUE OF SPIRITS JUDGING COMPETITIONS WRITTEN BY CHRIS LOZIER
PHOTOGRAPHY BY ANDREA HUTCHINSON
What’s it Worth?
come up and see the medal from experts,
driven by the spirit itself, not by your label
and they’ll give it a better shot,” says
or your bottle. Human bias is an issue.”
Arthur Price of McMenamin’s Cornelius
something that promotes the idea that
Pass Roadhouse Distillery in Hillsboro,
‘This is good, it’s a gold medal, or it’s
Oregon. “They think ‘this is supposed to
celebrated on an international level,’
people begin to pay attention,” explains
“The ones that are the best to go to are the ones that are double
John Wilcox, head distiller at Rogue
competitions and reviewers to choose
blind, the ones that
Spirits in Newport, Oregon.
from if they want their spirits judged, and
are truly driven by the
most every competition claims to be the
spirit itself, not by your
become powerful marketing tools for
authority. Erik Martin of Aria Portland Dry
distillers and purchasing standards for
Gin offers this advice: “A distiller should
label or your bottle.”
consumers. They help to give consumers
ask a few things about the judging: Who
confidence in a product. “People who
is judging? Are the judges qualified? Is
maybe don’t taste spirits very often, or
the judging taken seriously by those
don’t know a whole lot about spirits, they
“People who maybe don’t taste spirits very often, or don’t know a whole lot about spirits, they come up and see the medal from experts, and they’ll give it a better shot.”
ARTHUR PRICE MCMENAMIN’S CORNELIUS PASS ROADHOUSE DISTILLERY
JOHN WILCOX ROGUE SPIRITS
involved? Will I get tasting notes from the
“There are lots of competitions
judging? How will the results be posted?
out there, but some of them are not
If we win a medal, will we be charged
considered very objective, i.e. they may
an additional fee after the fact just so
favor those companies who buy their
that we can mention it online or via
advertising,” tells Lea Beckett of Grand
social media? Is the spirits judging just
Teton Distillery in Driggs, Idaho. “That is
a ‘medal factory’?, And, most importantly,
a disadvantage to small craft distilleries.”
if our spirit medals, how are we going to
Many spirits publications also offer
incorporate it into our marketing?”
ratings, and although a few do not
Wilcox also offers his experience with
sell advertising in order to eliminate
competitions, saying, “The ones that
accusations of bias, most of them do
are the best to go to are the ones that
receive advertising dollars from the
are double blind, the ones that are truly
spirits companies they are reviewing.
Beckett said the potential for buying
break through to distributors. “Early on
or from interested third parties,” says
reviews diminishes trust in ratings and
in trying to get distributors to take us,
Wilcox of Rogue. “You can say ‘Look,
medals. “I think the confusion exists now
they would not return my calls.” She said
this stuff is good, these people have
for both consumers and for vendors like liquor stores, bars and restaurants…the system can be played by big producers and big advertisers…who dominate the market and keep small craft brands off the shelves with their imports.” Still, by choosing objective, transparent competitions
said it’s good, so you don’t have to fret
“You get good tasting notes, especially at the craft level. A lot of distillers know ‘my spirit’s not good enough to get an award, but I’m
about whether or not it’s going to be good, you’re not wasting money, you’re going to be investing in something that’s good.’” Arthur Price of McMenamin’s says spirits judging is also helpful because distillers “get feedback from professional tasters or experts. That’s nice because
distillers are certainly able to receive a
going to get notes and
a lot of times you’ll get notes. That can
fair judging and the marketing benefits
maybe the notes will
be useful.” Wilcox agrees, saying, “As a
that their ratings and medals provide. For example, Beckett’s Grand Teton vodka is the number one rated potato vodka in the world, and number three
help me get better.”
producer, I’m interested in finding out what we can do to improve.”
DAVE PICKERELL OAK VIEW CONSULTING
Dave Pickerell of Oak View Consulting says many distillers submit their spirits
vodka in all categories, according to
many distributors cited the wide variety
for judging exclusively for this purpose.
Proof66 editor Neil McDonald’s rating
of imported vodkas already dominating
“You get good tasting notes, especially at
system that utilizes scores from three
their product list. “Now, with our ranking,
the craft level. A lot of distillers know ‘my
competitions they consider to be objective
at least some of them will talk to us.”
spirit’s not good enough to get an award,
and unbiased. Beckett said these awards helped them
“There is a very strong marketing edge to receiving accolades from the industry
but I’m going to get notes and maybe the notes will help me get better.’”
The First ACDA Judging of Craft Spirits: A Peek Behind the Veil On February 5th and 6th, the
American Craft Distillers Association
categories of moonshine, gin, brandy,
(ADCA) hosted their first Judging
rum, and whiskey.
of Craft Spirits at Huber’s Starlight
Since starting with the most
intense spirit of a class would
Distillers were allowed to enter as
overwhelm the judge’s palate and
many spirits into the competition
diminish their ability to evaluate
as they wanted. Before the judging,
tasters from the judging team, but
not the judges themselves, tasted
into their individual classes and
and separated each individual spirit
according to proof and intensity. The
Judges sat as panels of four at separate
team ordered the spirits into flights of
tables, each panel reviewing a different
effort, judges were not allowed to talk
two to eight depending on grouping,
class. The judges were served flights
to each other until after the spirits were
ascending in proof and intensity. This way
of a single subcategory of a class, i.e.
scored. Then they discussed the full
delicate spirits would lead their flight, as
“Smoked Whiskey.” Flights were arranged
flight, compared notes and deliberated on
well as the judge’s palate, to receive fair evaluation.
in ascending intensity and labeled “A” “B” “C” and so on, this way the judges
the quality of the spirits for the purpose of scoring and medaling.
Sixteen judges were selected for their
were blind, evaluating the spirit alone
Spirits were evaluated and scored in
experience in the craft spirits industry,
with no knowledge of the distiller. Initially,
five categories: color, nose, palate, finish,
including distillers, retailers, mixologists,
judges were only given information about
and overall balance. Each category had a
educators, and spirits writers. Alternates
the spirit’s class, subcategory, proof and
potential point score - color and finish 20
were also available if needed. Pickerell
age. However, additional information
points each, nose and palate 30 points
said it is important to have enough
could be obtained from the board, Dave
each for a total of 100 points. The points
judges. “You don’t just want one or two.
Pickerell and Ted Huber, if it was deemed
were tallied at the end to create a total
Not everybody is going to catch everything
necessary to the judging, and did not
score. Medals were not awarded based
every time – subjectivity, palate, personal
provide information that would reveal
solely on points. Instead, a bronze medal
preference, bias, there are a lot of things.
the brand, distiller, or other information
would be, “this is something that’s good
Sometimes you just get distracted or
that would threaten the blindness of the
enough to purchase,” a silver would be
burnt out and sometimes you just miss
judging. This was done in an effort to
“a spirit I would buy for a friend,” and
something.” This is why after they
gold something “I would buy for myself.”
finished evaluating a class the judges
“Above and beyond all else, we want
There could be multiple medals, or, if the
were shuffled to a different class to keep
to give a fair and unbiased judging for
judges so determined, no medals at all.
their palate responsive and sensitive.
the folks that submit their products,”
The head judges reviewed the evaluations,
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and if they felt a spirit had been judged inconsistently, they could have that spiritâ€™s flight reevaluated by a different panel. ACDA judges also provided detailed tasting notes about each spirit, including positive feedback, recommendations and critiques. Brad Irwin of Oregon Spirit Distillers in Bend, Oregon, said the notes are one of the main reasons he submits spirits to competitions, particularly ACDA. â€œA medal is cool, but ACDA supplies notes as well, and that gets me excited.â€? Dave Pickerell said that the ACDA judging is very valuable to distillers because the notes come from experts. â€œI think that 1187 W. HAWTHORNE LANE WEST CHICAGO, IL 60185 630.206.3747 www.loggerheaddeco.com email@example.com
people enter the competitions, and our competition in particular, to get tasting notes from subject matter experts.â€? He says there are different formats for judging spirits, but he prefers to have spirit classes judged by class experts. â€œI think itâ€™s better to have
d Winning Awa r o t 1855 ork ince S u p p ly i n g C s s ller d i st i
subject matter expert panels, because you get a more in-depth judging than you would if everybody judges everything.â€? Ted Huber of Starlight Distillery said ACDAâ€™s format allowed for a well-rounded, detailed and fair evaluation, because it utilized the experience of diverse players in the craft spirits industry. â€œCraft guys have more and more diverse palates. Theyâ€™re not just doing bourbon. As we mature as an industry weâ€™re going to have better judges because weâ€™re going to have more diverse palates.â€? Gold, silver and bronze medals were awarded to spirits as merited, and multiple medals could be assigned in each flight. â€œA spirits judging is not a race with first, second, or third place,â€? explains Erik Martin of Aria Gin. â€œA great spirits judge will have the ability to judge each spirit on its own merits, and not necessarily against others.â€? In this fashion, if multiple spirits in a flight were deserving of gold, then they were all awarded gold. Gold medal winners were resubmitted for judging to determine the â€œBest of Classâ€? spirit for each class. A â€œBest of Showâ€? medal was also awarded, and distillers could submit their product into a separate competition for â€œBest Packaging Design.â€? The winners
will be announced at the ACDA Awards Ceremony on March 14th in Denver, Colorado.
f f o g n i t e k c o r future THE O T
WRITTEN BY AMBER G. CHRISTENSEN-SMITH PHOTOGRAPHY BY AMANDA JOY CHRISTENSEN
legacy It’s a quaint building laid out before you when you come upon the of fabrication. The men in his family even crafted their own still Seattle Distilling Company (SDC) headquarters. Nearby, on the and experimented with distilling. At one time, out of desperation, quiet property, you can see a children’s swing set with giggling they made a moonshine out of lawn clippings. “I wouldn’t try minions running around and an equally close-at-hand custom that at home,” Joyce muses. This upbringing instilled in Joyce a painted Volkswagen Bus adorned with the distillery’s classic fascination with fermentation, causing his own experimentation looking logo. It is a family run business benefiting from the hard with wine and cider making…and then distilling. work of all members—men, women, and children—as the owners explain and pride themselves in. “It really isn’t just the guys. It’s the wives and the kids, it’s all of us working together to make
great spirits—by hand, from scratch,” says Paco Joyce, master Joyce was primarily raised in the Mojave Desert. Upon graduating distiller.
from high school, he wanted to go somewhere with rain. He
Joyce is obviously comfortable in this setting as he grew up in longed for a green landscape that was much less dry than what a family business himself. His uncles and grandfather in Butte, he was accustomed to. With that he found himself at Gonzaga MT were welders, owning their own foundries. These same University in Spokane, Washington, and not too long after uncles and grandfather were tinkerers as well, and Joyce grew up graduation (and some work in social work utilizing his Psychology hanging out in a metal shop—a place where he learned the skills degree), he journeyed with his wife to her hometown of Vashon,
Seattle Distilling Company is located on Vashon Island, just southwest of Seattle in the Puget Sound off of Washington State’s inland coast line. Vashon—named after the explorer George Vancouver’s dear friend, James Vashon—is rural still in many ways due to its location (you can only get there by ferry as there are no bridges) and its relatively small population of around 10,000 people.
with a passion for distilling burning within him. Joyce knew he could build his own still and hone a recipe; to him that was the easy part. The part that intimidated him the most was creating a business plan and dealing with the various laws and licenses needed to start the business. To his benefit, he met Ishan Dillon, who knew the insand-outs of business from his family’s construction business and also had a background in bio-chem. Soon after the addition of Dillon to the scheme, David Waterworth, a graphic designer, came along to assist with branding, and the trio became a complete team. Joyce admits that once the three came together it felt like it all just clicked. Joyce advises, “Assemble a team of people you trust and respect.” With this mentality and the strength of the relationships between this small crew, SDC is growing fast.
for the love of community Although SDC is small in size, the advantage of this is that their focus is easy to maintain. Being a relatively young distillery (they were established in 2011), they have been able to support their families and contribute to the Vashon community. The success of their new company is due to the community support and their relationships within the community. Joyce
The safe located in the old autobody building is original to the property. It’s worn appearance is not due to age—but to an adventure it went on when it was once stolen by teenagers from the island, dragged through the woods, and abandoned when they couldn’t get it open. Later it was returned to its original location and cemented to the floor.
is happy to share that they were welcomed with “wide open arms” as a business in the Vashon area. They are lucky to be able to work within an amazingly supportive town. Right away, they found 2 local metal-smiths and a fabulous patina artist to help them fine tune and shine up the custom fabricated still (based from a Texas elementary school’s 1955 steam kettle and finished with copper sheeting at Joyce’s family foundry), as well as local farmers that they could donate their spent grain to for livestock (with the benefit of having sausage brought back to them from the farmer). Additionally, they’ve been able to utilize the herbs and coffee beans from the local coffee roaster and herb grower next door, which have found a home in their Alpinist Gin and Luanna Beach Coffee Liqueur. “It’s been awesome to start this distillery
in our small town.
With four products
We instantly had a
made from scratch
can’t imagine doing
this anywhere else.”
part is meeting the
Vodka, Alpinist Gin,
and Vashon Idle Hour
Joyce reflects: “this
making a name for
embraced us and we
craft spirits market.
wouldn’t be where
Joyce knows that it’s
we are today without
important to share
ideas and techniques with other craft distillers if they hope to
Joyce loves, “that we can work with growers, [and] we can know grab any more market share in the field, and to keep educating exactly where our ingredients are coming from.” He’s excited themselves within the market. “We can create awesome products about the future of craft distilling. What’s really wonderful in that inspire each other,” which is one of the best tools for growing the SDC mindset is the community building and the ability to the craft distilling market. support one another as craft distillers. They hope to continue to
work hand-in-hand with the other businesses in their community Seattle Distilling Company is located on Vashon Island, WA. For more as well as contribute to the craft-distilling field.
info visit www.seattledistillingcompany.com or call (206) 463-0830.
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flavor EMPLOYING THE
WRITTEN BY JASON BARRETT AND ROBB CHRISTENSEN PHOTO BY JOHANNES KROEMER
A whole cottage industry is popping up alongside craft distillers to supply the public with liquor related gourmet foods and goods.
or centuries, people have whiskey sausage. That’s right! used
create There is in fact whiskey in
and enhance the food they
the sausage. But the addition
serve and the other goods of craft spirits directly into they produce in the market. a product is only one of the Infusing these spirits into ways artisans are creating new different goods has been an
goods. The barrels that house
easy way to make something
the wonderful nectar while it
your own. With the resurgence of ages have also been turned craft distilling, artisans today are pushing that to the next level. into items like rocking chairs In fact a whole cottage industry is popping up alongside craft and swings. Now the barrels are distillers to supply the public with liquor related gourmet foods
also being reused to put a new spin on old classics. Al Wood of Wood’s Vermont Maple Syrup Company is one
and goods. Pastries, sauces, syrups, salts and
of these artisans. He partners with
sugars are all being imparted with
local craft distilleries to fill their used
craft distilled spirits. Ole Smokey
bourbon barrels with his extra thick
Moonshine in Gatlinburg, TN has
maple syrup. The bourbon barrel helps
no less than 78 foods available on
mellow the sweetness of maple syrup
their website that contain their white
while adding just the right amount
of bourbon flavor in the process. In
Blueberry Moonshine Jelly to Apple
fact, syrup isn’t the only thing being
Jack Moonshine Salsa is getting the
aged in barrels. The market is growing
white whiskey treatment. Kentucky
so large that some companies have
Woods, of Louisville, KY, is bringing
popped up focusing exclusively on
bourbon to the table in a different way.
making foods that have been aged in a
They bake up a Bourbon Barrel Cake
bourbon barrel. The company is called
that brings together chocolate, brown
bourbonbarrelfoods.com, and whether
sugar, walnuts, caramel and bourbon
it’s their Bourbon Barrel Soy Sauce,
right to the end of your fork. They
Bourbon Barrel Worcestershire Sauce
even come in a handmade wood barrel
or Bourbon Smoked Sea Salt, they are
cake box. High West Distillery in Park
sure to shake up your taste buds and
City, Utah has even partnered with a
bring the best of craft spirits to the
local charcuterie company to make a
solid portion of your dining room table.
The offerings are only getting more interesting and more unique
Maple Bourbon Bread and Butter Pickles, Whiskey Sour Pickles and Whiskey Barrel Sauerkraut all with Finger Lakes Distilling craft spirits. Combining the sweet and salty pickle with the rye and bourbon leads to a perfect match. Besides adding food into the barrel for flavor, using the wood for smoking is a unique option. You can go online and find a wide variety of used barrel staves cut for use in the backyard smoker. Why not add a little bourbon or whiskey smoke to your favorite BBQ while sipping on a moonshine?
M O N EY
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Many companies are even working to bring the infusing experience home. Consumers are finding new and exciting ways to turn bottles of craft vodka and white dog whiskey into fun and legal DIY projects. Uncommongoods.com has a “Homemade Gin Kit” that lets you transform your favorite craft vodka into your own personal gin. They send the juniper and other botanicals along with basic instructions, but you make the final decision of when it is ready based on your taste. Another way to make a spirit or cocktail personal is to age it in a small barrel. Charred American White Oak barrels can be used in a multitude of different ways from turning moonshine into aged whiskey or making a barrel aged Manhattan. The consumers are the judge of how it turns out. There are even ways to get in on making your own cocktail mixers. Ever wanted to make your own cocktail bitters? Williams Sonoma has you covered. Their Bitters-Making Kit lets you take the reins on what flavors you want the end product to have. Craft spirits and related goods are growing rapidly. They are helping turn the ordinary into the extraordinary. Try some of these out in your own home to see for yourself--craft spirits can be a new part of your world in a new and exciting way.
Jason Barrett is a distiller and managing member and Robb Christensen is the head bartender for Black Button Distilling in Rochester, NY. For more info visit www.blackbuttondistilling.com or call (585) 730-4512.
CURRENTS of SUCCESS SPRING44 DISTILLING WRITTEN BY AMBER G. CHRISTENSEN-SMITH
PHOTOGRAPH BY MARIA LANSKY
he Hungarian Physiologist, Albert Szent-Gyorgyl once
of 60% water—Spring44 has been able to distinguish
stated, “Water is life’s mater and matrix, mother
itself in the US craft distilling market, as the flavor found
and medium. There is no life without water.” Water is the
in this Rockies spring is exceptionally fresh. They pride
essential life force necessary to all our existence. It is pure
themselves in their number one ingredient and the smooth
and simple. Perhaps that simplicity is what initially drew
quality it gives to their spirits.
Russ Wall and Jeff Lindauer, longtime friends, to the spring in the Northern Colorado Rocky Mountains as young men.
Spring44’s vodka was recently ranked number two in the world by Paul Pacult, a well-known spirit aficionado, who
Just outside Loveland, Colorado, Spring44, the namesake
called it the best domestic vodka he had tasted. Getting
of Wall and Lindauer’s birthed idea, was brought forth as a
noticed like this is something that not only brings them
way to share with the world the incredible fresh water source
an enormous smile for doing something right, but also
that they often enjoyed on moonlit nights. The spring was
helps them gain some market share. Lindauer explains
purchased by Lindauer’s father in 1969, then merely known
that, “The Premium-and-above category in vodka and gin
as Spring 9044, and was a coveted place by the men in
is huge—somewhere north of $12 billion in US consumer
their youth. It was a place where two boys could hang out
consumption, and north of $3.5 billion in supplier
and explore, as the spring is surrounded by the gorgeous
revenue. Imported brands dominate this space and own
Roosevelt National Forest in the Rockies. It was here, one
about 96 percent market share in the US.” Spring 44’s team
night, that Russ exclaimed: “This is the best water on earth;
is working hard to pull in at least a little more of the market
it’s liquid energy! Do you know what we have here?” and an
share with locally sourced goods and the craftsmanship and
idea was born.
art of distilling at the core of their company.
By starting with great ingredients—Vodka is composed
Beyond their notable vodka, the fellas at Spring44 also
52 WWW.ARTISANSPIRITMAG.COM 52 WWW.ARTISANSPIRITMAG.COM
have gin, whiskey, and bourbon on the menu. In total,
from imported spirits, he’s incredibly excited. “However,
they have six different spirits in house, and it is exciting
the amount of industry focus on craft, coupled with the
to see what else they have planned with the attention they
number of quality entrants into the space, suggest a trend
are getting thus far. Customers are growing more and more
similar to what happened with beer.” This in itself is
energized, as is evident when you read the reviews online,
enormously fresh and exciting for Lindauer and his team.
about their brand. The smoothness of their vodka is not
Even with growth, Spring 44 has been able to keep its
only sweetly celebrated by those at Spring44, but by many
humble operation small and, well, pure like its amazing
water source. Lindauer and Wall have kept their distillery
The team at Spring44 is proud of its relationship with
equally as simple with a team of less than 10. They are
their customers and the Colorado community. Last fall
proud of their ability to run the operation smoothly, as
they opened their tasting room and they couldn’t be
well as please their customers, grow their fan base, and
happier. This move has brought them closer to customers
contribute to the ever-growing craft distilling industry.
and has created more devoted fans and opportunities to
Spring44 is excited to continue to make spirits and to
distribute their spirits. The Northern Colorado community
delight their customers while having fun. The ebb and flow
has truly embraced them, even making them a part of the
of great business sense while still having fun, along with
DStill Event held in Denver in March, a grand distiller’s
notable flavor, will keep these guys going for many years to
symposium held annually to celebrate, discover, and
educate those in the distilling community (www.dstill.com). While Lindauer recognizes that craft distilling has a long way to go before it will grab a sizeable amount of market share
Spring44 Distilling is located in Loveland, CO. For more information visit www.spring44.com or call (970) 414-0744.
WWW.ARTISANSPIRITMAG.COM 53 WWW.ARTISANSPIRITMAG.COM 53
D O I N G JUSTICE TO AMERICA’S F I R S T S P I R I T THE 200
MISSION TO REVIVE A YEAR-OLD RUM BOTTLE
WRITTEN BY CHRIS LOZIER
PHOTOGRAPHY BY HANNAH DOLLE
ne important aspect in the skyrocketing success of craft distilling is the teamwork between distillers and their suppliers. In all
the industries surrounding distilling, from coopers to still builders to glass companies, distillers often find excellent working partners ready to offer any resource they can to help. Phil Prichard, owner of Prichard’s Distillery in Kelso, TN, found an excellent partner in Arkansas Glass Container Corporation (AGC) and Packaging Support Group (PSG) in Jonesboro, AR. The joint businesses were capable and willing to help when Prichard approached them with an unusual request. At a New England antique store, Prichard found an antiquated hand-blown spirits bottle like those made in colonial America. The bottle stands out primarily because it has a crooked neck, something modern glass design and manufacturing does not generally strive to achieve. “Leaving that shop, prize in hand,” Prichard says, “my thoughts turned to how perfect it would be if, somehow, we could recreate this antique bottle for use with our rums and some of our other products.”
TECHNOLOGY AND TRADITION Prichard
antique bottle to AGC/PSG to see if it was plausible. “The first challenge was to re-create the appearance of
said Joel Sharp of AGC/ PSG. They took careful measurements
bottle and then entered the dimensions into a 3-D computer-aided
(CAD) program that made a virtual model of the bottle. Sharp
challenge was to “make sure that the bottle retained its imperfect appearance while achieving a high level of functionality. The cork finish had to be true to
Prichard said their original intent when starting their distillery
to follow this model and “recreate America’s first distilled spirit, a traditional American Rum very much like the rums made in New England over two hundred years ago.” Using traditional pot still techniques and grade “A” molasses from Louisiana plantations,
rum is complex, flavorful and comparable to great brandy, something many spirits consumers would not expect having grown accustomed
marketed as a mixer rather than a stand-alone spirit like bourbon. He hopes the new bottle will help consumers think outside the box of current rum conventions.
the center of the container, but look as if the container was created with the imperfections of a unique, antique, hand-made bottle.” After making the necessary adjustments to the CAD model,
THE “IMPERFECT” BRAND “The hand-crafted look of the new bottle with many of the
AGC translated the data into machine code and used several 3-D imperfections of the antique bottle will look really unique among printers to produce an ABS plastic version of the bottle. A few a myriad of look-alike bottles on retail shelves and behind the hours later, they had a tangible model almost exactly like the bar,” says Prichard. The bottle stands out among its competition, 200 plus year-old rum bottle they started with.
much like the rum inside, fulfilling the goals Prichard started with. It completes Prichard’s vision of his brand.
WHISKEY IS THE NEW RUM Rum was America’s flagship spirit during colonial times before it was eventually, due to a number of factors, outpaced by whiskey. “America’s first rums were very different from the modern rums of the tropics,” says Prichard. “The first American rums were made from the same wonderful, sweet molasses that was used to make baked beans, brown bread and Indian pudding.”
Sharp of AGC/PSG says that brand differentiation and recognition is key, and the packaging completes the brand’s identity. “We want to help distillers fulfill the complete vision that they have for their product,” says Sharp. “Distillers take great pride in their craft. The bottle and packaging should reflect the same level of pride, individuality, and attention to detail that goes into the contents that they hold.” Prichard’s vision of quality, historical American rum is uncommon. “Like most in intrepid entrepreneurs,” jokes
Prichard, “I approached my banker with the idea of building the first legal distillery in Tennessee in almost fifty years. ‘You are going to make what?’ they said. ‘Rum in Tennessee?’ I can still hear the muffled laughter.” Prichard is the one laughing now. The distillery’s seven rums, six whiskies and two liquors are favorites of spirits connoisseurs and bartenders alike, with their Private Stock rum being so popular they cannot even ship it before it sells out at the distillery.
KEEPING IT LOCAL AGC/PSG is only a five-hour drive from Prichard’s distillery. By using AGC, Prichard was able to cut his transit time from 6090 days to 4-5 hours. AGC/PSG can process Prichard’s orders within two weeks, which Sharp says will “virtually eliminate the guessing game in forecasting future sales of Prichard’s Distillery’s products. Because AGC can quickly react to the needs of its customers, like Prichard, he can react to unexpected high volume sales periods.” Not only is the turn-around faster, but it keeps the money in America. AGC is “the only remaining single-location privately held glass container manufacturer left in the United States,” tells Sharp. “We have all benefited greatly from the lower cost of goods manufactured for us by many of our foreign trade partners. As with all things, however, there comes a price. In our country it’s the small manufacturer, companies like Arkansas Glass Container Corporation and untold others, that have shouldered much of the cost.” Sharp says they have stayed competitive and successful by being creative and dynamic in their approach to business, recognizing and reacting to market trends more quickly than their competitors. At the company’s inception in 1949, they produced large glass display containers and minnow catchers that caught minnows for fishing bait. Now they produce food containers of all kinds for various industries, including wine and spirits. Sharp also emphasizes their customer service and knowledge. By doing business with an American company with the history and track record like AGC/PSG, Sharp says you gain access to their expertise in many fields, including, “transportation, sales, purchasing, mass communications, and manufacturing.” “Our assistance is free. There’s no requirement to purchase anything from us because you called with a question. We will be glad to help.”
Packaging Support Group is located in Jonesboro, AR. Call Chad King, Sales Manager, at (870) 268-6266 for more information.
THE STILL WRITTEN BY STEVEN SEIM & AMBER G. CHRISTENSEN-SMITH
PHOTOS COURTESY OF THOROUGHBRED SPIRITS GROUP
t Thoroughbred Spirits Group, distilling has been ingrained in the family lifestyle.
Scott Schiller, Managing Director of Thoroughbred Spirits
Group, is a fifth generation distiller having 20 years of experience in the distilling industry, and previously owning two distilleries as well as overseeing five others. His distilling lineage goes back to 19th-century Italy where his great-grandfather Pasqualli D’Anna produced liqueurs from leftover fruit crops. His grandfather, Joseph D’Anna--who spent his whole life around spirits – wanted to spend time with the people who enjoyed his creations and so opened the Bucket O’ Suds bar in Chicago in 1951. Scott learned personally from his grandfather through his time at the bar to “Focus beyond the still” – words that have resonated for Schiller throughout his career. And it’s one of the reasons that make Thoroughbred qualified to help new and existing distilleries with any part of their business.
supporting NEEDS Thoroughbred offers consulting for almost every aspect of running a distillery including initial brainstorming, financial planning, building production and sales teams, and researching proper equipment. Alongside Schiller’s experience, other personnel at Thoroughbred bring in expertise such as marketing, strategy and brand development lead by David Large, distilling experience under distiller Rob Masters, and packaging design by designer Ben Carr——all these skills coming from men and women that have worked successfully in their
fields and the distilling field as well. Schiller says “We are often that can be found in both: “The underlying passion for the spirits needed in a general management role or on an advisory basis, to business” is what drives him in his desire to help other distillers be a steady resource for the many challenges facing a company find their niche. The majority of their new clients come as and brand portfolio.”
referrals, from both past clients and vendors, and Thoroughbred
Schiller says that the initial relationship with a customer does not take a cut or a commission. usually starts with identifying which pieces of the puzzle the
While it is unfortunate, Thoroughbred says it is sometimes
client hasn’t quite figured out yet. This varies widely between necessary to inform a potential client that they don’t think a different distillers. Some things they can help with right away, partnership will work. “Sometimes the chemistry is just not like creating financial projections in order to clarify how much there,” Schiller told us. But as they have experienced with money is needed. From there, they can help with decisions both successful and failed distilleries, they are always honest. related to liquids and designs. Schiller describes the next step as Schiller said “We always try to share insight as to why it is we are the ideal time for a client to make a “‘go’ or ‘no go’ decision.” If passing on an opportunity.” And sometimes there is still a happy the money is there, the potential distiller can invest and proceed conclusion. “Sometimes these individuals come back with an with confidence. If not, they have an accurate goal for the amount edited approach, and some even come back and thank us later!” of money needed to be raised before they take the next step.
all SHAPES AND SIZES
THE big PICTURE Schiller shared with us some of the best advice he can give
When asked about whether they served more clients that were to people wanting to start a distillery--and common mistakes to new to the business or were already established, Thoroughbred avoid. He says the most common thing he sees is people that Spirits Group said they have a nice mix of both. They feel their buy copper stills before they sufficiently plan out their business diverse experience and skillset allow them to help both startups and then realize too late that they are in over their heads. He and more established brands. Scott loves the common thread encourages being honest about how much time and capital is
required to succeed. The most important question they ask their clients is “Why do you want to do this?” Thoroughbred has
distilleries will take several steps before actually making a solid business plan, which can cause unforeseen obstacles to appear and cause delays. “To answer [the above question] honestly can be quite uncomfortable sometimes, but doing so often clarifies if this is in fact the correct path to be on” Schiller told
product off the shelf and into the consumers’
“I truly believe that there is no better time to be considering the craft distilling segment.”
us. Another key question is a client’s comfort with risk, which this industry comes with plenty
Scott also explains that the
ultimate obstacle is a poorly made or falsely perceived product. You simply cannot cut corners or cheat. Thoroughbred points out that one of the biggest trends they see is
[who] are challenging the norms.” Among those challengers are unique mash bills, processes of production, and
believes that these are helping bring about
a change in what is uprooting the standard. He believes there are more “revolutionary” brands yet to
of. “If junior’s college fund is on the line, we always pass if they be introduced, and that there is still room for more producers. are not willing to raise outside capital.”
Perhaps the most important sentiment Scott shared with us was
Schiller also pointed out that poor packaging and design can “I truly believe that there is no better time to be considering the be detrimental. “For better or worse, spirit products are just as craft distilling segment. I didn’t say this five years ago, and I much about the outside as they are the inside.” Thoroughbred
may not say this five years from now.”
is great about helping distillers redesign or newly design their
packaging to appeal to new customers, in order to get their Thoroughbred Spirits Group is located in Louisville, KY. For more
information visit www.tbspiritsgroup.com or call (502) 533-7071.
P E R ST I L L S P O C R U O ALL OF MADE ARE HAND .A. IN THE U.S
A E E D TO B E N U O Y T A WH IN C A N BU I L D EAT PRIDE E R G W , E N K A W T O WE E. A L L O NS D OMER CAR NDUSTRY. I T S G U N I C L R F RO M 1 5 0 G L I U T O IN DIS NS H I P A N D T H E C R A FT A 0-334-3400 N I M S S T S F E C A S.COM 27 C R L IL SU T 4 S LY OU R C IL OW, KY 4202 .HILLB WWW
WAY 817 BROAD
Dogfish Head Distillery
written by Amber G. Christensen-Smith photography by Justin Williams
NEW BEGINNINGS 101
stayed connected with Gerhart (who moved on to Otter Creek
as their brewmaster), and also learned much from the likes of Distillers come into their own on many different accounts. They Thomas McKenzie of Finger Lake Distilling in Burdett, NY and come from all backgrounds— former psychologists, teachers, Bryan Selders of Post Brewing Company in Lafayette, CO. “These even lawyers—and all manner of different ages and areas of our three men helped me become a better distiller,” and for that she nation. The same is true for Alison Schrader, master distiller is very thankful. at Dogfish Head Distillery in Rehoboth, Delaware. Schrader, a trained art historian and former employee of a Fortune 500 company, found herself waiting tables at the popular Dogfish
OFF-CENTERED DISTILLING Dogfish Head has been brewing eclectic, craft beers since
Head Brewpub after her divorce. She noticed that Mike Gerhart 1995, but have only been creating spirits since 2002. Sam (previous master distiller at Dogfish Head) had lost his distilling Calagione, president and owner of Dogfish Head, has grown the assistant. Schrader kindly asked if she could help in any way. brewery and distillery from its initial beginnings of a small batch Little did she know that this small catalyst of a question would brewery, to now contain a brewpub, newly located brewery, and a wind up making her the head distiller at Dogfish just under two small distilling operation. years later.
Calagione, when first creating the distillery, spotted the still
Schrader, essentially thrown to the craft-distilling wolves, they would use in a scrapyard in the Baltimore area on one of found herself immersed in an intense distilling education. Her his excursions. He thought it resembled a still and that is when biggest advice if you find yourself on this path: “READ READ “Frankenstill” was born. The still, simply known as “Frank” READ,” she emphasizes, and, “Ask lots of questions and pick now, was purchased and the distillery was designed and birthed the brains of brewers and other distillers in the area and online.” shortly thereafter. Fortunately, she was driven by her new passion to discover the
Schrader is lucky to work for a company that values “off-
knowledge and she had great support all around her. Schrader center” thoughts, in that they often experiment with unique
flavors in their beers and now embody that experimentation in different way and builds on their already great relationship of their spirits, as well. Schrader is excited about the ability to working together. Additionally, they created the Dogfish Dash, a explore this field of distilling, much like an artist would explore a 5k and 10k run that benefits local nature conservation. new medium. She’s always eager to try new things and to throw
Dogfish also connects to their community by trying to find
unusual flavors into the mix. When asked what excites her about local ingredients—like the local wildflower honey they use— the industry she doesn’t hesitate
something so many craft distillers
to name exploration of new ideas:
are doing to benefit the communities
“How about a hop vodka? What
in which they reside. However, they
about a peanut butter vodka?”
will go anywhere necessary to find
She’s happy to push the standards
ingredients that stand out and
with each new spirit concoction.
enhance the flavors of their spirits
It’s not often that one is
and brews—like the Askinosie cocoa
rewarded for being “off-centered”
they use in the Chocolate Vodka.
in a traditional field like distilling (until
Schrader is excited about the
clientele is just as excited about Schrader’s
future of Dogfish Head Distilling.
“Ultimately I am inspired by the
Dogfish Head’s Peanut Butter Vodka
confidence and muscle I have
gained by working in a very physical
peanuts, vanilla, and wildflower
job. Because the end product makes
honey. The Chocolate Vodka is
a lot of people happy.” It is also
made from the finest Askinosie
apparent that this new shift in life
cocoa. Their Jin (yes, gin spelled
makes Schrader very happy, too.
with a “J”) is infused with
Perhaps the reason craft distilling
cucumbers and hops. Schrader
encourages distillers to be brave and experiment with ingredients is so exciting for Schrader and for many other new distillers in the that excite them, and owner Calagione encourages her to try new US is that we are seeing so many craftsmen coming from different backgrounds. It’s exciting to see new flavors and infusions being
things, something that feeds her vibrancy.
born of great spirits found within those like Schrader. As she
states, “Don’t be afraid to learn by making mistakes….oh, and
Dogfish Head Distillery has been greatly welcomed into the always check your valves.” community. To thank their community, they give back in many ways. Every year they contribute by building a Habitat for Humanity Dogfish Head Distillery is located in Rehoboth Beach, DE. Visit their home in their area. This activity brings their team together in a website at www.dogfish.com for more information.
P R O V I D I N G R Y E to the distilling industry for over 50 years.
Brooks Grain Improving the quality of life with grain.
o you have all your licenses in order, label approval was a breeze, and your still is running like a dream. Now the really
hard part: getting your product on shelves. Where do you even begin? There is a lot you need to take in so as to learn about the world of craft spirits retail. I live and work in New York State, where wine and spirits cannot be sold in grocery stores, so we have privately owned liquor stores. My experience comes from this type of highly specialized retail environment. Your state may be different but the principals remain the same.
PRICING the BEST for the BENEFIT of ALL The first thing you need to examine in your strategy is pricing. The cost of your products will make or break your entire business model. It is common practice for spirits to be sold by the case with discounts at varying quantities. These varying quantities are called levels. For example: the wholesale cost of a one bottle purchase is $30, if one case (12 bottles) is purchased the cost per bottle drops to $29, two cases (24 bottles) $27.50/bottle, etc. Keep quantity discounts low. You are a craft distillery, not a big global brand; nobody wants to buy five cases to get the best price on a new product. Single case buys and combo-packs are the perfect way to get your products into a store for the first time. Another reason for lower levels for the deepest discount is that high levels will cause a pricing slide. You don’t only want the larger stores selling your product, you want all stores to have an equal shot. I’ve seen it a thousand times: there are customers that will spend $5 in gas to save $1 on a bottle. Small/medium stores are your best friends; don’t price them out of the game. Keep in mind that stores will mark-up spirits roughly 20%, so if
written by GEORGE CATALLO
you have a price you want your product to ideally retail for, price accordingly on your deepest level. Another item to consider when developing a price point of your products, is to be cautious when pricing your products even in your own tasting room. Setting prices too low onsite does not necessarily give you the advantage of cutting out the “middle man.” While customers may be more likely to buy from you directly, you may be damaging your relationship with retailers
LEARN the LINGO ooppeenn
ORDERING Case 12 bottles of 750mL/1L or 6 bottles of 1.75L
50mL Mini or Airplane
Half Case 6 bottle pack
200mL Half Pint
(#) Case Drop/Deepest Level Number of cases needed to purchase to attain best price/bottle
Levels Case discount scale Single Bottle Buy Ability to purchase one bottle at lowest discount price
Combo Pack Case of assorted products
On Deal Pricing on product is temporarily lower (generally found with larger brands)
1.75L Mag, Magnum or Handle
Off Deal Product is no longer “on deal”
at the same time. People buying directly from you sounds like a thousands of others out there? It’s not just about taste – it’s your great problem to have, but it will limit your growth and tarnish your story. A good bottle with a great story will outsell a great bottle relationship with retailers. Living and working in this industry in with no story every time. Tell your brand’s story so that people fall Western New York has provided me with the unique opportunity in love with it. Once you sell your story to the salespeople, the to visit many producers that we do business with at the store salespeople will use your story to sell the bottle to a customer. and this sentiment is nearly universal: tasting room prices are Have a great story. much greater than retail prices. This allows stores to move more of your product without consumer pushback over pricing which then gives stores reason to repeatedly buy more product from you. Remember, we either grow together or don’t grow at all.
a STORY to SHARE
PROFESSIONALISM In your travels there are many types of purchasing managers that you will encounter, but regardless of how laid back some may be, always act professionally. I recall a time that a regional manager from one of our distributors came in with the son of the
Now that pricing is out of the way it’s time to represent your owner of a decently sized international flavored vodka company. brand. Before you head out to hit the pavement selling your The son talked about the brand, his family’s involvement with product store-to-store, pack sample bottles. Most stores will the brand, and of course tasted me on the full line of products. not bring in a new product if they can’t taste it first. However, It was by no means the best flavored vodka I have ever had, but taste alone will not sell your product. No matter how good your the brand had been requested by a few customers and he had a bourbon is, it’s still just another bottle of bourbon that tastes reasonable chance at making the sale. The moment he lost the like most every other bourbon out there. Why is your product sale was when he uttered this line, and I quote word for word (I different? Why will people want to buy your product over the will never forget it), “peeps are really sellin’ it.” Carrying yourself
Saxco AS 2:Layout 1 5/7/13 5:26 PM Page 1
in a professional manner is absolutely paramount to making that
Stock Inventory Custom Design Decorating Capsules Closures Corks
first sale. First impressions are everything. I’m not saying that you need to go around in your Sunday best looking like a government field agent, but you do always want to look good. Dress in a way that accurately represents your brand. Bearing in mind that first impressions are so vital, make sure to carry yourself in a professional and respectful manner, but without coming across as corporate. You’re craft, a small and
possibly family run business, and so are most stores. Adjust your
Call Jimmy at 502-326-8451 or Chad at 502-326-8452
level of professionalism to at least a notch above whom you are
ONLINE and ACTIVE
Your Clear Choice for Premium Packaging Solutions
There are many tools out there at your disposal but I feel that two things reign supreme over the rest, the first is social media. Being a craft distillery you probably don’t have a huge advertising budget, but having a strong enough social media presence will work wonders. Where a salesperson or brand representative may
For more than 25 years, Saxco International has been helping distillers create the packaging identity that is their brand. A turn-key supplier of packaging needs, we offer a comprehensive range of products tailored to craft distillers, bottled colorado, usa and capsules. that includes in bottles, corks, closures,
miss, the right person happening upon you online at the right time can work wonders. Stores will bring in new products that customers ask for. Having a cool and easy to navigate website, as well as entertaining, informative, and interactive social media pages, is the perfect way to get people interested and talking about you.
high proof spirits CoNtrACt BottLiNg high VoLUME CApABiLitiEs CoMpEtitiVE priCiNg BottLED iN CoLorADo, UsA
undoubtedly one of the most powerful tools in the wine and spirits
WE pUt thE JUiCE iN thE BottLE
the products, producers, distributors, and pricing. It requires a
Another tool at your disposal is sevenfifty.com. Sevenfifty is industry. It’s a database of wine and spirits with information on valid liquor license to be tied to each account, so only people
blue egg bottling
in the industry can create accounts. It also acts as a portal for
970 344 8111
new products and apply for accounts with new distributors. If a
salespeople to track leads with stores and for stores to explore customer asks about your product and you have it on Sevenfifty, it makes it that much easier for the store to track you down and purchase from you. Going from the still and into a store can be an incredible
2/21/14 9:54 AM
undertaking. But as long as you keep a level head and present yourself and your brand professionally and in a friendly manner, you should do fine. The advice I’ve given certainly isn’t the be-all end-all, though I hope in sharing my experience it aids you on your quest for growing your brand and sharing the amazing art that is your spirits.
George Catallo works in beverage retail with Parkway Wine and Liquor in Rochester, NY and posts online reviews and discusses spirits on www.JustOneDram.com.
an INTERVIEW w i t h
O-I O-I founder Michael J. Owens with one of his original bottle-making machines, which transformed the industry.
he craft distilling industry thrives on innovation. Yet, it’s easy our offices, you’ll see images of Michael J. Owens with a motto to forget that behind the enthusiasm and experimentation ascribed to him: “It can be done.” His spirit and drive to break
is a great deal of technology and tradition. Few companies have new ground continues to inspire us. been as successful at merging these concepts as O-I. We reached
out to David Waldock, Covet Director for North America, to learn a AS: What prompted O-I to enter into the craft distilling little more about this multi-faceted international glass company. marketplace?
DAVID: We were already serving some of the world’s top taste-
Artisan Spirit: David, can you please provide some making brands when the craft distilling movement started to take background information on O-I? off. But we saw a gap between the needs of our large, global
DAVID: O-I’s roots go back more than 100 years to 1903, when spirits customers and the up-and-coming craft distillers who were our founder, Michael J. Owens, transformed glassmaking with looking to us for distinctive packaging. The multinational distillers the invention of the automated bottle-making machine. Since could invest in proprietary bottle designs to help differentiate then, we’ve grown to 77 plants in 21 countries around the world, their brands, something that newly-established craft distillers and more than 22,000 employees.
might find beyond their reach. So we put together a suite of
Even with our size we haven’t lost sight of the fact that what cosmetic flint glass bottle designs with a range of customization started it all was one man who had the passion and vision to options to help craft distillers distinguish themselves as they build on his craft and find ways to make it better. If you visit grow their business.
O-I’s Covet Classics product portfolio gives craft distillers access to an extensive line of customizable glass packages.
AS: How has the business and production of glass containers changed over the years? DAVID: Like distilling, glassmaking dates back thousands of years. We continue to see innovation, with new ways to decorate and emboss bottles, and new shapes and designs to stand out on the shelf. This focus on differentiation has gone hand-in-hand with changes in the market segments. As people’s tastes have become more sophisticated, so have their perceptions of what the package says about a brand. So it’s more important than ever for the packaging to play a key role in shaping the brand’s identity. Sustainability
importance for consumers. We know that our customers, driven by consumers, are more and more aware of the environmental impact of each part of their supply chain. Glass is a great choice for the environment– it’s made of all natural ingredients, doesn’t break down into harmful chemicals, and can be recycled over and over again into new glass bottles without
display front and center. So the bottle design must make
loss of quality. We’re working to find ways to get higher
an immediate impact on the consumer and clearly
quality recycled glass into the supply chain, which reduces
communicate the key elements of the brand. And since
the amount of energy used to make new containers.
showcasing a bottle of spirits is part of the ritual of
AS: What other markets does O-I serve and how do those experiences relate to craft spirits?
enjoying it over time, the design should have a lasting impression that lends itself to being proudly displayed.
insight into trends across these industries that we can
AS: You work with a lot of large distillers, as well as the craft industry. What do these two groups have in common?
leverage to better serve our customers.
DAVID: Distillers of all sizes need flexibility in terms
DAVID: O-I also serves the beer, wine, food and nonalcoholic beverage segments. This gives us broad
As the craft distilling industry continues to grow,
of small volumes as they cater to consumer desires
analysts are looking for parallels between it and
for new flavors and unique, small-batch spirits. That’s
other segments, especially craft beer. On the
why we offer a product portfolio that allows customers
surface their trajectories appear to be similar,
to order as little as a pallet at a time and take delivery
but there are some key differences between craft
only when they need it, providing affordable access
beer and craft distilling that have implications for packaging considerations. One of those is the role that package design plays
Korbel chose O-I’s Aspira bottle for a limited-edition release of 1,800 six-bottle cases of California Brandy called Korbel 12.
in brand interaction with the consumer. More than any other product, the brand image the container
into the high-end category without sacrificing beauty
projects is crucial for craft spirits. Whether on a
or speed to market.
retail, bar or home shelf, the bottle is always on
AS: Have you detected growth for craft Institute (ADI) and the newly-created American Craft Distillers Association (ACDA). We believe that the conferences and other distilling on a global scale? DAVID: As interest in craft distilling grows, forums these organizations provide to share ideas and best consumers crave new experiences beyond the traditional spirits they know and love. This flavor sophistication is leading adventurous consumers to seek new and different spirit
practices have a key role to play in the industry’s success.
AS: What about the craft industry excites you the most? DAVID: We are excited to continue investing alongside our
tastes, creating global growth opportunities customers in anticipation of growth for U.S. craft spirits in for craft distillers. For example, BYE JOE overseas markets. Seventy percent of annual U.S. whiskey USA recently introduced an old world spirit growth through 2016 is expected to come from overseas, so we from China to the U.S. market. Baijiu is an are expanding our Covet Classics portfolio to include bottle sizes ancient spirit that is widely consumed in that meet the needs of the European market. We are also looking to premiumization as a growth area China but virtually unknown in other parts of the world.
within craft spirits. Super-premium spirits continue to outpace mainstream spirits, and consumers who are willing to invest in
AS: How can distillers and suppliers these products expect a high level of quality both inside and work together to help promote the out. O-I is well-positioned to help high-end brands seize market industry and educate new distillers? opportunities. With O-I as a partner, distillers can focus on what DAVID: Establishing forums to connect they do best – crafting quality spirits that are becoming more distillers and suppliers is crucial to helping the industry grow. That’s why O-I is a proud founding sponsor of the American Distilling
popular with consumers around the world every day.
For more information on O-I’s product offerings, please email O-I at firstname.lastname@example.org, visit www.o-i.com
the proud distilling state of
COLORADO WRITTEN BY JOSH BAYNE
here are two consistent things about Colorado. One is the
Two major advantages of owning a distillery in Colorado are
inconsistency of the weather, the other is the ever increasing
the abilities to self-distribute and have tasting rooms. The
quality of the craft distilling industry. You never know what you’re
state allows each distillery two tasting rooms, offering you the
really going to get in regards to the weather. But rest assured, chance to market to a number of demographics. And since state if you pour yourself a drink from one of Colorado’s many craft law prohibits chain liquor stores, you can essentially sell your distilleries, you’ll quickly pour yourself another. We here in Colorado have been blessed by the distilling gods to have incredible ground water, abundant agricultural resources,
products in two locations on your own. This easily saves 20-30 percent of margin to reinvest back into your business. Self-distribution is obviously a major opportunity, as well.
and legislation that makes it quite easy to run a prosperous Although some of the large distributors handle most of the distillery. This is why Ted Palmer of Roundhouse Spirits in
distribution in the market, having the ability to self-distribute
Boulder gets two to three calls weekly from people across the
puts you in the driver’s seat as opposed to the corporate
front range of the Rocky Mountains asking questions about distributors. Many states don’t allow self-distribution, while starting a distillery in Colorado. “The excise tax is reasonable, other have strange rules such as not allowing sales to bars, but the yearly permit is reasonable, and distribution is easy as well,” allowing sales to hotels. says Palmer.
With Colorado becoming an epicenter of craft distilling, we are
starting to see trends in the industry here before anywhere else. When asked about trends Palmer had this to say, “Women are beginning to realize that vodka is boring.” Speaking to the major resurgence of vodka into the industry 5-10 years ago, Palmer went on to explain that overall vodka sales had been dropping, while gin sales had increased by 12%. Andy Causey of Downslope Distilling in Centennial is seeing a major increase in “aged spirits.” Whiskeys, bourbons, rums, and other brown spirits are seeing a major increase in sales with the craft sector of the industry driving much of that growth. “Craft distilleries are at liberty to develop and create new spirits that divert from the mainstream,” says Causey. With distilleries in Colorado developing everything from bourbons and whiskeys to liqueurs and gins, variety is a point to notice within the state. “Craft Distilleries gave people more options than what they had previously. Much like the craft breweries did 20 years ago.” Another trend Causey is seeing is the increase of educated buyers. “Spirits drinkers across the US are starting to educate themselves on the industry. They are starting to notice the differences between Distilled and Bottled by vs. Produced and Bottled by.” Causey should know, since his distillery also runs regular distillation workshops, so an educated buyer is truly an asset to his business. With all this said, there is one factor which has been often unnoticed in the Colorado craft spirits industry: teamwork. The Colorado Distillers Guild is home to a number of the state’s distilleries and their relationships are not that of the typical competitor. When speaking to Ted Palmer he had nothing but great things to say about the other Colorado distilleries. Fred Linneman from Mystic Mountain Distillery in Larkspur is always talking about the spirits produced by J and L Distillery in Boulder and Peach Tree Distillery in Palisades. “Us small guys are not the competition,” says Causey, “the big guys are! The guild is a close knit group with people working with each other not against each other.” With approximately 50 distilleries either open or opening soon, the opportunity is explicit. The spirit industry in Colorado is not just alive, it is thriving. While the weather in Colorado right now is dry and cold, the distilling industry is hot and the forecast shows blistering temperatures ahead.
Josh Bayne is the Director of Craft Distilling Academy, an organization devoted to quality distillation education for both the novice and intermediate distiller. Email email@example.com or visit www.CraftDistillingAcademy.com for more information.
A blank page can be daunting. Letâ€™s fill it together.
W W W. A RT I S A N S P I R I T M A G . C O M / G R A P H I C D E S I G N
the WRITTEN BY STEVEN SEIM
PHOTO PROVIDED BY REED WAX
eed Wax is celebrating 75 years this May, supplying wax to distillers to help select a tear tape, melting pot, or any vessel for several industries. Until recently, that did not include the the purpose of dipping.
craft distilling industry. However, when a friend of the company
A distiller can expect to add approximately $.30 to $.35 to the
bought a distillery and wanted an option for wax sealing their cost of producing each bottle after adding a wax dipping. This can bottles, the people at Reed Wax decided they were missing out of course vary with the size of the bottle, how thick the coating is, on a growing market. They are now offering their services to how much is used on each bottle and which technique a distiller those craft distillers who want the extra touch of wax sealing decides to use. And bartenders, Reed tells us, are especially their bottles. Reed Wax is focused on serving smaller clientele, excited when a bottle is dipped in Reed Wax. They design and targeting the best
their coatings to tear
they can offer for their
in a clean, easy line,
leaving the remaining
With 75 years of
wax on the neck of the
bottle for the extra look
desired by the distiller
feels they have the
(and with the ease that
experience to solve any
allows bartenders to
situation that presents
continue serving their
They make a point to
Currently the most
popular color choice
the exact solution they
with is black. However,
need; they even have the ability to formulate a custom wax if they specialize in custom colors, and encourage distillers to get necessary. “They [distillers] have access to our technical staff creative in that regard. “The end products are always worth the and we can custom craft the exact bottle dipping wax they want.” extra effort for everyone involved.” As to whether wax dipping Reed’s waxes have qualities that many bartenders and distillers is associated with higher quality, more premium products, they enjoy, and most of their waxes have a lower melting point than agreed that it does send a statement. “A wax dipped bottle other companies’. They can also do one time color runs for special stands out on the shelf and sends the visual message that the projects. Reed will even provide samples to ensure you’re getting contents inside are special.” Plus, they say a specially colored exactly what you want. Reed also told us they can work with wax seal is good for product recognition.They also believe that
the customer who buys a bottle with a wax seal appreciates the extra step taken by the distiller, which they described as “like a bow on a gift!” Applying a wax seal does not have to be an intimidating process, either. Reed described the process as “very forgiving.” First, they guide their customers to a youtube video during their initial partnership. Reed also advises customers how to apply tear tape before applying the wax. If a mistake is made, it is possible to peel the wax off and start over, which allows distillers with unique bottle designs to perfect their process without wasted bottles. Reed also offers a few tips on how other decisions can affect your ability to wax seal easily. “The more textured a t-top cork is, the greater the chance of getting bubbles trapped in
“Take notes, Make friends, and Distill Great Liquor!”
the wax.” Reed also told us that they recommend using lighter
An entry level distilling course for the enthusiast as well as the start-up distillery
coat any bottle/top combination that suits a specific desire for
Weekend courses to accommodate your schedule at a price you can afford www.craftdistillingacademy.com 888-559-0998 firstname.lastname@example.org
REL CO AR
You craft the spirits We provide the Barrel • Co-Marketing Programs • Packaged Products • Promotional Items • Special Projects • Gift Shop
colored t-top corks when wanting to use lighter colored waxes, instead of the common black corks used. However, waxes can a superior final product. Formulators can also take into account local climates and design a seasonal formulation that works better in specific ambient conditions.
ottle b d e p p i d “A wax elf and h s e h t n o stands out sual message vi sends the s inside t n e t n o c that the l.” are specia Reed Wax loves the distillers they have met and interacted with while entering this market. They appreciate the different individual stories, and are excited by each new challenging combination of spirit, bottle, label, or top a distiller provides. They laud the industry’s openness and willingness to provide them with valuable input. And like so many other companies have learned, they highly value the partnerships they’ve been
1 Liter to 15 gallons & other customized spirit items Large Project Specialists
able to cultivate. “Custom formulating is our strength. We can color match a label, formulate for a specific need, and can do small runs…We are the micro-craft waxery for the micro-craft boozery!”
www.1000oaksbarrel.com (703) 885-1483
Reed Wax is headquartered in Reading, MA. For more information email email@example.com or call (781) 944-4640.
G&D CHILLERS with
THE THIRD IN OUR “FREQUENTLY ASKED QUESTION” SERIES TAKES US TO G&D CHILLERS. THEY GIVE US A LOOK INTO THE WORLD OF REFRIGERATION EQUIPMENT FOR THE DISTILLING ENVIRONMENT.
WHAT IS A CHILLER? A chiller is a versatile piece of central refrigeration equipment. Instead of cooling air like your refrigerator or air conditioner, it cools fluid which can then be pumped throughout an entire facility to provide cooling to any number of different processes: air conditioning, distillation columns, mash coolers, heat exchangers, fermentation tanks, etc.
WHAT IS GLYCOL? Much like antifreeze used in a car, it protects the chiller and process piping from freeze damage. Glycol is a heat
Fluid Cooler and Chiller
transfer fluid. It is cooled in the chiller, then pumped through the distillery, where it is used to cool many different processes. Some systems use glycol to cool water, and then the water is used to cool the equipment in a distillery.
DO I NEED GLYCOL? It depends on multiple factors: location of the chiller,
ambient conditions. If the chiller is located indoors and the operating temperature is high enough, you probably don’t need glycol. However, if the chiller is located outdoors, in almost all but the warmest climates, glycol is a necessity.
HOW DOES A CHILLER WORK?
with a manufacturer who knows the
A chiller works the same way any other
distilling process is integral to procuring
refrigeration system does by exploiting
a reliable chiller.
the pressure/temperature relationship of a refrigerator at home, or the air conditioner
IS A CHILLER REQUIRED IN A DISTILLERY?
in your car, it cools water or glycol. The
The short answer is no, a chiller is not
basic components of a chiller are: a
required in every distillery, but in most
compressor, condenser, heat exchanger,
cases a chiller is extremely beneficial.
pump and reservoir.
Distilling is an ancient tradition, created
gas. Except instead of cooling air like your
long before chillers existed. Stills were
WHY DO I NEED A CHILLER?
first cooled by the air surrounding the
A chiller is used in a distillery to provide a
still. Distilling in this manner is difficult
constant supply of cooling fluid to condense
to control, and extremely slow. Soon,
the vapors from your still, and to cool the mash from cooking temperatures down
water was used to cool the still more
Reservoir and Piping
efficiently. Water is still used today in
to fermentation temperatures as quickly as possible, preventing many applications, but in a production facility, constant water bacterial growth that would undoubtedly happen if the mash were usage and treatment is extremely costly. A chiller allows water to allowed to cool too slowly. After cooling the mash, the chiller is be recirculated with virtually no waste, improving cost efficiency, and increasing your production capability. also used to keep fermentations under
I ONLY HAVE SINGLE PHASE POWER. WILL A CHILLER RUN ON THIS?
control, and to chill filter spirits.
WHAT SHOULD I LOOK FOR WHEN DECIDING WHICH CHILLER TO BUY? Without of
does limit the size of chiller you can use. Depending
distillery, distilling is
impossible. Most chillers are not made to handle the extreme
size of your distillery,
and your production schedule,
temperatures that are present in a distilling application, and multiple ways to handle this potential problem. If the distillery become extremely unreliable when used in a distillery. Working isnâ€™t going to run 24 hours per day, the solution is often to apply
a principle used in water heaters: heat a large batch of water is the first visible sign of a refrigerant leak. If you find oil residue, before it is needed, then use it over a relatively short amount of call your refrigeration technician to have the leak repaired as time. In the case of a distillery, a relatively small chiller may be soon as possible. used to cool a large amount of water which can in turn be used to
AT WHAT POINT IN THE PURCHASING PHASE SHOULD I CONSIDER A CHILLER?
quickly and efficiently cool any process in the distillery.
WHAT INFORMATION WILL I NEED TO PROVIDE WHEN SELECTING A CHILLER?
As soon as youâ€™ve decided on size of your still(s), and mash cooker, you should contact a chiller manufacturer for help with
Each distillery has its own unique demands: different production designing the distillery cooling system. You should finalize the schedules, different plans for growth, and different space design, and place the order at the same time you order your stills. requirements. Having a good idea of how and when each piece of equipment will run ahead of time will speed the process along.
WHERE SHOULD I INSTALL THE CHILLER?
Most manufacturers should be able to provide you with cooling Air cooled chillers require a constant supply of fresh air and must load data for their equipment. This is extremely helpful when be installed outdoors. If outdoor space is limited, the chiller may be split into separate skids, and only the condenser portion
selecting the proper size chiller.
would have to be outside.
WHAT KIND OF MAINTENANCE DOES A CHILLER REQUIRE? Maintaining a chiller is
coils, In an existing distillery, there are a few different ways to proper increase your chilling capacity depending on which route you
and choose to increase your production. If production is increased leaks by adding a second still, or by switching to a larger mash cooker,
most then increasing capacity may be as simple as adding a second important maintenance reservoir. However, if increasing production takes the form of tasks you can do. The adding a night shift, then adding a larger chiller is usually the
CAN MY CHILLER SYSTEM BE UPGRADED AS MY DISTILLERY GROWS, OR SHOULD I BUY AN OVERSIZED UNIT TO ALLOW FOR FUTURE GROWTH?
be best/only way to go. Planning for growth from the beginning cleaned with just a eases the growing pains, and can save you a lot of money in the garden hose sprayed at long run. Talk through the scenarios, and ask about the different
a downward angle. For especially dirty condensers, spray on coil options available for future growth. cleaners work wonders, and are simple to use. The glycol solution should be checked with a standard refractometer. In most cases, G&D Chillers is located in Eugene, OR. For more information visit the glycol solution should be kept at 35% by volume. Oil residue www.gdchillers.com or call (800) 555-0973.
THE WHEELS OF GOVERNMENT
MOVE SLOWLY BUT THEY DO MOVE
(IF YOU KEEP PUSHING THEM) WRITTEN BY RALPH J. ERENZO
he Legislative Work Group of the nascent American Craft noting the importance at this time for a bi-partisan introduction Distillers Association (ACDA) has undertaken as its first in both houses, they have so far declined to sponsor the bill
chore, the composition and introduction of a bill to reduce without assurances there will be equal Republican sponsorship. the Federal Excise Tax (FET) rate charged to Craft Distillers in The Republican legislators of NY are supportive, but have until the United States. Presently, small breweries and wineries are recently bowed to party leadershipâ€™s ruling; they will not introduce charged roughly 20% of the rate charged to the major producers. any new bills for a reduction in revenue and in particular for That discounted rate is largely responsible for the overwhelming alcohol industry tax relief. success of craft breweries and small wineries across the US.
The main effort now being undertaken by the Committee of
Craft Distillers, however, still pay 100% of the FET rate, with the ACDA is mobilization of the Craft Distillers across the nation. no consideration for the difference in the economies of scale The small producer is a critical player and the effect of the between the craft producers and the major producers.
passage of the bill will mean the craft distillery pays (if taking
Members of the new ACDA have been working for the past five out of bond 100,000 proof gallons in a year) $270,000 FET years on composing a revised bill, which has replaced a previous bill instead of $1.35 million at the rate proposed by the bill. bill introduced by Maurice Hinchey (D-NY). Hinchey has retired That savings means increased job creation, increased excise tax and his bill along with him. That bill was flawed and not much revenue, increased sales tax revenue, expansion and upgrade of liked by the Fed or Distilled Spirits Council of the United States equipment, etc. It is not money that will be pocketed; it will be (DISCUS) members. With the help of DISCUS attorneys, the Legislative Work Group
spent, injected back into the economy. Objections have been suggested. Resistance against giving the
has developed text ready to be introduced by a sponsor to the large producers a tax break of any kind is the primary issue. The House and the Senate as soon as we can identify a Legislator revenue loss to the Fed by giving this discount to all distillers willing to sponsor.
for the first 100,000 proof gallons is minor compared to the
The new bill proposes a substantial reduction in the Federal overall increase in Federal Excises paid by the growing number Excise Tax rate for the first 100,000 proof gallons removed from of successful craft distilleries. And those who are pushing back bond by any distillery. This satisfies DISCUS in that it does not are perhaps not taking into account the multiplier effect of this establish a privileged class of distillery. The Democratic NY legislators are behind it 100%, but
kind of savings by the 400+ small producers. Additional effects beyond increased excise taxes are realized
by the increase in sales taxes paid on spirits sales off site and in distillery tasting rooms for spirits and other accessories. There is also the important effect the rise in small distillery operations has on job creation nationwide. Craft distillers typically acquire their raw materials from local and regional farmers, using grains and fruits and herbs grown locally. Distilleries draw tourists who spend money not only at the distillery but in the nearby restaurants and shops, contributing to the local economy. Mobilizing American craft distillers is a daunting task. All the distillers and their crews are very busy, producing spirits and building their facilities out. We are reaching out to every distiller in the country with the strong reminder. This is cash in your pocket, call your Legislator and tell him/ her to support the Craft Distillery FET discount bill proposed by the ACDA. If they don’t know what you’re talking about, send them to the ACDA website: www.americancraftdistillers.org Or download the information and bring it to the Legislator’s office and hand it to a Legislative Assistant yourself.
Ralph J. Erenzo is founder of Tuthilltown Spirits Farm Distillery in Gardiner, NY. Visit www.americancraftdistillers.org for more information on his work as Chairman of American Craft Distillers Assocation’s Legislative Working Group.
Recycled bricks form a new home for an old still on page 35. Photo by Amanda Joy Christensen
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Master Distiller, The Jack Daniel Distillery
The magazine for craft distillers and their fans.