SPOT SIGNS OF success THE LABOR OF THEIR FRUITS WHAT TO DO WITH A
MONEY DOWN THE DRAIN
YOU CAN'T TOP
Brand Design for the Craft Spirits Industry.
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TABLE of CONTENTS A LETTER FROM THE EDITOR
QUARTERLY GUILD REPORT
What’s going on, state-by-state and province-by-province
FUNDING THE FUTURE
Considerations for byproducts vs. coproducts vs. waste products from alcohol distilling
WHISKEY FROM THE HEART OF MEZCAL COUNTRY 23
From the American Craft Spirits Association
MONEY DOWN THE DRAIN?82
Agave makes way for Mexican heirloom corn as a mezcal producer introduces Sierra Norte Oaxacan whiskey
A NIGHTMARE ON OAK STREET88
DISTILLING LESSONS FROM RECENT TRADEMARK CASES
Scandalous trademarks, generic vs descriptive, and related alcohol beverages
What to do when a barrel turns out wrong
IT’S IN THERE
Inventory certification, losses and shortages
HOW TO WRITE MARKET POSITIONING STATEMENTS FOR ALCOHOL BEVERAGE BRANDING
FROM POLAND WITH LOVE
AMERICAN SINGLE MALT WHISKEY COMMISSION UPDATE
BELTWAY BANTER WITH JAMES HYLAND
THE FRUITS HAVE FIRST BITE
FINNISH YOUR GIN
DRINKING THIS WILL NOT GET YOU HIGH
6 REASONS TO CONSIDER CANS OVER BOTTLES
Brand Buzz with David Schuemann
Part 2 — Trusts
Defining a new American spirit
Interview between James Hyland and Robert Lehrman
PECHUGA47 A special-occasion version of mezcal
REUSING WINE BARRELS IN THE DISTILLERY Wine-soaked barrels require special care
Kozuba and Sons of St. Petersburg, Florida
Distillers in Goa, India turn cashew fruit, once agricultural waste, into a unique spirit
Do you know what signs to lookout for?
Beverage Flavor Chemistry – Part 1
Kyrö Distillery gave Finland a taste for gin and now it’s ready to take on the world
And other myths about Colorado High Vodka
THE LABOR OF THEIR FRUITS55 Brandy makers face greater raw material, production, and supply chain needs
A packaging option gaining popularity
PORTS OF NEW YORK
THE EFFICIENT (RUM) DISTILLER
WINNING AMID CONSOLIDATION AND INNOVATION
BRANSON’S NEW DISTILLERS
THE RISE OF AMERICAN WHISKEY
of Ithaca, New York
Keeping an eye on energy conservation to increase profits
Missouri moonshine comes out of the hills
DEVELOPING A SPIRITS REGIONAL BRAND IDENTITY
Establish and maintain a Destination Management Organization
DESCRIBING FLAVOR IN GIN
Visually communicate your gin's flavor story to consumers
DIVORCING YOUR DISTRIBUTOR Spoiler: It's complicated
67 72 76
COPPER FOR STILLS79
of Jersey City, New Jersey
Key considerations for high growth brands (and those that want to be)
The Women’s Distillery Guild shares what they have in mind for the future
Learning from American wineries’ perseverance
From our first president to our explorers and writers, our history is seeped in whiskey.
From serendipity to functionality
from the COVER
Kozuba and Sons in St. Petersburg, Florida. Image by Devon Trevathan. See their story on page 94.
small batches. big selection. one clear choice.
Issue 24 /// Fall 2018 PUBLISHER & EDITOR Brian Christensen CREATIVE DIRECTOR Amanda Joy Christensen SENIOR WRITERS Devon Trevathan
Eleanor (Ellie) Atkins Luis K. Ayala Colin Blake George B. Catallo Renee Cebula Jeff Cioletti Brian B. DeFoe Carrie Dow Andy Garrison Mary Hallerman Reade A. Huddleston Paul Hughes, Ph.D. Stephen Johnson
Tim Knittel Aaron Knoll David Large Robert Lehrman Jim McCoy John McKee Shannon O'Neil Benjamin Peim Kurt A. Rosentrater David Schuemann Sarah Nagel Sisisky Gary Spedding, Ph.D. Gabe Toth
LEADERS IN PACKAGING SOLUTIONS B THE CRAFT DISTILLING INDUSTRY
Amanda Joy Christensen
PHOTOGRAPHERS Amanda Joy Christensen Carrie Dow Breanne Furlong Molly Gough Cheryl Juetten
Veera Kujala Benjamin Peim Polara Studio Devon Trevathan
SALES & MARKETING Ashley Monroe ARTISAN SPIRIT is the endorsed publication of the American Craft Spirits Association.
Ask for Ray or Claire on the Spirits Packaging Team 800-457-5657
ARTISAN SPIRIT is a quarterly publication by Artisan Spirit Media. www.artisanspiritmag.com facebook.com/ArtisanSpiritMagazine
General Inquiries (509) 944-5919 Advertising (509) 991-8112 PO Box 31494, Spokane, WA 99223
huge floor stock inventory
All contents © 2018. No portion of this magazine may be reproduced without the written consent of the publisher. Neither Artisan Spirit Media nor ARTISAN SPIRIT magazine assume responsibility for errors in content, photos or advertisements.
custom bottle design and molds for your unique package.
While ARTISAN SPIRIT makes every effort to ensure accuracy in our content, the information is deemed reliable but not guaranteed. We urge our readers to consult with professional service providers to meet their unique needs.
in the packaging industry.
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.
in multiple warehouse locations throughout North America.
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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.
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THANK YOU TO ALL OUR SPONSORS. Our mission at Artisan Spirit Magazine is to share and celebrate the art and science of artisan craft distilling. We are humbled by the support of our sponsors. With their help, we can further our common goals of supporting creativity, innovation, and integrity within the industry we all love so much.
American Craft Spirits Association exists because of real-world momentum and a perceived need for a trade association in the U.S. governed by licensed craft distillers on behalf of craft distillers. Our mission includes legislative advocacy in support of a strong business environment for distillers, and through outreach to consumers help build brands and increase consumer awareness. We welcome your ideas, suggestions and participation.
BSG is focused on supplying craft distillers with the best ingredients from around the world. The craft distilling market trusts BSG to deliver the finest ingredients at competitive prices, without sacrificing customer service. With distilling malts and grains from Rahr Malting Co., Weyermann®, Simpsons, Crisp and Malting Company of Ireland, as well as a full range of yeasts, yeast nutrients, enzymes, botanicals, and finishing products, we have a wide range of distilling ingredients to help you create high quality, artisanal spirits.
We think that we will continue to see increased M&A activity as multi-national and national distillers seek to diversify their portfolios and be competitive with the rising local craft markets. This generally increases competition on the store shelf, leading to more product innovation. Throughout the value chain, from packaging to flavors, brands are experimenting with innovations that drive consumer interaction, with a focus on mass-personalization. We also expect greater focus on e-commerce, directto-consumer efforts, and online brand presence and marketing campaigns as a way to develop new, more economic means of supply. — John Zanini
The alcohol beverage industry has gone through a tremendous amount of disruption in the last 20 years. The craft industry in beer saw a tremendous amount of proliferation with new breweries and brands launching for many years. The same is now happening with Spirits. With this rapid expansion in craft came operational challenges and financial challenges at all three tiers (supplier, wholesaler and retailer) which meant that consolidation and mergers were bound to happen to improve efficiency. In order to win in this competitive space, it is more important than ever to support your brands with investment to gain trial from consumers. — Elias Aguilera
With the increase in large corporate mergers, and online sales pressure, how do you see the wholesale and retail side of the industry evolving in the future for the alcoholic beverage industry?
We have a strong belief that you’ll start seeing more and more start ups in the distributor and online space that will use tech to try to disrupt the industry. The closer you can get to simplifying the route to market will open up opportunities for all types of newcomers and specialty products to flourish online. We have clients that are already turning the market place upside down with online first strategies. At the same time you’ll have new and old chains like Whole Foods that are also going to push the boundaries of online sales as well. — Philip Kolodziey PARTNER
COMMERCIAL DIRECTOR, SPIRITS CATEGORY NA
VICE PRESIDENT – SPIRITS & BEER DIVISIONS AND CONCIERGE SALES
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Cage and Sons Distilling Systems build premium distillation systems and equipment for premier distilleries. Every element of Cage and Sons equipment is designed and crafted to provide you with the very best distilling experience at an affordable rate because we know that bottom line matters, but so does function. At Cage and Sons, adequate is never an option, and we continue to develop and design new high functioning, cutting-edge distillation systems that enhance the distillation industry. Cage and Sons works every day to bring you the very best distillation systems for the very best value
Unlike other agencies that work within a blinding myriad of industries; our focus is 100% within the spirits, wine, beer and other alcohol sectors. This specialization has allowed us to become experts in the alcohol beverage category. We have an exceptional understanding of design that sells, complimented by professional project management and flawless production oversight. The result has been strategic solutions that consistently produce both critical acclaim and strong measurable return on investment for our clients.
Distillery Products is your "Go To" source for wholesale premium branded distillery merchandise for your Distillery. Specializing in custom branding and engraving on Glassware, Premium Flasks, Cocktail Tools and Insulated Tumblers and more… Our Marketing Team will work with you to create your custom merchandise line to elevate your brand and capture your market identity. Our goal at Distillery Products is simple, have your target market think of you, your company and your brand first! Distillery Products is your innovative partner and "Go To" source in brand development and brand identity.
ARCHITECTURE ◆ ENGINEERING ◆ CONSTRUCTION
Decorative label solutions…we’ve got you covered. Fort Dearborn has the expertise and creative appreciation for development and application of labels for the spirits market. Whether your application needs cut & stack labels with specialty hot stamping and embossing, the “no label” look of pressure sensitive film labels or full body graphics using shrink sleeve labels, we have a product to meet your needs. We service brands large and small. Contact us today to discuss your brand building objectives.
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G&D Chillers is as committed to the cold as they are to their clients. They strive to build long lasting partnerships by offering on-going technical support from their team of engineers, all backed by their satisfaction guarantee. G&D Chillers offers a widerange of options from small portable chillers and heaters, to large custom chilling units. All units are ETL approved in both the U.S. and Canada. Most of their standard package chiller designs have been tested for over 20 years in the field.
Haskell delivers Architecture, Engineering, Construction (AEC) and Consulting solutions to assure certainty of outcome for complex capital projects, both within existing facilities as well as new brownfield/greenfield projects. Haskell is a fully integrated, single source firm with highly specialized, in-house design, construction, procurement and administrative professionals working across diverse market sectors. The Beer, Wine & Spirits Division is one of Haskell’s most mature markets having served discrete and distinguished clients for decades. Haskell is defined by its people, a culture of transparency and trust, and the delivery of value.
Trusted Oak Expertise Since 1912. We’ve been in this industry for over 100 years, during which time we’ve learned a thing or two about what makes a great barrel to age great spirits. Our R&D team and account managers have hundreds of barrels currently in experimentation. Partnering with distillers, we think outside the box to develop new products that push your vision forward
A vital part of the alcohol production process, fermentation products from Lallemand Biofuels & Distilled Spirits have been designed and selected to create value by tailoring objective solutions to distillery needs.
SPIRITS E P
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MGP is known for its mastery in formulating, fermenting, distilling and maturing world-class spirits. The company’s expertise in blending art and science to produce premium bourbons, whiskeys, gins and grain neutral spirits serves as the foundation of a lasting legacy steeped in know-how. Customers benefit from MGP's in-depth experience, state-of-the-art capabilities, and strong penchant for developing tailored formulations and meeting precise product requirements. MGP's entire team, with distilleries in Atchison, KS, and Lawrenceburg, IN, takes great pride in delivering the highest quality results with each and every product made. For details visit mgpingredients.com/alcohol.
Live Oak Bank specializes in financing solutions for craft distilleries nationwide. As one of the largest originators of small business loans in the country, our loan options allow you to meet your customers’ demand and take your business to the next level. Our team is guided by craft experts and peers who have a combined 75+ years of lending expertise in this space. With access to a cash flow business model, industry knowledge and innovative technology, you’ll be able to grow your distillery with a committed partner. Financing can be used for expansion, equipment purchases, refinance, working capital, construction and more.
Our Mission: To craft world-class oak barrels and other cooperage products so our employees, customers and communities flourish.
Lallemand Biofuels & Distilled Spirits is the industry leader in supplying fermentation products and valueadded services to the distilled spirits industry. We specialize in the research, development, production and marketing of yeast and yeast nutrients as well as a solid belief in education of the distilled spirits industry.
TS OF INTEGRIT
Moonshine University is located in Louisville, Kentucky on the Beverage Campus with its sister company, Flavorman. Moonshine University offers a variety of classes for enthusiasts, entrepreneurs, industry professionals and those seeking careers in the distilling industry. Our distillery was designed as part of our classroom, and all classes incorporate hands-on learning and sensory evaluation in order to provide a complete and comprehensive education. In addition to its knowledgeable instructors, Moonshine University hosts a range of renowned industry experts for specialized instruction and training.
For over 60 years our company has produced cork stoppers and a wide variety of bottle closures. Family-owned and operated since its inception, Tapi USA continues to develop new products and enter new markets. Tapi USA is proud to support the growth of the artisan distillery industry and is honored to be the Bottle Closure Sponsor for Artisan Spirit Magazine.
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A LETTER FROM THE EDITOR: Distilling is a terrible retirement. Assuming what you want from retirement is anything approaching leisure. Yet more than a few of our friends and counterparts in the industry chose that life after tiring of their corporate careers and 9-5 stability. In fact, itâ€™s fair to say that most distillers are not born, they are self-chosen. In part because of the legacy of prohibition, there are few distilling dynasties outside of Kentucky. This edition of Artisan Spirit Magazine stands as a tangible reminder that the craft distilling renaissance is made up of individuals that chose the challenging path. Stories of brandy, pechuga, and trans-Atlantic migration are just a few examples of men and women deciding to do something more ambitious than the ordinary. We do our best to emulate the industry we write about. Artisan Spirit Magazine continues to remain independent, advertorial free, and always providing more content then advertising in each issue we produce. Itâ€™s damn hard meeting the expectations of this industry, but itâ€™s the path we chose, and we proudly walk it with you.
(509) 944-5919 firstname.lastname@example.org PO Box 31494, Spokane, WA 99223
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Y L R E T R A QU T R O P E R D GUIL
ne unifying f there is o the guild onvince element to al level to c c lo d n a ry ve te e me time, n a sta is Fall it’s th cord for so their part o re g n in e o k d updates th ro b is a uild e federal unded like ost every g rn about th ation has so 2019. Alm rs f o ve n d o n c real conce e T e th FE lapsing at nitely. The reduction ction indefi u d . re e excise tax th intain g that drum nd and ma eep beatin e k xt e to to ve ti rs n ince legislato a massive dustry has in s it ir sp but the
ACSA STATE GUILD COMMITTEE The American Craft Spirits Association State Guild Commitee continues to work on ways to make your life easier and more profitable. On our most recent call we discussed the FAQ page for guilds and a forum for guild leaders, both of which will be on the new ACSA web page soon. We also focused on how to maximize Guild impact during the August Congressional recess as we ramp up the fight to make the FET reduction permanent. There is the possibility of an updated tax bill in September that could be the right vehicle for WWW.ARTISANSPIRITMAG.COM
FET permanence. If every single one of us reaches out to our Congressional delegations and impresses upon them all the ways we have been reinvesting our FET savings there is a good chance we can get this done. If not, get ready to go back to paying $13.50 a proof gallon in 16 months. The ACSA PAC gave its first donation in July, and we hope to be able to continue to help the representatives that have helped us. Please look at the PAC, it is a great way to help insure positive legislation for our industry.
The things you should be doing at this moment to continue to save $10.80 per PG: join the ACSA and your Guild, tell your reinvestment story to your Senators and Representatives, and find out how to become involved in the ACSA PAC by sending a request to: email@example.com P.T. Wood ACSA BOD, Chair State Guild Committee, Wood’s High Mountain Distillery in Salida, CO firstname.lastname@example.org
ALASKA DISTILLERS GUILD OF ALASKA Alaskan distilleries have been fighting for the right to continue serving cocktails in our tasting rooms since August 2017. At that time the new Alcohol and Marijuana Control Office Director reinterpreted part of the Alaska State Statute regarding distilleries
ARIZONA ARIZONA CRAFT DISTILLERS GUILD The Arizona Craft Distillers Guild would like to introduce ourselves to Artisan Spirit Magazine’s Quarterly Guild Report. AZCDG was established in 2014 with the goals of promoting awareness of the craft distilling industry in Arizona and to help the industry continue to grow. AZCDG has seen a recent revival in activity and held their first meeting of 2018 on June 6th with 9 DSPs represented. Our main topic of discussion was collecting guild dues and what we can do to convince those DSPs that have yet to pay. Since the meeting we have had several DSPs financially join the guild with more expected in the coming months.
MASSACHUSETTS MASSACHUSETTS DISTILLERS ALLIANCE At our annual meeting in July, the Massachusetts Distillers Alliance was happy to welcome Beaver Pond Distillery, Short Path Distillery and Silversmith Spirits as new members. Top issues discussed at the meeting were FET reductions, parity between all craft beverages in the state, and marketing MDA to the our craft loving consumers.
and opened a regulation project seeking to prohibit distilleries from serving mixed drinks. Under the new regulation, distilleries would have been required to serve their spirits straight alongside a mixer, leaving the patron to mix their own drink. Since January, the Distillers Guild of Alaska has been working with legislators to pass a bill to clarify the language in the statute and restore the original intent of the Tasting Room law. Public support was
tremendous, and in a last minute push, HB269 was passed to allow distilleries to continue serving mixed drinks to showcase their spirits. We are relieved to put the issue behind us, and are looking to head into the next legislative session prepared and organized as a unified industry voice.
The second topic of discussion was FET reduction extension. AZCDG members are working together to set up informative gatherings with local politicians including distillery tours that would also feature reinvestment information. AZCDG also discussed ways to raise funding, focusing heavily on distillery and spirit-based events within the state of Arizona. Directly leading to the formation of our first Events Committee. The Events Committee members are Kris Bohm of Grand Canyon Brewery + Distillery, Chris LaBelle of CaskWerks Distilling Co, and Craig Miller of Arizona Liquor Industry Consultants. The Events Committee hopes to organize and coordinate with several events across the state to help grow the Arizona craft spirits industry. We also discussed how to improve communications to and from AZCDG as
well as communications between distilleries. This lead to the nomination of Brittni Koski of Adventurous Stills to the role of Secretary. The guild website is close to being completed and our social media presence has grown in an effort to promote the industry. The guild now has a private Facebook group providing members with a space to ask and answer questions and coordinate with each other. This meeting was incredibly productive for the guild and we have seen a lot of growth and activity. Our next meeting is in September and we expect a bigger turn out, possible presentations, and a wider range of discussion topics. It’s becoming a very exciting time to be a part of the Arizona Craft Distilling industry.
With 18 months to ensure reductions remain in place, MDA is working toward the renewal of FET by strengthening lobbying efforts with representatives at the federal level. Working with the Massachusetts Department of Agriculture, MDA has begun to aggregate data from distillers to better present a cohesive snapshot of distilleries in the state. Moving forward on state and local issues, MDA will continue lobbying for parity between spirits, wine and beer. Legislation is being introduced at the state house that would allow for distillers to sell at agricultural
events throughout the state. This will be a focus for MDA state lobbying efforts. MDA is also continuing with marketing efforts to educate and engage the craft spirit consumer by establishing a tasting event this fall, expanding the Distillers Trail and delivering MDA “Sold Here” stickers to retailers throughout Massachusetts. For more information, find us at www.massdistill.com.
Maura Selenak Owner/Founder Amalga Distillery email@example.com
Brittni Koski Adventurous Stills Tempe, AZ
Alison DeWolfe Damnation Alley Distillery
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NEW YORK NEW YORK STATE DISTILLERS GUILD In our continuing effort to raise awareness of New York State’s local spirits, the New York State Distillers guild celebrated our inaugural spirit competition, NY Distilled, with a grand tasting. Members of the trade and consumers alike joined us to sample spirits from 16 distilleries from around the state of New York. The summer tourism season in NY has been livelier for craft beverage producers this
NORTH CAROLINA DISTILLERS ASSOCIATION OF NORTH CAROLINA Primary Objectives for 2018: FOCUS ON OUR LEGISLATIVE AGENDA Significant progress with respect to state law reforms favorable to NC spirits producers has been made over the past two years, thanks to a strong grass roots effort by NC distillers coupled with targeted lobbying efforts by DANC. As a control state with an entrenched system of archaic regulations, much time and political capital has been invested in reforming current laws and fighting for legislative parity with our friends in craft beer and wine. Thanks to these efforts, NC craft distillers can now sell up to five bottles per person per year from their tasting rooms. Work this year has been focused on SB 155, “ABC Omnibus Legislation”, also known as, the Brunch Bill due the bill’s main headline in the media…’Alcohol sales before Noon on Sundays.’ The chief
OREGON OREGON DISTILLERS GUILD The Oregon Distillers Guild had a great turnout for voting for the 2018-2019 Board
year with the addition of “Farm” produced beer, wine and cider in our tasting rooms. The state now allows Farm Producers from all beverage categories to sell all other categories of Farm produced craft beverages. This is both a boost to our own tasting rooms and also generates new outlets for our products in other tasting rooms. Legislatively, this summer New York passed a new bill allowing the custom production of spirits for personal, noncommercial use. While the governor has not yet signed this new bill, which will allow farm distilleries to produce and sell bespoke products for individuals, we anticipate his approval.
As we head into the fall, we are busy positioning ourselves to advocate for reducing our state excise tax with a production tax credit. Beer, wine and cider producers in New York have production tax credits that reduce their state excise tax, but the distillers tax credit only covers a small fraction of the total expense. This year, we hope to achieve parity with the other craft producers of the state.
benefit of passage of SB 155 to distillers has been an easing of rules regarding tasting events. Still on the list for future legislative changes are legalizing direct to consumer mail order sales to out of state customers and the ability for craft distillers to sell mixed drinks featuring their spirits in their tasting rooms. As the number of licensed distilleries in NC is now in excess of 60 and growing, our political capital as employers and buyers of locally produced grains and raw materials continues to enhance our position and voice with legislators representing our group in Raleigh and DC.
in order for the association to thrive. DANC is shifting our primary funding mechanism from a voluntary per distillery contribution of a percentage of tasting room bottle sales to a more sustainable model based on a series of day long tasting events to be held in various metro markets across the state.
IMPROVING DANC’S FUNDING MODEL Like most new associations in the industry representing cash-strapped craft producers, DANC has struggled to fund operations. While there has been no shortage of significant investments of time and talent from the members of DANC, funding has been challenging. DANC’s primary expenditure to date has been funding of a state lobbyist. Looking ahead, we also recognize that adding a paid Executive Director to the roster is a foundational step that needs to take place
of Directors in May. Jill Kuehler, Freeland Spirits; Tom Burkleaux, New Deal Distillery; Laura Baumann, Heritage Distilling; and Finn Parker, Pilot House Distilling were elected by their peers, growing the board
Daric Schlesselman Distiller/Co-Founder, Van Brunt Stillhouse, Brooklyn, NY Board Member, New York State Distillers Guild
RELATIONSHIP BUILDING WITH NCABCC The board of DANC recognizes that strong working relationships with the NCABC Commission are critical in promoting the agenda of NC craft distillers and has made this a priority for 2018. The board continues to work closely with the Commission in 2018 as the Commission’s leadership has changed and as Commission’s legal advisors draft the rules that determine how hard-foughtfor legislative changes will be interpreted, implemented, and enforced. DANC has worked to gain a seat at the table and has become a respected voice during these discussions and negotiations. Pete Barger Principal — Southern Distilling Co., Statesville, NC President — DANC
from seven to nine members. Officers are as follows: Brad Irwin, Oregon Spirit Distillers, President; Kevin Barrett, Swallowtail Spirits, Vice-President; Laura Baumann, Heritage Distilling, Secretary; Jamie Howard, Sinister
Distilling, Treasurer; and Christian Krogstad, House Spirits, Past-President. The Guild continues to work with local state representatives and senators to pass a bill that would reduce the amount distilleries pay to the State on spirits sold in their tasting rooms. Crosswater Strategies has been hired to help achieve this goal and get legislation passed in the 2019 session. Oregon Senator
PENNSYLVANIA PENNSYLVANIA DISTILLERS GUILD The Pennsylvania Distillers Guild today announced that it would begin offering an affordable healthcare insurance plan to its membership, becoming the first organization of its kind in the United States to offer this valuable benefit for its members and their employees and families. The multi-tiered healthcare plan is scheduled to go live September 1st, 2018. “As an organization we strive to provide value to our members,” said Robert Cassell, President of the Pennsylvania Distillers Guild. “The ability to provide healthcare to employees of small businesses is imperative for long term key employee retention.” Leaders of the organization believe this offering will provide an unprecedented value to its membership and solidify the foothold of the burgeoning Pennsylvania micro distilling industry. National industry leaders expressed overwhelming support for the move, recognizing the Pennsylvania Distillers Guild for being at the forefront on the issue.
UTAH DISTILLERS GUILD OF UTAH The Distillers Guild of Utah is making progress. We are working to maintain
Lee Beyer is taking the lead on this charge at the State Capitol. Oregon is still seeing growth in craft distilleries opening and is currently at 99 distilleries having a retail location across the state. The Guild is reaching out to all distilleries in the state for support in the bill to help distilleries retain tasting room profits. Many Guild members were present at
the Oregon Distillers Festival, held July 28 at the McMenamins Edgefield in Troutdale, Ore. McMenamins will hold another festival for Oregon Distillers in October at their Bend location.
“Under its leadership, the Pennsylvania distillers guild has been ahead of the curve on a number of things, helping to modernize the marketplace for distilled spirits. Providing affordable healthcare options is just the latest example, providing a much-needed benefit for its members and their employees.”
“As the craft spirits industry has matured, its been great to see state organizations addressing the needs all small craft distilleries. The Pennsylvania Distillers Guild has set a great precedent in providing this service to its members, and shown that by binding together our segment of the industry can have strength in numbers.”
FRANK COLEMAN, DISTILLED SPIRITS COUNCIL SENIOR VICE PRESIDENT, PUBLIC AFFAIRS AND COMMUNICATIONS
“Trade groups are created to strengthen the business climate for its member organizations. Of course, employees are at the root of each successful business, the backbone of trade associations. The Pennsylvania Distillers Guild, as a leader in innovation and creativity, is perhaps one of the first guilds to honor distillery employees by providing access to health insurance for its member companies. Removing fiscal burdens and ensuring the health of all employees is an incredible benefit to guild membership.” MARGIE A.S. LEHRMAN, EXECUTIVE DIRECTOR, AMERICAN CRAFT SPIRITS ASSOCIATION
Jamie Howard Co-founder/Marketing Deluxe Brewing Company & Sinister Distilling Company
— BILL OWENS, PRESIDENT, AMERICAN DISTILLING INSTITUTE
ABOUT PENNSYLVANIA DISTILLERS GUILD Officially founded in 2014, the Pennsylvania Distillers Guild is a collaborative organization of distilled spirits producers striving to enrich the state’s burgeoning micro distilling industry. ABOUT MANAGED CARE CONSULTANTS Managed Care Consultants (MCC), was formed in 1997 in order to create customized employee benefit solutions for small to large employers. MCC is comprised of consultants, account managers, and administrators. For more information on the PA Distillers Guild: www.padistillersguild.com Robert Cassell
cooperative contact with local legislators in regards to the ever changing liquor laws in Utah. The guild website is up, www. distillersguildofutah.com, and we are printing referral cards for each distillery so that we can easily send customers to other
distilleries in the guild. We will be hosting our first fundraising event in October to promote the guild and all of the member distilleries. Ethan S. Miller President Distillers Guild of Utah
VIRGINIA VIRGINIA DISTILLERS ASSOCIATION There has been a lot of positive momentum in the Virginia distilled spirits industry this year — much of which can be attributed to the state’s growing interest in supporting our local distilleries, and cumulative efforts by the Virginia Distillers Association (VDA) to advance strategic initiatives since our inception in June of 2016. The VDA meets regularly with Virginia ABC to advance ongoing internal policy requests, and to discuss strategic partnerships for the future. For 2019 we will be embarking upon a Joint Legislative Proposal with Virginia ABC focused on increasing the commission paid to Virginia distilleries for onsite sales, as well as expanding (optional) Sunday operating hours to open at 10am (currently 12pm) for all ABC stores, as our distilleries’
tasting rooms are also considered ABC stores. As the VDA continues to focus on short and long-term regulatory matters, we believe that promotional activities to expand consumer awareness of our industry is equally important. This September will mark the third anniversary of September Virginia Spirits Month; which is a statewide month long campaign to promote our burgeoning spirits industry. The campaign tagline is “It’s 5 o’clock for 30 days,” and to play upon the tagline we will be releasing one “How To” cocktail video featuring members’ products daily on social media, throughout the month. The VDA was able to produce the cocktail videos 100% in-kind, through an Associate Member (videographer) and a filmography intern. We are also distributing 2,000 branded totes to Virginia ABC stores as a ‘free gift with purchase’ of any
bottle of Virginia Spirits. The totes were also produced by an Associate Member for the VDA at a rate less than cost and sponsored by the Virginia Tourism Corporation. We will also be hosting three of our Virginia Craft Spirits Roadshow festivals between August – October at different venues and distilleries across the state. Each Roadshow typically has 10 distilleries featured, however, our August Roadshow will have 20 participating distilleries – as it will also serve as the launching pad for the September Virginia Spirits Month campaign. The first two hours of the event will be invite only, with state leaders and media partners as our guests. Amy Ciarametaro Executive Director Virginia Distillers Association
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t a recent meeting at the Republican National Committee in Washington, D.C., ASCA Executive Director Margie A.S. Lehrman presented Rep. Erik Paulsen (R-MN) with a check from the American Craft Spirits Association Political Action Committee. This was the PAC’s first donation and the event signaled the ACSA’s decision to step up its efforts to push for a permanent reduction of the Federal Excise Tax (FET), as well as to establish stronger ties with your elected officials. “Our donation to five-term incumbent Representative Erik Paulsen, [R-MN], one of our biggest advocates with the Craft Beverage Modernization and Tax Reform Act, is an important step for all of us,” says Lehrman. The ACSA’s PAC was established in early 2018 after it became clear to the ACSA Board of Directors that a formal unit of the association was necessary to focus exclusively on the membership's legislative goals. “Having achieved our greatest priority with FET reduction in the 2018 tax reform bill, we see that in order to fully fund the effort to make permanent these cuts, a dedicated funding mechanism, with the stated purpose of supporting legislative efforts will be more effective and efficient in fundraising and ensuring that those funds be directed to the appropriate campaigns and events,” explains ACSA Legislative Committee member, Johnny Jeffery of Bentley Heritage Estate Distillery. The effort to achieve FET reduction began WWW.ARTISANSPIRITMAG.COM
The ACSA PAC gives members the chance to contribute to candidates on both sides of the aisle on Capitol Hill, who are supportive of ACSA’s mission, vision and values.
before the formation of the ACSA. Early entrants in the craft distillery movement used their own money, made time in their already busy days and acted as their own lobbyists to contact their state’s elected officials, to launch what became an industry-wide and ultimately, successful push to see our FET drop from $13.50 to $2.70 per proof gallon. The list of those early visionaries is long, and includes well-known distillers like Ralph Erenzo (Tuthilltown), Melkon Khosrovian (Greenbar), Nicole Austin (Cascade Hollow), Tom Mooney (House Spirits) and Mark Shilling (Treaty Oak). Says Legislative Chair, Mark Shilling, “It has taken a tremendous effort over nearly ten years to get tax parity for small distillers. Now is the time to invest in the future of our craft, to make the reduction permanent, and continue to lead the charge for a better legislative and regulatory environment.” The PAC Committee is fortunate to have the guidance and wisdom of long-time lobbyist, Jim Hyland, Principal of the Washington, D.C.-based Pennsylvania Avenue Group, who has been working with the ACSA since 2015, and will continue to be instrumental in
guiding us through the subtleties and nuances of working with the legislators on Capitol Hill. In addition to Jim Hyland, Jeff Wuslich of Cardinal Spirits, will round out the membership of the ACSA’s PAC Committee. The funds raised by the ACSA PAC will be used exclusively for the purpose of supporting candidates, sitting legislators, and events which are known to be in support of the permanent excise tax reduction we seek on behalf of our members, and other legislative priorities set by the membership and Board of Directors of the ACSA. As every distillery owner and employee is no doubt aware, without ongoing financial support, and sustained efforts to demonstrate the growth achieved by the industry members, the FET reduction is only a temporary respite, rather than the incentive for growth of small businesses that it should and could be. Acting as a unified voice, we, the industry members, must consistently convey our message to legislators that we are hiring additional staff, investing in new equipment and expanding our distribution base where ever possible, in response to the reduce federal tax burden. So how will the PAC raise funds? Under federal guidelines, the PAC’s fund raising efforts are legally restricted to our members. Our message will be sent through ACSA-PAC's ongoing outreach through events and campaign support, and an important avenue to communicate with the ACSA’s members will be through the network of state guilds. Under the leadership of ACSA Guild Committee Chair, PT Wood (Wood’s High Mountain Distillery, CO), all state guilds will be asked
to encourage the distilleries in their respective states to join the ACSA and also to donate to the PAC. “This is an extremely important time in our industry,” says PT Wood. “With the benefit of the lower FET, every distiller in the country is now able to reinvest additional funds into their businesses, and I hope that all of us will be able to also make a donation to the ACSA PAC.” PT’s message cannot be understated. The tax reduction will expire on January 1, 2020 and if the tax returns to its previous $13.50 level, it will be significantly more difficult to reinstate once expired. Accordingly, the time is now for all of us to actively pursue support for a permanent reduction. All of the ACSA members will also be receiving an email asking for their support and it cannot be stressed enough, that a donation of any size will make a difference. Under federal guidelines, the PAC’s fund raising efforts are legally restricted to our members. Members can request forms or ask questions or make your preferences known by sending an email to: firstname.lastname@example.org.
Steve Johnson is President of Vermont Spirits, where he has worked since 2007. He served as Treasurer & Secretary of the ACSA from 2014 to 2016. Visit www.americancraftspirits.org for more information on ACSA and to join. ACSA PAC Committee: Stephen Johnson, Colin Keegan, Mark Shilling, Chris Montana, Jeff Wuslich, John Jeffery, P.T. Wood and Margie A.S. Lehrman.
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distilling lessons from recent
TRADEMARK CASES BY MARY HALLERMAN & ELEANOR (ELLIE) ATKINS
raft distillers know the value of a good trademark. The name of a particular spirit, a logo, or a label design can be vitally important to a brand’s identity (and a distiller’s bottom line). They also know how complicated—and legally fraught—branding can be. For better or worse, trademark disputes involving alcohol beverage products are becoming increasingly common. The disputes that make it to court provide valuable insight that could prevent future legal headaches surrounding the selection, protection, and enforcement of alcohol beverage trademarks. Several recent cases highlighted below offer guidance concerning issues that craft distillers may encounter.
1. SCANDALOUS TRADEMARKS CAN NOW BE REGISTERED WITH THE USPTO In 2017, the Supreme Court held in Matal v. Tam that the Lanham Act’s prohibition of the federal registration of any mark that “disparaged or falsely suggest[ed] a connection with persons, living or dead, institutions, beliefs, or national symbols, or [brought] them into contempt, or disrepute” (often called the “disparagement clause”) was unconstitutional. This paved the way for the Asian-American band who challenged the provision to register their band name, THE SLANTS.1 After this decision, many questioned the viability of the Lanham’s Act prohibition of the federal registration of “scandalous” or “immoral” marks. At the end of last year, the U.S. Court of Appeals for the Federal Circuit in In re Brunetti2 held that this provision, like the disparagement clause, was unconstitutional. The appellant, Erik Brunetti, sought to register the trademark FUCT for clothing. While the Federal Circuit acknowledged that FUCT was “scandalous” or “immoral,” the ban on the registration of such marks impermissibly discriminated based on the content of speech in violation of the First Amendment. While this may be good news for distillers seeking to protect provocative brands, these decisions are limited to the government’s registration of trademarks. Private businesses (e.g., a wholesaler or retailer) can still refuse to do business with distillers offering products that they view as offensive and trade associations can withhold certain benefits from (what they deem) offensively branded products. 1 See Marc Sorini & Ellie Atkins, Implications of Recent Supreme Court Free Speech Decision, Artisan Spirit (Fall 2017) at 29-31for further discussion of Matal v. Tam. 2 877 F.3d 1330 (Fed. Cir. 2017).
2. THE THIN LINE BETWEEN GENERIC AND DESCRIPTIVE TRADEMARKS The line separating merely descriptive trademarks from those that are generic is an important demarcation. Fall on the generic side of that line, and your “mark” is unregistrable. Indeed, generic words, the common name for a type of good or service, can never serve as a trademark. For example, no one distiller could own a trademark for the word “vodka” for vodka. Merely descriptive words, however, can serve as trademarks, provided that the mark has acquired distinctiveness (also referred to as “secondary meaning”). A mark has acquired distinctiveness when the public views the descriptive word(s) as a source identifier, meaning consumers recognize the mark as an indication that a good or service is somehow connected to a specific entity. Recently, the U.S. Court of Appeals for the Federal Circuit expounded upon the generic/ descriptive analysis in Royal Crown Co. v. The Coca-Cola Co.,3 a case involving Coca-Cola’s trademark applications for a number of ZEROformative marks, such as COKE ZERO, for various beverages. Royal Crown Company, Inc. and Dr. Pepper/Seven Up, Inc. (collectively, “Royal Crown”), opposed Coca-Cola’s trademark applications, arguing that the term THE ZERO was (1) merely descriptive of the products (namely, that BAN they were low-calorie) or ON THE (2) generic when used in REGISTRATION connection with beverage OF SUCH MARKS products, and therefore not protectable as IMPERMISSIBLY a trademark and DISCRIMINATED unregistrable. The BASED ON THE Federal Circuit ultimately sent CONTENT OF the case back SPEECH IN to the Trademark VIOLATION OF Trial and Appeal THE FIRST Board (“TTAB”), the administrative tribunal AMENDMENT. that oversees trademark registration disputes, for further consideration, stating that the relevant inquiry is whether ZERO “refers to a key aspect of at least a sub-group 3 No. 2016-2375, 2018 WL 3040163 (Fed. Cir. June 20, 2018). WWW.ARTISANSPIRITMAG.COM
or type of  beverage”—if so, the mark is generic. With respect to the descriptiveness analysis, the Court clarified that an applicant’s evidentiary burden for proving acquired distinctiveness depends on whether the mark is merely descriptive or highly descriptive: the more descriptive the mark, the more evidence is needed to establish the mark has acquired A MARK distinctiveness. This new decision blurs the CAN NOW BE distinction between generic and FOUND GENERIC descriptive marks, potentially NOT ONLY WHEN IT broadening the scope of the “generic” classification to IS THE COMMON NAME encompass some marks that FOR A CLASS OF GOODS would have previously been OR SERVICES, BUT ALSO designated as “descriptive.” WHEN IT REFERS TO A Moving forward, it will be interesting to see how the FEATURE OR ASPECT OF USPTO and TTAB analyze THE GOODS OR SERVICES, generic and descriptive OR EVEN A SUB-GROUP marks. A mark can now be found generic not only when (OR A FEATURE OF THAT it is the common name for a SUB-GROUP) OF class of goods or services, but also THE GOODS AND when it refers to a feature or aspect SERVICES. of the goods or services, or even a subgroup (or a feature of that sub-group) of the goods and services. For descriptive marks, the evidentiary requirements for acquired distinctiveness will vary depending on whether the mark is “merely descriptive” or “highly descriptive.” When applying to register any sort of arguably descriptive trademark (e.g., “Coco Cocktail”), distillers should muster the strongest evidence possible to show the distinctiveness of the mark, such as the scope and size of advertising, sales revenues, and any media coverage of the applied-for mark to maximize the chances of registration and thus protection.
3. ALL ALCOHOL BEVERAGES ARE CONSIDERED RELATED…EXCEPT WHEN THEY’RE NOT An often-considered question by the USPTO and the TTAB is whether certain types of alcohol beverages (e.g., wine, vodka, beer etc.) are “related” when assessing likelihood of confusion. The question arises when a party applies to register a trademark for one type of alcohol beverage that is identical or similar to an earlier-filed application or registration for a different type of alcohol beverage. In many cases, the USPTO will refuse to register the applied-for mark or a third-party will oppose the application based on a likelihood of confusion with the earlier-filed application or registration. When assessing likelihood of confusion, the USPTO, TTAB, and courts analyze multiple factors. Often, however, the two most important factors are (1) the similarities of the marks and (2) the similarity or relatedness of the goods/services. The TTAB has WWW.ARTISANSPIRITMAG.COM
long held that there is no per se rule that all alcohol beverages are “related,” and cases have thus gone both ways. Recent case law highlights just how fact specific this inquiry really is, providing valuable insight to parties applying for, challenging, and protecting alcohol beverage trademark registrations. In In re Bear Creek Distillery, LLLP,4 decided in May 2018, the TTAB refused registration of BEAR CREEK DISTILLERY5 in connection with “Spirits; Spirits and liqueurs; Distilled spirits” due to a likelihood of confusion with BEAR CREEK for “wines.” The TTAB found that the marks were similar and that the facts showed that “consumers would be familiar with the fact that there are combination wineries and distilleries, or companies that produce both types of goods, such that they would assume a connection between the two products.” In response to Applicant’s evidence that many wineries do not produce spirits, the TTAB stated “the question is not whether consumers would expect to order spirits at a winery or wine at a distillery, but whether wine and spirits are so related that purchasers would expect these goods to emanate from the same source if they were sold under the same or confusingly similar marks.” Similarly, in May 2018, the TTAB cancelled a trademark registration for MASKED BANDIT for “beer” based on a likelihood of confusion with BANDIT for “wine” and “alcoholic beverages except beers.”6 The TTAB found the marks were similar, which weighed in favor of a likelihood of confusion. Likewise, the TTAB found that the goods were related, based on evidence of “at least 24 entities offering both wine and beer under the same mark,” four trademark registrations where the same mark was used for both wine and beer, and articles discussing entities that produce both wine and beer. In contrast, the TTAB recently found there was no likelihood of confusion between HOP SAVANT for “beer” and SAVANT for “wine.”7 Despite finding that the marks were similar, which weighed in favor of a likelihood of confusion, the TTAB ultimately dismissed the opposition because the SAVANT trademark registrant had not provided any evidence to show that the goods were related, choosing instead to rely only on past decisions from the TTAB and Federal Circuit determining beer and wine were related. The TTAB stressed that the relatedness of the goods must be determined by the facts and evidence in each particular case; prior decisions involving similar goods will not dictate the result in a future case. Likewise, in Patrón Spirits International AG v. Conyngham Brewing Co.,8 the TTAB dismissed an opposition to the registration of PIRATE PISS for “beer, ale and lager,” finding no likelihood of confusion with PYRAT for “distilled spirits” or PYRAT RUM for “rum” and stating once 4 Serial Nos. 87026602 and 87026770 (TTAB May 1, 2018). 5 Applicant filed two applications: one for BEAR CREEK DISTILLERY (word mark) and one for BEAR CREEK DISTILLERY and design. 6 Rebel Wine Co. v. Piney River Brewing Co., Cancellation No. 9206391, 2018 WL 2445463 (TTAB May 25, 2018). 7 Justin Vineyards & Winery LLC v. Crooked Stave, LLC, Opposition No. 91229132 (TTAB June 26, 2018). 8 Opposition No. 91226939 (TTAB June 8, 2018).
again that the opposer s h o u l d not rely on previous decisions to show that all alcohol beverage products are related: “Put simply, Opposer cannot evade its burden to prove relatedness by bootstrapping upon previous factual findings made in other decisions on different records.” Moreover, the evidentiary record in this case—six third-party trademark registrations covering both beer and rum—fell far short of the evidence presented in other cases “given the number of breweries and beer brands in the U.S.” Make no mistake: the fact that there is no similar pending application or registration for alcohol beverages does not mean that an alcohol beverage application faces a clear road to registration. In fact, the TTAB recently refused to register TURNURA for “cigars” based on a likelihood of confusion with TURNURA for “liquor; tequila; vodka; wines,” finding that the goods were related in part
because they were “complementary products.”9 The evidentiary record showed that multiple third-parties produced both alcohol beverage products and cigars under the same mark and that the products were marketed for “simultaneous consumption.” Applicant pointed to a case from 1970 in which the court said tequila and cigars were unrelated, but the TTAB stated that the evidence presented in this case showed that industry practice had changed: “To be clear, we are not finding that cigars and alcoholic beverages in general are related based upon some abstract similarity between alcohol and tobacco. The record in this case establishes that cigars and alcoholic beverages are not only produced and offered for sale by third parties under the identical mark, but they are also complementary products that are marketed together for simultaneous consumption.” These cases highlight the importance of the fact-intensive inquiry surrounding the relatedness of alcohol beverage products. When opposing the trademark application for a mark for wine, beer, or other alcohol beverages, distillers should provide ample factual evidence to prove that the specific goods are related. Merely relying on previous cases to show that spirits and other alcohol beverages are related will not suffice. Conversely, applicants seeking a trademark registration for alcohol beverages (be it beer, wine, vodka, etc.) should pay particular attention to applications and/or registrations for all alcohol products (as well as products that could 9 In re El Galan, Inc., Serial No. 86961428 (TTAB Feb. 1, 2018).
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be considered complementary to alcohol beverages) and know that a similar mark for a separate alcohol product may, but not always, block registration of the mark. Distillers should investigate the circumstances of the use of the mark (e.g., is the wine only sold at the winery where made, whereas the spirit product is sold at retail) to understand the risks of using that mark and of refusal of registration by the USPTO. The relatedness of alcohol products also extends to issues of registering trade dress (the PRODUCT packaging, shape, or design of a product). The TTAB recently affirmed the refusal to PACKAGING register a bottle design for “mezcal,” TRADE DRESS, stating that the distinctiveness of the SUCH AS BOTTLES, bottle design should be assessed in comparison to all distilled CAN BE INHERENTLY spirits and not just other mezcal DISTINCTIVE, products. The proposed bottle MEANING THAT mark can be seen to the right. THE APPLICANT Product packaging trade dress, such as bottles, can DOES NOT HAVE TO be inherently distinctive, SHOW ACQUIRED meaning that the applicant DISTINCTIVENESS does not have to show acquired distinctiveness to TO REGISTER register the mark. There are a
number of factors the TTAB considers when assessing inherent distinctiveness, namely (1) if the mark is a common shape or design, (2) if the design is unique in the field, and (3) if the design would be viewed by consumers as mere ornamentation. In this case, the applicant argued that the field of comparison should be limited to other mezcal products only, but the TTAB disagreed, finding the “distilled spirits market” to be more appropriate. In comparing the proposed trade dress with other alcohol beverage product bottles, the TTAB found that while this design may be the only one which incorporates this unique combination of elements (e.g., spherical stopper, ribbing, etc.), the individual elements were prevalent among alcohol beverage bottle shapes. Accordingly, the proposed mark was not inherently distinctive, and the TTAB affirmed the refusal to register the mark.
Mary Hallerman is a partner in the law firm of McDermott Will & Emery LLP, based in the Firm’s Washington D.C. office. She focuses her practice on trademark, false advertising, and copyright litigation and has represented numerous beer and alcohol companies in cases in both federal court and the Trademark Trial and Appeal Board. Eleanor (Ellie) Atkins is an associate in the law firm of McDermott Will & Emery LLP, based in the Firm’s Washington D.C. office. She works in the Intellectual Property Group, where her practice for beer and alcohol companies focuses on the selection, registration, and enforcement of trademarks.
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WRITE MARKET POSITIONING STATEMENTS FOR ALCOHOL BEVERAGE BRANDING
If your marketing team is developing a new alcohol beverage or is repositioning an existing one, a good market position statement is a crucial component.
t the onset of every project, I walk through a comprehensive creative brief before beginning design. A good portion of this brief is devoted to analyzing and visualizing the market positioning goals of the brand so that we can develop a design solution that is not only aesthetically beautiful but appropriately positioned in relationship to the target market. Once you’ve developed your brand’s essence, a succinct positioning statement is the next important step. If you’re a brand owner and you can’t define your positioning in 3-4 sentences, it’s time to refocus.
WHAT IS A POSITIONING STATEMENT AND WHY DOES IT MATTER? A good positioning statement will include a succinct description of your target market along with a clear picture of how your target market will perceive your brand. In other words, it’s how your brand essence, or core attributes, are presented in the market to the target consumer in relation to their lifestyle. Developing a market positioning statement is an integral exercise to be done with your marketing team. This will ensure that everyone understands and shares the proper vision for the brand — ideally before package design, marketing plan development, etc. The last thing you want is to develop the brand only to discover at launch that everyone has a different vision for the brand and its direction.
A GOOD POSITIONING STATEMENT HAS 4 KEY COMPONENTS 1. TARGET MARKET A specific group of consumers at which your alcohol beverage is aimed.
2. POINT OF DIFFERENTIATION A description of your competitive advantage.
3. FRAME OF REFERENCE The category in which your brand competes.
4. REASON TO BELIEVE The evidence that supports your claim of differentiation.
GUIDELINES FOR DEVELOPING A GREAT POSITIONING STATEMENT Doug Stayman, Associate Dean for MBA Programs at Cornell University Johnson Graduate School of Management, highlighted these six guidelines for a good positioning statement. My words follow his:
It is simple, memorable, and tailored to the target market. Leave product descriptors such as flavor profile and flowery adjectives for back label copy and marketing materials.
It provides an unmistakable and easily understood picture of your brand that differentiates it from your competitors. Remember, all your competitors have many similar attributes and a delicious product — focus on your unique value proposition.
It is credible and your brand can deliver on its promise. Make sure you can deliver on the brand promise or risk alienating your core consumers with disappointment. Authenticity is crucial in the alcohol beverage category. Consumers today are more research savvy than ever before. If you “fake it” — they’ll know.
It sets your brand as one of the very few or sole occupier of a market position. Consider whether your brand fills a specific void in the market, has a specific attribute that sets it apart from competition, or fits your consumer’s lifestyle and tastes in some unique way.
It helps you ensure that marketing decisions are consistent with and supportive of your brand. The positioning statement is the litmus test by which all brand activities are evaluated for their purpose. Your brand essence, package design, brand story, and the beverage itself must align with your positioning.
It leaves room for growth. Alcohol beverage brands must inevitably evolve over time to remain relevant. A focused positioning statement doesn’t mean you have to pigeon hole yourself — as your brand evolves, so will your positioning. Once established, every subsequent product and marketing decision made should align with and support your positioning statement. If done well, your positioning statement becomes a compass to guide your efforts and to help you stay focused on your brand promise.
David Schuemann is the owner and creative director of CF Napa Brand Design. For more info, visit www.cfnapa.com or call (707) 265-1891.
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SUCCESSION PLANNING PART 2 — TRUSTS WRITTEN BY JOHN MCKEE
e did the ESOP conference (see Part 1 in the Summer 2018 issue of Artisan Spirit Magazine) and found some failings on the model in the way we wanted the future of the business to proceed. But while we were there we heard some whisperings about trusts and started looking deeply into that model. Then, we had an interesting incident occur with one of our employees which further reinforced our view that an ESOP wasn’t for us, but maybe a trust was. We were giving a tour to some potential distribution partners and we spent a few moments delving into the plan to transfer ownership to the employees of our company. We mentioned that, “To make a sale of the companies affordable to our employees, we’d probably have to sell it at a discount to what we’ve been offered previously.” One of our employees in the meeting made a quick comment to the effect, “and then we’ll turn around and sell it to that same big guy for 2X the next day,” and we were taken aback. That comment did however, help us realize a few things:
1. Our culture wasn’t being exemplified by this person and that was something that we’d need to work on.
WHEN YOUR BUSINESS WAS BUILT WITH A SPECIFIC PURPOSE AND
2. We want to create long term value for our community and this person was saying that by selling it to our employees, we would give them something to immediately resell at a premium, regardless of community or our intent.
3. It would be our employees’ company by that point. Why couldn’t they just sell it, regardless of our intent for its future? The insights of the conference and the off-hand remark by an employee set us along another transition plan — trusts. You can delve deeper into trusts as fiduciary relationships, but in summary, a trust is set up to ensure management structures that are not bound by stock value, can be purpose driven, can maintain independence in perpetuity, can’t be sold, and can be managed by its employees with different rules than those forced by ESOP law. WWW.ARTISANSPIRITMAG.COM
INDEPENDENCE IN MIND,
COULD A TRUST BE THE ANSWER? 35
A recent example of this process was just completed by Organically Grown Company in Oregon, the first example in America. OGC was founded in 1978 and grew into an Employee and Grower owned company that moved 100 million pounds of produce a year. Their push to be purpose driven and to ensure the future of OGC’s mission was in response to the issue of selling a company and potentially losing its purpose to differing motives of a new owner….including potentially the motives of its own employees. By creating a trust with the directive of managing OGC via the priority of “positive economic, social and environmental impact” rather than solely via “share value and quarterly profit,” the OGC was able to satisfy its vision of the future of the company.
transition model, in which a for-profit entity (the fourth largest in the world in the art of making and selling beer) is being managed by a non-profit with social-based-purpose as its primary mission….. and they’ve been doing for over 140 years. en.wikipedia.org/wiki/Carlsberg_Foundation Seeing a successful, purpose-driven company in beverage run itself for 140 years gave us great hope that a similar model could be used for our company and our purpose of “building value for our community.” A trust still allows for operation of the companies to be employee driven, profits can be directly returned to and retained by the employees, day-to-day operations can be managed by the employees, and a long-term company can be established to concentrate on its purpose without the pressure of stockholders, parent company directives, or short term gains. The trust model is more our style and we’re excited to spend more time working out the details…which will include a long trip to Denmark for some beer and learning from those in the Carlsberg Foundation on what makes this model successful. Join us?
www.organicgrown.com/organically-grown-company pioneers-groundbreaking-steward-ownership-structureto-maintain-independence-into-perpetuity Another example of trusts comes from our own industry of making and selling hooch, the Carlsberg Brewery and the Carlsberg Foundation. Carlsberg is the fourth largest beer brand in the world and is managed by a non-profit (in effect, a trust). On the death of the founder of Carlsberg, his will transferred the controlling stock and voting share majority of the brewery to the Carlsberg Foundation, which funds scientific research, the Natural History Museum at Frederiksborg Palace, and social works beneficial to society. Carlsberg is a great example of a purpose driven business
John and Courtney McKee are the owners/founders of Headframe Spirits and Headframe Spirits Manufacturing in Butte, MT. John lost his wallet floating the Madison River this summer…if you find it he’ll put you in the trust.
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ADI accepts U.S. and International entries in all classes and categories of distilled spirits, RTDs, cocktail bitters, aperitifs & fortified wines from small and medium-scale producers.
deadlines Registration Opens: September 2018 Deadline for International Entries: November 30, 2018 Deadline for U.S. Entries: December 14, 2018 Deadline to Receive Spirits: December 20, 2018 Visit: distilling.com/judging for more information
An examination of the traditional philosophies and methods of blending whiskey, rum and brandy. The 3-day workshop will include instruction on practical applications, sensory analysis and hands-on experience. Nancy Fraley, Instructor December 7 - 9, 2018 Ironroot Republic distillery in Denison, TX For more information visit: distilling.com/events/distilling-workshops
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Craft Spirits CONFERENCE & EXPO MARCH 18 - 21, 2019 IN DENVER
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American Single Malt Whiskey Commission Update
Whi l e the bu re a u c ra c y c hu rn s o n a S t and ar d o f I d e n ti ty, t h e A S M WC f o c u s e s o n e d u c a ti o n .
Wri tt e n by Margarett Wa t er b u r y
ntil a couple of decades ago, any bottle of whiskey sold in the United States and labeled “single malt” almost certainly came from Scotland. Then, during the early 1990s, the first signs of change began to surface. Pioneering craft distilleries like St. George and Clear Creek introduced whiskeys made not from the classic North American grains of corn, rye, and wheat, but instead concocted from 100% malted barley. Slowly, other distillers began to follow suit — quiet, malty voices in a forest of bourbon and rye. As the craft distilling movement picked up steam, those voices became louder, more numerous, and now, more organized. The American Single Malt Whiskey Commission (ASMWC) was formed in 2016 as a trade group, advocacy organization, and promotional arm for American single malt whiskey producers. From just a few founding members, it now counts nearly 100 distilleries among its ranks. First order of business? Finally get a standard of identity for American Single Malt Whiskey on the books.
Can I See Some ID Please? American single malt whiskey is a burgeoning category attracting serious trade, consumer, and media attention. Yet it lacks a formal categorical definition. While the TTB defines 41 different types of whiskey, single malt is not one of them. The closest federally defined category is malt whiskey, which only needs to contain 51% malt to qualify. American producers are free to call a whiskey “single malt,” but WWW.ARTISANSPIRITMAG.COM
in the absence of a defined category, adherence to any specific standards of identity has been entirely voluntary. In 2017, the ASMWC developed a proposed set of rules for the category after extensive discussion amongst its members (see sidebar). That proposal was formally submitted to the TTB in October 2017. The commission says that last they heard, the TTB is planning on reviewing it towards the end of 2018. After that review will come a comment period, during which time anybody can file comments on the proposed regulations.
American Single Malt Whiskey • Made from 100% malted barley • Distilled entirely at one distillery • Mashed, distilled and matured in the United States of America • Matured in oak casks of a capacity not exceeding 700 liters • Distilled to no more than 160 (U.S.) proof (80% alcohol by volume) • Bottled at 80 (U.S.) proof or more (40% alcohol by volume) This definition was formulated to give distillers the ability to experiment while also creating clear definition around the category. “We all have different approaches and value the fundamental American idea of being free to pursue something in your own way,” says Matt Hofmann, master distiller at Westland and a founding member of the ASMWC. “Our definition leaves room for people to make whiskey that might not be as good,
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AMERICAN SI NGL E M A LT W H I SK EY COM M I S S ION
MEMBER PRODUCERS 10th Street Distillery • Admiralty Distillery • Alltech Brewing & Distilling • Amalga Distillery • Andalusia Whiskey Co • Balcones Distilling • Bendistillery • Big Bottom Distilling, LLC • Black Heron Spirits • Blaum Bros. Distilling Co. • Bogue Sound Distillery • Boston Harbor Distillery • Bull Run Distillery • Cedar Ridge Distillery • Copper Fox Distillery • Copperworks Distilling Co • Corsair Distillery • Crowded Barrel Whiskey Co • Dark Island Spirits • Deerhammer Distilling Co • The Dampfwerk Distillery • Distillery 291 • Do Good Distillery • Dogfish Head Distillery • Fainting Goat Spirits • Few Spirits • Firestone & Robertson Distilling • French Distillers & Alchemists • Golden Moon Distillery • Great Wagon Road Distilling Co • Hamilton Distillers • Hatch Distillery • Headframe Spirits • Henerbery Spirits • High Peaks Distliing • Highway 101 Spirits • Hood River Distillers • House Spirits Distillery • Hotel Tango Distillery • Hudson Valley Distillers • Jersey Spirits Distilling Co • John Emerald Distilling Co • Kings County Distillery • Laws Whiskey House • Liberty Call Spirits • Liberty Pole Spirits • Liquid Brands Distillery • Loch & Union Distilling • Long Island Spirits • Los Angeles Distillery • Liquid Riot • Mad River Distillers • Maui Brewing Company • MB Roland • Millstone Spirits • Modisett & Sons Distillery • New Holland Spirits • Old Line Spirits • Old Route Two Spirits • Old Trestle Distillery • One Eight Distilling • Orange County Distillery • Painted Stave Distillery • Postmodern Distilling • Preservation Distillery • Rock Town Distillery • Rogue Ales And Spirits • Routt Distillery • San Diego Distillery • San Tan Brewing-Distilling • Sand Creek Distillery • Santa Fe Spirits • Seven Caves Spirits • Solar Spirits • Sonoma County Distilling • Spirits of Salt Lick • Spirits of St Louis Distillery • Stark Spirits Distillery • Stillwater Spirits/Moylan's • Stranahan's • Stumpy's Spirits Co. • Sugar House Distillery • Sugar River Distillery • Sweetgrass Distillery • Tom's Foolery Distillery • Triple Eight Distillery • Tuthilltown Spirits • Up North Distillery • Van Brunt Stillhouse • Vapor Distillery • Vaya Con Dios Distillery • Virginia Distillery Company • Wanderback Whiskey • West Fork Whiskey Co • Westland Distillery • Whiskey Acres Distilling Co • Wiggly Bridge Distillery • Witherspoon Distillery • Wood's High Mountain Distillery • XO Alambic
but that’s up to them. We’d rather have the freedom to innovate than restrictions placed on it.” To that end, this definition of American Single Malt departs at several points from the Scottish requirements. Scotch single malt whisky has to be at least three years old, and must be matured entirely in oak casks. While American single malt whiskey must be “matured,” there’s no minimum amount of time it must be matured. And while it must be matured in oak casks, it isn’t required to be entirely matured in oak casks, giving distillers the option to use other kinds of casks, like chestnut or acacia, if they like. However, like the Scottish version, American single malt must be made entirely from malted barley. This precludes the use of malted rye, a grain that some American distillers have employed in their production of whiskey labeled as single malt. One potential hurdle to the passage of the new standards of identity comes in the form of Trump’s 2017 executive order mandating federal agencies to eliminate two regulations for every new regulation passed. “We don’t know for sure, but for something even as common sense as this, formed with industry consensus, that executive order makes this really challenging,” says Hofmann.
Why Define? With continued growth across the category, it’s worth asking why forming a standard of identity is so important in the first place. Hofmann, says that helping consumers make educated purchasing decisions is a major goal. He cites the media reception of a recent release of a straight malt whiskey by Woodford Reserve as an example of the dangers of a regulation-free American Single Malt category. While Woodford didn’t market its whiskey as an American single malt, stories began describing it as one, even though it also contained corn and wheat. “The terms are so close,” says Hofmann. “We don’t want things to start to bleed through.” Al Laws, founder at Laws Whiskey House and a member of the ASMWC, points to rum as a cautionary tale of why defined
standards of identity are so important. “There are no real standards in rum, so finding great rums that are really what they say they are and aren’t packed full of sweetening and coloring is tough.” Defining the category may also support growth in export markets, which could be particularly important in the future since international consumers tend to be more familiar with the single malt category. And, by undertaking the definitionmaking process from within the industry, the ASMWC hopes to protect producers from potentially less useful standards of identity that could be created by external stakeholders like the TTB or distributors. “This is planning ahead so we protect our category before somebody else comes along to do it for us,” says Colin Kegan, founder of Santa Fe Spirits, another founding member of the ASMWC. “It’s better for us to form our own club rules. It’s our tree house; you can come in if you can climb the ladder.”
Education and Outreach While the slow gears of bureaucracy churn, the ASMWC isn’t sitting idle. The commission is also acting on other critical aspects of the American Single Malt Whiskey category’s growth. One major area of focus is shelf placement. There’s currently no one area where liquor stores display American single malt. Some mix it in with the craft whiskey, others shelve it with bourbon and rye, and still others nestle it alongside the Scotch whisky. With more than 100 producers now making American single malt, ASMWC is advocating directly with retailers to get shelf space dedicated specifically for the category. Another area of emphasis dovetailing with placement is education. The ASMWC sponsors seminars, tasting events, dinners, and panels about American single malt whiskey, including trade- and consumerfocused events. “All of us who are trying to sell single malt whiskey have a big job to do even explaining to people what that means. We’re not that far removed from the cosmo days. A lot of people in this country don’t even know that bourbon is made from corn, let alone what single malt
is,” says Hofmann. “It would be great to say, ‘This is an American single malt,’ and see people’s eyes light up,” says Kegan. “At the moment, their eyes go a little glassy, even retailers.” Recent events at the American Distilling Institute conference, Astor Wine and Spirits, and local restaurants in markets around the nation sponsored by the ASMWC have provided opportunities for American single malt whiskey producers to get their whiskey in front of drinkers and talk about how their products are different from other global single malts.
Regional Realities Complicating the educational initiative is the amazing diversity of American single malts, which seem to lend themselves to regionalization more readily than any other whiskey category. Some Northwest American Single Malts, for instance, use specialty malts inspired by the craft beer movement, while Southwestern producers experiment with using local fuels like mesquite to smoke their barley. The result is a much broader range of flavor profiles than bourbon or whiskey—great fun for enthusiasts, but a potential challenge when it comes to creating a cohesive story about what this category of whiskey is all about. Hofmann thinks American single malt shows its extensive regionalization because there’s no real precedent for American distillers to follow. “In malt, we’re all starting from someplace new,” he says. “Sometimes we talk to people about the traditions of Scotch. We respect its history and tradition, but it’s not our tradition. We can respect that while trying to push it forward to be more relevant to where we are today.” Will the Southwest become the next Speyside, the Rockies the next Highlands, the Northwest the next Campbelltown? Only time will tell—but if the ASMWC has its way, more American drinkers will be clear-eyed about the difference between American Single Malt and its international siblings.
Want to get involved? Any interested party is welcome to join the ASMWC, including distillers, retailers, distributors, media, or other industry stakeholders. Visit the website, americansinglemaltwhiskey.org, to sign up. WWW.ARTISANSPIRITMAG.COM
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BELTWAY BANTER with JAMES HYLAND Interview between Jim Hyland & Robert Lehrman
elow is an email interview between James Hyland and Robert C. Lehrman. PROVIDED BY JIM HYLAND James worked in the U.S. Senate and House of Representatives on Capitol Hill for 19 years. By working in the personal offices of three U.S. Senators and Committees in both the U.S. House and Senate, he has acquired an impressive range of experience to help advocate your cause effectively. James gained federal appropriations expertise by serving as Legislative Director to two senators over five years, including Senator Kay Bailey Hutchinson of Texas. In addition, he successfully led the effort to create the unique Breast Cancer Stamp and authored the first Senate bills to eliminate marriage tax penalties and to criminalize church burning.
Tell us about the tax bill (The Craft Beverage Modernization and Tax Reform Act of 2017) The tax overhaul passed in December of 2017. It is a major victory for craft distillers. The FET was reduced to $2.70 per proof gallon for those producing less than 100,000 proof gallons. It took many years of grass roots work from the distilling community to get to this point. It also helped that we were united with the big and small producers in beer, wine and spirits so we could present a united front to the Congress. Our challenge will be to make this reduction for craft distillers permanent, so we have parity with craft brewers and vintners.
What is your background and how did you get involved with the American Craft Spirits Association (ACSA)? I have been in Washington for many years. I was on Capitol Hill as a staff person for 20 years, finishing as a Legislative Director to two U.S. Senators, including Sen. Kay Bailey Hutchison of Texas. I have been in the legal and lobbying profession for over a decade. I had a client in Texas who opened a distillery. As time went on, we discussed the need for a more organized, focused approach to get parity for distillers in the tax code. Working as an informal advisor with some of ACSA’s early founders and active members we started to build a strategic effort to get this across the finish line for this community. I am happy to say that after a number of years, we finally got this victory. It would not have been possible but for the distilling community from across the U.S., literally from New York to Oregon. They pressed this issue with their legislators. While ACSA was a young association, it played a major role in this victory, which many believed an improbable dream even a few years ago.
Why does it phase out after only two years? The tax bill was completed under some very complicated Congressional rules that allowed it to pass with only 51 votes in the Senate. Normally, it would require 60 votes in the Senate to do just about anything. The Senate and House had to “score” how much revenue might be lost to the Treasury from the tax overhaul bill. Thus, our champions had to make the FET piece fit within the overall “score” of the bill which meant only doing the relief for two years. The Joint Tax Committee typically opines on how much a tax provision will lose or gain in terms of revenue. They believed there would be a large loss of revenue from our FET bill. While we disagreed, even our Congressional champions had to defer to their judgement. Once we got in the tax code, however, we were confident it could be extended or made permanent in the future.
“Our challenge will be to make this reduction for craft distillers
permanent, so we have parity with craft brewers and vintners.” WWW.ART ISANSP IRITMAG.COM
“ACSA has worked hard to
Who pushed it over the finish line? We have several key champions in Congress. Senators Ron Wyden (D-OR) and Roy Blunt (R-MO) are our Senate champions. In the House, Congressman Erik Paulsen (RMN) and Ron Kind (D-WI) have worked to get over 300 House co-sponsors. A special recognition goes to Sen. Rob Portman (R-OH). In the Senate Finance Committee he made it a priority to get this in the bill, since then over 50 Senators have supported the bill. He remains a great friend to the craft spirits, beer and wine industry.
studiously be bi-partisan in building and keeping support on our issue.” How do the macro politics affect this smaller issue? (That is, Mueller, midterms, etc.).
Thus far for domestic producers there are no surprises. TTB made the FET reduction effective immediately. ACSA understands that importers are facing hurdles from Customs and Border Protection, and it is still collecting at the higher rate. This is unfortunate, and we are working with industry partners to get this fixed.
It all has impact on the Congress and its schedule. We are hopeful that the House will act this fall to make permanent or extend the FET reduction. The question becomes, what happens in the Senate. We are hopeful that after the election, the Senate will take up a tax fix and extenders bill that would address this issue. Nevertheless, the election results, Supreme Court nomination fight, and end of year budget issues all play a factor in timing and goodwill and working in a bi-partisan fashion. ACSA has worked hard to studiously be bi-partisan in building and keeping support on our issue.
How does TTB feel about the law?
What trade associations helped the most, and how?
I think they have concerns with the import piece and the reduced FET and believe they will have difficulty determining who produces less than 100,000 proof gallons overseas. They have been good to work with, however, and Director Manfreda attended the ACSA and DISCUS Washington policy meeting and brought along most of his key staff. I think they are an agency that wants to be open and responsive to industry concerns.
Every major alcohol, beer, wine and spirits group, both big and small, pitched in and helped on this effort. Last year, beginning in August, we held weekly strategy calls. This has continued into this year. We are planning a major joint effort in September 2018 on Capitol Hill. Our unity has been invaluable when lobbying for the FET reduction.
Any surprises so far about implementation?
Who is opposed to renewal? At this point, no one. The obstacles we face are potential “costs” to the Treasury from lost revenue. We are working to convince the budget experts that this will indeed produce more revenue to the Treasury from economic and job growth. ACSA, very creatively, put together a video at our convention in Pittsburgh. It shows distillers across the U.S. discussing the investments they will make, due to the reduced FET. We have sent this video to many policy makers, and it has had impact on Capitol Hill. Proponents of the tax bill see it as real evidence of the bill’s impact on main street.
What else is happening on Capitol Hill, as to spirits? Right now, trade and tariffs are a major issue. ACSA has taken a real leadership role in working the Congress and Administration on this issue. Our Executive Director was recently in Kentucky for a G-9 Summit with other alcohol trade groups to discuss how to stop a trade war. It was hosted by the Kentucky Distillers Association. We have been in touch with key Committee Chairmen in the Congress on this issue and have penned joint letters with DISCUS to them. We think the Congress understands the very negative potential for a trade war, but many think the ultimate decision maker is the President himself. President Trump’s recent meeting with the EU gives us some hope it can be resolved.
Is there any movement to make the tax break bigger, or less big, depending on how things go?
What is your long-term prediction on all this?
No, not at this time. There could be technical changes perhaps, but nothing major. Our focus is to make it permanent. Beyond that, there will be continued efforts to provide regulatory relief at the federal level for craft distillers. We have made some improvements in reducing the time it takes for a DSP license or label approval, but more can always be done.
I think we will get a temporary extension and then a permanent fix in the future. We are working hard to make this happen in 2018, but it could carry over to 2019. The craft distillers grass roots will make all the difference in getting this done sooner rather than later. Rest assured, however, ACSA is working literally every day on this issue.
Robert C. Lehrman is a lawyer at Lehrman Beverage Law, PLLC in metro Washington, DC. Since 1988 he has specialized in the federal law surrounding beer, wine and spirits, such as TTB permits, labels, trademarks and formulas. The firm has six beverage lawyers, over 50 years of combined experience, and publishes a blog on beer, wine and spirits trends, at www.bevlaw.com/bevlog 44
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PECHUGA W R I T T E N B Y G A B E T O T H / / / I L L U S T R AT E D B Y A M A N D A J O Y C H R I S T E N S E N
echuga is often associated with its most notorious ingredient: animal protein. (The name literally translates to “breast,” as in chicken breast.) Traditionally, poultry or rabbit is hung inside the still for vapor infusion, but meat is just one potential ingredient of a unique concoction that often includes whatever fruit, nuts and spices are local and available. “I think of pechuga as a special-occasion mezcal. You’re putting something different in for a celebration, something to set it apart,” says Dylan Sloan of Oaxaca’s Mezcal Vago. While pechuga is a centuries-old tradition with unverifiable origins, he attributes its repopularization — in Mexico, at least — to the tequila boom of the 1970s and ’80s. Before the boom, Oaxaca had been known for good mezcal, “and so people would come down to Oaxaca and go out to these little rural communities where people made their own booze, and would buy it up and then take it back with them to restaurants in Oaxaca or back to Mexico City or Guadalajara or wherever,” says Sloan. However, once tequila started to take off, it became more a part of Mexican identity, and mezcal quickly fell out of fashion. “All of a sudden tequila was everywhere and it was kind of cheap, and it just became something the city folk were proud of and thought was cool, whereas mezcal has always been the poor man's drink,” Sloan says. WWW.ARTISANSPIRITMAG.COM
It quickly began to impact the rural producers in remote farms and poor campesinos. The mescaleros were left with excessive amounts of mezcal once the buyers stopped showing up. Luckily the mezcal did not go to waste. That excess stock led to a “resurgence” in pechuga production, specifically for celebrations. “If you're sitting on a bunch of mezcal and everyone in your town has been drinking your mezcal for years anyway, and then your daughter is about to turn 15 and everyone's going to come over for the quinceanera, or a wedding …Well you want to put a little twist on it,” he says. Often that “something different” would include chicken, fruit, spices, nuts, or whatever was fresh and available. Sloan says, “It is about locally specific [ingredients]. And some people use animals and some people don’t.” In the case of Mezcal Vago’s Elote, the mescalero simply tweaks the spirit with some toasted corn, rather than a complex cocktail of additions. He used to distill the mezcal twice before macerating the corn and distilling it a third time — a tradition that could hearken back to a time when producers were looking for something to do with already-finished mezcal. Now he macerates the corn in low wines and finds that two distillations leaves more character
in the spirit. “Our main producer never used chickens and quite frankly doesn't really like the way it affects the flavor,” Sloan says. “His idea was just to use toasted corn because he's already growing corn. Everyone grows corn in rural Oaxaca.” In thinking about corn, many people immediately jump to thoughts of bourbon, but Sloan notes that the corn sugar never converts or ferments, it simply infuses into the low wines. “Any residual sugar, color or strong flavors drop out and what's left is a really subtle corn maceration. This is indigenous Mesoamerican corn, heirloom corn."
MEXICO VIA MARYLAND Naturally, the siren song of a unique type of spirit that reflects locals flavors, or at least local tastes, has been irresistible to a small group of craft distillers in the United States. The Baltimore Whiskey Company has doubled down on their love of both mezcal and pechuga with Maryland-ized versions. “We do a smoked apple brandy that we distill like a mezcal, that really drinks a lot like a mezcal. It’s a really cool spirit,” co-founder Max Lents says. “We're super nerdy about spirits and we kind of have a wide breadth of what we really enjoy, but we do drink our fair share of mezcal.” Lents and his team follow in the tradition of collecting through the tails. Rather than making a cut and proofing with water, he continues to collect the spirit and uses the tails to bring it down to proof. “A lot of the really heavy smoke phenols don't come out
till very late in the run. That's how they get that very particular kind of rich smoky flavor profile for the mezcal,” he says. Starting last fall, they began to release their pechuga-style brandy, using meat, fruit and nuts that are produced or found native in Maryland. “We're super reverent of the mezcal distillers and the pechuga distillers,” Lets says. “We think the purpose of pechuga is to be kind of an expression of terroir, where it's always about locality and what's ripe at the end of harvest season. Lents goes on to explain that the most traditional meat to hang in the still is raw chicken, but there’s certainly a lot of precedent for doing other protein in the still, whether it's venison or ham. With that in mind, a traditional Maryland meat is the Maryland country ham. Inspired, they hung a 30-pound salt-cured ham, like a Maryland prosciutto, from the top of the still, and filled it with smoked apple brandy low wines and foraged pawpaws, persimmons, and black walnuts, all found in Maryland. “It's something we can only do once a year and it's a very short window when pawpaws are ripe,” he says, “which is why they aren't cultivated because they don't have much of a shelf life. So we have about a two-week window to go out and harvest all these pawpaws and our persimmons and our black walnuts, which is in September, and get them all in the still. The pechuga versus our regular smoked apple brandy, the pechuga is a lot more fruity. There's absolutely a really nice kind of salinity and umami note on the finish that you might attribute to the ham.” Lents doesn’t expect to reproduce the previous batch exactly this fall; each year will be a unique vintage based on the harvest and the particular ham they get. “It's not a recipe that is exactly reproduced. If the next piece of meat comes in as 23 pounds or 40 pounds, then that will be what it is that year.” The reception has been excellent, with the spirit landing in Michelin-starred and James Beard Award-winning restaurants. “We were lucky enough to be able to present it to the Jose Andres Restaurant Group
and they really adored it, which was nice since Jose Andres did his own pechuga,” Lents says. “. It's certainly one of the most exciting and finest things we've ever done. We really couldn't be happier with how it came out.” He’s had no pushback from the TTB or the vegetarian/vegan community. “It mentions the ham on the bottle. We certainly talk about that a lot. We do tell people, if somebody comes into the distillery and asks to try it and we don't know anything about them. We'll probably make sure they're not vegetarian before moving forward with it, but we haven't had any negativity come our way because of it.” It also hasn’t presented any trouble in cleaning. “We do pretty intense cleaning fairly often, whenever we're sending spirit which is pretty much every week. We didn't really find that it was particularly weird inside the still after the run. It's metal and fat. We we ran a little caustic and we ran our citric, and good as new.”
PIZZA PLUS WHISKEY 451 Spirits, Chief Distiller Chad Kessler is pushing the edge of what the style could be with his whiskey-based Pizza Pie-Chuga. “The whole thing was a one-off, a guerrilla marketing stunt,” Kessler says. “We partnered with a pizza place in town that does all kinds of really off-the-wall pizza, and they have a similar kind of punk rock ethos as us, an irreverence. And so I reached out to them to see if they'd want to partner to co-release it together, so it really just started off as a joke and then it turned into a real thing.” After doing a single nine-case run on his 10-gallon alembic test still, with six cases going to the pizza place and three to the distillery, people kept asking for it. Kessler and his team know that there is a novelty factor with the product, but it’s serving a purpose. The press release writes itself, and who wouldn't want to claim they created the world's first pizza whiskey. In building the spirit, he started simply: a few slices of pie in a gallon of white
whiskey, and redistilled it to get a sense of what would carry over. “Then I went back and thought about what’s the top note of the pizza, base note, middle note, how do I recreate the flavors of pizza,” Kessler says. “So I reverse engineered it and added sun dried tomatoes — the bulk of it — and then pepperoni, Parmesan basil, garlic, a lot of garlic actually. He uses a simplified version of their normal whiskey base, just malted and unmalted barley. His regular mash includes roasted and chocolate barley, rye, and oats, but he thought it would be best to simplify. “I also don't think roast barley would taste good with pizza. Chocolate and pizza don't pair very well,” he says. He had a little more trouble with the TTB than Lents did, but only in label approval. “I was amazed when I got the TTB formula approval. I figured they would fight me on it. I literally just put down whiskey distilled with pizza and then listed the ingredients for pizza,” Kessler says. “It got approved the first time I tried. [However] they fought me and fought me on the labeling. I tried to reference Mexico, I tried to reference mezcal. I couldn't use any of those words and so the back of our label ends up with this vague [description].” He hasn’t found cleaning up after a piechuga run to be too much of a problem, but the unique ingredients are definitely a factor. Kessler says, “The pepperoni cooks, it's all brown and crusty and gross afterwards. The herbs are the same as they'd be after doing like a gin run. But yeah, there's definitely a bit of oily residue that I have to scrub a bit more than when I do regular stuff.” Local, innovative, and a touch mysterious. Pechuga has a far reaching history that shares so many characteristics that personify distilling itself. More than a happy accident or gimmick, Pechuga holds a wealth of possibility.
Gabe Toth is lead distiller at The Family Jones Spirit House in Denver and Loveland, CO. A former craft brewer, his passion for fermenting and transforming ingredients also extends to sausage and meat curing, cheesemaking, and pickling. He can be found up in the mountains or at firstname.lastname@example.org WWW.ARTISANSPIRITMAG.COM
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WINE BARRELS IN THE DISTILLERY WRITTEN BY ANDY GARRISON
flash of inspiration hits and the breakout product you’ve been searching for appears with crystal clarity in your mind’s eye: Napa Cabernet barrel-aged Something or Other! In a fit of vision, you order in a truckload of barrels from a California barrel broker, but the production is slowed by TTB COLA approval and the fact that you don’t actually have any Something or Other. Weeks pass but finally you’re ready to fill the barrels; you remove the bung and take a deep whiff of….Mold! Sulfur! Vinegar! Wine is dramatically more perishable than spirits, and winesoaked barrels can be plagued by a variety of bacteria, molds, and pests which aren’t much of a concern for spirit barrels. While used barrels from wineries can be a great source of affordable high-quality oak barrels, they require special care to avoid the tragedy just described. In conducting interviews, it became clear to me that the best way to approach using wine barrels is as a collaborative act with the supplying winery. A collaboration requires clear intention and precise communication to succeed. Before looking for a supply of wine barrels, think about how you want to utilize the barrels and why. Wine barrels can be split roughly into their usage as a ‘finishing’ barrel or as a ‘maturation’ barrel. Each path requires different handling and preparation of the barrel. With a finishing barrel, the distiller is using already mature spirit to extract additional character from the barrel and absorb some elements of the barrel’s previous contents. This can produce a unique twist on an established product or provide a distinctive blending component to expand the blender’s palette. Wine barrels can give significant color and tannin to a spirit, as well as a variety of aromas and flavors not typically
found in new or used spirit barrels. Lee Medoff, head distiller at Bull Run Distilling in Portland, Oregon, makes extensive use of French oak wine casks for aging and finishing a variety of whiskies, as well as vodka and aquavit. Medoff finds that French oak wine casks “dry out the whiskey and give more elegance, lending a roundness to the finish,” as well as fruit and wine aromas. A maturation barrel is the primary aging vessel for the spirit and is employed in place of a new or used spirit barrel. The distiller isn’t looking for a flush of color or to extract wine residue; instead the wine barrel is a lower-priced source of air-seasoned French oak. The previous usage for wine has removed some portion of character from the barrel, meaning it will have a more subtle, gentle impact on the spirit which might make it suitable for longer aging or more delicate spirits. The barrels might also be used to mature liqueurs or other spirits where time and oxygenation are beneficial for mellowing the product but big oak flavors aren’t desired.
COMMUNICATION IS KEY After identifying out how you’d like to use the barrel, the next step is finding a winery to partner with. In the Pacific Northwest where I am based, there are over 1,500 wineries, and several hundred are within a 90-minute drive. While the West Coast is certainly awash in wine, there are now wineries in every single state and burgeoning scenes in places as varied as Texas, Vermont, Virginia, and Michigan. Working with a local winery can help give the product a sense of place, particularly if there is a variety or style that is well-established, such as Pinot Noir in Oregon or Riesling in New York. Being local also makes it easier to build a strong relationship, which is essential for sourcing casks in the condition distilleries require. Wineries shed barrels at different points depending on their style of wine and barrel program, and what they have run through the barrel has an effect on the flavors it will impart to the spirit. Similar to resteeping a tea bag, each use of the barrel will diminish some aspects of oak flavor, so
it’s important to know if you want a big oak impact or something lighter. In the winesoaked Pacific Northwest a French oak barrel used for one vintage may sell for $350-500+, a three-year/twovintage barrel for $150, and a ‘neutral’ red barrel might be $50-100. This can be a huge savings, as new French oak barrels can cost ~$800-1000+ and might be the only way economically to utilize French oak barrels for certain spirits. However, that ‘neutral’ barrel might have been used for three years as an aging vessel and still have a lot of life to give or it might have been used for 10 years as a fermentation vessel and impart as much oak as stainless steel, so it is important to ask questions and let them know what you are looking for.
FINISHING FOR FLAVOR For finishing barrels, the ideal is a freshly emptied barrel that has not been steam cleaned (which will maximize the flavor and color contribution by leaving a lot of wine residue in the barrel), not gassed with sulfur dioxide (SO2) and not refilled with storage solution. Sulfur Dioxide is used in the wine industry as an antioxidant and microbial control to protect wine from bacteria, but unfortunately if there is SO2 in the barrel it will be absorbed by the spirit and taint it with a volatile, burnt match odor which is difficult to remove. A winery’s standard procedure after emptying the barrel would typically be to steam it to extract wine residue and sanitize it, and then gas the barrel with SO2 to prevent bacterial or fungal growth while it sits empty. To prevent that from happening it’s usually necessary to arrange ahead of time with the winery. This ‘wet’ barrel is a microbial time bomb and needs to be filled with spirit promptly or it will spoil. The barrel shouldn’t sit empty or filled with water for more than a brief period, and SO2 or storage solution can affect the flavor of the spirit so you
are damned on all sides if they can’t be filled immediately. Knowing the harvest and bottling schedule of your winery partner can be a big help in making sure you are ready when the barrels become available. When it comes time to select the barrels, my program is ‘Look Then Smell.’ The barrels should be looked over for damage (see Barrel Prep 101 last issue for more details), but a freshly dumped barrel will generally be sound unless the winery is selling it as ‘furniture grade.’ That said, one thing to look for is beetle borer damage, which is a much larger issue with wine barrels than spirit barrels. These oak devouring bugs will eat holes in barrels, particularly around the chime, and can really swiss cheese a barrel if they are stored outside. These leaks can be repaired, but it can be tedious work, and in testing for leaks repeatedly you will inevitably remove much of the wine character you want to preserve! If everything looks okay, I will remove the bung and ‘science class waft’ towards my nose in case the barrel still contains SO2 gas which can strongly irritate or burn the nose and throat. If there is SO2 present, the gas needs to be allowed to dissipate or the barrel rinsed or steamed, which will remove some wine character. If it’s clean of SO2, I dive in and smell around looking for both flaws and the character of the wine aromas present. Lee Medoff says he “really relies on [his] nose a lot” to root out any barrels with sour acetic or vinegar odors, damp musty or moldy aromas, the phenolic WWW.ARTISANSPIRITMAG.COM
Wine barrels can fill a variety of roles in the distillery and have the potential to elevate your spirit to great heights as well as be one of the last opportunities to totally ruin everything you’ve achieved thus far. funk of Brettanomyces or the sulfurous rotten-egg smell of reductive wine. Any of these are cause to reject a barrel for use in finishing as the spirit will take on whatever aromas are present. Depending on the severity of the fault, some of the barrels may be salvageable through steaming or treatment with a caustic cleaner like sodium percarbonate (Proxycarb), but in removing the negatives the wine character will also be stripped, which eliminates its value as a finishing barrel. The spirit I am filling into the barrel costs about 30x what the barrel does, so I don’t find it’s worth the risk or time to fool around with a dodgy barrel. Dud barrels are easily resold as planters or repurposed as décor.
STRIPPED CLEAN FOR MATURATION Tad Seestedt, owner and distiller at Ransom Wine Co. & Distillery in Sheridan, Oregon, relies on used wine barrels for the majority of their spirit maturation. He initially began working with cleaned wine barrels nearly 20 years ago for aging brandy, where he wanted a subtle oak intensity that wouldn’t overwhelm the fruit character of the spirit. After starting a winery and
developing a barrel aged Old Tom Gin, he began to feel that new charred oak was too aggressive for the style of spirits he produced and has been gradually phasing it out. He also doesn’t want to impart wine character to the spirit, as he is looking for an aging vessel which will let the raw material shine and not a flavoring vessel. Under the program he developed, Tad sources high-quality French oak barrels from a winery that uses a very high percentage of new oak barrels. He uses this initially for wine production, so the microbiological integrity of the barrel is critical, and he stresses the importance of finding a partner you trust to supply barrels free from TCA (cork taint), Brettanomyces, or volatile acidity. After 18-20 months in winery use, the barrels are moved to the distillery side for spirits aging but are first treated to an extensive cleaning to remove wine residue. The barrels are first rinsed with a GamaJet hot-water pressure washer to scour out lees and tartrate crystals. Then the barrels are steamed and bunged up, as the barrel cools some vacuum forms which draws wine residue out of the wood. This leaves a clean barrel, relatively free from wine flavors, which is ready to fill with spirits. Andrew Tice, Director of Operations at House Spirits Distillery, uses Oregon wine
barrels to mature their Krogstad Gamle Aquavit and requests their winery partners perform this GamaJet and steam clean regime to remove some wine character from the barrels and prevent the aquavit from turning pink. Initially House Spirits treated the barrels with ProxyCarb and then a citric acid rinse but has found steaming to be equally effective and easier for the winery to achieve. The flavor of these barrels can still be profound even after such heavy usage, owing to the greater penetrative/extractive power of high ABV spirits compared to wine. Wine barrels can fill a variety of roles in the distillery and have the potential to elevate your spirit to great heights as well as be one of the last opportunities to totally ruin everything you’ve achieved thus far. Understanding a bit about how the barrel is used and treated at the winery and proceeding with eyes wide open gives you the best chance for success with your Something Or Other!
Andy Garrison is Head Distiller at Stone Barn Brandyworks, where he’s worked since 2012, and has distilled at a few other Portland-area distilleries including New Deal Distillery and House Spirits Distillery. He really likes Riesling. For more info, email Andy.email@example.com.
the LABOR of
WRITTEN BY JEFF CIOLETTI PHOTOGRAPHY BY BREANNE FURLONG
t’s not often that you hear distillers say they started producing whiskey as the more economical alternative to their core spirit. But when that core distillate is fruitbased, that’s quite often the case. From a supply-chain perspective, most fruits are far more fleeting and volatile raw materials than grain. Sure, you often have to wait years for your grain-based spirit to come of age in barrels before it can qualify as more marketable styles of whiskey, but from a procurement perspective, there are fewer headaches associated with sourcing grain. “The thing that really surprised me is that [making brandy] is challenging in just about every aspect,” says Andy Garrison, head distiller at Stone Barn Brandyworks in Portland, Oregon. As you’d probably surmise from its name, Stone Barn Brandyworks opened, in 2009, as a maker of eaux de vie — particularly German-style spirits made from 100 percent fruit. In 2011, Stone Barn started making whiskey, mainly due to the restrictive seasonality of fruit. “To make fruit brandy, it’s essential that it has to be fresh fruit, just for the sake of quality and volume,” Garrison says, who distills brandy from apples, pears, cherries, plum, quince and other fruits. “If you get processed fruit, it’s not going to make the best brandy, plus it’s really expensive. You’re usually going to get something that’s going to be a glut or surplus and that means processing it at the height of the seasons.” He notes that, despite the bountiful fruit crops in the Pacific Northwest, nothing’s being harvested between January and May. WWW.ART ISANSP IRITMAG.COM
When compared with grain spirits, the raw material, production, and supply chain needs are immense for brandy makers.
You could get apples and pears out of cold storage, but, while stored, their quality and aromatics start to degrade over time. “Whiskey is just easier to manage, the volume of materials, the processing of it,” he says. “It takes between 500 and 800 pounds of grain to make a barrel of whiskey,” Garrison points out, but it takes anywhere from about 6,000 to 10,000 pounds of fruit—depending on the type of fruit—to make brandy. Fruit is also on the low end as far as sugar content goes. Most varieties of fruit are between 10 and 20 percent fermentable sugar, while grain, once saccharified, can pack between 55 and 82 percent sugar. “If you imagine eating a pound of apples, it would be boring, but you can still do it and probably eat dinner afterwards,” Garrison notes. “If you eat a pound of
bread, that would be it, you’d be satiated and full.” A ton of cherries, he explains, yields about 42 liters of pure alcohol (LPA), whereas, a ton of barley yields about 450 LPA for the average Scotch whisky distiller. There’s also an incredibly narrow time window to get fruit into fermenters once it’s been harvested. Scott Blackwell, cofounder and head distiller of Charleston, South Carolina’s High Wire Distilling Co. recalls one of his early forays into brandy distilling. “A friend approached us about using
cider apples — hewes and Pippin apples,” Blackwell remembers. “Hewes were the ones [Thomas] Jefferson was famous for growing, tiny, little tart crab apples. We ended up making an apple brandy with her apples two years ago.” But there was a lot of stress leading up to distillation. “She picked the apples, pressed the apples and then put them in a cold tank the night before,” he says. “The trucker slept in the driveway the night before, loaded the juice and brought it here quickly.” The juice was a bit brown when it arrived, so Blackwell couldn’t waste any time getting it into the fermenter. Fermentation time is another major issue for many brandy distillers. Apple brandy maker Tamworth Distilling in Tamworth, New Hampshire, notes that the fermentation temperature is lower for fruit than it is for grain. “It takes about two weeks,” says Tamworth distiller Jamie Oakes. “With grain, it’s a three or four day turnaround.” Oakes ferments the juice in the plastic IBC totes in which it’s delivered. “We have four steel fermenters for grain, but when it comes to brandy, we ferment right in the totes,” he says. “We go from having four fermenters working to 16 working at a time, just because of that long stretch of fermentation time. That way we don’t have to switch gears completely between grain and apples.” There are different equipment needs for fruit versus grain distilling, as well. “It takes a ton of fruit, but also that fruit has to be processed typically, and there aren’t a lot of people who have the right equipment at their distillery,” says Stone Barn Brandyworks’ Garrison. “It’s more similar to a winery in terms of what they need, fruit
sorting lines, washing equipment, those sorts of things.” The wine business is much more top heavy. High Wire went in the opposite direction of Stone Barn, as the Charleston distillery is primarily known for its grain-based spirits, having medaled in various competitions for its New Southern Revival Sorghum Whiskey and New Southern Revival Rye. High Wire also makes some award-winning gins, as well as a corn-based vodka. The company has been experimenting a bit more with fruit. In addition to apples, High Wire has made brandy from watermelons and peaches. The peach spirit is particularly near and dear to Blackwell and his wife and co-founder Ann Marshall, both natives of South Carolina. “I grew up with peaches, peach ice cream — everything was peach in June,” says Blackwell. High Wire partnered with Ridge Spring, South Carolina-based Titan Farms, one of the largest peach growers in the country, with nearly 6,500 acres of land producing the fruit. The neighboring state usually hogs most of the spotlight for its peaches, but Blackwell points out that Titan grows more of the fruit than the entire state of Georgia. When I spoke to Blackwell in early August, he had just turned 10,000 pounds of Titan Farms peaches into between 140 and 150 proof gallons of eau de vie. And that was something of a personal victory for him. “I was kind of grumpy the week before we got the peaches,” he says. “I had a lot on my mind, a lot of angst. One, it costs a lot of money to do it and two, I put a lot of mental energy and time into this project and I just really, really wanted it to succeed. I breathed a sigh of relief yesterday when it
was on the still and coming off..” He notes that in addition to the desirable heavy fruit flavors and oils, there’s also a greater presence of sulphur and burntrubber aromas — “things that I wouldn’t call really pleasant” — with fruit spirits than there is with grain. “[Fruit] seems to be a little less forgiving when you distill it,” he reveals. “It’s definitely a learning experience, for sure.” The spirit will be in barrels for at least a year, but no more than two. Blackwell’s hoping to lay down more barrels next year. He put about 20 gallons of the stuff aside, in which he’ll macerate some peaches and create a sort of artisanal peach schnapps. He hopes to ultimately build a following for the peach brandy, which would be a return to tradition in South Carolina. It was the dominant spirit in the state two centuries ago. It also reportedly predated bourbon as the base for the mint julep. It’s likely High Wire and others will find a willing audience for their fruit-based spirits, as American brandy is starting to have its moment. It’s just a matter of whether the process continues to be worth the effort. “People may be optimistic about making fruit brandy when they find a farmer and are able to source [the fruit], but then it all arrives and the nightmare begins,” Stone Barn’s Garrison warns. “They’ll make it once or twice, break their back to make this product, and then reality sets in: They don’t have time to do this, they can’t afford to do this and they’ve got to focus on things more practical to make.”
Jeff Cioletti is the editor at large of Beverage World Magazine, creator of The Drinkable Globe website, and hosts the web series, The Drinkable Week WWW.ARTISANSPIRITMAG.COM
PORTS OF NEW YORK Wr i t t e n a n d P h o t o g r a p h e d b y D e v o n Tr e v a t h a n
Frédéric Bouché makes Port-style wine at his winery in upstate New York, where he showcases vintage relics leftover from the many centuries that his family spent in the business of making beverages.
pirit is often inextricably linked to the history that surrounds it. It’s through the lens of the past that we come to view a spirit’s future: most potables improve with a bit of age, and any new national trend in consumer preference is usually contextualized with reference to its popularity in centuries past. Inside Ports of New York, a winery dedicated exclusively to producing fortified wines (a wine that has been combined with a distilled spirit), is so picturesque it seems to belong more on a Hollywood Studio Tour than a side street in Ithaca, New York. It's here that owner Frédéric Bouché recounts some of his family's past, including their early beginnings in the wine business. “The father of my great-grandfather planted a vineyard in Bordeaux, so he was not a winemaker per se, but he was growing Bordeaux grapes in the region of Buzet,” Bouché says when asked to start at the very beginning. He is French and speaks with a very agreeable affectation, though his command of the English language is impeccable. After all, he has lived in America for nearly three decades and is married to an American citizen, his wife Johanna, who was a professor at Cornell University. Her job is what brought them to upstate New York in the early 90s, long before the words “wine from the Finger Lakes” were ever uttered with any kind of reverence. Bouché’s great-grandfather decided to move to Normandy, where he started a winery while the vineyards in Bordeaux were kept by his sister. The winery eventually passed into the hands of his grandfather, who Bouché speaks of kindly. “He was a wonderful man, very good with wines, but not so much with the business side unfortunately.” His grandfather did not manage the winery into success, and by the time his father was in charge, there was little to be salvaged. “In the 70s there was a big revolution in this beverage and food world which was that stainless steel became the thing to buy
as a shift over from wood and animal, [and] all kinds of other containers,” Bouché notes. “My grandfather never went there, so we were completely obsolete.” There was also the matter of the war. Normandy, renowned for its apple-based beverages like cider and Calvados, is also famous for being the landing site of the Allied invasion on June 6th, 1944. “They were bombed the day of D-day,” Bouché recalls. “On the street side, there were three buildings, and one of them was fully flattened. The other one was partly demolished.” Inside a courtyard, there were two additional buildings: one was destroyed, but the other was miraculously spared because the bomb that had landed next to it never went off. That building happened to be full of bottled wine, which was left untouched, a necessity for anyone who wished to resume business after the hostilities had ended. Hearing Bouché describe his family’s journey in wine is one thing, but the experience is further heightened by the presence of vintage relics that he houses at his winery, transforming it into an improvised museum of French viticulture. His collection contains an array of pieces, including lab equipment from the 19th century, tools to repair casks, preserved wine bottles, a smuggling belt, and — my personal favorite — a vintage champagne spout from the mid 1800s. “People had those made by metalsmiths for themselves, and these were people who had plenty enough money,” Bouché says, admitting that he’s unsure how his family of modest means came to possess one. “This one is particularly beautiful because it’s very ornate, and it has what we call chinoiserie, which is anything Chinese or Asian, which in the mid 1800s people with money were totally crazy about.” For history buffs like myself, a visit to Ports of New York is singularly electrifying. There is no carefully curated tour attempting to credit Ports of New York for the early Port-style industry in America; instead, you see the history of one man’s lineage splayed WWW.ARTISANSPIRITMAG.COM
out in the artifacts that he’s amassed. You taste the distillation of over a century’s worth of knowledge, passed down from parent to child and so on, until it landed in the heart of New York wine country. Bouché is not only a student of history, he is also an accomplished producer of fine Port-style wines called Meleau, which he ages for a minimum of four years in a neutral oak Solera system. They are produced in a French style and range from 16-18% alcohol, which is lighter than typical Port-style wines. “That’s a tradition we’ve had in France for a very long time, and these are the kind of beverages we either drink before or after dinner,” says Bouché. “Before, typically with savory, as an aperitif, and after dinner as a digestif.” Bouché produces a white and a red, each made from a blend of grapes that he sources from vineyards in the Finger Lakes. Certain varietals that Bouché uses, specifically Cabernet Franc, Merlot, and Muscat Ottonel, come from Lamoreaux Landing, a consistent producer of award-winning wines located on the shores of Seneca Lake; others are bought from Leidenfrost Vineyards and Fulkerson Winery, including two hybrid grapes, Noiret and Vignoles. It’s important to Bouché that he use grapes from New York in his wine, in part for philosophical reasons but also because he knows that the juice he would receive otherwise wouldn’t always be made entirely from the varietals that he asked for, and he prefers to be the one to choose the blends in his product. A small amount of honey is used to grow the yeast prior to fermentation, and there is residual sugar present in the wine, but much like Bouché himself, everything is balanced. Acidity is a strong component in the appeal of Meleau wines: they taste bright and refreshing despite the alcohol percentage and apparent sweetness. The choice to use honey to grow the yeast came in part because of Bouché’s grandfather, who made mead for many years. Bouché WWW.ARTISANSPIRITMAG.COM
tasted meads that were decades old, some over 70 years, and found that the vintage honey products managed to stay incredibly stable. “So I thought that because we were in a new region, and I just didn’t know how the grapes and the product was going to evolve, and I knew that we had to age it for quite a while, I thought that using honey to grow the yeast prior to fermentation would be an asset for me no matter what as far as [a] preservative.” Bouché also chooses to oxidize his wines in the tradition of Tawny Ports. He has found, due to their drinkability, that his products can act as a gateway for the American consumer to the greater world of fortified wine. He’s also found that the alcohol content is representative of the area where they’re from — due to its climate and provenance, the Finger Lakes tends to be a region where wines with delicate flavors shine, and Bouché’s Meleau is no exception. Both the red and the white remain elegant and expressive years after their production. Ports of New York continues to be small, dedicated, and entirely at the helm of Bouché and his family, a choice he has made purposefully. Recently, they have released two table wines in a line dubbed Quotidian, derived from the Latin term meaning “daily”. They are Bordeaux-style wines meant to be enjoyed each night at dinner and fulfill a need that Bouché recognized in the domestic market. “The reason for Bordeaux was simply because we were making a number of Bordeaux-style wines in Normandy with our own grapes, so I wanted to do that, and more particularly we were interested in making an inexpensive table wine, something to drink on a daily basis.” A habit that will stay in the family for generations, no doubt.
Ports of New York is located in Ithaca, New York. For more information visit www.portsofnewyork.com or call (607) 220-6317. 59
THE EFFICIENT (RUM) DISTILLER THE NEED FOR HEAT TO BOIL ALCOHOL Heating a water-alcohol solution, such as the one obtained at the end of fermentation, allows for the alcohol to be evaporated, separated and concentrated. The evaporation part is easy to understand, even for those with only superficial knowledge of this industry, but the details of how the evaporation works can be a bit trickier to understand. Take for example, the following table1:
% of alcohol in the boiling liquid
Temperature needed to boil alcohol (F)
Temperature needed to boil alcohol (C)
% of alcohol in the condensed vapor
PART II WRITTEN BY L U I S K . AY A L A
I N PA RT I O F T H I S S E R I E S W E E X P L O R E D THE STOICHIOMETRIC AND ACTUAL YIELDS O F A L C O H O L T H AT C A N B E O B TA I N E D F R O M FERMENTING SUGARCANE. PRODUCING THE LARGEST POSSIBLE AMOUNT OF ALCOHOL D U R I N G F E R M E N TAT I O N , H O W E V E R , I S O N LY A P A R T I A L V I C T O R Y: W E M U S T E F F I C I E N T LY A N D T H O R O U G H LY C O N C E N T R AT E T H AT A L C O H O L T H R O U G H D I S T I L L AT I O N B E F O R E WE CAN ENJOY THE FRUITS OF OUR LABOR. A N D W H I L E P A R T I WA S R U M - C E N T R I C , P A R T I I A P P L I E S W I D E LY T O A L C O H O L S O B TA I N E D F R O M A L L F E R M E N TA B L E S O U R C E S .
The first, leftmost column, indicates the percentage of alcohol (ethanol, in this example) present in the fermented wash. Columns two and three indicate the temperature — in degrees Fahrenheit and Celsius respectively — needed for the amount of alcohol in the first column to become volatile. The fourth, rightmost column indicates the alcohol strength at which the condensed vapor will be. The table seems straightforward, but hidden within are several key pieces of knowledge, some more obvious than others: 1. As the amount of alcohol in the fermented wash approaches zero, the temperature required to boil it approaches the temperature required to bring water to a boil (212 F/100 C). 2. Conversely, the higher the alcohol volume in the liquid, the less temperature is needed to make that alcohol volatile. 3. The alcohol concentration of the vapors produced is much higher than the concentration of the alcohol in the starting liquid. If this wasn’t the case, the resulting distillate would have the same strength as the starting wash, which would defeat the purpose of distilling. 4. The difference between the alcohol concentration in the liquid and in the vapor is larger with lower ABVs, but tends to diminish as we exceed 90% ABV. The chart shows only the boiling points and concentrations for ethanol, which is the heart of the distillation and the heart of our business. Each type of congener (alcohol and volatile substance) in the wash will have its own chart, with its own set of volatile temperatures and concentrations. Those more volatile than ethanol are collectively known as heads, while those less volatile than ethanol are collectively known as tails. 1 Source: The Rum University, “The Art of Rum Making”
DIFFERENT TYPES OF HEAT SOURCES HAVE DIFFERENT COSTS Heating up the still and cooling/condensing the distillate are among the two highest operating expenses for a distiller. Producing excess heat is a waste of money and is compounded further if such excess results in additional cooling costs. Let’s explore first the heating side. Imagine you are camping and you start a campfire in order to heat up water to make coffee. You’ll notice that a lot of the heat goes around the water pot, which is great if you want to warm your hands up or if you want to put additional cooking pots around it. Much of the heat produced by the fire, however, is wasted, resulting in longer time needed to bring your water to a boil. Now imagine instead that you brought an iron, wood-burning stove to the campsite. Much of the heat produced by burning the wood within it is absorbed by the iron stove, mainly by its top surface, which then transfers the heat to the water pot. As the last scenario, imagine you brought your RV to the campsite and inside you have an electric kettle that has an immersion heating element inside, which transfers the majority of the heat it produces directly to the water, resulting in the shortest boiling time and the least amount of energy consumption. Burning fuel (usually gas) to produce heat (usually in the form of steam) has different costs around the world and even within each country, depending on availability and other factors. Heating using open flames is intrinsically dangerous and — rightfully — frowned upon within municipalities. Electricity also has different costs (is it generated by the sun, by the wind or by a hydroelectric dam?), but is also one of the safest and most common forms of producing heat.
DIFFERENT TYPES OF STILLS HAVE DIFFERENT HEAT FOOTPRINTS Now that we’ve discussed some of the sources of heat, imagine how they will transfer the heat into the still and you will quickly understand how some designs are more efficient than others. One of the least effective approaches is to heat up a hot plate atop which the still sits. The hot plate will radiate heat in every direction and the surface touching the still will have some losses too. There is also the option to heat the pot directly, using induction, but the most effective approach for a pot still is to have the source of the heat inside, just like with the electric kettle example. This source can be immersion heating elements or it can be a steam coil, depending on the cost analysis of electricity versus steam. But even this approach does not compare to the most efficient way of distilling, which is continuous distillation (as opposed to pot or batch). Continuous distillation was invented by Aeneas Coffey in 1930.2
As the name implies, fermented wash was introduced continuously into the still, where it would be heated by steam which would extract all the alcohol from it. Spent wash would come out of the bottom of the still while the alcohol-rich steam would be condensed, all in a continuous and very efficient process.
COMPARISON OF CONTINUOUS COLUMNS VS. POT STILLS Pot stills are “batch” distillation apparatuses. What this means is that the pot must be filled with a finite amount of fermented wash, prior to closing and heating the still. The alcohol then starts to evaporate and condense, before heads, heart and tails are divided. How soon the alcohol is extracted from the pot still depends on how much reflux occurs within the still, which is dictated by the design of the still but can also be influenced by the use of dephlegmators. The spent wash is then allowed to cool (until the heat is lost), the pot still is emptied of its contents and the process is repeated again, in batches. Aeneas Coffey saw the waste of time and of energy in the pot still approach and devised not only one, but two very clever innovations. The first was to continuously introduce fermented wash into the top of a column with perforated plates. Steam would also be introduced continuously into the same column from below and, as the steam travelled upwards, it would heat the wash travelling downwards, heating it up and vaporizing its alcohol in the process. The amount of steam injected and the amount of plates in the column were enough to guarantee sufficient contact time to extract all the alcohol, allowing the wash to exit the bottom of the column completely spent. The second innovation was to use fermented wash as a cooling liquid to condense the alcohol vapors coming out of the top of the still, taking advantage of the heat exchange to preheat the wash so it needed less vapor to reach the boiling point of alcohol once inside the column.
2 The Rum Biography, “Got Rum?” Magazine, February 2018 WWW.ARTISANSPIRITMAG.COM
As efficient as continuous distillation columns are, they are beyond the reach for most craft/small distillers, due to the initial investment required and the production volumes required to justify that investment. Nonetheless they serve a greater purpose: a. They teach us about the importance of energy conservation b. They explain how the large, industrial distillers are able to produce alcohol at such low prices and how these prices will never be achievable by craft distillers.
COMMON MISTAKES THAT COST MONEY Since continuous distillation is beyond the reach of most of those reading these lines, I am focusing solely on the operation of pot/ batch stills. 1. TOO MUCH HEAT, TOO QUICKLY, RESULTING IN COMMINGLED HEADS, HEART, AND TAILS. If the fermented wash contains heads, hearts and tails and we heat it up so much that all three are volatile at once, we may be extracting heads and tails when we expect to only be extracting the heart. The consequence is the need to re-distill, along with the overhead expenses and lost opportunity costs associated with it.
2. TOO MUCH OR NOT ENOUGH REFLUX. Reflux, or re-flow, refers to the cooling of vapors resulting in all or part of the resulting condensed liquid traveling back into the boiling chamber. Reflux can occur, for example, within the onion head of a still, as the vapors enter a larger chamber which is naturally cooled by the outside air, slightly cooling down the vapor, making it shed some of its water and/or alcohol content. Reflux can also occur in between plates and in the dephlegmator, which is a specially-designed plate with a cooling coil inside, designed to mechanically cool down the temperature in order to increase reflux. While reflux is essential in the enrichment of the alcohol vapors, a high rate of reflux results in longer running time for the still and in higher cooling needs (for the coolant used in the dephlegmator). 3. HEAT LOSSES. If you are trying to heat the contents of your still in order for the liquid to become volatile, but there are heat loses between the source of the heat and the environment (like in the example of the kettle over the campfire), then your energy cost will be higher and the processing time of your still longer. One way to minimize these losses is to make sure you are using the most efficient process to start with (internal coil or immersion elements). Another way is to make sure the kettle/pot is not losing too much heat through radiation, adding an insulation layer if necessary.
4. THE SPENT WASH HAS TOO MUCH ALCOHOL LEFT. You may be literally flushing money down the drain if you stop distilling while there is still usable alcohol in the wash. 5. THE SPENT WASH HAS TOO LITTLE ALCOHOL LEFT. Depending on your pot still operating costs, there will be a point of diminishing returns after which it will cost you more money to extract the remaining alcohol from the wash than the alcohol will be worth. If you revisit the first chart presented in this article, you’ll see how the strength of the alcohol obtained is reduced as we approach 0% ABV of the wash, but also notice how the amount of energy needed to boil it increases. Sometimes it is better to have a little bit of alcohol left in the wash than to try to get every last drop out 6. NOT TAKING ADVANTAGE OF OPPORTUNITIES TO PRE-HEAT THE WASH. As you saw from the description of the Coffey still, Aeneas Coffey saw a need to cool down condensate and also an advantage if he could preheat the wash. Using the latter as a cooling agent of the steam resulted in a heat transfer that allowed for less steam to be needed inside the column. 7. RE-DISTILLING HEADS AND/OR TAILS. This is a topic that borders on the realm of urban myths. When researching what to do with the tails, many distillers come across
“expert advice” that suggests they should collect them and add them to the next distillation batch. This is justified by saying that upon distilling it again, a bit more heart will be extracted, thus justifying the effort. While this can be true if the operating expenses were zero (free heating fuel, free cooling, free pot still usage and free labor for supervising), the reality is that leftover tails have already accrued their share of distillation expenses once. If they are allowed to cool down and then they are subjected to a second round of distillation (with its heating and cooling), the resulting alcohol would have to be sold for more money than that obtained the first time around. An example where this can happen is with the Queen’s Share, which is obtained from redistilled tails, but the Queen’s Share must be sold for more money than the initial heart from where it came, otherwise the additional time and energy spent will come out from the bottom line. Stay tuned for the third and last installment of this series, where we’ll bring all this information together!
Luis Ayala is an international rum consultant and broker of specialty aged rums. He is founder of The Rum University, Rum Central and Got Rum? magazine. Visit www.gotrum.com or email firstname.lastname@example.org for more information.
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BRANSON’S NEW DISTILLERS
MISSOURI MOONSHINE COMES OUT OF THE HILLS WRITTEN & PHOTOGRAPHED BY CARRIE DOW
n popular culture, moonshine is sometimes characterized as a low-grade, cheaply made illegal substance hidden deep in the Appalachian Mountains. However, the line of illicit stills that ran from Virginia through Kentucky also stretched into the Ozark Mountains of Branson, Missouri. Now a new generation of legal distillers is bringing moonshine out of the hills and into the city, changing opinions by making small batch, high quality products using a mix of traditional and modern techniques. Greg Pope of Missouri Ridge Distillers might be one of the most
famous of the bunch after appearing last March in the premier episode of Discovery Channel’s Moonshiners: Whiskey Business where Virginia moonshiner Tim Smith helps struggling distilleries improve their product and bottom line. A third generation distiller, Pope’s grandfather made moonshine in Utah’s Rocky Mountains during Prohibition. “I’m just the first generation to do it above board,” Pope laughs. While distilleries are new to Branson, distilling goes back decades in the surrounding Ozark Mountains. The Ozarks Studies Institute
Copper Run Distillery was built on family property just north of Branson in the rolling hills and horse ranches of Walnut Shadow.
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Missouri Ridge Distillers welcomes visitors unlike their moonshining ancestors. at Missouri State University describes distilling as a folk craft on par with quilters and blacksmiths. An article from The Joplin Globe in 1991 reported that in the decades since Prohibition’s repeal, federal agents seized 6,000 illegal stills in Northern Arkansas and Southern Missouri. Is it coincidence that Branson’s most popular outdoor recreation area is a swath of sand on Table Rock Lake called Moonshine Beach? Jim Blansit, founder of Copper Run Distillery, calls moonshine any unaged corn whiskey. Made on a traditional 4-plate diamond copper still, Copper Run’s Ozark Mountain Moonshine is an 80% corn and 20% wheat sour mash proofed down to 80 with a private well of naturally limestone-filtered water. Opened in 2009 on his family’s property just north of Branson in the rolling hills and horse ranches of Walnut Shadow, Copper Run is the first legal distillery in the Ozark Mountains since prohibition ended in 1933, according to Blansit. He also says his family has a history of moonshine production dating back to the Great Depression. However, he claims his ancestors made it more for trade than selling. While Blansit grew up in the area, Pope and his wife Jolie moved to Branson specifically to open the distillery. Jolie, who was raised in Nebraska, spent many summer vacations in Branson as a youth and had always loved the area. “I was trying to convince her to move to Alaska and she wanted to come here,” says Pope “We got here five years ago. I told her it’s
Alaska green, but warm, so I’m in.” For those who don’t know, Branson has become a popular vacation destination with amusement parks, outdoor recreation, and music theaters. Visitors come here from all over the world to experience attractions like subterranean caves, water recreation, and see country music acts and family shows. In 2016, Branson saw almost 9 million out-of-town visitors and the area has a growing retirement populace looking for new adventures. Some distillers moved in from other parts of the state to take advantage of Branson’s growing tourism status. Crown Valley began as a vineyard in St. Genevieve in 2002. As the winery expanded, the owners opened a brewery and distillery in 2008, making a variety of beverages including craft sodas. Crown Valley’s owners set up shop on “The Strip” of Branson’s Highway 76 in 2015. “Branson has been extremely welcoming,” says Tasting Room Manager Tena Smith. “It’s something new for them. They’ve had the wineries for years so we were the first distillery in town.” Crown Valley Branson is part bistro and part storefront with a tiny distillery in the back. While the tasting room serves and sells just about every product Crown Valley makes, including meats and cheeses, the Branson location is the only place that produces and sells a classic corn moonshine and four flavored whiskies that have grown in reputation. Scott Eckl, Crown Valley’s Head Distiller, says Branson’s Cherry Maple Malt Whiskey is his most popular, evoking the flavors of
(Top) Smith Creek Distillery's tasting room shares some moonshine history. (Bottom) Crown Valley's Branson location is part distillery, part bistro, part storefront. Southern Missouri. Eckl made 949 bottles of it last spring to get ready for the summer tourist season. While the main distillery in St. Genevieve has a 200-gallon traditional still, the Branson location has a 50-gallon fully automated iStill from The Netherlands. Since Branson is a four-hour drive from Eckl’s home, it makes things easier for him. Branson’s newest distillery is Smith Creek, which began as Smith Creek Moonshine in 2015 and changed to Smith Creek Distillery last February because the company now makes vodka and plans to release rum in the future. While the production still is located about four miles away, Smith Creek has a tasting room, retail outlet and BBQ restaurant in the coveted Branson Landing outdoor shopping and entertainment mall along Lake Taneycomo. “I feel like a real moonshiner when we drive up there,” says Sarah, one of the tasting room bartenders and bottlers, about the trip to the country still. “We do all small-batch distilling,” she says, “and every one of our bottles are signed by one of our distillers.” The off-site distillery makes the spirits and then transports it in containers to three tasting rooms, two in Tennessee and the one in downtown Branson, for bottling and labeling. “We don’t distill here because the [Branson] Landing didn’t approve it,” she says. According to Front of House Manager Kyle Ayres, the process begins with a corn mash and brown sugar using a traditional method of distilling including a thumper keg to remove the particulates. The distillery makes straight moonshine that is 100 proof, an 80-proof vodka and 11 flavored moonshines from Apple Pie to Salted Caramel at 50 proof. At Missouri Ridge, Pope uses his own creation, a refluxing pot still with a 45 degree canted column, to make his moonshine, which was prominently featured on the Discovery show. He makes 100-proof Corn Whiskey and 140-proof White Lightning. Pope adds that despite Branson’s conservative nature — not one of its 50 music theaters or the amusement park serve alcohol — Missouri is welcoming to distillers. “One of the things Missouri has going for it that other states do not is Anheuser-Busch,” he quips. “They have, for more than 100 years, lobbied to make alcohol manufacture as minimally restrictive as possible. Missouri is one of the few states that gives you all three tiers as a distiller. I get manufacturer, wholesale/retail and distribution.” While Missouri may not be the first place you think of when it comes to distilling, Branson has taken moonshine out of the mountains and onto store shelves.
DEVELOPING A SPIRITS
REGIONAL BRAND IDENTITY PART 2 W RI TTEN BY TI M KNI TTEL / / /
P H O T O G R A P H Y B Y A M A N D A JO Y C H R I S T E N S E N
In part 1, we established that a Regional Brand Identity consists of: >> Region — Where is the destination, how big is it and what is included within its boundaries? >> Identity — What is authentically unique about your region? >> Brand — What makes your destination so special it’s worth visiting? Answering those questions in relation to your region’s spirits industry is the first step to establishing a foundation for attracting tourists. The answers will be influenced by your region’s history, food & drink offerings, non-distillery attractions and other tourism elements. Finally, differentiating the experiences among the participating distilleries ensures reason to visit more than once. WWW.ARTISANSPIRITMAG.COM
HOW TO DMO A DMO is a ‘Destination Management Organization.’ A tourism region needs a DMO to develop and maintain the regional brand identity and associated assets, ensure communication among potential tourism destinations, spend marketing budgets and evaluate success. A DMO may be a government agency, an industry body or just interested individuals and organizations working toward a common goal. There might be an existing DMO that can either extend a regional brand identity to incorporate distilleries or to develop an entirely new identity. Alternately, distilleries may need to form a new DMO.
ROLLING YOUR OWN If you are creating a new DMO, be sure to establish it as a formal organization of some type with clear goals, membership guidelines, roles and responsibilities, plus dues and budget management. Like all organizations, clarity is a key to success. Creating your own DMO doesn’t exclude you from partnerships with other DMOs; in fact, it’s quite the opposite. Government and larger industry DMOs often prefer to work with a single point of contact for an industry instead of piecemeal with individual businesses. It may also be easier for a DMO to coordinate with interested non-profits, other industry or trade associations, and the like. Remember that spirits tourism exists within the broader tourism base of the region or surrounding regions, so a DMO “exclusively” for distilleries will still create benefit for, and will be benefitted by, work performed by other DMOs in the region. Coordinating strategies will typically lead to greater success than purely isolated marketing.
WHAT HAPPENS WHEN SOMEBODY DOESN’T PAY-IN? Creating and marketing a tourism region generates value for all of the destination locations as well as secondary businesses and organizations like hotels, restaurants, museums, transportation and event companies and more. A spirits region also potentially generates value for all distilleries, whether or not they’re active participants or dues-paying members of the DMO. While it might be possible to legislate membership in a distillery DMO, that’s not going to ensure buy-in or active engagement from all the distilleries. If potential members decline to be involved, there’s really nothing that can be done to change the situation. While the distilleries can be left off of official maps and other marketing pieces, they’re likely going to gain some benefit from the overall increase in tourism to the region. Harboring ill will or creating negative messaging won’t support the overall goals and won’t benefit the participating members. It’s best for everyone to let distilleries unwilling to be involved stay separate.
RBI MARKETING Creating awareness plus desirability is critical to attracting tourists. Potential tourists need to know the existence of your region and the unique, special reasons to visit it. You know that you exist, but unless they’re told, no one else does! Tourists also have a plethora of regions to visit; there is a limited pie of tourism dollars available, and you’re cutting a new slice with a new RBI. Marketing isn’t a ‘nice to,’ it’s a ‘have to.’ Awareness of your RBI is accomplished through the normal modern marketing mechanisms: Internet and social media, traditional media, tourism promotion offices, direct-to-events planners, etc. Ideally, the brand strategy will be comprehensive, consistent and reflected equally through those channels and also at each participating distillery. Branded large maps of member
distilleries and brochures with maps are the most common indistillery elements. Marketing is never a ‘one-and-done’ operation. RBI marketing needs continuous attention and budget, which is one of the primary functions of having a DMO. If it’s big enough, the DMO ideally invests in either employees or an outside marketing agency to ensure ongoing outreach.
DESIRABILITY THROUGH TANGIBILITY AND COMPLETENESS Invoking the twin forces of tangibility and completeness increases desirability to come tour the region. Tangibility is any physical element that can be experienced or, ideally, collected. For example, tasting every distillery’s spirits is a set of experiential physical elements while stamps in a passport are collected elements. Any form of token could easily be substituted for the stamps. Acknowledging completeness, typically by rewarding the tourist with a physical element like a certificate or a t-shirt, also increases desirability. Changing the reward annually encourages repeat visits. Be aware of the scope of work required to achieve completeness. If the drive time or number of stops makes it longer than 2 to 3 days to complete, consider creating subdivided regions or levels of completeness that don’t require visiting every member distillery.
MAKE IT EASY TO COME VISIT YOU Travel is hard. Even with airline and hotel booking websites and GPS navigation, it’s still considerable effort on the part of the tourist to get to you. Tourists want to maximize their value for that effort. And while different tourists have different values, distillery tourists (as a subset of food and drink tourists generally) are seeking educational and sensory experiences they cannot achieve at home. Lowering the barrier to achieving those educational and sensory experiences is a major goal for a distillery region DMO. This can include providing potential tourists trip planning assistance, driving directions and recommended routes, estimated drive time, tour options and hours of operation for the member distilleries, etc. The more sure a potential traveler is that they will achieve their values, the more likely they are to come. The lowest barrier to successful travel is hiring a professional tourism management or transportation company. Your DMO should work closely with such companies to help them bring tourists to you. Remember that tourism companies need destinations for their tourists so the arrangement is always a mutual benefit partnership. Ideally, a DMO would have dedicated staff to work with potential tourists to help them plan their visits but if not that work can be performed by partner tourism companies.
METRICS & ANALYSIS FOR FORWARD PROGRESS Like all marketing, a regional brand identity is an investment requiring time and money. Tracking to ensure success and to shift WWW.ARTISANSPIRITMAG.COM
strategies is critical to long-term success and achieving return on that investment. Each member distillery will need to capture metrics. Some of those metrics will be private while others should be shared with the DMO. Example private metrics: >> Dollars captured per visit on both tour tickets and gift shop purchases >> Number of visitors signed up for loyalty programs >> Number of visitors signed up for prepurchase (“Spirit Club”) programs Example shared metrics: >> Total number of visitors >> Number of visitors participating in a tour or tasting experience >> New social media followers plus social media mentions >> Marketing/referral awareness source The DMO, in turn, will collect regional metrics, such as: >> Total number of distillery visits >> Average number of distillery visits per visitor >> Estimated number of days and nights travelers spend in the region >> RBI social media followers and mentions >> RBI earned media >> Overall experience reviews
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The numbers should be reviewed on a regular basis to look for trends. For example, is one marketing platform outperforming others? Are certain distilleries receiving disproportionate numbers of visitors? Are any distilleries receiving consistent negative reviews? One more thing to consider is that marketing a region extends to the individual destinations and brands within that region. For example, earned media will often mention specific destinations (in this case, specific distilleries) and associated brands. Global tourism is shifting toward regional-specific experiences with food and drink tourism as one of the fastest growing categories. Developing a regional brand identity for a new distillery group will require time and monetary investments but, if properly measured and managed, can yield returns for not just the member distilleries but the region as a whole.
Tim Knittel is a Bourbon educator, writer and event specialist in Lexington, Kentucky. He formerly managed the culinary and VIP hospitality programs for the Woodford Reserve Distillery and currently manages events operations for The Kentucky Castle. He also runs Distilled Living which provides private Bourbon education, brand representation and distillery consulting services. He holds the titles of Executive Bourbon Steward through the Stave & Thief Society and Adjunct Professor of Tourism, Event Management and Bourbon Studies at Midway University.
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DESCRIBING FLAVOR IN
gin WRITTEN BY AARON KNOLL
Pause for a moment. Think about a perfume or a cologne you or someone you know has worn. Describe it. And now tell me exactly what is in it.
Therein lies one of the biggest challenges I’ve experienced in my ten years as an author and writer talking about gin. Gin can tell a complex story about a place or time merely through botanical choice. Caorunn Gin tells the story of the Scottish Highlands — rowan berry, blackthorn drupes, hawthorn berries, watermint, bilberries and sweet cicely. Ungava tells a story about the subarctic tundra through rose hips, crowberries, cloudberries, and Labrador Tea. And finally, Botanic Australis Gin from Mt. Uncle Distillery tells a story about the Australian bush — finger lime, lemon myrtle, wattle seed and lilly pilly to name a few. And while these stories are compelling and unique, one thing I noticed early on in my writing was that those stories left gin drinkers baffled. While rowan berries and wattle seed are somewhat uncommon enough that you can understand not knowing what to expect, I found that even common gin ingredients were confusing. The range of flavors a distiller may extract from coriander — depending on skill, technique, or just ratio — is astonishing. Before gin, I was a researcher. So I did what I always did. I began to talk to gin drinkers about their favorite gins and ask them to describe the flavor. Quickly, I began to notice there was a narrow range of terms people used over and over. People might describe Caorunn as being a little floral on the nose, but having some citrus to the taste. Ungava may be described as being a little spicy and finally Botanic Australis — well that one is really, super herbal. The six most frequently used terms were, “spicy,” “citrusy,” “floral,” “herbal,” “piney,” and finally, “hot.”
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But it also went beyond just the terms. It was how gin drinkers quantified the flavor. A gin like Nolet Silver has “a lot of floral flavor” while Hendrick’s Gin has “some floral notes.” Aviation Gin may register as “a little bit of floral in there,” but Gordon’s Gin has pretty much no floral qualities at all. Many people in the industry talk about “consumer education” as the best solution. If only people would learn about gin they would be able to appreciate it. But this seemed a huge barrier. In order to invest time in learning about something, a person would have to at least be a little bit interested. My experience talking to nongin-drinkers wasn’t that they needed to be taught. I learned that they already had all the tools they needed to appreciate gin. I needed to speak the universal language of gin. Understanding the power of the visual, I began developing a visualization tool using the descriptors and quantifiers. In 2012, I launched the first version of the visualization with the following categories.
Card Sorting is a research methodology where a participant is asked to place one of several words into a bucket that they think best describes it. In this example, participants are taking botanical names from gin marketing materials. They then have to classify it by how they think it would taste.
the dimensions of GIN FLAVOR
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ice Sp Heat WWW.ARTISANSPIRITMAG.COM
I replaced “piney” with “Juniper” because I found that most people understood juniper to be one of the main contributors to that flavor, especially in gin. However, many other botanicals contribute to flavors that people would perceive as piney. Coniferous botanicals like fir and spruce tips clearly invoked this reaction, but some unusual associations also emerged. Terpenic flavors like hops, and resinous aromas like Frankincense would also sometimes be described as piney or juniper-like. The juniper category can describe a range of flavor and taste sensations in addition to juniper. Citrus refers to a lot of what may be expected — orange peel, lemon, yuzu. Grapefruit and the like. However, some citrus tinged herbs like Melissa or the common Australian botanical Lemon-scented myrtle would also suggest a verdurous, but still citrusy, flavor. Herbal is a section that has exploded especially in the last few years. Classic standbys like anise, fennel and mint
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register as herbal. Many gin drinkers also describe the vegetal, green notes of cucumber as coming across as slightly herbal. But the rest of what associates with herbal is rather unsurprising: sage, rosemary, eucalyptus, basil, Thai basil, thyme, bay laurel. I found that this section was one of the most obvious to most gin drinkers when reading a botanical list. Partly because they understood the flavors suggested by many of these relatively common ingredients, but also because many distillers using bold flavors like rosemary and eucalyptus often included them right at the fore of the nose and palate. According to my research, spice is perhaps the most divisive category of the diagram. Spice botanicals seem to provoke a “love it” or “hate it” reaction. Spices like clove, black pepper, cardamom, and cinnamon tend to occupy this part of the diagram based on how they are distilled. However, some unexpected sensations like the vague unctuousness of an ingredient like pecan also invoked a spice-forward sensation. Some gin drinkers even describe a bold genever-style base spirit with lots of character as having a somewhat “spicy flavor.” Spice might also be the taste equivalent of how all color lights shining at the same time make white. When a gin has a lot of loud, boldly expressed botanicals — no matter which — gin drinkers tended to describe it simply as spicy. Floral is another one that can be fairly straight-forward, especially if a floral botanical is chosen as a signature ingredient, such as one of the several cherry blossom gins on the market. However, this is also where I see one of the biggest variations in expectation to how distillation and process can affect an ingredient. When a gin drinker hears the word “lavender” as a botanical, they often expect literal, slightly powdery lavender with maybe a tinge of violet sweetness. Lavender’s expression in a distillate can sometimes be herbal and light; other times it can be slightly vegetal; and even furthermore it could just be a subtle background note used for color and complexity— just at the fringes of your average gin drinker’s perception. The volatiles that give a flower its smell aren’t always the ones that come through when a floral ingredient is processed. My data suggests that this flavor category is a popular one to search for, but also that it’s one place where the promise of a drinker’s impression of a botanical and the resulting distillate is so frequently broken. Finally, and somewhat controversially, I kept the “heat” descriptor. Though not necessarily a flavor in itself, drinkers in general reacted pretty intensely to some of the organoleptic qualities of a spirit. While some might say they “liked the burn,” others would shy away r us Cit
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and say they wanted something a little bit “smoother.” Other factors contribute to this perception as well. Navy Strength Gin (a gin with about 57% ABV or higher) is nearly universally described as hot. Tannic notes, such as those present in young barrel aged gins, especially new char barrels also invoked notes like “warm,” in addition to the aforementioned “spice.” Conversely, Old Tom style gins that add sweeteners like honey are often described as “smooth” regardless of other factors. Heat isn’t always as straightforward as a gin’s proof.
WHERE DO WE GO from here Since 2012, I’ve shared over 500 of these diagrams on my website. Gin drinkers have thanked me many times for helping them discover a new gin that they would like simply by knowing that they “loved floral and disliked spice,” or wanted a “juniper bomb.” These are the most flattering things that a gin writer can hear. I’ve been using it to communicate something abstract like flavor to an audience in terms that they already know. But now, I’d like to encourage distillers to do the same. Keep telling your botanical story. Keep telling the story about your technique. Keep talking about flavor — but perhaps also do so by diagramming out your gin’s flavor on a hexagon like the one I’ve developed. The more we speak a universal language with our audience, the more we can help them discover new things — the things everyone reading this article is working on — and share that with their friends. A few years ago, I had a person tell me that they bought a well-known floral and spice-forward American gin. He was aflutter. It had been widely acclaimed; the bottle was peppered with all sorts of golden stickers. So he went out and bought it, the most expensive gin on the shelf. But you see there was one small detail — he was a lifelong junipersoaked Gordon’s drinker. He upbraided me and exclaimed that he “poured it down the toilet!” and swore to me he would never, ever buy another American distilled gin again. I shared with him several American gins that I thought
more aligned with their taste preference, but the damage was done. Nope. He’s sworn them off. This story has played out countless times in bathrooms and kitchens — anywhere there is a sink. That’s why I’m setting my diagram free. Please create your own as you develop your gins. Put them on your bottles, websites and marketing materials. Bartenders — put them on your menu. Store owners, put them on the shelf when you get a new local product in stock. There’s only one caveat. We need to all speak the same language. Use the same categories and descriptors. The temptation to riff on this work will be strong; however, I ask you to keep in mind the end goal: gin drinkers and wouldbe gin drinkers. If we speak their language, the language that is being used away from bar counters on dance floors; the languages being used in homes where friends watch Netflix together and try new spirits; and the language being used everywhere else out there where people with taste buds try new things and use their experiences to decide what they do or do not like. Gin can be there too. There are resources available at theginisin.com that you can download for your own personal use, or get further details on how to use the Flavor Hexagon to promote your gin’s unique flavor profile.
Aaron Knoll is a noted gin historian, critic and consultant. He authored 2015's “Gin: The Art and Craft of the Artisan Revival,” which has since been translated into three languages, and additionally co-authored 2013's “The Craft of Gin.” He also founded leading gin website TheGinisIn.com in 2009.
DIVORCING YOUR DISTRIBUTOR WRITTEN BY BRIAN B. DEFOE
the law of the “territory” covered by the agreement) will provide n these United States, it is now generally possible to end your the distributor with some rights that are to its benefit — and to marriage without having to prove that your soon-to-be ex did the detriment of the brand. The primary benefit? The lack of something horrible. And so while you may want to show a divorce an easy no-fault divorce approach for the brand to escape the court proof of your spouse’s bad acts — it isn’t actually required. You relationship. Rather, if the brand wants to leave the distributor can get what is commonly referred to as a “no-fault divorce” and go behind, it generally has a choice to make. It will either need on your merry, unmarried way. to demonstrate “cause” (or in some cases “good cause” or “just But this ability to escape what we occasionally refer to as cause” or some similar standard) under state law, or write a big the marriage contract without too much legal difficulty is check. the exception, rather than the rule, when it comes to actual The states that follow this model all approach the issue slightly contracts. In most cases, if you’re a party to a contract that differently, but there are certainly some thematic similarities. We you want to leave behind, your ability to escape will depend will consider several in turn. on the language of the contract itself and (potentially) your legal pain tolerance. For one type of contract near and dear to spirits brands — the distribution agreement — it may be even worse. Finding a distributor is often viewed by young brands as a rite of (BUT DON’T DEFINE IT) passage — something to aspire to, and potential indicia of success. Some might argue that a draconian standard for demonstrating This can be accurate. But just as marriage at a tender age (or at cause is the most challenging approach for a brand. Although any age for that matter) doesn’t always succeed, the same is a cogent argument can be made that the most challenging state true with respect to the relationship between a brand and a of affairs for a burgeoning brand is the situation where the law is distributor. The affianced, therefore, is well advised to move unclear. A few states’ laws create exactly that conundrum. In those cautiously into this relationship and, if appropriate, to enter states, the relevant legal regime requires that a brand demonstrate into a prenuptial agreement. [Note: For purposes of this article, some variant of cause in order to escape a distribution agreement we will assume the existence of an actual written agreement without penalty, but fail to provide a definition for cause. My between the brand and the distributor. However, readers should be home state of Washington is among these. Specifically, RCW advised that a distribution agreement may exist under state laws even 19.126.040 provides that a brand may exit without penalty in in the absence of such a document — often to the delight of the one of a few specific scenarios: distributor and the dismay of the brand.] There are many excellent resources for brands to consult when >> If the distributor has failed to live up to the terms and considering entry into a distribution agreement, so we will conditions of the distribution agreement; not repeat those items here. Instead, we will focus on one >>If the distributor’s conduct has run afoul of any of the provisions of particular concept, that of “cause” for termination of the a corollary statute (RCW 19.126.030 – fraudulent dealing with agreement and how it is implemented in several states. the brand or its products, bankruptcy and similar financial As a component of the three-tier system, the vast majority of problems, or certain problems relating to the distributor’s states regulate the relationship between an alcohol distributor and license to operate in the state); or the brands carried by that distributor. In nearly all of those states, >> For cause. the law of the state in which the distributor is selling the brand (i.e.,
SOME STATES ALLOW TERMINATION FOR CAUSE
SOME STATES GIVE A BIT MORE CLARITY ON CAUSE
Note that except with respect to the items in the second bullet, Washington still requires the brand to provide (BUT NOT ENOUGH) the distributor with sixty days’ notice of the intent to Not every state is as lax as Washington when it comes to statutory guidance. terminate the agreement. That notice must include Look closely at a few that seem to go the extra mile and you may decide that the reason for termination. Further, if the reason is the additional effort is just window dressing. something that can be cured within the sixty days — Connecticut is a good example. In The Nutmeg State, a brand can terminate and the distributor does in fact cure the deficiency a distributor for “just and sufficient cause” which according to Conn. Gen. — then the statute provides that the termination notice Stat. § 30-17(a)(2) is found when circumstances “in the opinion of a is null and void. All this means that even if you do reasonable person considering all of the equities of both the [distributor] everything correctly, Washington may require you to either and the [brand] warrants a termination.” This seems like it provides end up staying married to your distributor or paying for the helpful additional guidance for what constitutes cause in Connecticut. privilege of escape. But in fact, this is simply a recipe for litigation. Going back to the third bullet, it is meaningful to note The cited statute provides that the termination will only occur once notice that the statute does not define “cause.” Similarly, has been given to the distributor by the brand, with a copy to the Connecticut there is no relevant definition of cause in any of the Department of Consumer Protection, and the Department holds a hearing to regulations promulgated by our friendly local Liquor determine that just cause actually exists. and Cannabis Board. So, the intrepid brand is Let’s play out that string for a moment in a hypothetical scenario. The forced to go searching for what the term might mean. distributor will — by definition — be operating within Connecticut. It will It can’t mean failure to comply with the distribution have employees in Connecticut and pay taxes in the state. The brand may agreement, because that is listed separately as grounds or may not be operating within the state. In fact, it probably isn’t because for termination without penalty (i.e., if it is in the first although there are some excellent craft spirits being made within the bullet, it can’t be in the third). Similarly it can’t mean state there simply aren’t that many manufacturers that call it home. failure to comply with the various other items, which RCW Why should we care? Because when the good folks at the Connecticut 19.126.030 states are “deemed included” within every Department of Consumer Protection consider the equities of the proposed distribution agreement (e.g., the requirement that the termination (i.e., consider what is fair under the circumstances) there is distributor maintain the financial and competitive a reasonably likely chance that they’ll be influenced at least in part by the capability necessary to act as a distributor for the idea that an out-of-state party is kicking an in-state employer to the curb. If brand). What does it mean then? the brand is picking up a new distributor within the state, this issue will Borrowing from Washington cases interpreting obviously be mitigated a bit. Still, the jilted distributor may be especially similar statutes, we find a few likely candidates. For sympathetic in the eyes of the state, with the result being that the brand example, serious distributor misconduct (e.g., conviction (or its successor distributor) will likely be forced to pay to escape the of a felony) is likely cause for termination. But your relationship. In fact, if the brand is unsuccessful in convincing the distributor need not be a felon in order for you to find Department that it should be entitled to terminate the relationship, the cause. Washington cases also suggest that a brand may only other escape valve provided by the Connecticut statute is for the have cause to terminate a distribution agreement if the brand and the distributor to agree to terminate the relationship. As you distributor is simply engaging in business practices that might expect, that agreement is likely to come at significant cost to the brand. are detrimental to the consumer or the brand, or has Brands should note that Connecticut is not alone in requiring that a state inadequately represented the brand over a measured regulator approve termination of a distribution agreement. For example, period causing lack of performance in sales. Georgia law requires that the State Revenue Commissioner approve any The primary point, however, is not that there are termination of a distribution agreement in that state after the brand has methods of demonstrating cause, but rather that the filed a Notice of Intention to replace the brand’s existing distributor. Ga. failure of the statute to provide clarity on the definition Comp. R. & Regs. 560-2-5.10. That Notice must include the brand’s means that any brand seeking to terminate for this reason specific reasons for wanting to escape the relationship, and before the faces uncertainty with respect to the potential outcome. Commissioner will grant the termination it is required to give the distributor As a result, a brand seeking to terminate its distributor an opportunity for a hearing to object to the termination. The Georgia for cause really can’t know at the outset whether it statute provides additional clarity on the nature of cause for termination is actually heading down a path that will allow it to (e.g., the distributor’s failure to maintain sales volume of the brand reasonably escape the relationship without penalty. Since the consistent with sales volumes of other distributors or that brand). However, as penalty is in most cases picked up by a successor with Connecticut the only way for the brand to achieve freedom other than distributor, this means that the brand will likely have going through the notice and hearing process is for the brand to obtain difficulty getting that successor distributor on board from the distributor a voluntary release of the distribution rights. That and excited about the prospects of selling the brand in means a negotiated release, which means a payment to the distributor. the marketplace. WWW.ARTISANSPIRITMAG.COM
MOST STATES LIKELY REQUIRE PROMPT ACTION TO TERMINATE FOR CAUSE The franchise laws of many states with respect to beer require a brewer to take quick action if it is going to terminate its distributor for cause. For example, South Dakota provides that a beer distributor must be informed of its shortcomings within two years of the brewer learning of the problem in order for the brewer to have cause to terminate the agreement. While we are not aware of a specific state regulatory scheme that imposes such a requirement with respect to termination of a spirits distributor, the general legal principle here likely applies. The applicable legal doctrine is known as laches, which is generally applicable to contract disputes. Essentially, the doctrine holds that if a party to a contract breaches the contract, and the other party doesn’t complain about the breach within a reasonable period of time after discovering the problem, then the non-breaching party has waived the breach. Some form of the laches doctrine is in place in almost every state. So a brand that is internally complaining about difficulty with its distributor should make sure to voice those concerns with the distributor itself — and take appropriate legal action — in order to keep from waiving its rights.
SO WHAT TO DO? Rounding back to our marriage metaphor, brands should carefully consider the laws of the states in which they engage distributors and prepare accordingly. The distribution relationship is a marriage that can be difficult to annul. To the extent that a particular state allows the recitation within the distribution agreement of the specific responsibilities of the distributor — such that those may be pointed to by the brand as evidence of cause for termination — all the better. Nevertheless, be wary that some states may refuse to enforce certain parts of that prenup (e.g., performance requirements) as being against public policy. Moreover, nearly all state franchise laws are constructed to favor the distributor over the brand. Tread carefully.
Brian B. DeFoe is a business lawyer at Lane Powell, where he focuses his practice on helping companies in the customer-facing food, beverage and hospitality industries. Brian can be reached at firstname.lastname@example.org, via phone at (206) 223-7948, on Twitter @BrianBDeFoe or Instagram @HoochLaw. Visit www.hoochlaw.com for more thoughts on spirits and the laws that govern them. Brian would like to acknowledge the contributions of Bryan Taylor, a 2018 summer intern at Lane Powell, for his contributions to this article. This is intended to be a source of general information, not an opinion or legal advice on any specific situation, and does not create an attorneyclient relationship with our readers.
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Copper for Stills
FROM SERENDIPITY TO FUNCTIONALITY
WRITTEN BY PAUL HUGHES, PH.D.
What it is that makes copper as a material of construction so advantageous that it outweighs the higher cost, beyond esthetics? WWW.ARTISANSPIRITMAG.COM â€
he use of copper for the fabrication of distilling equipment remains a popular choice amongst still manufacturers and distillers alike. However, this is clearly not a decision made on economic grounds. As of May 2018, copper traded at around $3.10/lb, while 304 stainless steel traded at around $1.58/lb. So it is pertinent to consider what it is that makes copper as a material of construction so advantageous that it outweighs the higher cost, beyond esthetics. Copper has been in use since prehistory (the use of copper metal probably begins before 8000 BCE), not least because it can be found as the free metal in nature. Its relatives in the periodic table, silver and gold can also be found in their native states, and explains the historical uses to which these three metals were put. Today, native copper is not mined commercially as it is very rare. Rather, various ores, usually oxides and sulfides, are mined. Copper metal is typically released from its ores by heating in the presence of carbon.
Copper chemistry and its physical properties make it uniquely suited as a material of construction for producing potable alcoholic spirits. Historically the counties of Cornwall and Devon in the southwest of the UK were important sources of global copper, an industry thought to date back to the early Bronze Age (ie from at least 2000 BCE). By the end of the 20th century though, those mines were all closed. Today, most copper is mined in Chile, The USA, Peru and Indonesia, usually by open pit mining, although underground copper mines do exist. Apart from mining new copper, there is an extensive industry for copper recycling. This is facilitated by the fact that copper is relatively unreactive and so is fairly straightforward to recover. It is estimated that around a third of all copper used in manufacturing today is from recycled sources. Unfortunately this ease of recycling makes for an attractive but illicit trade in stolen copper, particularly copper cables. Whilst the relative ease of isolating copper metal in its pure state helped to establish it as one of the earliest metals in common use, copper chemistry and its physical properties make it uniquely suited as a material of construction for producing potable alcoholic spirits. From a physical perspective, the first thing to note is that copper has outstanding ductility and malleability. This means that it can easily be drawn into wires and formed into complex shapes, respectively. These properties are not insignificant when we consider copper worm fabrication for traditional condensers. However, apart from the facility to manipulate copper into a wide range of complex geometries, it is the chemistry of the copper surface that makes it serendipitously invaluable in many distilling situations. Copper is perhaps best known for its ability to bind strongly to free thiols and hydrogen sulfide, but not to sulfur compounds that lack an SH functional group, such as dimethyl sulfide, dimethyl disulfide (DMDS) or dimethyl trisulfide
(DMTS). With flavors such as rotting vegetable, drains and sewer, it is not surprising that there is a need to manage levels of these highly flavor-active compounds in the final product. For spirits that are matured, managing DMS during distillation is rarely an issue, as it is lost by evaporation (bp 100°F) and by oxidation to dimethyl sulfoxide, which is flavor-inactive at levels found in spirit. DMDS has been shown to deplete slowly during maturation, whilst DMTS is essentially stable. As an aside, these different maturation behaviors of sulfur compounds imply that maturation cannot solve all flaws in a new make spirit. This copper chemistry is not as simple as it may seem. While it might be assumed that thiols precipitate copper(II) cations, in fact, thiols can also stabilize the often more labile copper(I) oxidation state. In any case, the blackening of the inside of a still over time is testament to copper’s reactivity with species in the wash, and is probably made up mainly of a precipitate of colloidal copper(II) sulfide (copper(I) cyanide, whilst insoluble, has an off-white color). The presence of esters in spirits is rightly attributed to their formation during fermentation. However, copper has been shown to catalyze the formation of esters from alcohols and acids present in the wash. Watson (1983) showed that for a range of common esters in distilled spirit, the presence of copper typically doubled their concentration. The exact chemistry at work here is not clear, and what species of copper (eg copper metal or copper cations) are responsible for this catalysis is an obvious area for further research. For spirits rich in fatty acids, which can impart cheesy, sweaty, vomit, goaty and tallow notes if present at high enough concentrations, the presence of sufficient copper is not without merit! However, arguably of even more importance is the ability of copper to oxidize the cyanide anion. Cyanide is released
from its precursor, known colloquially as epiheterodendrin, which is found in malted barley and, if left unchecked, can be converted firstly into cyanate and then into ethyl carbamate, a suspect cancercausing agent in humans. The chelation of cyanate with copper(II) species catalyzes ethyl carbamate formation. Nevertheless, distillers have employed two approaches to minimize ethyl carbamate levels in final spirit. Firstly, barley breeders have been successful in eliminating the cyanide precursor, so at least for whiskeys the exposure to ethyl carbamate is minimized. Secondly, with a boiling point of around 455°F, sedate spirit distillation should leave most of the ethyl carbamate in the still residue. Copper is also found in the final new make spirit that is filled into casks. This may seem strange; after all, there are no volatile copper species reported in still feeds and thus it will not evaporate from the still. The reason for its presence is that small amounts of copper are leached from descending lyne arms and condensers, resulting in copper levels typically at around 1 – 5 mg/l. Higher levels are usually found when shell-and-tube condensers are used, presumably because of the greater surface area of a shell-andtube compared with a worm condenser. Anecdotally, a corollary of this is that spirits from worm tub condensers tend to have heavier and meatier sensory notes than their shell-and-tube counterparts, as there is less opportunity to remove some of the responsible sulfur compounds postdistillation in the former. The exact significance of this is not clear. However, copper(II) cations have an affinity for oxygen- and nitrogen-based ligands, and may complex to the toast/ char layer in a cask, that may in turn facilitate further oxidation reactions during the progress of maturation. Given that casks typically release acetic acid as the
interred spirit matures, it is interesting to speculate if such chelated copper can accelerate the formation of esters at the cask wall. Certainly some rapid maturation techniques focus on ester formation, so perhaps a soupçon of copper added to spirit in these systems would yield esters even more rapidly? So, is this bad news for the distiller with a stainless steel still? Not necessarily. There are two aspects to consider here. Firstly, not all distillations require the mediation of copper to attenuate the sensory qualities of their spirits. Redistillation of diluted neutral alcohol should not, at least in theory, require sulfide or cyanide binding. However, some distillers claim that putting a still under total reflux and insertion of copper metal into the column before the dephlegmator can improve the qualities of neutral spirit, especially for vodka production. Secondly, as alluded to above, copper can be inserted into the still, whether it is fabricated from steel or copper. Copper mesh of various mesh sizes, as well as copper netting or even rings, can
provide additional reactive surface area but also more reflux. Depending on the application, additional reflux may not be desirable, especially for applications such as gin production. It is worth bearing in mind that the main products from a distillation in terms of volume are the co-product streams. So, for an initial feed or 8% ABV and a final spirit strength of 80% ABV from the still, a theoretical aqueous co-product stream will be around 90% of what is put into the distillation process. For Scotch malt whisky, for instance, pot ale from the wash still is around 65% of the starting wash and spent lees accounted for around a quarter of the volume. There are various approaches to disposal, but the copper levels, typically 20 – 50 mg/l, cannot be ignored. So if a farmer sprays pot ale on fields to add nutrients to the soil, it is advisable not to graze sheep there as they are sensitive to copper and can readily develop copper toxicosis. The presence of copper in these coproduct streams implies corrosion of the whisky still, so that eventually the copper
thins to a point where it begins to lack physical integrity, at which point the still needs to be repaired. Interestingly it is the acidity of a whisky wash that leads directly to this corrosion. Copper gin stills, such as Tanqueray’s no. 10 still, has been in existence for over 200 years but, because of the neutrality of the still feed, has enjoyed a lot longer life. The use of copper as a material of construction for alcohol stills still has substantial merit, not least because of its largely favorable impact on spirit composition and because ethyl carbamate issues can be minimized. The insertion of additional copper into the still is feasible and employed in practice, but the additional reflux that can be observed by this additional copper may not be desirable in some cases. If in doubt, try it and see!
Paul Hughes, Ph.D. is assistant professor of food science and technology at Oregon State University in Corvallis, OR. For more info visit www.oregonstate.edu or call (541) 737-4595.
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Money Down the Drain?
here are many issues to worry about when operating a distillery. One of these is the non-fermentable materials that are left after fermentation. In some of my previous articles, I’ve talked about ways to add value to and utilize your spent grains. In this piece, I will talk about issues related to sending the non-fermentables down the drain for the municipal water treatment plant to deal with. A rule of thumb commonly used in the industry states that for every 1 kg of cereal grain used for fermentation, approximately 1/3 kg of each of the constituent product streams (alcohol, CO2, non-fermentable residues) will be produced. On a more scientific basis, the rule of thirds arises due to the metabolism of the yeast while they consume the glucose in the grain’s starch: 1/2 C6H12O6 (Glucose) C2H5OH (Ethanol) + CO2 (Carbon Dioxide)
Theoretically, one bushel of cereal grain can yield a maximum of about 2.97 gal/bu (0.44 L/kg). Realistically, however, an alcohol yield between 2.50 to 2.74 gal/bu (0.37 to 0.41 L/kg) is more common at many distilleries, although some plants can achieve up to 2.80 gal/bu (0.42 L/kg). Thus, 25.4 kg of cereal grain will typically produce about 8 kg of alcohol, 8 kg of carbon dioxide, and 8 kg of spent grains (not counting the water). This equates to a cerealgrain-to-distillers-grains conversion of about 0.30 kg spent grain / 1 kg cereal grain (with a range from 0.28 to 0.32 kg / 1 kg cereal grain) — thus the rule of thirds. Potential variations in cereal grain conversion and fermentation will substantially affect the quantity of coproducts that are generated during processing. Moreover, at individual distilleries, variations in raw material inputs, equipment used, and operational procedures will also result in conversion rates that will not match values found in literature, but instead vary over both time and location. As I have discussed in previous articles, there is much economic value to be gained from dewatering the TABLE 1: spent grains (i.e., separating the thin (TS) (%, dry basis) stillage, which TYPICAL contains water and PROPERTY VALUES dissolved solids) and Dry Matter 5.0 selling the distillers Protein 16.8 wet grains (i.e., Fat 8.1 suspended solids) Carbohydrates as livestock feed. Neutral Detergent Fiber (NDF) 11.7 Typical nutrient compositions for Starch 22.0 thin stillage and Ash 5.9
chemical properties of THIN STILLAGE
Considerations for Byproducts vs. Coproducts vs. Waste Products from Alcohol Distilling WRITTEN BY KURT A. ROSENTRATER
chemical properties of DISTILLERS WET GRAINS (DWG) (%, dry basis)
30.9 - 35.5
25.0 - 39.5
8.5 - 14.5
Carbohydrates Neutral Detergent Fiber (NDF)
39.4 - 58.1
Acid Detergent Fiber (ADF)
23.4 - 25.3
4.6 - 9.0 1.2 - 2.4
TABLE 3: proportion of municipal authorities using various wastewater characteristics to CALCULATE SEWAGE SURCHARGES
spent wet grains is provided in Tables 1 and 2. Separation can be achieved with a variety of equipment, including centrifuges, screens, etc. (n = 71) (adapted from Garcia et al., 2016) Many distillers, especially small plants, do not yet AUTHORITIES do this. If you are sending your liquid byproducts WASTEWATER CHARACTERISTIC UTILIZING (%) (i.e., whole stillage or thin stillage) to the city water TSS — Total suspended solids 97.2 treatment system, there are many issues that you BOD — Biochemical oxygen demand 90.1 need to consider. FOG — Fats, oil, and grease 31.0 Public wastewater treatment authorities have TKN — Total Kjeldahl nitrogen 26.8 fee structures where non-residential customers COD — Chemical oxygen demand 21.1 (e.g., distilleries) are charged according to the TP — Total phosphorus 16.9 burden that they place on a wastewater treatment facility. One component of this fee is a surcharge 16.9 NH3 — Ammonia based on the specific chemical characteristics of CBOD — Carbonaceous biochemical oxygen demand 4.2 your wastewater. Municipal authorities periodically CI Demand — Chlorine demand 2.8 sample customers’ wastewater streams and analyze TOC — Total organic carbon 1.4 them for parameters such as biochemical oxygen Some of these properties are explained in Table 4. demand (BOD), total suspended solids (TSS), Source: Garcia, R .A., Nieman, C.M., Haylock, R .A., Rosentrater, K .A., Piazza, G.J. 2016. The effect of chicken blood and its components on wastewater characteristics and sewage surcharges. Poultry Science. 95(8):1950-1956 ammonia (NH3), and other chemical/physical properties. The specific chemical characteristics which are monitored vary by authority, and these so understanding how these fees are determined is not always parameters are then used, along with the volumetric output of clear. In a recent study (Garcia et al., 2016), data was gathered wastewater, to compute each customer’s fee. on the methods used to determine sewage surcharges for industrial Every city in the U.S. is unique, however, and each has its own customers. For each public sewage treatment authority, information rate structure. But a large proportion of U.S. wastewater treatment on the pollution characteristics measured, rates, and methods of authorities do not post their surcharge formulas on the Internet, computation were recorded and assessed. Overall, information was collected on 71 wastewater authorities throughout the U.S. TABLE 4: Information about the chemical characteristics used to determine surcharges from these municipal authorities is summarized in Table 3. Over 90% of the municipalities surveyed included both TSS and BOD in the determination of sewage surcharges. Between PROPERTY TYPICAL VALUES 21% and 31% used FOG, TKN and COD to determine fees. Less Is the amount of dissolved oxygen needed (i.e. than 20% of the municipalities used other chemical factors. Table demanded) by aerobic biological organisms to break Biochemical oxygen down organic material present in a given water sample 4 provides definitions of these terms. demand (BOD) at a certain temperature (20oC most often) over a specific time period (5 days is common). In the national dataset of municipalities, there were multiple ways to calculate sewage surcharges. For 60 of the 71 (84.5%), Is a measure of the amount of oxygen that can be consumed by reactions in a measured solution. It surcharge formulas were expressed with this type of formula: Chemical oxygen is commonly expressed in terms of mass of oxygen
general definitions of parameters used to assess the PROPERTIES of WASTEWATER EFFLUENTS
consumed per volume of solution, which in SI units is milligrams per liter (mg/L). A COD test can be used to quantify the amount of organics in water.
Total suspended solids (TSS)
Is the dry-weight of suspended particles (not dissolved particles) in a sample of water that can be trapped by a filter, and is analyzed using a filtration apparatus.
Total phosphorus (TP)
Phosphorus compounds originate from the cereal grains, and are concentrated during fermentation.
Nitrogenous compounds originate from the cereal grains, and are concentrated during fermentation.
Total Kjeldahl nitrogen (TKN)
Is the total nitrogen bound in organic substances, nitrogen in ammonia (NH3-N), and in ammonium (NH4+-N) in the chemical analysis of soil, water, or wastewater (e.g. distillery effluent). Nitrogenous compounds originate from the cereal grains, and are concentrated during fermentation.
Fats oil and grease (FOG)
These are oils that accumulate in the stillage, and are concentrated during fermentation. They originate from the cereal grains that are used.
Si = V × (Bi − Ci) × D × Ei(1) Where: • Si is the surcharge for a given wastewater characteristic i (US $) (See Table 3 for the typical characteristics) • V is the total volume of wastewater discharged during the billing period (gallons) • Bi is the measured concentration of the wastewater characteristic i in the discharged wastewater (mg/L) • Ci is the allowable concentration of the wastewater characteristic i (mg/L) • D is a unit conversion factor (typically 8.34 lb · L/mg · gal) • Ei is a cost factor for the wastewater characteristic i (US $/lb)
If more than one wastewater characteristic is monitored by a municipality, then the total surcharge can be calculated using the following formula:
Total Surcharge ($) =Σ Si(2) Where: • Si is the surcharge for a given wastewater characteristic i (US$) (See Table 3)
WASTEWATER CHARACTERISTICS of ALCOHOL COPRODUCTS if sent to municipal wastewater treatment facility
As shown in Table 5, stillage fractions (either whole stillage out of the fermentor, or thin stillage after centrifugation/screening) both have relatively high BOD and COD levels. To date, little has been published about the other wastewater characteristics of stillage, however. It PROPERTY TYPICAL VALUES is important for you to understand your wastewater characteristics, Whole Stillage especially if you are planning on sending your coproducts to the city BOD (g/L) 37.0 for treatment. COD (g/L) 56.0 What do all of these things mean for distilleries? If you are not Thin Stillage selling your spent grains for livestock feed, and are instead sending BOD (g/L) 26.9 - 43.1 your byproduct streams to the city for treatment, you are spending COD (g/L) 59.4 - 64.5 money – the level of which depends upon your specific wastewater characteristics as well as your municipality’s fee structure. You need to consider these costs as you weigh all of your potential options for coproduct separation, processing, and sales. The optimal choice for you also depends upon the size of your distillery, proximity to livestock farms, transportation costs, etc. There is no one-size-fits-all approach. But as this industry grows, these are some of opportunities and challenges that we must all understand.
Kurt A. Rosentrater is with the Distillers Grains Technology Council in Ames, IA. For more info, email firstname.lastname@example.org or call (515) 294-4019.
Y E K S WHmI the fro f o T R A E H L A C MEZ Y R T N COU
AGAVE MAKES WAY FOR MEXICAN HEIRLOOM CORN AS A MEZCAL PRODUCER INTRODUCES SIERRA NORTE OAXACAN WHISKEY WRITTEN BY JEFF CIOLETTI PHOTOGRAPHS PROVIDED BY SIERRA NORTE
f you’ve looked at recent sales figures, you’ll know that it’s a great time to be in the agave spirits business. In the U.S., imports of tequila and mezcal were up a collective 8.5 percent, with mezcal alone experiencing double-digit growth in 2017, according to the Distilled Spirits Council. While that’s certainly a reason to celebrate, it’s a bit of a mixed blessing. Small producers in Mexico have been dealing with a supply problem that’s making it difficult for them to keep up with demand. That’s especially true in Oaxaca, the epicenter of mezcal production. The makers of Scorpion mezcal and the single-varietal Escorpion series knew they had to find a supplemental spirit to keep the stills running. And master distiller Douglas French, who’s been living in Oaxaca and making mezcal for nearly a quarter of a century, was determined to use an indigenous crop. “I came across the history of corn in the world and I knew this, but I never really paid attention to it: Oaxaca is the birthplace of corn in all of the Americas,” says French. “Actual samples have been carbon-dated back as far as 7,000 years ago. This heirloom corn was available in every color of the rainbow.” WWW.ART ISANSP IRITMAG.COM
So, he thought, why not turn some of that ancient corn into whiskey, since no one else really seemed to be doing it. And that whiskey ultimately would become Sierra Norte. While most of those heirloom varietals no longer exist, traditional Oaxcan farmers continue to grow the white, yellow and black variations. “Many of those farmers have faded into extinction because it’s not economically viable to compete with GMO corn,” French says. French started buying the heirloom corns from farmers selling them in village markets. Ultimately he was able to contract with
a group of farmers to continue to supply his distillery with those necessary raw materials. “I do my own farming, and I know what it costs, so I pay them more for the corn so they can make a fair living and continue doing it on traditional farms in small parcels, one to five acres,” he notes. “Rarely do you see a parcel larger than five acres.” Once he procures the corn, he makes a mash — 85 percent corn and 15 percent malted barley — double distills in pot stills and lets the spirit sit in used French oak wine barrels for six to 10 months, depending on how long the whiskey takes to achieve French’s desired flavor and color. The company, through its Caballeros, Inc. import/export arm, currently markets three different varieties of Sierra Norte Single Barrel Whiskey: Native Oaxacan Black Corn, Native Oaxacan white Corn and Native Oaxacan Yellow Corn. Each is bottled at 90 proof, and each one exhibits its own flavor and aroma nuances. White Corn has some faint smoky and toasty character to it. Spice and fruit are the dominant notes in Yellow Corn. Black Corn is striking for its lingering burnt-toast-like character. Right now, the company’s main focus is the U.S. market. “We’ve gotten distribution in about 20 states,” he says. “I’m selling a little bit in Mexico, but they’re not really big whiskey drinkers down there. I’m selling a bit in Europe as well.” But French’s mission is about much more than introducing the world to Oaxacan whiskey. “The main part of this program is that we’re recovering
LOGGERHEAD DECO, INC. 1640 LA DAWN DR. PORTAGE, WI 53901 630.206.3747 www.loggerheaddeco.com email@example.com 86
the heirloom corns and the culture of the traditional farmer who grows it because they’re fading into oblivion not being able to compete,” he explains. It’s one component of an overall effort to promote social values and economic stability in Oaxaca. The company says that for every job that’s created in the distillery, there are five indirect jobs created. With 15 people now working in the distillery, that means 75 indirect jobs, all making a living wage and feeding an average of three people in each family. “The other part of my program,” he says “is to revive the corns that are almost extinct.” To accomplish that, he’s replanted a few cobs of the endangered varietals that he’s
“The main part of this program is that we’re recovering the heirloom corns and the culture of the traditional farmer who grows it because they’re fading into oblivion not being able to compete.” — DOUGLAS FRENCH
been able to find in local markets. He then keeps re-planting the seeds that the new corn plants yield. He’s already resuscitated a purple corn crop and turned that into a spirit, which is, at the moment, maturing in oak and will be ready for release in 2019. He’s also been working with a red varietal called Sangre de Cristo (Blood of Christ), as well as a green corn. Those aren’t quite as far along. “It takes two to three years to establish a seed bay where you can plant 30 to 40 acres of corn to really have a commercial product,” French says. “We hope to continue that part of the program and recover as many varieties and species that we can find seeds for.”
Sierra Norte is located in San Agustin de las Juntas, Oaxaca, Mexico. Visit www.sierranortewhiskey.com for more information.
A NIGHTMARE ON OAK STREET WHAT TO DO WHEN A BARREL TURNS OUT WRONG W R I T T E N B Y G E O R G E B . C ATA L L O
veryone’s favorite day at the distillery finally comes: barrel selection day. As you go from barrel to barrel, you happen upon one unlike the rest. This one is downright bad. Panic sets in, all your hard work, all the money and time put into that barrel for nothing. But not so fast, all hope is not lost. You have the technology, you can rebuild him!
IDENTIFYING THE CULPRIT Clearly if there is only one unpleasant outlier, it’s not the distillate’s fault — it was probably the wood itself. Unfortunately the only way to avoid this situation is to partner with a really good cooperage. But even in doing so, you’re still going to run into a dud once in awhile. While partnering with a good cooperage certainly puts a strain on the wallet, you can’t make good whiskey with bad barrels.
REBARREL! The cheapest and easiest way to try and right this wrong would be to put the whiskey into one of your own used barrels. Perhaps time in a previously successful barrel might age out the flaws. For especially bad whiskey, time in an unused, heavier char barrel may be more appropriate. Obviously this is a huge risk, as you may be wasting money on perfectly good cooperage that will not improve the whiskey and be unable to be reused later.
DOUBLE, TRIPLE, QUADRUPLE BARREL Multiple cask maturation is all the rage right now. Did you know that its use is not just to put a twist on your whiskey, but a way to correct it? If you go down this route with your whiskey, make sure to give a nod to David C. Stewart of William Grant & Sons for popularizing the practice back in the 1980s. Wine casks are one way to go about this, especially if you’re in a winemaking region. While fortified wines like port and sherry bring a lot of great sweet dried fruit and confectionery flavors to the table, WWW.ARTISANSPIRITMAG.COM
the barrels can be very pricey. Look to non-fortified varietals for more cost effective used barrels. Reds like Cabernet Sauvignon and Merlot will bring lots of red and brambly but dry fruit notes into the equation, while whites like Chardonnay will bring apple, pear, and a bit of creaminess from the diacetyl from malolactic fermentation. Doing contract work for wineries to distill brandy for them is a great way to secure a supply of barrels. If you aren’t quite in wine country, the craft beer boom makes for lots of used barrel opportunities. A barrel from a good stout or porter can definitely mask or improve any off flavors. Don’t be afraid to push the limits here; a barrel that held a sour beer, bitters, or even maple syrup can yield interesting results.
WHEN A PROBLEM COMES AROUND, YOU MUST CHIP IT — CHIP IT GOOD Not quite feeling like investing in barrels but want to alter flavor? Hardwood staves or chips are a solid solution as well. If you can smoke a brisket with it, you can steep it in your whiskey. Applewood, cherry, maple, hickory, mesquite, pecan, and alder are some good examples. If your off whiskey has a whole lot of funk, try odd combinations of hardwoods. If it doesn’t completely mask the off notes, you’ll redirect the consumer’s palate enough to pass off the whiskey as interesting and different instead of flawed. Ironically, while writing this article, a friend of mine brought me a sample of a whiskey that, beyond aging in oak, saw contact with 5 other wood types. This distillery used hickory, maple,
WOOD TYPE FLAVOR CHART ALDER — Subtle, sweet, and delicate APPLEWOOD — Fruity and mild, lightly sweet BIRCH — Similar to but milder than maple CHERRY — Robust and fruity (mostly cherry, obviously) GRAPEVINE — Tart and fruity, can become too tart if overused HICKORY — Bold, heavy, and a little sweet. Immediately reminds drinkers of barbeque MAPLE — Mellow, sweet, maple syrup MESQUITE — Earthy, rich, and also reminiscent of barbequed meats. Sweeter and lighter than hickory MULBERRY — Sweet and apple-like RED OAK — Classic white oak notes but more robust PECAN — Like hickory but more mild and a touch less sweet WALNUT — Intense, nutty, oily, and bitter in large doses 89
mulberry, red oak, and grapevines and left the whiskey at cask strength. While you and I can speculate as to what they were really doing here, my enthusiast friend was unable to pass the whiskey up due to how interesting it sounded. Remember, a bad barrel can be a huge opportunity for a oneoff limited edition product and not just a curse. NOTE: If you want to try and correct by making a “smoked” whiskey after the fact, it is possible to use a liquid smoke product of a wood of your choosing. Just make sure to keep an eye on how much liquid smoke you add by percentage of volume or you may have to label your whiskey as flavored. Double check the TTB guidelines for the style of whiskey you are making to be sure of this percentage.
BLEND IT ANYWAY! A skilled blender can find a way to make a little bit of unpleasant whiskey work in a normal release. The way to do
this is simple in theory but difficult in practice, use contrasting flavor profiles to achieve balance. If it tastes old, dusty, and overwooded, blend it with younger, fresher whiskey. A good example of this has been seen when brands claim to have “accidentally” blended very old whiskey with very young whiskey and lament over how the mistake was a miracle in disguise. If you distill multiple types of whiskey, you can always blend varying types together to balance flavor.
WORST CASE ISN’T THE END Now we have to talk worst case scenario. This whiskey is shot. Absolutely FUBAR (Fouled Up Beyond All Repair). You have two last Hail Mary options before letting it find its way to the ocean. One is to divide the bad whiskey up amongst dozens of barrels of your younger whiskey in very small quantities. The goal here is to dilute
the bad whiskey so much that it is virtually undetectable, but left unwasted. The other, throw it back in the still and start over. While redistilling a failed whiskey may seem like you’re throwing a lot of time and effort away to start not quite fresh, it could beat a total loss. There are probably dozens of other ways to salvage a bad barrel of whiskey (like adding fruit and other flavors), but these are some of the more practical ways to go about it. Remember, never give up on your whiskey… unless it’s undergone saponification — then you really do need to dump it.
George Catallo is the "Whiskey Guy" and Floor/Social Media Manager at Parkway Wine and Liquor in Rochester, NY. He has been in the beverage industry since he turned twentyone and has worked as; the Bar Operations Manager of a wine bar, an Assistant Distiller and Supplier Rep for a craft distillery, and has even hosted a spirits review web series on YouTube under the moniker 'Just One Dram'.
It’s In There Inventory Certification, Losses and Shortages
WRITTEN BY JIM MCCOY
s the distiller becomes familiar with the “bible” of rules found in the Federal regulations, they will find the basics: monthly reporting, paying taxes, basic records requirements, transfer in bond approvals, etc. The TTB website does have plenty of information which can help to decipher the mysteries of how to be a compliant distillery operator. Within this realm of complex rules, there are things that are important to know and which have specific requirements the distiller should be aware of and comply with. In this article we will briefly try to illuminate the physical inventory record, reconciliation and certification requirements, and rules for dealing with losses and shortages.
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When are physical inventories required, and how should they be documented? 27 CFR Part 19, in specific sections 19.312, 19.333, and 19.371, require that the Distilled Spirits Plant (DSP) operator certify the accuracy of quarterly physical inventories of bulk spirits in the production and storage accounts, bulk unpackaged spirits in the processing account, and per 19.394 bulk denatured spirits (if any). The inventory record is required to be certified as per section 19.623. This means that at the end of each calendar quarter (March 31, June 30, September 30 and December 31) a physical inventory of all applicable bulk distilled spirits held in bond is taken and the results of that inventory certified under penalty of perjury by a person having authority to sign for the DSP operator. Regarding bottled and packaged (drums, barrels, etc.) spirits held in the Processing finished goods account (Reported in Part II of the Monthly Report of Processing Operations TTB F 5110.28) the regulations add more specific requirements, and require the inventories to be taken generally on June 30 and December 31. Such counts permitted to be made as provided in 19.372(a) a few days before
cation Quarterly Physical Inventory Certifi Year ______
Quarter ending the last day of: Mar ______ June ______ Sept ______ Dec ______ ired ry that the physical inventories requ I declare under the penalties of perju and 19.394, as 72 19.3 71, 19.3 33, 19.3 12, 19.3 by 27 CFR Part 19, Sections by and the record of inventory required may be applicable, have been taken ined by me exam been has ts, men docu g ortin 27 CFR 19.623, including supp . belief, is true, correct, and complete and, to the best of my knowledge and
or after and reconciled to the inventory date, and in 19.372(b) to be conducted on an alternate date, if TTB permission is obtained, as long as the alternate dates are at the end of a tax period and at least 6 months apart. One of the inventories may be waived, per 19.372(c), with only one annual inventory, if TTB permission is obtained. The regulation in 19.372(d) requires that TTB be notified 5 days in advance of a physical inventory, to allow for TTB to supervise the inventory if they so desire. In reference to the published Delegations in TTB O 1135.19D the appropriate contact points for the alternatives available in 19.372(a), (b) and (c) are the TTB National Revenue Center, or your District Director of Tax Audit Division or Trade Investigations Division. The notice of inventory in 19.372(d) is to be directed to your District Director of Trade Investigations. Contact information and territories covered by these offices are on the TTB web site at www.ttb.gov. The regulations at 27 CFR 19.623 specify the format of your inventory record, requiring date of the inventory; identity of the container(s); kind and quantity of spirits, denatured spirits, and wines; losses, gains or shortages; proprietor's signature, or the signature of the person taking the inventory, with the penalties of perjury statement as prescribed in §19.45. The DSP “must record in the daily records of operations, tank records, dump/batch records, bottling and packaging records, or denaturation records, as appropriate, any overages, gains, or losses disclosed by an inventory.” Inventory records must be retained and available for inspection by TTB officers. Here is a basic format that can be used to certify inventories. Also, be sure that the inventory entries on the monthly reports reflect the results of the required inventories and that gains and losses, or shortages, are reported appropriately on the reports. Bulk losses in storage or processing are subject to the limitations in regulations, generally 1.5% of the spirits accounted for during the period. General method within each account (Production, Storage and Processing) is to add beginning inventory to quantity received during the period, subtract quantity removed during the period, subtract recorded losses, subtract ending inventory and compute the percentage of loss by dividing the overall accountable total before subtractions into the computed loss.
1,000 pg 900 pg
To Account for
Recorded Losses Ending Accounted for
10 pg 687 pg 1,887 pg
Percent of Loss
Loss for this period is within tolerance, no claim required. Should the bulk losses exceed this tolerance, a claim for remission of tax is required per 19.462 and as per 19.263, explaining how the loss was determined and the reasons that it was excessive. Absent approval of the remission claim, the excessive loss may be subject to tax. Be sure that if a shortage of finished bottled goods is determined by an inventory reconciliation, the shortage is tax-paid by creating an increasing adjustment in Schedule A of the next tax return after the date of the inventory per 27 CFR 19.465. A common question is to define a shortage of finished goods versus a loss. A loss is something event driven and documented, such as a properly documented breakage in bonded bottled goods inventory (a casualty loss), while a shortage is the finding by inventory reconciliation that a quantity of finished bottled spirits cannot be located and are presumed removed for consumption. Review the loss and shortage rules in 27 CFR part 19, Subpart U. As always, laws, regulations and related TTB published guidance are the official “word” on what the rules are and how the government expects operations, procedures and records to be conducted and maintained. In respect to reconciling inventories and handling losses, the accuracy of gauging methods and measuring devices, and consistency of procedures in recording gauges of spirits, are the most important factors in maintaining required records, as well as preventing the need to “explain and claim” or pay tax on excessive losses or shortages.
Jim McCoy operates J. McCoy Alcohol & Tobacco Compliance Consultants LLC, and since 2010 has assisted alcohol and tobacco businesses in their efforts to meet Federal regulatory and tax requirements. For more information email Jim at firstname.lastname@example.org WWW.ARTISANSPIRITMAG.COM
FROM POLAND WITH
LOVE WRITTEN & PHOTOGRAPHED BY DEVON TREVATHAN
PHOTO BY MOLLY GOUGH
Zbigniew Kozuba and his two sons traded the moderate summers of Poland for Florida’s tropical heat. They bridge the international gap in a distilling operation that pairs European tradition with modern innovation.
here is a renovated warehouse just a few blocks off Central Avenue in downtown St. Petersburg, Florida. Away from the colorful galleries and open-air restaurants, below a strip of highway and surrounded by the frondescence of Florida pines, this old seafood storage icehouse is now home to Kozuba and Sons, a family-owned and operated distillery run by Zbigniew “Papa” Kozuba and his two sons, Matthias and Jacob. In the early 2000s, Zbigniew retired from a successful career as a biochemist and set off to live in the countryside of the Mazury Lakes district, three hours north of Warsaw in his native Poland. Instead of allowing his hands to become idle, Zbigniew turned to tinkering with cordials. It was something that his grandfather had done even before the second World War. Back then, the family grew their own rye, wheat, barley and potatoes, and made a spirit similar to moonshine that they would macerate fresh fruits with in a style that has a long tradition in Poland. This drink, called Nalewki, was then aged for a number of years to further develop flavor. “It wasn’t even two years [and] his cellar was full of bottles, full of different potions and mixtures,” says Matthias Kozuba, the elder of Zbigniew’s two sons. The cordials had quickly become a favorite of the community, lauded by priest and policeman alike. “That’s when he asked us a question, if we would like to take it to the next level and commercialize his passion.” The three Kozubas — Zbigniew, Matthias, and Jacob — began producing cordials to sell in 2005. As the infusions aged, the Kozubas went through the steps necessary to start a business. By 2007, they had introduced their product into the market and were officially the first privately owned craft distillery in Poland. And then, they waited, but what they were expecting never came. WWW.ARTISANSPIRITMAG.COM
The Kozuba family knew that the craze surrounding craft distilling had not yet reached Poland. They thought it would arrive eventually, five or six years behind at most. Unfortunately for them, the Polish mentality towards local business never shifted. “They would rather spend more money on a product that was imported because they do not consider Polish products as quality products,” Matthias says. His brother, Jacob, chimes in, saying the attitude is a result of “the years of communism when there were no good products in Poland.” While the Kozubas were facing difficulties gaining traction in their local market, critics from other countries began to recognize and applaud the spirits they were putting out. Theirs was the first single malt whiskey ever produced in Poland, a 100% barley mash, which was released after aging for three years in American Oak barrels. They found themselves caught between a rock and a hard place: the economic situation in Poland was not ideal, nor was the mindset of the native people. When they went to conventions in other countries, they saw the spirits industry booming in all of its entrepreneurial glory. After a couple more years of producing at home, they finally decided that, for their business to grow, they would need a change. Adapt or perish. The Kozubas set their sights on America. They wanted to land where the market was still lean, not overstuffed on craft commodities. “We were comparing not only the market saturation, we were also comparing business environment, tax structures, and at the end of the day we were picking between Texas, California, and Florida,” says Matthias. California was quickly axed; it remains the most saturated state for small distilleries in the U.S., not to mention one of the most expensive ones to live in. Texas was friendly to businesses, but the Kozubas were turned off by the stories they
heard of its social conservatism. That left the Sunshine State. “Over twenty years ago, we were sitting in Miami for a couple of months learning English, and we loved this place,” Matthias remarks. But their once-beloved city had changed over the ensuing decades, and the Kozubas’ lawyer reminded them that they had families to think of. He suggested they consider Tampa, which the brothers did. “That was actually our first choice. We loved it, we loved the city, the architecture, the neighborhood, the mentality of people,” but zoning difficulties stalled their momentum. They decided to look outside of Tampa, and their search brought them further down the west coast of Florida to St. Petersburg. The city was a perfect fit. Matthias says, “it even reminded us a little bit of Europe, the smaller cities with all the boutiques and galleries.” Finally, they had found the locavore that they needed to make their distillery a success. Assimilating to a new market, however, was far from a cake walk. “In Europe people love packaging,” explains Matthias. They embrace fanciful design, and when the Kozubas arrived in America, their bottles reflected that preference — they were beautiful, ornate and wholly unique. Their distributor was the first to break it to them: those kinds of bottles wouldn’t cut it here. In most cases, the American consumer expects a clean look, artisanal labels without much embellishment. “That was the first thing that was like a bit of a wakeup call.” The family had spent so much of their time focusing on the benefits of the American market, but they hadn’t stopped to consider the disadvantages that continue to plague many on the craft side of the industry. Though craft is more established here than it is in Poland, most distributors aren’t able to give small producers the attention that they need to excel in the market. “A small distillery like ours stands no chance against the incentives and support they receive from the bigger suppliers, so we knew that
we would be the ones to do the walking and talking and pushing.” Again, the Kozuba family chose to adapt. They split ways with their former distributor and are currently shopping around for a smaller coterie. “We’re still looking for that uniqueness behind our brand, because family owned and operated is not enough at the end of the day,” Matthias admits. “I think the biggest revolution that we had just took place when we introduced our first boxed vodka.” The wheat-based vodka, a 1.75 liter offering called B Squared, is one of the more recent releases by the Kozuba brand and has already garnered positive attention. The credit belongs to Zbigniew, who saw the need for a beach and pool-accessible format for spirits. Total Wine picked up the product right away, and it is now available in 19 states throughout the country. Since arriving in Florida four years ago, Kozuba and Sons have streamlined their packaging and made drastic cuts to the portfolio of spirits they offer. There is currently a vodka distilled from wheat; Mr. Rye, their rye malt whiskey; a barrel-aged vodka called Starkus; a white whiskey; three cordials; and Kindred, a wheat and rye whiskey similar in character to some bourbons. The family hopes to make experimentalism part of their brand by releasing limited edition products consistently. “We want this place to become more of a boutique, experimental distillery, giving people the opportunity to learn and try a variety of different products.” Whether they are aging vodka in European oak or hosting block parties every Tuesday in St. Petersburg, Kozuba and Sons has set the gathering of their community firmly in their crosshairs. Matthias explains, “We want to give people the possibility to explore different cultures and different spirits from all over the world. That’s our new concept.”
Kozuba and Sons is located in St. Petersburg, Florida. For more info visit www.kozubadistillery.com or call (727) 201-9078. 96
i n e F DDLESTON READE A. HU WRITTEN BY FAULKINBERY TE ET N D BY LA ILLUSTRATE
he old saying “one man’s junk is another man’s treasure” undoubtedly speaks to the heart of many distillers. One of the first things every distiller learns is to never let anything go to waste. Be it finding new ways to recapture process heat or sending spent grain to local farmers, distillers love to repurpose what others see as unusable. This is especially true in Goa, India, where local distillers have been turning what was once thought of as an agricultural waste product into a unique regional spirit named Feni. So, what exactly is Feni, how is it made, and why is it unique to Goa? Well, the answers can be somewhat complex. Traditionally, Feni is made from one of two sugar sources: coconuts or cashew fruit.1 Feni made from coconut, which is far less common in Goa, is essentially the same product as the Indian distillate Arrack and will not be focused on. Instead, this article will look at Feni made from the cashew tree. The process of making Feni is relatively simple. Nevertheless, to fully understand its production, one must first learn about the cashew tree and how its products are harvested. Cashew trees are tropical evergreen trees that are most commonly known for their nuts. What is not as well-known though, is that the trees also produce a “fruit” known as a cashew apple.2 This fruit, which is technically an engorged stem and not a true fruit, is important because the valuable cashew nuts grow attached to the cashew apple.3 This means that the nut and apple are often harvested from the tree as one unit and then later divided.4 In most cashew-producing regions, the nut is considered the only valuable part of the crop and, once separated, the apple is left to rot.5 In Goa, however, this is not the case. During harvest season — normally between February and May — Goan farmers will separate the fruit from the seeds by hand and place the fruit in a large basin called a Colmbi.4,1 Similar to traditional wine production, the fruit is then crushed by foot to create a pulp, before WWW.ART ISANSP IRITMAG.COM
Distillers in Goa, India have been turning cashew fruit, what was once thought of as an agricultural waste product, into a unique Goan spirit named
Feni it is pressed with a large rock and the juice is collected. This unfermented juice, which is called Neero, has an incredibly high polyphenol and vitamin C content and is very astringent.1,6 However, it is sometimes consumed as a medicinal tonic. Normally, the fresh-pressed juice, which is already inoculated with naturally occuring yeast from the surface of the fruit, is allowed to ferment for a number of days to create a lightly alcoholic beverage.7 This fermented juice, which typically has an alcohol content of about 4% ABV, is then transferred into a wood-fired pot still and distilled.6 This first distillation creates a mildly alcoholic distillate, known as Urrack. The Urrack will then be removed from the still and mixed with a set amount of fermented Neero. This Urrack-Neero mixture is again distilled, producing what is known as Cazulo. Some Feni producers consider the double-distilled Cazulo to be the final product and will simply sell it as Feni. However, other producers believe that Feni must be distilled at least three times and will distill the Cazulo once more. This difference in opinion can create a wide variety in tastes and alcoholic strength of each producers Feni.1,8 So now that we know what Feni is and how it is made, let’s address
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its origins. Feni’s history, like that of so many liquors, is clouded in mystery, but there are some things that we know for certain. For example, its production could not have started until sometime after the 16th century because cashew trees are not native to India. During the mid 1500s, Portuguese explorers in search of new cash crops brought the cashew tree out of its native Brazil and planted it around North Africa and Southeast Asia.4 The tree took root in many overseas Portuguese colonial holdings, but grew especially well on the west coast of India, which has both a climate and soil make up that closely resemble that of Brazilian rainforests, the cashew tree's native home.1 However, the Portuguese either had no knowledge of Feni production or had no interest in it, as there is no evidence that they ever attempted to make it.6 Ultimately, Goa seems to be the only cashew-producing region to place any value on the cashew apple at all, much less make liquor out of it. So the question remains: Why did the Goans learn to make Feni? Most agree that Feni production probably arose from necessity. In 2009 alone, India produced 728 million kilograms of cashew nuts for export, much greater than the next closest nation, Vietnam, which only produced 300 million kilograms.4 India has a long standing tradition of creating “country alcohols” out of whatever fermentables are close at hand. A majority of cashew nut production is based in Goa, which means that distillers in Goa would have easy access to plenty of cashew apples.9 Additionally, much of India’s production is done by small family operations. These operations rarely waste anything, especially potential sources of supplementary income. Therefore it would have been greatly beneficial to find some way to capitalize on the cashew apple.4 Regardless of how Feni came to be, it plays a major role in the Goan culture and economy. As mentioned previously, many producers of Feni are cashew nut farmers with small operations. These producers often sell directly to consumers or have established relationships with local taverns. This is not only a great way of boosting the local economy but also evokes certain regional pride, much like a local sports team.1 Thanks to its Portuguese occupation in the 16th century, Goa has a considerable number of Roman Catholics. In fact, nearly one third of all Goans are Roman Catholic, and Feni is one of the favored drinks of men during religious festivals.10 In 2009, Goa granted Feni a geographical indication, helping to protect its production in the state.9 This protection was further increased in 2016 when Goa introduced a bill to grant Feni “Heritage Spirit” status. Much like the French Appellation d’Origine Controlee or the Scotch Whisky Regulations, this bill pushed for the recognition of the social and cultural importance of Feni to Goa and limited its production outside of the state.11 By now, I am sure you are wondering what Feni tastes like and where you can get your hands on some. Luckily, trying a dram of Feni does not require a passport or a very gracious worldtraveling friend. It does, however, require a bit of searching. The Spirit of India is a Feni distillery in Goa that produces a threeWWW.ART ISANSPI RI TMAG.CO M
times distilled Feni and has U.S. distribution. Supply can be a bit spotty, though, so you’ll have to work with your local liquor store to see if they can obtain it. When you’re lucky enough to track down a bottle, you’ll be rewarded with a liquor that is richly fruity and slightly citrusy. It’s a great spirit to try neat or mixed in cocktails. The Spirit of India’s website has some enjoyable recipes.8 Although today Feni is a beverage unique to Goa, its status as the only cashew-based alcoholic beverage may soon change. Impressed with the resourcefulness of the Goan farmers, other cashew-producing regions of India have begun to experiment with producing their own versions of cashew liquor.5 If they are able to show other unique and profitable ways to utilize what was once thought of as waste, it may not be too long until those regions and other cashew producing-countries, such as Brazil and Vietnam, do the same. Perhaps in the future, cashew liquors will go from being a category of one to an entire class of liquor.
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Reade A. Huddleston is Head Distiller at Deep Ellum Distillery in Dallas, Texas. He received his Masters Degree in Brewing and Distilling Sciences from Heriot-Watt University, and is fascinated with all things drinkable. If you would like to contact him about Kräuterlikör, or any other strange and forgotten spirit, please email him at ReadeHuddleston@gmail.com. Corporate Office West Coast North Northwest Canada British Columbia Pleasantville, NY Windsor, CA Geneva, NY McMinnville, OR Montreal, QC Kelowna, BC
GOA.life, 2018. The Incredible Story of Feni that Butler Didn’t Tell You. Available from < http://goa.life/the-incredible-story-of-feni-that-butlerdidnt-tell-you> [July 25, 2018]
Evergreen Arborist Consultants. 2017. Cashew Trees. Available from <https://greenarborists.com/cashew-trees/> [July 30, 2018]
Bradtke, Birgit. 2018. Growing Cashews. Available from < https://www. tropicalpermaculture.com/growing-cashews.html> [July 20, 2018]
Red River Food Inc, 2011. Cashews: Highlights of the Cashew Industry. Available from < https://www.africancashewalliance.com/sites/default/ files/documents/2011CashewBroch.pdf> [July 25, 2018]
Mandal, R.C., et. al. 1985. Cashew Apple Liquor Industry in Goa. International Society for Horticultural Science, 108(32)
Subba, Rao. 1985. Scope for Development of Alcoholic Beverage from Cashew Apple. International Society for Horticultural Science, 108(30)
Prabhu Khorjuvenkar, Supriya. et al. 2016. Antimicrobial Activities of a Novel Pichia membranifaciens Strain Isolated from Naturally Fermented Cashew Apple Juice. Proc. Of the National Academy of Sci., India Sec. B: Biological Sciences. 86(1). pp. 125-129
Spirit of India, 2018. About Us. Available from < http://fenidrink.com/ about-us/> [July 19, 2018]
Rangnekar, Dwijen. 2011. Remaking Place: The Social Construction of a Geographical Indication for Feni. Sage Journals. 43(9). pp. 2043-2059
10. Mascarenhas-Keyes, Stella. 1997. Catholic Goan Food. The Anthropologists’ Cookbook, Routledge Publishing. 11. India Times, 2016. Goa Takes it a Peg Further; Labels Feni as Heritage Spirit by Law. Available from < https://economictimes.indiatimes.com/ industry/cons-products/liquor/goa-takes-it-a-peg-further-labels-fenias-heritage-spirit-by-law/articleshow/53603605.cms> [July 28, 2018] WWW.ART ISANSP IRITMAG.COM
G N I K C TRA S S E C C SU
WR ITT EN BY DA VID LAR GE
DO YOU KNOW WHAT SIGNS TO LOOKOUT FOR?
ow is my brand or distillery doing? Are we measuring up to the competition? What are some things we can look at now in determining if we are positioned for success? All great questions to ask yourself when attempting to look at the health of your brand objectively. In the early 90’s, Dr. Robert Kaplan and David Norton published an article introducing the “balanced scorecard” or a system that divided up a company’s perspectives into four major groups of indicators: financial, innovation and learning, internal business and processes, and customers. While the traditional “balanced scorecard” has its place in some businesses, for most companies it works
best to apply the “innovation and learning” variable to both inward facing processes and outwardly to customers, thereby focusing on just three unique groups:
1. Financial 2. Innovative Business and Processes 3. Customer Innovation and Marketing Here we are going to focus on some of the high-level indicators used in the spirits world to help in getting a good snapshot of your own company’s position. Although indicators are an imperfect science in a complex world (especially the financial and regulatory world of alcoholic beverages), they can be used as a good measuring stick
to gauge your present health and likelihood for future success. It’s important to note that an indicator is just that: an indication of the possibility of something good or bad in the future. As in medicine, once you go to the emergency room with a heart attack, the problem is very obvious. It’s attempting to measure specific indicators, like cholesterol levels years before, which becomes the goal. Get ahead of the issues; prepare your company/brand for the future. The selection of variables that require monitoring can differ across businesses depending on your distillery or brand’s long-term plan, but the following are some more typical which make sense in young spirit companies.
First, and perhaps most apparent, is managing costs and cash flows. While it seems very elementary, knowing your weekly and monthly expenditures and balancing that to your capital invested in your business is crucial. On day one of your business, the clock starts ticking and your cash begins to flow; sometimes at a surprising rate in the wrong direction. Having a plan and knowing the realities of alcohol beverage space is critical. Relying on “hockey stick growth” out of the gate is a recipe for bankruptcy. Be realistic in your sales forecasts, timing, and capital needed for an adequate runway to success. Secondly, a good indicator of a brand with potential is increased revenue, quarter over quarter, year over year. The velocity of increased revenue will slow over time but it still should be increasing from day one. As a startup brand, you have tremendous upside and lots of opportunities. If that isn’t translating to revenues, there could be an issue. Another indicator of both short-term profitability and long-term success is having adequate margin in your cost structure. A good rule of thumb is aiming for a minimum of a 50% contribution margin per SKU, or have a sliding scale that measures margin against realistic sales volumes thereby adjusting internal components if necessary. Another metric to gauge is longer-term profitability by is market penetration. Distribution attainment and placement in a new market is only the first step to long-term growth. The real work begins after that first sale. The number of outlets both on and off-premise and the amount of time before a re-order; otherwise known as VPO (velocity per outlet), are quantifiable metrics that give a brand owner a good idea of where, how often, and ideally “why” your brand is selling or not selling in a given outlet. Analyzing VPO versus local sales and marketing initiatives is a good way to see what’s working or not in various markets.
CUSTOMER INNOVATION AND MARKETING
Innovation is a theme that can be applied across business units from financial to organizational; therefore you can dovetail this variable with both the stakeholders and customers group, and the internal business and process category. As far as the outward facing customer group, this means creating and deploying new products and/or packaging in possibly new ways that meet the needs, expectations, and concerns of customers. By giving customers answers to perceived needs, whether those needs be tangible (I desire a high-quality rye whiskey at an affordable price) or more intangible (I desire a tasty rye whiskey that when ordering makes
me look and feel similar to its masculine brand positioning), you create value for both them and your stakeholders as this appropriately done will translate to increased sales. Taking a hard look at underserved markets, smaller or up-and-coming categories, and other low hanging fruit is a good way to position your brand as a future leader in its category. Conversely, just because a category is small doesn’t mean you should jump in with both feet. Balancing realistic future revenues against the cost of implementation of a new product or in a new market is the defining variable in determining whether it’s worth the effort.
Access to quality data and having a good pulse on the industry in that region is instrumental. Measuring customer satisfaction, both end consumer and distributor, is a problematic task scientifically for a small brand, but doing so can garner some insightful tendencies of your consumers or miscues in your branding or positioning.
INNOVATIVE BUSINESS AND PROCESSES
For a start-up brand, working the market is a prerequisite. Outside of being in “selling mode” while on-site, consistently take the time to ask customers questions about your brand or bottle and get insight from distributor reps who often get the brunt of pushback from buyers.
At the core of everything financial and customer-driven is the internal workings of your distillery and/or brand. The operations and processes you spend your time on every day should be equally as important to you as your forward-facing initiatives. These daily tasks, calls, meetings, management focus, operations, and the structure underlying it all is crucial to your long-term success. Timing, productivity, and cost measures are good variables to determine the efficiency of your back end. Competencies and processes that have direct impact on your product are the best focus areas and metrics by which to gauge success in this area. One such variable is throughput and inventory controls. Batch sizes, timing and schedule of distillation, amount of components, and holding times of finished goods are variables that are very telling of your internal process mechanism. There are no cookie cutter metrics concerning numbers in this area, but most times there is a direct correlation in keeping a detailed eye and constant track of all variables to being able.
So what’s it all mean? By keeping a watchful eye on a number of your financial and market focused variables, a brand owner can get a relatively succinct snapshot of your company and determine if your findings can meet long-term objectives. Let's say Distillery X shows slowly increasing revenues and normalized margins. Many owners would stop there, be happy with increasing cash flows and continue with the status quo. But perhaps they look at their VPO in their top 5 markets and see that the average is drastically down while a few specific outlets have made up the lag. Perhaps this is a sign that overall sales may begin to slow, or maybe it's an opportunity, as a few establishments are consuming their product in a new manner or a marketing initiative in those markets is working well.
Either way, tracking specific variables can show signs of potential problems and/or present new opportunities. Let’s look at another example in Distillery Y. Revenues are up, throughput is good, consumer testing has shown positive results, but margins seem to be slipping. They see that grain prices are about flat but notice barrel prices are rising. This very well could mean a barrel shortage is soon to come and prices of existing stock will skyrocket, if they can even find a cooperage with capacity. Now Distillery Y has options: make a more immediate investment in wood and ramp up production of their bourbon, or perhaps use some alternative wood casks for an unreleased whiskey. Again, it's watching these variables that will give you possible indications of something specific to your brand or a glimpse into some larger
macro movements in either input prices or consumer trends. Remember, financial metrics alone tell a story of what has happened in your sales and cash flows in the past. Adding these to both customer-based variables and internal health can give you a more accurate position of your brand and unearth some potential unique opportunities in preparing for your future success. Engage your customers, distributor network, on and off-premise outlets, and other industry insiders to identify metrics and ingrain best practices. It can mean the difference of standing still or capitalizing on the ever-changing spirits world and being the next big brand.
David Large is senior advisor of strategic growth for Thoroughbred Spirits Group. For more information visit www.tbspirits.com or call (312) 809-8202.
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BEVERAGE FLAVOR CHEMISTRY â€“ A SERIES
FRUITS HAVE FIRST BITE INTRODUCTION, CHEMISTRY PRIMER, AND PART 1 WRITTEN BY GARY SPEDDING, PH.D. PHOTOGRAPHY BY AMANDA JOY CHRISTENSEN
his is the first in an anticipated series of notes covering the general chemical principles behind the flavors in alcoholic beverages. A vast assortment of fruit and vegetable raw materials find their way into beverage production today — think flavored vodkas and gins for starters, as well as liqueurs (1). In addition, fermentative yeasts and even other microorganisms are at play in producing metabolites that are both volatile and flavorful and add to the rich tapestry of flavors we find in our alcoholic beverages. Flavor molecules are comparatively strong-smelling, low molecular weight and low boiling point organic compounds with characteristic and usually pleasant odors. Though unpleasant aromas can arise if careful control of spirits production is not ensured (2). Volatile chemical compounds are thus involved in our sensory perceptions. Describing them is not always an easy task yet understanding a little of the chemistry involved goes a long way towards the appreciation of the highly complex and nuanced world of taste and flavor. By way of an introduction to the vast array of flavors Table 1 presents a generalized list of flavor descriptors and associated generic descriptive notes. These terms will form a solid platform on which to build the necessary sensory vocabulary in understanding flavors described in this article and the forthcoming papers in the series. In addition, the Spring 2018 issue of Artisan Spirit provided a discussion of the latest findings in our understanding of human sensory perception and will be a good companion article to this new series (3). This short series will thus consider flavors derived from or that are reminiscent of fruit, flowers, herbs and spices or, in other words, those derived from or emanating from a wide array of plant-based raw materials or from fermentation. In certain cases, raw or fresh ingredients may be used. Today, with careful extraction techniques the resultant purees or essences of authentic fruit, herbs or spices allows for desired flavors to be conveyed to the beverage of choice. In addition, yeast choice and control of fermentation can lead to fruity ester formation and add other flavor nuances by providing some of the same components that are derived through plant metabolism. Controlling all variables is both science and art, design and balance. For this first part we start with fruit flavors — the citrus, fruity, and green attributes noted in Table 1.
CHEMISTRY & THE LANGUAGE OF FLAVOR As noted in the introduction, the odors of single chemical compounds are extremely difficult to describe unequivocally (2,3). The odors of complex mixtures are often impossible to describe unless one of the components is so characteristic that it largely determines the odor or flavor of the entire composition. However, while an objective classification is not possible, an odor can be described by adjectives such as flowery, fruity, woody, or hay-like, which relate the fragrances to natural or other known products with similar odors (Table 1) (3). As noted
in Reference 3 and below, one uses terms like those in Table 1 and then delves deeper into the meaning and relevance of that first impression. This is the only way — using language and a vocabulary to unravel the complexity of a spirit or other beverage’s flavor profile.
FLAVORS & VOLATILITY Over 10,000 volatile compounds have so far been detected in foods — yet only several hundred are noted as aroma compounds (4). Those of high odor value (a term noted as OAV or odor activity) have been determined. An OAV or odor unit/ odor value is used to estimate the odor potency of a compound in terms of the ratio of the concentration of that volatile compound to its odor detection threshold. The detection threshold is the concentration of that substance at which it is positively identified on a statistical basis by human subjects. We learn this for general foods, beverages and other items as we develop through childhood or, later, with training on specific foods or beverages of interest — whiskies, gins, rums etc. This then makes us better tasters, judges or sensory panelists etc., (see 3). For many though no second thoughts are given once it is established that the meal or drink before them is “good enough." We must learn to appreciate more fully the raw materials, the processes and the final, hopefully pleasing and potable, products we deal with. While there is much more information in the literature on all of this, the point to be made here is that, through many different chemical groups, there are chemical families or classes that exhibit a set of general “flavor characteristics” when it comes to flavor profiling. Once we have the general classes and characteristics noted (and memorized) we can begin to drill down into the more specific flavor nuances — Apple? Yes. Green, red, sour, sweet apple and so forth. These flavor impressions in our brains are conveyed by the classes of chemical species of low molecular weight and of high volatility. In using several different fruits, herbs or botanicals in a formulation many of the same or related volatile components will add to the concentration of those species present in the beverage and maybe raise the concentration to detection threshold levels. These additions could become balanced or unbalanced, or certain notes become enhanced in combination with related or unrelated classes of constituents or even masked-off from perception. Understanding how flavors play together is crucial to quality control. And is why the big distillation and brewing companies implement sensory programs and train staff to become experienced tasters. Even on a small scale, tasting raw materials and products on the way to the final packaging, and even beyond, makes good sense! To summarize, beverage flavors that delight the senses through their perception must be volatile to be perceived. Chemical functional groups, the molecular structure and the chemical mass of flavorants are important factors in this WWW.ARTISANSPIRITMAG.COM
table 1: generic terms for
FLAVOR CHARACTERISTICS & ASSOCIATED FLAVOR TERMS
LACTONES An important class of compounds which we will see crop up in our
series. Lactones are cyclic esters of hydroxycarboxylic acids containing a 1-oxacycloalkan-2-one structure, or analogues having unsaturation or heteroatoms replacing one or more carbon atoms of the ring. Think oak or whisky lactone (coconut, woody and celery notes) and see under apricots, plums and peaches for lactone compounds providing the “lactony” note. These will be seen to play some very important and interesting roles in flavor delivery and perception.
a general flavor vocabulary builder
ASSOCIATED DESCRIPTIVE NOTES
ACIDIC Pungent and sour – acetic acid (vinegar), lactic (not so much aromatic) with NOTES yogurt/dairy-like notes. Butyric acid - rancid, cheesy, baby vomit. Longer
MAILLARD- The Maillard reaction plays a huge role in flavor formation – giving cooked RELATED flavors via the formation of a vast number of different chemical compounds NOTES including many cyclic molecules called heterocycles. Reactions occur between amino acids and sugars at mild to higher temperatures. Above a certain higher temperature, caramelization reactions can also occur and produce similar compounds as from Maillard chemistry but based only on sugars themselves. Sweet, bready, nutty, caramel-like, toffee, toasted, roasted and burnt flavors (coffee and chocolate nuances) are produced and a complex sweetness may occur through compounds known as melanoidins which are generated during Maillard reactions (14, 15). Furfural is a noted component – sweet, butterscotch, caramel, smoky and almond nuances.
chain fatty acids are also involved but are best covered under “Fatty acids” below.
ALCOHOLIC As we are dealing with alcoholic beverages we must note the warming
and solvent notes of ethanol and comment on the fusel or higher alcohols (alcohols with a longer carbon chain length – ethanol has 2). The higher alcohols are often described as harsh, solventy and like rubbing alcohol. However, they can also be described as fusely, pungent, roses, sweetish, bitter, chemical and almond-like. There are dozens of compounds to consider here.
ALDEHYDIC Odor notes associated with long-chain fatty aldehydes with, rancid, cheesy, fatty and sweaty, ironed-laundry and seawater-like aroma-flavor qualities. Also, soapy-waxy-lemony-floral descriptors used. Acetaldehyde, as one of the simplest aldehydes, conveys green, fruity, floral (florist shop) and green fruity (green/bruised) apple and ethereal notes. Terpenic aldehydes (see “Terpenic” below) and bitter and nutty-flavors occur through compounds such as benzaldehyde – also associated with cherry flavor
ANIMAL(IC) Associated with typical notes of animals: goaty, horsy/horse sweat, wet
dog (fur), barnyard-like, musk, castoreum (animal, specifically beaver, territorial-marking scent), skatole (fecal or coal tar-like), boxwood (cat urine-like) civet (catty), ambergris (marine, animalic, sweet), wet leather. Yummy!
BALSAMIC Balsamic notes are described as providing warm or sweet sensations and
are often associated with resinous materials – fir trees, Peru balsam. Also noted as heavy, sweet odors, e.g., cocoa, vanilla, cinnamon.
CAMPHO- Camphoraceous flavor chemicals elicit cooling sensations and thus “fresh RACEOUS or invigorating” notes or a medicinal character associated with the essential oils of many herbs and plants such as rosemary or eucalyptus. Also described as reminiscent of camphor.
CEREAL/ Obtained from raw materials – corn, rye, barley, malt, wheat etc. Certain GRAINY spirits are supposed to taste of the raw materials from which they are made. Various husk acids leading to distinctly flavored phenolic compounds (with spicy notes) and many Maillard compounds can be derived from grains.
CITRUS Odors of fresh and stimulating odor of citrus fruits such as lemon, orange or grapefruit.
EARTHY Humus-like, reminiscent of humid earth, forest floor-like. FATTY Reminiscent of animal fat and tallow. Can convey creamy texture sensations. Certain ketones such as 2,3-butanedione (diacetyl) convey buttery/dairy notes for example. See also “Fatty acids.”
FATTY Medium to long chain length fatty acids: cheesy, rancid, dairy. Goaty/ ACIDS muttony/sheep also noted – see also under animalic aromas and fatty headings.
FLORAL, Generic terms for odors of various flowers – roses, jasmine, hyacinth, lilac, FLOWERY lavender geraniums, orange flower, lily of the valley – strong accented
examples. Honey notes may also fit here based on pollen flower source. Honey-like notes though can be conveyed through many “sweet” compounds – alcohols and esters.
FRUITY Generic term for odors of various fruits. Apple, Pear, Peach, Tropical,
Other stone fruits, Berry fruits etc. Associated with esters. See also citrus (regarded as a fruity classification in its own right). Fruity notes conveyed through esters (and some aldehydes) formed in fermentation can be perceived as if derived from actual fruit but can also present as artificiallike depending upon balance.
GREEN Typical odor of freshly cut grass and leaves, florists shop, green unripe fruit – also conveyed via some aldehydes – see “Aldehydic.”
HERBA- A wide array of complex odor notes as with fresh green or dried green herbs; CEOUS sage, minty, eucalyptus-like, or with earthy nuances. KETONES Includes 2,3-butanedione (diacetyl) and other compounds which will appear in our flavor notes from time to time.
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ASSOCIATED DESCRIPTIVE NOTES
MEDICINAL Odor notes described as disinfectant-like including, phenol, lysol, methyl salicylate etc.
METALLIC Notes include, blood-like, tin, ink-like, iron, brass or steel and like hot metallic surfaces.
MINERAL Minerality is a little nebulous but is sometimes used to describe a wine’s fla-
vor profile for example. Minerality is noted by some as referring to a group of non-fruit, non-herb, non-spice notes but the term has been used to describe both aroma and taste. Minerality is associated with water sources and can give metallic-like notes from certain cations (see “Metallic”) but minerals – the anionic portion of a salt can also enhance other flavors, or the extraction of flavors derived from other raw materials. The bitterness of beer from hops comes to mind here, along with the sulfate content of the water. While minerals are generally flavorless it is certainly noted how the overall taste of water is perceived in the absence of any ions – distilled water for example is bland and without character. Some may describe certain waters as “flintlike” or “chalky.” Certain minerals such as sodium and chloride can lend, besides, salty notes a “softness” to water and other ions influence yeast activity in fermentation and so the term minerality is included in this table for the sake of completeness. Direct influences or indirect effects on flavor notwithstanding. Additionally, water can be tainted with moldy-like aromas and chlorine-based compounds and if used to make a spirit can affect the taste in an unredeemable way. [A recent study has shown the effect of different water compositions on the flavor of Scotch whiskies.]
MINTY Minty notes, especially peppermint-like, spearmint. MOSSY Typical note reminiscent of forests and seaweed. POWDERY Notes like body powders (talcum) which are sometimes “diffusively” sweet. RESINOUS Aromas of tree sap and resins – exudates. SPICY The generic term for odors of various spices such as cinnamon, cloves, curry leaves, nutmeg, (ginger?).
SULFURY Many compounds with distinct sulfur qualities can manifest in spirits.
From hydrogen sulfide (rotten egg), sulfitic (burnt match) to corn and other vegetal descriptors (dimethylsulfide) to garlic, rotten vegetable, onions, stagnant water and on to sewer drains and skunk-like notes from thiols and mercaptans (16). We will also see notes derived from the Maillard reaction (see above) with heterocyclic compounds which include sulfur atoms (14, 15). Not all these are bad compounds – some unique ones give grapefruit its “lift” (see Table 2).
TERPENIC Like turpentine, noted as terpy, hops (myrcene and linalool). The name
"terpene" is derived from the word "terpentine", an obsolete form of the word "turpentine". Rosin – resin-like. Terpenes form the largest class of plant-derived biomolecules.
VEGETAL Under vegetal notes we see notes such as cucumber and fennel. Potato
vodka (there are unique potato aromatic compounds)? The flavors of chili peppers are also notable. We may expand on all this later!
WAXY Think of candle wax. WOODY Generic term for the odor of wood, e.g., cedarwood, sandalwood, oak etc.
Other woods, sawdust, freshly sharpened pencils etc. Here we also need to think of the many wood-derived compounds that accumulate during wood-maturation. Some of these notes appear under several of the headings noted above. But many are important contributors to mature spirit flavor profiles. Certain oak (whisky) lactones comes to mind here.
Adapted from References 2 and 6. A few category extensions added here, and additional terms applied.
table 2: COMMON FRUITS & THEIR KEY CONSTITUENT FLAVOR MOLECULES
DETAILS OBTAINED FROM REFERENCES 1, 6, 13, AND OTHER SOURCES
(Malus sylvestris var. domestica)
The genus Malus belongs to the Rosaceae family and the apple is also referred to as a Pomme fruit. Due to its high commercial value the flavor of apples belongs to the best known and documented natural flavors (6). TASTE: With hundreds of varieties the “typical” apple flavor is noted as: juicy, refreshing, sweet-acid, watery taste combined with fruity, estery, green notes and supported by species characterizing sweet, floral nuances (6). KEY FLAVOR MOLECULES & NOTES: (E)-2-hexenal, (E)-2-hexenol, (E)-2-hexenyl acetate and hexanal are responsible for the fresh, green-fruity basic flavor of apples (aldehydes, esters and alcohols). Ethyl-2-methyl butyrate and hexyl acetate support the fruity-estery note and additional compounds like 3-methyl butyl acetate, hexyl-2-methyl butyrate, damascenone (powerful floral fruity note smelling intensely of natural, rose, plum, berry and tobacco), and linalool (floral, waxy, sl. spicy, woody citrus and green) impart the specific species character. Benzaldehyde (see below under “cherry”) intensifies the pip note (6). Hexanal, aka, caproaldehyde (with freshly cut grass notes) occurs, for example, in apple and strawberry aromas as well as in orange and lemon oil illustrative of a fatty-green odor and in low concentration reminiscent of unripe fruit. Butyl acetate (see Ref 5 showing red apple accents) is interpreted as a strong fruity odor. It occurs in many fruits and is also a perceived constituent of apple aromas.
(Prunus armeniaca L)
Apricots are members of the Rosaceae family. They belong to the subfamily Prunoideae and the subgenus Prunus of the genus Prunus. TASTE: Sour-sweet with a fresh, fruity, perfumy, sweet, creamy odor (6). KEY FLAVOR MOLECULES & NOTES: Linalool (see under apple), phenyl ethanol (fruity, floral-rose, sweet, honey) and traces of damascenone (see above) impart the floral, perfumy notes of apricot while 4-decanolide (a lactone – see text) adds the sweet, heavy lactone character and (E)-2-hexenal, (aldehyde) and (E)-2-hexenyl acetate (ester) impart the fruity, fresh, green top note.
(Musa sapientum, M. paradisiaca, M. acuminata, M. balbisiana and hybrids thereof, Musaceae)
Banana belongs to the genus Musa in the family Musaceae, order Zingiberales (13). TASTE: Over 200 types — different tastes. Flavor develops
from bland, slightly sour, astringent character to a fruity, fresh, sweet and typical fruity-estery ripe banana note dominated by 3-methyl butyl acetate and then to overripe sweet, creamy, spicy and full-flavored estery character (6).
KEY FLAVOR MOLECULES & NOTES: The fresh, estery, fruity-sweet character (solventy) is carried by 3-methyl butyl acetate (aka. Isoamylacetate – “banana” or “pear ester”). Eugenol (clovelike/nutmeg) adds the spicy nuance of ripe and over-ripe bananas. Several volatile esters: 3-methyl butyl butyrate, 3-methyl butyl-3-methyl butyrate and 4-hepten-2-yl acetate round off the general fruity notes while vanillin adds sweetness and creaminess. The 3-methyl butyl acetate (isoamylacetate) is a strongly fruity smelling compound identified in many fruit aromas. Isoamyl butyrate (fruity sweet, estery, green, tropical, green apple and melon-like) also exhibits a strong fruit odor and occurs in banana.
(Prunus avivum, sweet cherry and Prunus cerasus, sour cherry)
Any of various trees belonging to the genus Prunus and their edible fruits. Basic varieties, sweet and sour cherry have been crossed to over 600 types. TASTE: Taste of stone fruits is acid, sweet and slightly astringent. Balance depends on ripeness and especially on the species. Flavor noted as fresh, fruity, green, floral and slightly spicy. The noted bitter almond, benzaldehyde character develops upon crushing of the fruit (6). KEY FLAVOR MOLECULES & NOTES: (E)-2-hexenal, hexanal, (Z)-3-hexenol are responsible for the fresh, green impact of cherries, (E,Z)-2,6-nonadienal and phenyl acetaldehyde (green, floral, strongly hyacinth-like, honey note and waxy) add the “full heavy green, fatty” character. Linalool, geraniol (floral, geranium, rose, waxy, fruity peach nuanced and passion fruit) and damascenone bring out floral nuances. Fruity notes associated with 3-methyl butyric acid (aka. Isovaleric acid = cheesy, dairy, ripe fatty and fruity) and eugenol carry the spicy notes. The compound, benzaldehyde is associated with the almond-like and cherry-flavor notes (see above).
respect. Typically, molecular masses of around 200 Daltons — small or low weight compounds for our purposes here — are conveying the more important flavor notes (2). They need to evaporate off — “to boil” quite easily for us to detect them as our olfactory system catches them and the brain attempts to interpret them. Furthermore, as aromatic compounds differ in volatility, the odor of a beverage’s composition changes during evaporation and is divided into the top note, the middle notes or body, and the end note or dry out, (from perfumery terms) which consists mainly of less volatile compounds. Odor perception also depends largely on odor intensity. Therefore, the typical notes are not determined only by the most volatile compounds but also by how they are influenced by the other components in solution. Some compounds are “held back” by other constituents preventing too rapid evaporation. The concentration of some compounds may be below their individual threshold of detection level, but related compounds present allow it to be detected more easily — changing its threshold perception level. As hinted at above, complex antagonistic and synergistic effects occur in complex mixtures and in alcoholic solutions. Careful sniffing and sipping and reflection is necessary to fully evaluate a product (3). Starting from an understanding of the terms in Table 1 and knowing that physical and chemical principles govern our perception of those desirable aromas and tastes that make up the true and holistic brand flavor profiles of our favorite beverages, we can move forward to looking at individual flavors of interest in various types of beverage.
SO ON TO FRUIT FLAVORS As noted above, for this first article we cover fruit flavors. The careful use and blending of actual fruit or fruit extracts today has led to some excellent products with crisp, clean and integrated flavor profiles, and of course many cocktails are produced by mixing fruity notes to create a desired harmony of flavors. Yet it is easy to get artificial fruit notes that are objectionably out of character — as such the topic is important enough to delve into a little. So, where and how do those fresh, clean and hopefully authentic and non-artificial tasting flavors arise? Grab that apple or peach sitting next to you, take a juicy bite and while savoring those authentic flavors, read on.
COMMON FRUITS AND THEIR FLAVORS Considered here are the more widely known or used fruits, with descriptors of their common flavor identifiers. There will be one or more dominating volatile constituent(s) that convey the fruit’s overall flavor. And a plethora of others adding the subtle nuances and authentic complexity of a natural product’s flavor. As agricultural products there will WWW.ARTISANSPIRITMAG.COM
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PEACH be seasonal, crop-year and species differences and possibly even terroir considerations at play. Storage, stabilization and shelf-life issues will also bear on product flavor profiles. Preservatives and processing conditions such as pasteurization will affect flavors too. While clearly the use of fruit itself in a formulation should convey all the nuances of that fruit many esters, aldehydes and other compounds, produced via fermentation or the use of fruit “essences,” may provide the dominant flavor note — alone or as a collective set — which will be interpreted in the brain as peach, etc. A reminder here is that the aroma/ flavor does not reside in a molecule or in a mixture — it is sensed, constructed and interpreted as such only in the brain. Provided in Table 2 is a listing of common fruits together with notes presenting the listings of key flavor molecules which convey, to the brain, the essence of each fruit’s flavor profile. The lists are by no means complete. An original intention here was to present the chemical components in a figure with their, structures, names and flavor descriptors. However, this would have proven a difficult task for such a short review. So, the reader is instead referred to Table 2 and to the references to look up molecular structural details and properties (10) and to find the associated flavor descriptors (9). Note: some of the names in the text may exist in different forms according to chemical naming rules. There are common vocabulary terms and officially approved nomenclature rules in place. Some effort will be called for to learn more here. Of note here, for those remembering a little of organic chemistry, is that many if not all chemical families are represented in the complex matrix of many beverages — acids, alcohols (besides ethanol) aldehydes, esters (combinations of alcohols and acids), lactones (“cyclized esters”), sulfur compounds (called mercaptans and thiols which are often quite stinky with low detection thresholds) and terpenes (huge class of compounds). The vast number of species present showing the complexity of metabolism and molecular composition. All these molecules being interpreted “flavor-wise” by the brain after nosing or tasting the samples. An excellent concise book detailing the basics of organic functional groups is that by Lemke (12) and will provide a good guide to further exploration of the topic. Note, generally you know what type of organic functional group and class you are seeing by WWW.ARTISANSPIRITMAG.COM
(Prunus persica, Rosaceae)
Peach belongs to the Prunoideae subfamily of the family Rosaceae. TASTE: The taste of ripe peaches is dominated by the sweet succulent juice characterized by the aromatic fruity and fresh aroma. The heavy fruity, fatty, typical peachy note is described by the term “lactony.” This flavor sensation is derived from compounds called gamma lactones (6). KEY FLAVOR MOLECULES & NOTES: The typical so-called “lactony” note is produced by 4-decanolide (Fruity, creamy, peach and apricot with a syrupy, fatty nuance). The flavor industry uses 4-undecanolide or “peach lactone” in its formulations of peachiness. The lactone is balanced with fruity esters such as 3-methyl butyl acetate, the floral-fruity note of linalool and with some green notes like (E)-2-hexenal.
(Pyrus communis — European pear)
Pear species belong to the genus Pyrus, the subfamily Maloideae (Pomoideae) in the family Rosaceae. TASTE: The sweet juicy, fruity taste of pears is accompanied by a typical sweet, fruity, fatty pear note (6). KEY FLAVOR MOLECULES & NOTES: The typical fruity, fatty pear note originates from ethyl-(E,Z)-2,4-decadienoate (pear ester - juicy, ripe pear, sweet, very fruity) and is balanced with ethyl-(E)-2-octenoate and ethyl-(Z)-4-decenoate. Farnesene (woody, green, vegetable, floral, herbal, citrus) adds a fresh floral, terpeny top-note and esters, such as hexyl acetate, contribute to the fruity-estery character. Hexyl acetate also has an associated/perceived sweet-fruity, pear-like odor. It is present in several fruits and alcoholic beverages. Another reference states: The ethyl-(E,Z)-2,4-decadienoate (aka. Ethyl 2-trans-4-cis-decadienoate) has been identified in pears and has the typical aroma of Williams pears.
(Ananas comosus, Bromeliaceae)
Pineapple is a perennial monocotyledon belonging to the family of Bromeliaceae, subfamily Bromelioideae. TASTE: Ripe, fresh pineapples are described as having a sweet, acid, slightly biting taste with a fragrant, sweet, fruity, and fresh aroma combined with a fruity caramel like aftertaste (6). Though in this author’s opinion pineapples convey more of an acrid/earthy “rotten fruit-like” aromatic note. Others may call this the tropical character? Biting into one provides much more of a refreshing, sweet-sour and fruity impact (6). KEY FLAVOR MOLECULES & NOTES: More than 280 volatile compounds have been found in pineapple fruit. Methyl hexanoate equates with the fresh, fruity character while, ethyl-3-(methylthio) propionate imparts the overripe impression. A fresh green, biting top note is conveyed by 1-(E,Z)-3,5-undecatriene (though no other reference confirmation) while 2,5-dimethyl-4-hydroxy-furan-3(2H)-one is supposedly responsible for the ripe, sugary, fruity, caramelic lasting aftertaste. Ethyl butyrate, occurs in fruits and alcoholic beverages. It has a fruity odor, reminiscent of pineapples. Ethyl hexanoate, aka ethyl caproate (sweet, pineapple, fruity, waxy and banana with a green, estery- nuance) is sensed as a strong fruity odor and is also reminiscent of pineapples. 2-Propenyl hexanoate aka. allyl caproate (sweet, fresh, juicy pineapple and fruity), has also been shown to occur in pineapple. With its typical pineapple odor, it is used in pineapple flavors.
(Prunus domestica, Rosaceae)
Plums belong to subfamily Prunoideae of the family of Rosaceae. TASTE: Many different cultivars with very sweet to green, acid flavor and with a pronounced heavy, sweet, floral, “lactony,” spicy, fruity aroma (see under peach for lactony). KEY FLAVOR MOLECULES & NOTES: Approximately 75 volatile compounds have been identified in plum juices. Lactones from C6 to C12 (6 to 12 carbons) are major classes of volatile compounds in plums but the key flavor compounds in fresh plum fruit have not yet been fully identified. The green note of plums is said to be represented by (Z)-3-hexenol, (E)-2-hexenol, (E)-2-hexenal (green, grassy type notes from these alcohols and the aldehyde). A lactone-like character is provided by 4-Decanolide (see under peach). The heavy floral note is the result of a balanced mixture of linalool, 2-phenylethanol, benzyl acetate (fruity, sweet, with balsamic and jasmine floral undernote). The fruity, fatty body is imparted by the esters (Z)-3-hexenyl-2-methyl butyrate^ (fresh green apple and pear with a waxy skin like nuance) and ethyl nonanoate (waxy, soapy, cognac, estery fruity and tropical, grape). SIDE NOTE: ^[Imparts a refreshing green and tart granny smith apple note to fruity floral compositions. Blends
well with lavender, clary sage, and geranium. We may refer to this in the other sections of this series (9)].
(Rubus fructicosus, Rosaceae)
Belonging in the family of Rosaceae. TASTE: Ripe, wild blackberries should have strong, sweet, heavy fruity, floral musky and sugary flavor characteristics. KEY FLAVOR MOLECULES & NOTES: Key components are listed as 2,5-dimethyl-4-methoxy-furan-3(2H)-one (odor of strawberries) conveying sugary sweet fruity aroma and this is combined with the aromatic fruity p-cymen-8-ol flavor compound (also called cherry propanol — fruity, cherry, sweet, hay, cereal, bready, celery and herballike). The floral note is provided by dihydroactinidiolide (a volatile terpene with a sweet, tea-like odor), 14-cyclotetradecanolide and 16-cyclohexadecanolide (known as juniper lactone — musk, laundered cloth, amber, dry paper, waxy, animal).
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A woody shrub in the family Grossulariaceae grown for its piquant berries. Bunches of small, glossy black fruit develop along the stems. The raw fruit is particularly rich in vitamins and polyphenol phytochemicals. KEY FLAVOR MOLECULES & NOTES: Major anthocyanins (colored pigments with antioxidant properties) in blackcurrant pomace are delphinidin-3-O-glucoside, delphinidin-3-O-rutinoside, cyanidin-3-O-glucoside, and cyanidin-3-O-rutinoside, which are retained in the juice concentrate among other yet unidentified polyphenols.
Anthocyanins from Greek (anthos) "flower" and (kyanous) "dark blue" are water-soluble vacuolar pigments that, depending on their pH, may appear red, purple, or blue. Two constituents responsible for the characteristic blackcurrant odor are trans-p-menthane-8-thiol-3-one (sulfurous, alliaceous*^, green and tropical with rich body, blackcurrant nuance) and an S-acetate derivative which are two of a very small number of naturally occurring sulfur-containing (menthane) monoterpenoids known. The typical 'catty' note caused by the sulfurous trace constituent, 4-methoxy-2-methyl-2-butenethiol was identified several decades ago in blackcurrant buds. *^[Alliaceous e.g., from allyl disulfide has odors described as onion and garlic-like with metallic nuances and with the flavor noted as green onion and garlic-Iike with meaty nuances.]
Vaccinium species (many)
Common and widespread genus of shrubs or dwarf shrubs in the heath family (Ericaceae). The fruits include cranberry, blueberry, bilberry (European blueberries), whortleberry, lingonberry and huckleberry. TASTE: As with commercial strawberries, blueberries lack the richness of flavor that they should. Bilberries in this authors opinion — wild blueberries convey a distinctive rich balanced acidic/sweet and fruity taste. KEY FLAVOR MOLECULES & NOTES: Ethyl isovalerate perceived as a fruity odor (sweet, fruity, green, blueberry, butter, apple) reminiscent of blueberries.
RASPBERRY(Rubus idaeus, Rosaceae) TASTE: Common cultivated raspberries are described as having a nice shape and color, but with watery and acidic taste. Fragrant raspberries though should be delicious with fresh, fruity, green, floral, violet like perfume within a seedy, woody background. Ripe raspberries will be sweet and quite juicy. KEY FLAVOR MOLECULES & NOTES: The main flavoring molecules are α-and β-ionone which convey floral, violet and the typical perfumy, raspberry, woody character. 1-(4-hydroxyphenyl)butan-2-one imparts the fruity, sweet raspberry body. (Z)-3-hexenal is responsible for the fresh, green top note and 2,5-dimethyl-4 hydroxy-furan-3(2H)-one adds the overripe, almost cooked fruit jammy body. 4-(4-Hydroxyphenyl)-2-butanone aka. 4-Hydroxybenzylacetone or raspberry ketone is a highly characteristic, higher mass phenol ketone component of raspberry aroma. It is perceived as a sweet-fruity odor strongly reminiscent of raspberries.
STRAWBERRY(Fragaria ananassa and other species) Strawberry belongs to the genus Fragaria. The genus is comprised of 32 species. TASTE: Commercially, strawberries lack any real character being dull, acid, green, and force-ripened. Wild or garden ripened fruits are best and should convey fragrant, sweet, fruity, aromatic notes and have rich juicy flavor. Flavor chemistry occurs rapidly with major flavor changes after picking and during storage (6). KEY FLAVOR MOLECULES & NOTES: The basic flavor nuances of strawberries are built of 2,5-dimethyl-4-hydroxyfuran-3(2H)-one* and 2,5-dimethyl-4-methoxyfuran-3(2H)-one. These two components impart ripe, fruity, caramel, cooked character and together with ethyl hexanoate (red apple with a hint of aniseed and possible pineapple nuance), the fresh fruity, estery note. The compounds (E)-2-hexenal and (E)-2-hexenyl acetate convey the fresh, green impression.
*Commercially this is also known as Furaneol® and is a constituent of pineapple and strawberry aroma. Its odor sensation is that of cotton candy, caramel and strawberry. Other components listed elsewhere (6, 7). CITRUS – GRAPEFRUIT(Citrus paradisi, Rutaceae) Citrus, belonging to the family Rutaceae. TASTE: Taste of the juice is acid, fruity and bitter sweet. The terpenoid rich peel oil has a characteristic terpeny, woody, exotic fruity character (6). KEY FLAVOR MOLECULES & NOTES: Nootkatone, a sesquiterpene ketone is primarily responsible for the characteristic aroma of grapefruit oil. Noonkatone – fruity, sweet, citrus, grapefruit peel - also stated to impart the characteristic fresh woody odor. The bitter taste originates from naringin^^. Acetaldehyde (green, floral, green apple) and ethyl butyrate (pineapple-like) improve the juicy note and 1-p-menthane-8-thiol (grapefruit mercaptan) is also responsible for the typical exotic grapefruit character. Other components listed elsewhere (6).
^^[Naringin belongs to the flavonoid family a vast collection of plant compounds. Flavonoids consist of 15 carbon atoms in 3 rings, 2 of which must be benzene rings connected by a 3-carbon chain. Naringin is a flavanone-7-O-glycoside between the flavanone naringenin and the disaccharide (sugar compound) neohesperidose. The flavonoid naringin occurs naturally in citrus fruits, especially in grapefruit, where naringin is responsible for the fruit's bitter taste. In commercial grapefruit juice production, the enzyme naringinase can be used to remove the bitterness created by naringin.]
the following clues. Aldehyde names end in “al,” esters in “ate,” ketones in “one” (pron. “own”), alcohols including phenols in “ol,” lactones appearing as such (simply “lactone”) or ending in “olide,” terpenic compounds end in “ene,” sulfur compounds with thiol or mercaptan in the name and certain ethers ending in “ole.” Other classes are not considered here (see 14-16). Learning a little of the chemistry and the names of some of these components, or at least noting the flavor descriptors applicable to each fruit, will enable a better sensory evaluation and understanding of a complex matrix incorporating these fruits in the beverage formulation. Taste the fruits and really learn about them, memorize the descriptors and then seek out these flavor notes in that grapefruit flavored vodka or that rhubarb root enhanced gin (Eden Mill Love Gin, 11). Also, you will need to use some of the references to find more about the flavors of rhubarb! Those wishing to try other fruits such as durian, grapes, guava, lychee, kiwi (or other gooseberries), mango, melons and papaya etc., should consult the references to be aware of how best to describe the flavors — it's not easy with mangos apparently (6). And to be aware of their major flavor components and contributions. Knowing if they contain similar flavor chemicals to those in other fruits may make the choice easier as to which to use and obtain (and in which form — whole fruit, purees or extracts) and which are likely to retain fresh flavor and even colloidal stability (propensity to form hazes or sediments) over the shelflife of the product. Any supplier of fruit products should be able to advise and, as usual, if they don’t appear to be helpful, go elsewhere. One thing to be aware of is that many raw materials and flavorings have not been extensively tested outside the soft drinks market (except perhaps privately in the big flavor houses) — how they hold up in an alcoholic environment may need some trials — including sensory evaluation — before scale-up. The major players do their due diligence in this respect — the craft distiller ought to do likewise. WWW.ARTISANSPIRITMAG.COM
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CITRUS – LEMON(Citrus limon, L, Rutaceae) Citrus, belonging to the family Rutaceae.
CONCLUSION This concludes our introduction to the topic of flavor origins, sensory evaluation and a quick examination of fruit-related flavor notes. This first part has hopefully conveyed some ideas as to the use and understanding of fruit, fruit flavorings or the nature of fruity esters that appear to be part of the overall flavor profile of your own branded spirits. The series will continue with a look at the flavor attributes, respectively, of herbs, spices and flowers. In the meantime, evaluate all the foods and beverages you come across, carefully by applying all your senses to truly learn how to evaluate your distilled beverages made using such raw materials or via the perceived notes of fruits etc., as conveyed through the esters, aldehydes and other biochemicals produced from fermentation etc. (3). How authentically do chemically produced esters and other artificiallyderived flavor compounds compare sensorially with true-fruit derived flavors? How will you best create an authentically tasting fruit-flavored beverage? How will you know? As we have seen that depends on many variables and the environment and concentrations of other components in the matrix. And how the artist in you brings the right combinations of flavors together. Now where is that fresh peach you were contemplating or consuming as you started reading?
Gary Spedding, Ph.D. is a brewing and distilling analytical chemist with special interest in the origins and development of beverage flavor and in the sensory evaluation of beer and distilled spirits. He owns and operates Brewing and Distilling Analytical Services, LLC and the new division — Brewing and Distilling Educational Services in Lexington, KY.
REFERENCES 1) Troupe. M. and Spedding, G. (2018) The Vast and Fantastic World of Botanicals: The Art of Extracting and Preserving the Exquisite Flavors of Gin. Artisan Spirit, 23: Summer 2018. pp. 60-67. 2) Bauer, K., Garbe, D. and Surburg, H. (1997). Common Fragrance and Flavor Materials: Preparation, Properties and Uses (Third Edition). Wiley-VCH.
TASTE: Lemon juice and lemon peel. Juice: very strong acidic taste (high citric acid levels), refreshing juicy aroma, far away from the peel oil (6). KEY FLAVOR MOLECULES & NOTES: Limonene is the main constituent of lemon oils (60%) [Sweet, citrus, orange, mint, herbal, terpenic, camphoraceous, cilantro and green juniper berries]. Citral is an important contributor to fresh lemon character but decomposes in a short time in an acidic beverage matrix. It is actually a pair of isomers (terpenoids) geranial – strong lemon odor and neral – light lemon odor but sweeter (aldehydes). The composition of lemon oils depends on the variety of lemon and the country of origin. Other major components, besides the (+)-limonene, are the terpenes β-pinene (piney, polish, woody terpy, resinous and camphoraceous), and γ−terpinene (citrus, lime-like oily, green and tropical). The characteristic odor of lemon oil differs from that of other citrus oils and is largely due to the neral and geranial (noted above). Other components listed elsewhere (6).
CITRUS – LIME(Citrus aurantifolia, Rutaceae) Citrus, belonging to the family Rutaceae. TASTE: Lime juice has acidic and juicy floral notes KEY FLAVOR MOLECULES & NOTES: The lemon-like cold pressed lime oil is characterized by a relatively high citral
content (see under Citrus-Lemon), balanced with β-pinene (fresh, piney, hay and woody, terpy and resinous with a slight minty note, camphoraceous with a spicy nuance), γ-terpinene and neryl acetate (floral, rosy, soapy, fruity, pear and tropical). Key components derived from distilled oils also include 1,4-cineole (cooling, minty, menthol-like, green and herbal, with a terpy and camphoraceous nuance), 1,8-cineole (eucalyptol - eucalyptus, minty, fresh, cooling, herbal), α-terpineol (citrus, woody with a lemon and lime nuance and with a slight soapy mouth-feel), the γ-terpinene, 2,2,6-trimethyl-6-vinyltetrahydropyran and 2-(2-buten-2-yl)-5,5-dimethyltetrahydrofuran. Other components are listed elsewhere (1,6). CITRUS – ORANGE, SWEET & BITTER(Citrus sinensis — sweet, Citrus aurantium — sour, Rutaceae) Citrus, belonging to the family Rutaceae. TASTE: Refreshing, sour, sweet with a fruity, juicy flavor. Peel is sometimes bitter – this peel oil has a strong terpeny, aldehydic, nonfruity or juicy character. Taste of blood oranges is more tart with slight berry and floral nuances (6). KEY FLAVOR MOLECULES & NOTES: Fresh orange peel is associated with d-Limonene (95% in orange oils). Acetaldehyde, while weak in smell/ taste, is an important factor in conveying juiciness and freshness. Ethyl butyrate and (E)-2-hexenol add the fruity, green note along with α-pinene (intense woody, piney, cedarwood, earthy and herbal-like qualities and camphoraceous).
Sweet orange oils have a high terpene hydrocarbon content (> 90%, mainly (+)-limonene), but their content of oxygen-containing compounds can differ/vary and affect their quality. Important for aroma are aldehydes, mainly decanal and citral, and aliphatic and terpenoid esters. Octanal (aldehyde C8 or caprylic aldehyde -aldehyde-like, green with a peely citrus orange note) and the decanal (aldehyde C10 or capraldehyde sweet, waxy, orange peel, floral) are said to be responsible for the green peely, aldehydic orange note. The sesquiterpene aldehydes α-sinensal (citrus, orange, mandarin) and β-sinensal (orange, sweet, fresh, waxy, juicy) contribute particularly to the special sweet orange aroma. Bitter orange oil differs from that of sweet orange oil with a lower aldehyde content and a higher ester content. Of acids and esters: aliphatic acids up to C10 (10 carbons in the chain length) accentuate certain aroma characteristics (C3-C8 for fruity notes; C4, C6-C12 for cheese flavors). These notes are conveyed through the condensation of the respective acids with alcohols to form the esters. Reference 5 provides a neat descriptive table of esters and their fruit flavors. Reference 6 provides formulas of flavors representative of the fruit in question. Reference 7 also has a wealth of flavor information. References 8-10 provide descriptors associated with the flavors for each chemical component, chemical details and structures and formulas of the molecules. Extensive lists of volatile compounds in major fruits may also be found in Reference 13.
5) Kennedy, J. (2013) Infographic: Table of Esters and their Smells. https://jameskennedymonash.wordpress.com/2013/12/13/ infographic-table-of-esters-and-their-smells/ [Last accessed July 2018] 6) Ziegler, H. (Editor) (2007). Flavourings: Production, Composition, Applications, Regulations. (Second Edition). Wiley-VCH. 7) Berger, R.G. (Editor) (2010). Flavours and Fragrances: Chemistry, Bioprocessing and Sustainability. Springer-Verlag.
3) Spedding, G. (2018) New Understanding of Human Sensory Perception: Potential for more Robust Sensory Evaluation of Distilled Spirits. Artisan Spirit, 22: Spring 2018. pp. 78-85.
8) http://www.leffingwell.com/ [Last accessed July 2018]
4) Jelen, H. and Gracka, A. (2017). Characterization of aroma compounds: structure, physico-chemical and sensory properties. In: Flavour: From Food to Perception. E. Guichard, C. Salles, M. Morzel, and A-M Le Bon (Eds). Wiley Blackwell. Chapter 6. pp. 126-153.
10) http://www.chemspider.com/ [Last accessed July 2018]
9) http://www.thegoodscentscompany.com/ [Last accessed July 2018] 11) Roskrow, D. (2017). Collins Little Books. Gin: A Guide to the World’s Greatest Gins. Harper Collins, UK.
12) Lemke, T.L. (2012). Review of Organic Functional Groups: Introduction to Medicinal Organic Chemistry. (Fifth Edition). Wolters Kluwer Press. 13) Hui, Y.H. (Editor) (2010). Handbook of Fruit and Vegetable Flavors. John Wiley & Sons, Inc. 14) Spedding, G. (2017) Toasting My Spirits – Maillard and the Incredible Reactions he Uncovered in 1912. Part I: The Chemistry. Artisan Spirit, 18: Spring 2017. pp. 98-102. 15) Spedding, G. (2017) Toasting My Spirits – Maillard and the Incredible Reactions he Uncovered in 1912. Part II: The Maillard Reaction and Distilled Spirits Production. Artisan Spirit, 19: Summer 2017. pp. 65-69. 16) Spedding, G. and Jeffery, J. (2015) Distilled Spirits and Key Flavors: Smelling Roses, Fruit, Stinky Feet and Much More in My Glass. Artisan Spirit, 12: Fall 2015. pp. 53-58.
FINNISH YOUR GIN Kyrö Distillery gave Finland a taste for gin and now it’s ready to take on the world.
Written by Jeff Cioletti Photography by Veera Kujala
in is essentially a global category, with distillers on every populated continent enjoying some sort of surge in interest in the botanical spirit. While most are creating some variation on traditional, juniper-forward London dry gin, many are keen to bring a bit of their own local terroir to give consumers a rare taste of their regions’ native flora. That’s been the goal of Kyrö Distillery Company in Isokyrö, Finland, which is making a significant international push with Napue, its rye-based gin. The gin and its barrel-aged counterpart, Koskue, made their official U.S. debut at Bar Convent Brooklyn in June. “What we tried to do was capture the Finnish summer in a bottle,” says head distiller Kalle Valkonen, who, along with Miika Lipäinen, Mikko Koskinen, Miko Heinilä and Jouni Ritola, founded the distillery in 2012. Napue Gin’s recipe features indigenous botanicals like sea buckthorn, birch leaves and the perennial, strongly aromatic herb meadowsweet — more properly known as Filipendula ulmaria. Kyrö also uses Finnish cranberries, whose characteristics contrast significantly with those of North American varieties. “They’re much smaller and much more packed with taste,” Valkonen says. “There’s no cranberry cultivation here, it’s all naturally grown in swamps.” Kyrö sources most of the more traditional gin botanicals from within Finland as well. “Whatever we can source locally, we do,” Valkonen notes. “The coriander is grown here, the dill is grown by a farmer nearby and the caraway is also Finnish.” But the Napue Gin that the U.S. market is importing is a slightly tweaked version. The distillery replaced the meadowsweet and birch leaves before Napue entered the U.S. “We decided to do a little bit sweeter gin for the U.S. market,” Valkonnen reveals. “We used all of the original botanicals, except for those two, and then added some angelica leaves, heather and rosemary.” Those, too, are sourced locally. Kyrö distills four of the gin’s botanicals — rosemary, sea buckthorn, cranberries and orange peel — while they’re still fresh to capture all of the volatile components that wouldn’t survive in the dried versions. The Koskue aged version sits for about three months in small American oak barrels and is fine-tuned with freshly distilled orange peel and black pepper to complement the vanilla notes that the wood imparts and the spicy notes from the rye base. Napue and Koskue have attracted considerable international attention, and they have the medals to prove it. In 2015, the International Wine & Spirits Competition (IWSC) recognized Napue as “The World’s Best Gin for Gin & Tonic.” “That really made the gin fly in Finland,” Valkonen recalls. It also played a key role in giving Finns a taste for gin, in general. “When we first started, there was like, one premium gin in the state monopoly in 2014,” Valkonen says. “The gin boom kind of arrived in Finland with us in 2015.” A prohibition on alcohol advertising in Finland meant that the only place people could really find out about a spirit was in a bar. “The market didn’t really know about gin that much, but we got WWW.ARTISANSPIRITMAG.COM
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a lot of good press through the nomination to be the gin for a gin and tonic,” he says. Many other awards followed. In 2016 the San Francisco World Spirit Competition gave Napue a gold. In 2017 the San Francisco competition gave Koskue a gold and IWSC gave it an Outstanding Silver. Such accolades are all the more remarkable when you consider that gin wasn’t even a part of Kyrö’s original mission. The principals launched the company as a rye whiskey distillery. “Finns love rye, we have a very special relationship with rye,” Valkonen points out. “It was the most important crop back in the nineteenth century.” Rye acreage may have receded since then, but the country’s love affair with the grain certainly has not. When Finland celebrated the centennial of its independence, the country selected rye bread as its national dish. Kyrö’s founders even hatched the idea for the distillery while sipping rye whiskey in a sauna, baffled that no one was already producing it in their rye-mad country. In the EU, a spirit needs to mature for three years before a distillery can call it whiskey. They started producing it in 2014 and, like most whiskey distilleries without deep pockets, realized they needed a secondary product to generate revenue while the whiskey sat in barrels. “Gin was the obvious choice,” Valkonen says. But the founders were committed to staying true to their mission of being an all-rye distillery and that meant the gin had to be derived from that grain as well. For the gin base, though, they source grain neutral spirit from Estonia. Valkonen and his colleagues were a bit blindsided by the success of their gin after it started gaining international acclaim in 2015. It created a challenge at first, as they were working with only one still — which meant when they were producing gin, they could not be making whiskey simultaneously. Kyrö expanded with a second still in 2016, so now it’s able to produce both without disrupting the production of either. But the whiskey remains mostly a domestic product for Kyrö, as it’s yet to have enough finished stock on hand to export it. So it’s likely that the world outside of Finland will get to know Kyrö as a gin producer, despite its whiskey-making origin story. And the same is likely to happen at home. Since 2015, Kyrö has grown its share of the premium gin market from about one percent to 10 percent. “There are now some more distilleries in Finland producing Finnish gin and there have been some good things happening in the gin and tonic culture here,” Valkonen observes. “Previously, gin and tonic was something your grandmother used to drink, but, since 2015, it’s become a fairly popular drink — and a celebrational drink — for young people as well.”
Kyrö Distillery Company is located in Isokyrö, Finland. Visit www.kyrodistillery.com for more information
WILL NOT GET YOU HIGH
AND OTHER DEBUNKED MYTHS ABOUT COLORADO HIGH VODKA WRITTEN & PHOTOGRAPHED BY CARRIE DOW
n 1970, the federal government passed the Controlled Substances Act making the Cannabis sativa plant a Schedule 1 drug and thus a prohibited material. Until then, Cannabis sativa had been cultivated for fiber and other uses worldwide for over 10,000 years. American colonists grew vast quantities of cannabis for items like sails and boat riggings, paper and cloth, and animal bedding and feed. What the government didn’t approve of were the plant’s ‘medicinal and spiritual’ uses. You probably know Cannabis sativa as marijuana. Nevertheless, like Chihuahuas and St. Bernards are different breeds of dog, Cannabis sativa has different strains, the most common of which is hemp. While marijuana Cannabis sativa gets people high if smoked, hemp has little tetrahydrocannabinol or THC, the psychoactive ingredient in marijuana. At less than 1% THC, smoking hemp won’t do a thing for you. Since 1970, many states have relaxed their laws, and Cannabis sativa, both marijuana and hemp, became legal in Colorado in January 2014. Shortly after that, Peter Caciola, owner of Colorado Gold Distillery in Colorado Springs, had a product idea: Colorado High Vodka. Caciola wasn’t the first person to consider mixing cannabis and alcohol; however he was the only one who wanted to distill with hemp. Other distilleries currently producing cannabis spirits infuse after distillation, a completely different flavor profile. Colorado Gold distills from 51% course-ground hemp from Canada, a product that doesn’t look or smell appealing in a bag on the distillery floor, but makes for an interesting vodka in the bottle. A chat with Head Distiller Mike Almy reveals Caciola’s simple logic behind Colorado High. “Why not?” says Almy with a
hearty laugh. Though he stresses that this product is not a gimmick. “I hate to use the word novelty, but to some extent that it was it is. However, we didn’t want it to be something where somebody buys it, tries it once, and then never buys it again. We want them to try it and like it.” For Almy and Caciola, the concept of distilling hemp into vodka seemed straightforward but creating a process proved a challenge. Between the distillation itself and the regulations involved, it took over a year to get Colorado High Vodka off the ground, so to speak. “We want to differentiate between hemp and marijuana,” he states. “They’re both cannabis, but what we use is referred to as industrial hemp. Since we are federally regulated, even though marijuana is legal in Colorado, federally it is still illegal and that supersedes state law. We can have THC in our raw material, but if it’s greater than 0.05%, we cannot legally possess it and must return it to the manufacturer.” Almy tried eight different recipes before settling on the current product. The structure of hemp itself makes things difficult. “Heating hemp to break down cellulose releases oils,” he explains. These oils degrade quickly when cooled. “I had just heated some up for days on end and then it cooled off. All the oil went rancid. It literally smelled like cow manure. I couldn’t stand it so I dumped it down the drain and went back to the drawing board.” That wasn’t the only issue with ground hemp, which looks like brown beach sand. “Another issue we have is it’s so high in minerals, especially iron,” Almy adds. “It’s difficult to move. Some of these bags will come in magnetized. You’ll scoop out a bucket and a string of hemp will be attached to each other. Just moving WWW.ARTISANSPIRITMAG.COM
it through is hard on our equipment.” Add government regulations and distilling hemp gets more complicated. “Because we called it ‘hemp,’ the government had to approve our labels,” he continues. “We weren’t allowed to have a [Cannabis] leaf on it. There was also a government shutdown during all this. It took about three months for approval.” The government also requires rigorous lab testing, which adds to expenses. Despite these issues, Almy doesn’t cut corners in the process. The vodka is distilled in a continuous fractional column with 24 distillation plates. The distillery also has a giant custom-designed carbon filtration system that filters the vodka for 36 hours. “We don’t do things the easy way,” Almy laughs again. “The rule for making vodka is making some attempt to clean out organic material. Some people take a household carbon filter, pass it through one time and call it good. We like to go above and beyond. [Filtering] is an expensive process and that’s why companies that do carbon filtration really tout the process. Some will say, ‘oh, we six times, seven times carbon filter. We’re about 20 times carbon filtration. We cut heads by hand. We hand bottle. We just want to make a good product.” All that attention to detail has paid off because Colorado High Vodka is the company’s best selling spirit. In fact the distillery was originally founded in the town of Cedar Ridge on Colorado’s Western Slope, but demand for Colorado High caused Caciola to move to a larger, more accessible facility in Colorado Springs. The taste of Colorado High is unique. Also made with Colorado corn, there is no funky smell like infused cannabis products when the bottle is opened. The taste is sweet and smooth with a silky mouthfeel and hints of butterscotch and hazelnut. Still not everyone fully understands what Colorado High Vodka is, so the distillery created a consumer cheat sheet.
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A SPIRIT THIS WELL-CRAFTED DESERVES AN ARTISANAL GLASS.
1) Colorado High Vodka is NOT made from marijuana. 2) Colorado High Vodka will NOT get you high. 3) Colorado High Vodka will NOT cause you to fail a drug test. 4) Colorado High Vodka is NOT actually green, the bottle is tinted. Colorado Gold also makes agave spirits, brandy, gin, corn whiskey, rye, and bourbon. Almy would like to experiment making absinthe and gin from hemp, but with all the growth, he hasn’t had time. Caciola plans to remodel the distillery’s tasting room, which is currently a large empty room with an office counter for serving, into a proper cocktail bar with indoor/outdoor seating. The distillery is also bottling smaller sizes of Colorado High, both liter flasks and shooters, so consumers can try the vodka without committing to a 750mL bottle first. “It’s easy to sell one bottle to one person,” he notes, “but to sell them a second bottle is the toughest act.”
Colorado Gold Distillery is located in Colorado Springs, Colorado. Visit www.coloradohighvodka.com more information. WWW.ARTISANSPIRITMAG.COM
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7/20/18 3:04 PM
REASONS TO CONSIDER CANS WRITTEN BY SHANNON O'NEIL
rom music festivals to football tailgates, it’s hard to compete with the portability and convenience of an aluminum can. Popularity has grown so much among consumers that cans are becoming a viable option for more than just soda and beer. Over the summer, you probably spotted a friend or two at the beach or on the lake with a so-called “cocktail-in-a-can” beverage. From spirits-infused seltzer to fruity sangrias and even the classic gin-and-tonic, more manufacturers are offering their adult beverages in can form. Recently, this packaging trend has taken another leap forward with several distillers now offering their spirits in cans. Whisky maker Scottish Spirits will soon roll out a 12 oz can version of their 80 proof, single grain scotch whisky in the US. The can amounts to approximately eight shots, though the distiller encourages consumption in sips. Hochstadter’s, an American distiller since 1884, has also unveiled a can option, this one a 100ml blend of rye whiskey with honey, bitters, navel oranges and rock candy called the “Slow & Low” that packs an 84 proof punch. Of course, there are some who say the spirits industry shouldn’t stray from the history of the glass bottle. Aluminum cans still carry the perception amongst some consumers of a cheaper product, though that perception is shifting with other spirits, including wine, offering canned options. Cans also have the disadvantage of not being resealable, which poses a conundrum for the occasional spirits drinker who will need to find someone to share with or be forced to toss the leftover beverage. Still, for on-the-go events, places where glass isn’t allowed, and the occasional gathering, the can offers an alternative. And even though the can concept bucks tradition and may never beat out a glass bottle in terms of average consumption, there are some advantages for distillers who choose to go with the aluminum option. From saving money to preventing product losses, here are a list of six reasons to consider cans...
REDUCED COST IN PACKAGING MATERIALS & EQUIPMENT
From a production standpoint, aluminum cans are far cheaper to produce. Cans are also less prone to breakage, which results in fewer instances of lost product and materials due to manufacturing and shipping accidents. The more durable nature of cans also means there’s less of a need for secondary packaging such as the corrugated partitions used to separate bottles.
HIGHER SPEEDS, HIGHER OEE
Can production lines require fewer equipment units in operation and consequently take up less floor space in a facility than a typical bottling line. Additionally, because cans are more stable (especially those with a reverse taper or higher center of mass), the can lines can move at higher speeds, increasing daily production potential. Most importantly, the reduction of equipment units of operation translates to a higher OEE (Overall Equipment Effectiveness).
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ADAPTABLE OPTIONS FOR GROWTH
Outside of a dark warehouse, bottles don’t provide much protection from sunlight and other elements that can turn good spirits bad. Aluminum cans, however, are not penetrated by UV Rays and remain more tightly sealed. This ensures that the product will be consumed at its highest level of quality.
When it comes to the finished product, cans offer the ability to create a cubed pallet load with higher density. They’re also lighter, which reduces the energy cost for transportation to warehouses and distribution centers.
From a marketing standpoint, liquor bottles offer less real estate when it comes to label imagery. Conversely, cans can be completely wrapped for maximum branding impact. It can also be more cost effective to switch out a shrink sleeve for special one-off runs than it is to change out a cold glue labeler for a bottle.
PRODUCT & BRAND DEVELOPMENT STRATEGY & FINANCIAL PLANNING
Changing a bottling line from 700 ml to 1.5 liter bottles requires extensive modifications to the equipment, programmable logic controls and automation controls that We work well together. can cost manufacturers time and money. But aluminum can production lines that maintain the same diameter can easily undergo a height changeover.
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Glass packaging will always have a place in the spirits industry, but as the popularity of cans grows, it’s worth exploring the option to see if it’s a packaging option that could appeal to your consumers.
Anthony White leads the Beer, Wine & Spirits division at Haskell which is dedicated to engineering and installing world-class manufacturing systems and facilities for clients in the Beer, Wine & Spirits Markets. Anthony graduated from the University of Florida’s Hough Graduate School of Business with a Master of Business Administration and from the University of Florida with a Bachelors in Construction Management, and is a Certified General Contractor.
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Corgi Spirits WRITTEN BY BENJA MIN PEIM
he first thing you should know about distiller Robert Hagemann is that he loves dogs. He named Corgi Spirits after his favorite breed: the corgi. It’s a breed long associated with the British royal family and was the breed of Hagemann’s childhood pup. But he didn’t choose the name just for nostalgia, he wants the spirits the distillery produces to exemplify what he thinks of as the corgi spirit: fun and enjoyable, with a rich pedigree. Hagemann, 34, opened the distillery last year in a working class but gentrifying section of Jersey City, a diverse city of 250,000 that stretches along the Hudson River opposite Manhattan and the State of Liberty. The distillery currently makes gin and vodka and will start producing whiskey in October. It’s located in a 10,000 square foot warehouse with a private office, a bar, and a spacious tasting room that evokes a British country lodge. “We’re British inspired, and proudly made in America,” Hagemann says. Hagemann entered into the spirits business after a seven-year career in corporate marketing. His goal was always to do something with food and drink, which he had long been attracted to for its convivial nature and sharing spirit. “It’s something real that you can bond over with others, it offers people a way to connect on a deeper level,” he says.
Photo provided by Corgi Spirits
Photograph by Benjamin Peim Hagemann began his journey into the distillery business by devoting himself to education. In 2014 he trained at Moonshine University in Kentucky, followed by a stint in the Netherlands. In November 2016 he found a suitable location for a distillery. Eleven months later, after maneuvering through local, state and federal regulations, Corgi Spirits opened for business with a huge party in which over 100 people attended. “I was nervous as hell but also really excited,” Hagemann says. The distillery is Jersey City’s first and so-far only distillery. Hagemann grew up in a suburb 30 minutes away and is a current resident of the city. He says he always intended to open up his business in Jersey City. “Why would I not want to start a business here?” He says rhetorically. “It’s the most diverse city in the country, with a Brooklyn type of feel.” He found a 10,000-square-foot space so that, when Corgi Spirits grows, he can expand his business without having to go hunting for another warehouse. Hagemann and his seven employees operate two stills, a Vendome and an iStill. The Vendome holds 100 gallons and is used to make the whiskey. The iStill holds 500 liters. It was made in the Netherlands, and it has an iPad on its side from which the inside is controlled via software. According to Hagemann, the software controls the internal temperature and ensures consistency over every single batch. “You don’t have to stand here all night observing,” Hagemann says. The British influence extends to the actual spirits, as well. The distillery’s signature is the Earl Grey gin, in which gin is combined with what might be Britain’s other favorite drink: tea. In fact, Corgi Spirits is one of the only distilleries in the country to sell Earl Greyinfused gin. The Earl Grey-infused gin was inspired by a famous New York City mixologist, Audrey Saunders, who mixes drinks at WWW.ARTISANSPIRITMAG.COM
the celebrated Pegu Club and is known for her Earl Grey martini. Hagemann wanted to take it one step further by making a high quality Earl Grey infused spirit commercially available. To do this, the gin is infused with the Earl Grey tea and bergamot orange peel. Hagemann said that it mixes well with honey, mint, lemon, club soda, and tonic. Corgi Spirits gets the tea leaves from Harney and Sons, a high-grade tea blender based in upstate New York, and sources other botanicals from Mountain Rose Herbs, based in Eugene, Oregon. Corgi Spirits also produces a vodka from creamy, dense potatoes that is distilled six times, along with a Pembroke gin, and limited edition seasonal gins like Very Merry gin for the winter, and Garden Party gin for the summer. Based on current projections, Corgi’s plans to sell 1,600 sixpack cases by year’s end. Their goal for the second year is to double that number to 3,200. The distillery has a strong social media presence focused on Instagram. In under a year, it’s collected 10,500 followers, and posts photos multiple times a week of its spirits, and consumers enjoying them. Corgi Spirits’ social media strategy is targeted toward the local Jersey City community and its surrounding area to make them aware of the brand and to encourage them to drop by the distillery for cocktails. Hagemann said that they focus secondarily on a consumer profile of cosmopolitan people within a certain age range (he wouldn’t say which) who appreciate fine dining and consumer cocktails. Hagemann credits social media with being hugely important to his business. “There’s a level of interaction that we get that allows consumers and customers to understand more about the brand,” Hagemann explains. “When they see it on the shelf, they’re already excited to try our products.” For now, the distillery is only focusing its sales in New Jersey. It’s planning next year to expand outside of the garden state, and already receives orders online from California and Texas. The distillery also hosts events to involve the local community. It recently put on a celebration for the royal wedding, for instance. Food trucks have taken to parking next to the building in a lot owned by a neighbor. “People love it,” Hagemann says. “It’s great for us because we’re not allowed to serve food, so they can have something they can enjoy along with our cocktails. It makes it a more holistic experience.” One thing Corgi is especially focused on is showing that a distillery can be a socially minded business. To that end, the distiller lends out its space principally to animal groups, along with local art groups, and non-profit organizations like food banks and refugee affairs organizations. It also comes as no surprise that the distillery also donates a portion of its sales to local dog rescue groups.
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Corgi Spirits is located in Jersey City, New Jersey. For more information visit www.corgispirits.com or call (201) 448-4184. WWW.ARTISANSPIRITMAG.COM
Winning Amid Consolidation and Innovation
Key Considerations for High Growth Brands (and those that want to be) PART ONE of TWO WRITTEN BY SARAH NAGEL SISISKY
All data and statistical information have been sourced from Bar Convent Brooklyn 2018 Routes to the U.S. Beverage Alcohol Market for Entrepreneurial Brands presentation.
t seems that more than ever, one of the toughest challenges facing American spirits producers in today’s market is the increasingly consolidated distributor landscape. Carving out a successful route-to-market in this environment has proven to be quite challenging. The good news is opportunities have been created for alternative distribution solutions and pathways to reach American consumers. Part One of this two part series will explore the current U.S. spirits landscape from a high level vantage point, and Part Two will examine key considerations for success within this landscape, including thoughts on how to determine an optimal route to market.
The Regulatory Framework It is first important to touch briefly on the underlying regulatory framework of the U.S. market. While not a glamorous part of the business or the showcase of this article, a basic understanding of two core regulatory realities will help drive thinking on other issues addressed at length in the article. The first reality is that the regulatory framework in the U.S. is complex — no surprise there. There is regulation at the federal level through many executive branch agencies, including, among others, the Alcohol and Tobacco Tax and Trade Bureau (TTB), Food and Drug Administration (FDA), Federal Trade Commission (FTC), and U.S. Customs and Border Patrol (USCBP), as well as regulation and oversight at the state level, which is by nature highly decentralized. In essence, the U.S. market is roughly equivalent to 51 different countries — one level of federal regulation plus regulation in each of the 50 individual states. The second reality is the “three tier system.” Under the three tier system, which dates back to the 1930s, the TTB divides the industry into three tiers and requires that manufacturers/suppliers (first tier), wholesalers/distributors (second tier), and retailers (third tier) must remain segregated and operate only within their own tier. Despite the regulatory complexity of the market, consumption of spirits in the U.S. has increased on average by 2.4% annually with the latest data showing total U.S. consumption in 2016 at 221 million nine liter cases. With this trajectory, the market should increase by over 22 million cases in the next five years. This growth has been driven and is expected to continue with premium priced
Over the period 1990 to 2017, market share of the top five distributors has increased from 23.8% to 64.4% brands. Non-premium products in several categories, including gin, rum, and vodka have all shown negative growth while every premium segment across distilled spirits shows volume growth. Over the five year period from 2018 to 2022, non-premium spirits anticipate increased volume of 4.3 million cases, or an increase of 2.9%, and premium spirits are expected to nearly quadruple that number with an increase of 17.7 million cases, or 23.6%. Within this context of overall sector growth, large suppliers continue to hold a highly concentrated position. Data from 2016 indicates that the top ten spirits suppliers account for 72% of total market share, driven by the largest supplier, Diageo, accounting for 24%. Similarly, there has been significant consolidation in the distributor tier. Over the period 1990 to 2017, market share of the top five distributors has increased from 23.8% to 64.4%. Despite significant consolidation among large suppliers and distributors, there has been a notable rise in domestic craft spirits producers. In fact, domestic craft spirit producers number more than 1,600 with a combined market share of less than 4% of total market value. For a more detailed view of the craft spirits landscape, the Craft Spirits Data Project produced by the American Craft Spirits Association, Park Street, and IWSR is a useful resource (Authors Note: I am the head of Client Development at Park Street). Amid the backdrop of consolidation, how are small brands competing against the large suppliers with often entrenched market positions?
An Era of Democratization One key factor for success among emerging brands is their ability to capitalize on the changing media landscape. There has been since 1980 a considerable increase in overall media consumption across channels (e.g., print, TV, Internet and games), together with the introduction and subsequent wide scale adoption of new media
formats (e.g., digital, social) which enable precision (e.g. geofenced, age-qualified) targeting. Perhaps equally important, within each media category, there has been a proliferation of production and distribution points from specialty cable channels to online and social media. As a result, there are significantly more messages reaching consumers in much shorter timeframes and from a much greater number of sources. This has yielded what can best be described as a democratized media landscape, particularly among digital and social media. While ownership of the media platforms themselves remain highly concentrated, the traditional barriers to direct access to a critical mass of consumers have been removed. As a result, emerging or subscale marketers are able to reach narrowly defined target audiences directly and cost-effectively and thus compete (and win) against larger marketers within the context of the narrowly defined audience groups. The increase in messaging and diversity of sources and touch points has created an opportunity that is ripe for consumers to engage in discovery. As part of this discovery, consumers seek to validate brand messaging and identity, which yields either engagement or swift rejection. Further, online and social media has accelerated multifaceted communication between brands, consumers, and among individual consumer networks. As a result, authenticity becomes increasingly important because any rejection of a brand is highly amplified within and among consumer networks. Within this context, emerging innovation brands are able to compete effectively as they are not challenged by legacy brand identities and messages (i.e., brand baggage). The democratization of marketing and validation supports another part of the business which is significant, specifically, consumers’ interests in discovery and authenticity. This is a key factor in driving new brand entrants into the market. While the democratization of spirits production is not as dramatic as in certain media production (e.g., music, news, video), the barriers to entry have decreased in three major ways:
1) State laws easing market access for entrepreneurs
(e.g., tax credits, simplified licenses, three tier system regulations)
2) The rise of shared infrastructures and service providers 3) Low interest rates especially in the last ten years or so Some examples of state law changes that have created a favorable backdrop for entrepreneurial brands include craft distiller licenses and on-premise consumption in tasting rooms. With respect to shared resources, over 25% of craft distillers offer contract production, which is a shared infrastructure solution for other brands, and many producers and brand owners utilize shared service providers, including back-office import and distribution platforms, HR and benefits management services, and working capital solutions. Similarly, self-distribution models have evolved in large demographic, open states, most notably California, New York, New Jersey, and Florida.
Premium Emerging Brands Gain Market Share The wave of new market entrants among emerging brands is highly correlated with innovation in terms of production technique, packaging, category development, marketing, and more. As a result, many of the emerging brands are connecting with consumers, particularly those consumers who are exploration-oriented, and achieving high growth rates in the double or even triple digits. While the absolute volume and value numbers for the individual brands may be equivalent to rounding errors of the large brands, emerging brands in aggregate are commanding noticeable attention in the market. As a result, while large brands continue to account for a significant majority of sales by volume and value, they are losing market share to a large group of premium emerging brands, which is creating a high degree of fragmentation among this market segment and giving rise to a “long tail”, or a large number of brands that sell in relatively small quantities. Over the past twenty years, the top five brands in the gin, rum, tequila, and vodka categories have all suffered market share erosion with the top five gin brands faring the best with a five percentage point loss and tequila and vodka performing the worst, each with a twelve percentage point decline. Entrepreneurial activity among craft and non-craft emerging brands has been the key contributor to this trend. If barriers to entry and operating costs become low enough that larger numbers of entrepreneurs can enter the sector, even on a limited basis with the intention of keeping their day jobs, growth in the emerging brand segment will continue to accelerate and likely remain a source of innovation within the industry. Other drivers of growth in the sector overall include initiatives by existing suppliers, which range from line extensions of popular brands (e.g., Brown Forman’s Jack Daniel’s Tennessee Honey, Diageo’s Crown Royal Vanilla) to new brands launches (e.g., William Grant’s Hendrick’s, Proximo’s Kraken Rum) and private label activity by retail chains (e.g., Costco’s Kirkland). Does increased fragmentation and the growth of the emerging brand segment mean the end for large brands? Absolutely not. Jameson, Tito’s, and Fireball are only a few examples of mega brands that are posting remarkable growth — Jameson the lowest of the three with a compound annual growth rate (CAGR) of 13.3% over the five year period ending in 2016, and Fireball the highest with an astounding 53.5% CAGR during the same period. Certain large brands in categories with higher barriers to entry, perhaps due to regulatory requirements, production capacity constraints, aging needs, or some combination thereof have continued to outperform (think Jameson here). Alternatively, large brands at lower price points where scale and leverage matter more have proven successful at maintaining strong growth rates (think Burnett’s Vodka — 7.8% CAGR for the five year period ending 2016). Tito’s is an example of an independent brand without a major supplier affiliation that is still relatively early in its brand lifecycle that continues to post robust growth (36.7% CAGR for the same five year period referenced above). Lastly, Fireball highlights how large supplier innovation can be relevant despite new brand creation at large suppliers typically having a low success rate.
The innovation and growth that is occurring in the emerging brand segment has added pressure to large suppliers to find new avenues for growth and relevance among younger consumers. One such avenue is investing in or acquiring entrepreneurial brands. As the competition among large suppliers for these deals has increased, large suppliers have begun investing in or acquiring emerging brands at earlier and earlier stages in the lifecycle of the target brand. Some examples, among many others, of large suppliers making investments and acquisitions in recent years include:
Teeling Irish Whiskey (2017)
Leblon Cachaça (2015)
Patron Spirits (2018)
Constellation Brands Casa Noble Tequila (2015)
High West Distillery
The Prisoner Wine Company (2017)
Catoctin Creek Distillery
The Real McCoy
Nelson’s Green Brier (2016)
Copper & Kings (2018)
Pernod Ricard Tequila Avion (2015)
Paddy Irish Whiskey (2016)
Del Maguey Mezcal (2017)
This trend will likely increase as fragmentation continues. In addition to seeking growth by acquiring high growth brands, large suppliers will continue to invest considerable resources in growing or preserving portfolio anchor brands. Activities may include, among others, seeking more favorable terms from distribution partners and implementing brand and product line extensions. Further, large suppliers will likely continue to shed underperforming brands which are not core to their portfolios or are in highly challenged categories or segments and will continue to avoid new brand creation in-house.
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to the distilling industry for over 50 years. 122
In the context of these insights into the industry, the next question is what can entrepreneurial brands do to increase the likelihood of success? Part Two of this series will address trends among distributors and outline key considerations for navigating these trends.
Sarah Nagel Sisisky is the Client Development Director at Park Street in Miami, Florida. For more information visit www.parkstreet.com or call (305) 967-7440. WWW.ARTISANSPIRITMAG.COM
D E D GUIL N E M WO
The Women’s Distillery Guild debuted its new name at this year’s American Distilling Institute conference in Portland. I spoke with women active in the organization to find out what they have in mind for the future. WRITTEN BY D E V O N T R E VAT H A N
Mooney of Spirits Consulting Group, and pon hearing the word LOAD, your first thought may not be Molly Troupe, head distiller for Freeland of an organization that is devoted to the empowerment of Spirits. Hoskin says that the idea came to her after women in a traditionally male-driven industry. Fair, but you would feeling a bit disappointed with the event’s organization be wrong, or you would have been wrong this time last year. The in the past. “All these people are here and we’re just having Ladies of American Distilleries (LOAD) has rebranded itself, now lunch, and you kind of get stuck at whatever table you’re at, but taking on the moniker of Women’s Distillery Guild (WDG). the person you want to talk to is at a different table.” The name might be new, but the passion and persistence Though the format was less formal, this year’s summit marked that’s driven women like Samantha Katz, Director of Community an important moment for the Women’s Distillery Guild. The Engagement for New York Distilling Company, and Karen Hoskin, organization has been at it for years, ever since Katz founded President and CEO of Montanya Distillers, to create and develop the Ladies of American Distilleries while both she and Hoskin this organization has been around for quite a while. were working in New York. When it first started, the Ladies of At this year’s conference hosted by the American Distilling American Distilleries was more Institute, the Women’s of a casual gathering for likeDistillery Guild announced its minds. “It was just a small new brand and website during “The guild’s ethos is to become an influential assemblage of group,” explains Lisa Laird the annual Women’s Summit. experts founded on a mission-driven platform that fosters Dunn, Vice President of Laird & About 60 women were inclusion through mentorship, sponsorship and education.” Company. “It was more kind of gathered around circular tables getting together and discussing inside a conference room at — MEL HEIM issues and so forth.” the DoubleTree Hilton Hotel. EXECUTIVE VICE PRESIDENT of OPERATIONS/MASTER DISTILLER Laird Dunn has well over Most carried heavy jackets or FOR EASTSIDE DISTILLING and TREASURER for the GUILD thirty years experience in this windbreakers on account of the industry, including her current cold and damp, an inevitability position as an executive at a top brand, and she has experienced in Oregon. At the front of the room, Hoskin shared with the crowd first hand the climate that has existed for women. “I came upon her experiences as a female firefighter before recounting her one [man] when I first started in the industry who refused to buy entrance into the distilling industry. whiskey from a woman. It’s like, okay, well, I guess you’re not “That event in Portland was so much about connecting people getting any Applejack.” who are looking for inspiration with people who are inspiring,” At the time of LOAD’s early days, and even today, there wasn’t Hoskin recalls. another institution quite like it. The goal was always to improve Unlike summits in the past, this year was formatted almost visibility for women so that they might prosper in their careers, like a speed-dating night. Instead of fixed seats, attendees and so that other women would feel encouraged to join the were encouraged to get up and switch tables every industry. couple of minutes. This allowed for everyone to Despite the talent and fervor rallying behind LOAD, gains talk more intimately with veterans of the remained incremental. “We’d throw these gatherings at Tales, industry, including Andie Ferman at ADI. We did these fundraisers in New York for years,” but o f St. George Spirits, Susan
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the organization just wasn’t reaching the potential that so many says Lacie Thornton, Founder of Cutwork Lace people saw in it, especially its founding members. One day, Katz Distilling Co., who is the current Secretary for the decided to step aside and fully hand off the reigns to Hoskin. Women’s Distillery Guild. “That just really opened the door for me to take more of an active Though they are evolving and moving forward, the role.” organization hasn’t forgotten where it came from. Hoskin Since then, the organization has recommitted to the values presumes that it was originally called Ladies of American that have always been central to their mission: opportunities Distilleries because it was founded in the age of the Ladies United for connection, education, and advocacy on behalf of women. for the Preservation of Endangered Cocktails (LUPEC). “LUPEC The revamp has been both originally, before it splintered, external and internal. “The had some incredible, femaleguild’s ethos is to become driven spirits events,” she “I really just hope to see the guild grow and continue to notes. Hoskin is sure that an influential assemblage grow as kind of a welcoming haven for women in the industry there is room for the guild to of experts founded on a currently, or women hoping to get into the industry.” mission-driven platform that bring their own unique brand fosters inclusion through to cocktail events and spirits— SAMANTHA KATZ mentorship, sponsorship and driven events around the DIRECTOR of COMMUNITY ENGAGEMENT for NEW YORK DISTILLING education,” says Mel Heim, country. Executive Vice President of Another focal point for the Operations/Master Distiller for guild is the distillery finance Eastside Distilling and Treasurer for the Guild. “LOAD collected model; their members have witnessed or been privy to difficulty invaluable data from our peers as to what was needed to grow gaining capital. They believe that there needs to be greater opportunities for women in the space and as a guild we now have education on how to present a company, access financing, the foundation and resources to curate solutions.” access investment, and cultivate a visible profile for women who A huge part of this process has been increasing the amount are starting out or looking to expand. of mentoring relationships between established members of the The Women’s Distillery Guild remains a place where female industry and exciting young newcomers. “I’ve now mentored seven members of the industry can find the support they might lack different women who are either opening distilleries or becoming from their surrounding community. It was where the name LOAD head distillers, just really representing some leadership in their initially came from: women can carry the load, and they can also companies or starting companies, and it’s been one of the most share the load. satisfying things I’ve ever done,” Hoskin says of her experience Thornton, who’s been in the industry for nearly three years, in this role. initially found the guild when Samantha Katz was still in charge. "Karen has been incredibly generous with her time and support, She transitioned to distilling from a separate industry, which left encouraging me as I get my business started,” says Manya K. her with plenty of questions about what to expect as a female Rubinstein, owner of Industrious Spirit Company and mentee of distiller. “I really just hope to see the guild grow and continue the Women’s Distillery Guild. “[It’s] so great to have someone to grow as kind of a welcoming haven for women in the industry to go to with thorny questions for a quick gut check or longer currently, or women hoping to get into the industry.” consultation when needed.” As for Hoskin, she hopes to eventually step back from the The guild is acting as a network to connect women to mentors spotlight and refocus on the parts of this business that were that are closer to them geographically. This culminated at the always of interest to her, namely the work done at her distillery, event in March, where women from all over the country gathered Montanya Distillers. “At some point along the way I got really to exchange questions, insight, and provide inspiration. tired of people just talking about me being a woman in the world Hoskin reveals that “so many of those distillery owners and of distilling. It’s not really the story that I want to be constantly distillers that were at that lunch at ADI...have contacted me telling about my distillery because we’re so much more than afterwards or found me over the course of the week and said, that.” ‘I’ve been living in such a cave thinking I was the only one, or Perhaps now this community can call these women and the thinking there wasn’t anybody else that was dealing with some of many others like them what they actually are: distillers, or the stuff that I’m dealing with.’” entrepreneurs, or bartenders. Talented members of this industry Moving forward, Hoskin and others hope to follow the structure with a passion for what they do. of other guilds that have come before theirs and eventually open regional chapters. “Specifically in the last couple of months, If you’re interested in joining the Women’s Distillery Guild, you now that we’ve had a board elected and we’re an can email them at email@example.com or find more official non-profit, I’ve seen it grow not only in information on their website: womensdistilleryguild.wildapricot.org membership numbers but also in vision,”
Learning from American Wineries’ Perseverance
Written by Margarett Waterbury /// Photography by Polara Studio
t’s 11:30 a.m. on a glowing summer morning in Oregon’s Tualatin Valley. The patio at Ponzi Vineyards Winery is already starting to fill, even though it’s only Tuesday. Couples share quiet laughter over glasses of riesling while kids play on the terraced lawns above two beckoningly unoccupied bocce ball courts. Just down the road, a similar scene is playing out at Raptor Ridge Winery, where three friends admire Mount Hood in the distance while a tasting room attendant opens a fresh bottle of pinot noir. In fact, similar scenes are playing out at hundreds of wineries throughout the Willamette Valley, the crown jewel of Oregon’s wine industry and one of the most exciting winemaking regions in the New World. Winery tasting room culture is so pervasive today it can feel as if it has always existed, but that’s not the case. Fifty years ago, the first winemaking pioneers were just setting up shop in Oregon, and most consumers didn’t know pinot noir from a pineapple. The progress those winemakers have made in transforming how Americans think about, taste, and experience wine has a lot to teach the newer American distilling industry, which, even with plenty of recent growth, still finds itself on the early slopes of the adoption curve. WWW.ART ISANSP IRITMAG.COM
From Garagistes to Global Force Dick and Nancy Ponzi started Ponzi Vineyards in 1970, making them one of the very first winegrowers in the Willamette Valley. “Back in those days, nobody knew about wine,” says Anna Maria Ponzi, President and Director of Sales and Marketing of Ponzi Vineyards, and Dick and Nancy’s daughter. “So the tasting room really provided an opportunity for education.” The Ponzi family’s first tasting room was modest. It was only open for a few hours on Saturdays and Sundays, and instead of a bar, visitors sidled up to a hollow core door laid across two barrels in the Ponzi’s garage. Most visitors knew little to nothing about wine, so the Ponzis spent the bulk of their energy on simply introducing visitors to what they made and how it tasted — a familiar concept for anybody who’s ever worked behind a distillery tasting room bar. As the consumer base evolved, the Ponzis evolved alongside it, eventually starting to charge for samples and introducing additional education opportunities like tours for particularly interested parties. Finally, in 2013, they unveiled an expansive contemporary winery, event space, commercial kitchen, and tasting room in the Tualatin Valley, just 40 minutes’ drive from downtown Portland. It’s a trajectory that mirrors the Northwest wine industry as a whole. From humble origins in the 1960s and 1970s, wine in Oregon and Washington has become a major cultural and economic force, creating new centers of gravity in regional tourism and finding new ways to draw
retreating residents and visitors from the urban core into rural, agricultural zones. A recent study found that Oregon vintners generated $5.6 billion in economic impact in 2016, approaching double the $3.35 billion impact measured just three years prior. Distilleries looking to build their tasting room traffic and engage more deeply with their local and regional economies are hoping wine’s success presages a similar story for distilling in years to come.
PHOTO BY CHERYL JUETTEN
Moving from Education to Storytelling
For any beverage businesses, there are multiple roles every tasting room must play. If, like the Ponzi family in 1970, you’re making a product that’s unfamiliar to most of your guests, an emphasis on education will naturally be a major part of your tasting room program. Yet finding a way to tell a more personal story about your brand is also critical, giving you a chance to stand out in an increasingly crowded marketplace. “Distillers have an incredible opportunity,” says Anna Maria, “because I think spirits are still kind of where wine was 50 years ago. People are intrigued, and maybe a little afraid. They don’t know what to do when they walk into a whiskey tasting room. How much will they have to drink? Will there be food? Can my kids come in?” Anna says that now, more than ever, people want to do more than simply drink at producer tasting rooms; they want experiences. While that can sound like a tall order (few get into distilling because they crave operating a tourist attraction), it’s also an opportunity to tell a story that goes beyond the technical details of the product you make and speaks to the heart of what makes your brand unique. In a landscape like the Willamette Valley, where there are more than 500 wineries, virtually all of which make Pinot Noir, creating a point of brand differentiation based on something beyond the wine itself is crucial. Anna Maria says one of the biggest changes Ponzi Vineyards made in the new tasting room was the introduction of full-service seating options, including food pairings, rather than asking guests to stand at a tasting bar. She says the new format requires more labor and the margins are tighter, but the trade-off—getting to deliver a longer, more nuanced experience to guests, especially those who are already familiar with Oregon pinot noir but not familiar with the
Ponzi’s family story—is worth it. “We want to tell people more about us,” she says. “We want you to have a comfy chair. We want you to stay a little longer.” Underscoring that mission, a museumstyle display of artifacts from the early days of Ponzi Vineyards greets guests in the entrance, immediately conveying the pioneering history of the Ponzi family. Elsewhere, other producers are trying different tactics to offer experiences beyond the tasting flight, from simple to upscale. Domaine Serene Winery recently opened a wine bar in the Sentinel Hotel in downtown Portland, complete with VIP helicopter rides from the hotel to the winery in the Dundee Hills. Fortunately, not all innovations require a helicopter pad. Raptor Ridge Winery offers yoga classes and growler fills, as well as an “aroma apothecary”—a wall of 54 identical glass jars, each containing a single aroma common in wine, for visitors to sniff and test their sensory acuity. All of these tactics have something in common: they give visitors something to talk about, photograph, and remember that goes beyond the sensory experience of the product.
Know Your Customer Anna Maria says knowing your customer is crucial to creating experiences that resonate. In addition to making wine, the Ponzi family also founded Bridgeport Brewing, one of Portland’s first brewpubs, and they have played a major role in getting the legislation passed that allowed breweries to serve drinks onsite for the very first time. She chuckles at the early memory of designing the feel of the Bridgeport Brewpub. “We’re winemakers first, so we set up the brewpub with our experiences as winegrowers. We had fresh flowers on all the tables, the beer labels were really elegant. And then we realized that maybe wasn’t as important to the beer drinker,” Anna Maria says. “So we ended up with an English Pub concept.” At the same time, oncefirm borders around consumers’ beverages of choice are now starting to erode, and Millennials may be more open to boundary-crossing tasting room experiences. “Now we have wineries that have pop cans,” laughs Anna Maria. “So it really depends on what you’re trying to do.” Annie Shull, co-owner and national director of marketing and sales at Raptor Ridge Winery, says that their tasting room visitors have a broad range of expectations, and part of the challenge
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is making sure everybody is taken care of. “We want this to be comfortable for people with a wide variety of levels of experience and knowledge,” says Annie. “So we pride ourselves on being approachable, down to earth, and welcoming. The most critical thing is finding the right people who can address all different audience levels. They can’t be so self important that they make the customer feel ignorant, but they also need the ability to educate a visitor who needs more hand-holding.” She also says designing the tasting room to offer a mix of seating types, including grouped stools around barrel tables, grouped upholstered chairs, an outside picnic area, and a traditional bar facing the expansive view, has improved the interior dynamic of the tasting room. “People can come in and choose what fits their mood, instead of finding only one place to stand or sit,” says Annie.
Collaboration, Within and Across Boundaries No single producer can establish a tourism destination alone, no matter how high profile. “Collaboration is just incredibly crucial,” says Annie, rattling off several groups—the Tualatin Valley Visitors’ Association, the Washington County Visitors’ Association, and the Oregon Wine Board—that help promote Oregon wine and drive traffic to the tasting room. “And the Ponzis are amazing neighbors; in that true collaborative spirit of Oregon, we sent customers to each other all the time.” Annie and Anna Maria both site the development of “loops”— loose groupings or itineraries that link several wineries (or wineries and other amenities) within a region to one another for promotional purposes—as an important piece of raising regional wine’s visibility. “I think it’s great to include restaurants and lodging in these loops,” says Annie. “There can be a lot of impact in crossing industry boundaries that don’t necessarily make sense to the customer. They don’t always care what county or AVA you’re in. It’s nice to collaborate beyond that.” For pioneering distilleries in communities without a strong distilling scene, that approach opens a host of other possibilities. By looking beyond simple distillery-only loops and partnering with like-minded restaurants, breweries, hotels, wineries, or cultural attractions in your town, city, or county, opportunities for crosspromotion quickly reveal themselves. Wineries and distilleries are different, but they have plenty of shared qualities: a dedication to craftsmanship, a love of hospitality, and a deeply held desire to elevate the beverages that bring us together. Learning from wineries’ hard-won experience can help distillers contribute to creating a thriving American beverage industry once again.
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Margarett Waterbury is the managing editor of The Whiskey Wash and regularly contributes to other publications about food, drink, and agriculture. She was named the 2017 Alan Lodge Young Drinks Writer of the Year by Spirits Business Magazine. www.margarettwaterbury.com WWW.ART ISANSP IRITMAG.COM
the RISE of AMERICAN WHISKEY Written by Renee Cebula
Washington and Lafayette at Mount Vernon, 1784. By Thomas Pritchard Rossiter
n September 2006, Distilled Spirits Council president Peter Cressy announced “George Washington’s distillery will give the world a clear view of the entrepreneurial spirit of our nation’s first president and a valuable insight into America’s distilling heritage.” We think of George Washington as the father of the country, but he’s also the father of American whiskey. Maybe they’re the same thing. Originally built in 1797, Washington’s was one of the largest distilleries in the new nation. Within two years, the facility was producing nearly 11,000 gallons of whiskey annually. Distilling was the first president’s most lucrative business venture. Washington’s liquor was no fine sipping whiskey. Most of the barrels left the distillery without aging, meant for immediate consumption at taverns and in homes throughout the region. The popularity of Mount Vernon whiskey was one sign of the shift in the nation’s drinking habits, as whiskey supplanted the previous mostpopular spirit, rum. For over 100 years, the original Thirteen Colonies had been a nation of rum drinkers. Rum was at the center of hospitality, commerce, and woven into politics. Molasses, one part of the Triangular Trade, provided the raw material for rum, and Rum was tightly linked with slavery. Enslaved Africans on Caribbean plantations grew the sugar cane that became rum. In some instances, rum was used as currency to trade for slaves on the African coast. The British tax on molasses was one of the sparks that ignited the revolution. However, it was rum that established the drinking traditions and mores of a soon-to-be new nation. All this changed with the Revolution. What had been a seaboardhugging population with a north-south trajectory immediately pushed inland, doubling the size of the infant nation in the first five years. The push west led a shift in agriculture. The new western land lent itself to the growing of grain, particularly corn and rye. Where did the rum go? Molasses, which had flowed so freely in the
colonies, was now difficult to get. Blocked trade in the Caribbean, depleted soils at sugar plantations, and (thankfully) reduced numbers of slaves due to emancipation in England all limited access to molasses. Rum lost its founding role as commodity and inexpensive spirit. It was the spirit of the past, a relic of the old regime. The spirit of the future was in the west, in whiskey. As these early settlers pushed west, they encountered rich soils but found it difficult to transport their produce to market. The Appalachian Mountains and rough wagon roads made trade with more settled areas difficult. A horse could carry four bushels of grain, but distill that grain into whiskey and the same horse could carry the equivalent of twenty-four bushels. Whiskey, unlike grain, would not spoil, was easier to store and transport, could be used in trade, and filled the gap left by rum for a quick tipple or an elaborate punch. In many areas of the American frontier, whiskey became a currency more common than the legal tender. For the new government looking to raise revenue to pay war debts, whiskey was also a solution. On the advice of Alexander Hamilton, George Washington imposed the nation’s first tax on a domestic product. In 1791, six years before embarking on his own distilling venture, the government imposed a tax on distilled spirits, angering farmers in the western frontier. Between 1791 and 1794, an insurrection ensued. The Whiskey Rebellion ended with the first use of the militia to disperse the protestors. The popular musical Hamilton has Washington and Hamilton rapping the protestors into submission:
But what about the rebels Who are mad about this whiskey? I have a plan, but it’s risky. Put your guns down on my command This is Hamilton, my right-hand man. WWW.ARTISANSPIRITMAG.COM
Washington reviewing the Western Army at Fort Cumberland, Maryland. By Frederick Kemmelmeyer On October 16, 1794, President Washington arrived to review the militia preparing to suppress the Whiskey Rebellion in western Pennsylvania. Even today the western Pennsylvanian town of Washington celebrates this historical event. The Whiskey Rebellion Festival has period demonstrations, exhibitions, and historical reenactments, including a tar-and-feathering of a tax collector. The nation doubled again in 1803 with the Louisiana Purchase. Americans moved farther west and navigated the vast inland waterway system of North America. Advances in the distillation process and the invention of both the perpetual and continuous column stills improved efficiency and outcomes of whiskey distilling. These advances, along with increases in grain surpluses and the end of the whiskey tax, meant American whiskey distilling and consuming increased exponentially. Prior to prohibition, America was home to an estimated 18,000 distilleries. In The Alcoholic Republic: An American Tradition, historian W. J. Rorabaugh noted, “During the first third of the nineteenth century the typical American annually drank more distilled liquor that at any other time in our history.” A British visitor to the United States in the 1830s wrote home that, “In America, a man is not considered drunk so long as he can move or make a sound.” Barrels of whiskey were put on flatboats and floated down the Ohio and Mississippi Rivers to New Orleans. That months-long trip in the barrels was found to improve the quality of the liquor. It was in New Orleans that this steady stream of whiskey gave rise to the birth of American cocktail culture. Bitters, originally developed for their medicinal properties, were discovered to be an excellent modifier to a whiskey base. One New Orleans pharmacist, Antoine Peychaud, expanded his pharmacy to include a bar where he served a new cocktail he had invented using his bitters. That cocktail was the Sazerac. Soon other “cocktail modifiers,” including vermouth and liqueurs, were added to bartenders’ repertoires. The popularity of cocktails led to the use of a variety of spirits, such as gin and rum, and to the growth of different types and styles of whiskies. It was whiskey that went farther into the western WWW.ARTISANSPIRITMAG.COM
frontiers, all the way to the Pacific. Along with the compass and quadrant, a library, and fifty dozen of Dr. Rush’s patented "Rush’s pills,” Meriwether Lewis and William Clark packed 120 gallons of whiskey as they embarked on their expedition. It wasn’t enough. They had to trade for more whiskey several times on their way to the far west. Even America’s great writer and humorist, Mark Twain, wrote of the role of whiskey in the push west:
How solemn and beautiful is the thought, that the earliest pioneer of civilization, the van leader of civilization, is never the steamboat, never the railway, never the newspaper, never the Sabbath-school, never the missionary—but always whiskey! Twain lived and wrote during the settling of the far reaches of the west. As Americans followed the Oregon Trail, advances in distilling techniques and new inventions for both bartender and distiller, carried American drinking traditions into the twentieth century. Mount Vernon had been one of a few large-scale distilleries when it was built, with many more small and local distilleries producing American-style whiskies. Today, small and large scale whiskey distilling are on the rise, as they had been in Washington’s time. According to the Distilled Spirits Council, sales of American whiskey grew over 8 percent in 2017. Rye whiskey sales increased over 16 percent. At the Mount Vernon Distillery dedication in 2006, Peter Cressy concluded, “George Washington was one of the most successful whiskey distillers of his time and symbolizes everything modern distillers stand for: responsibility, moderation and quality.” The rise of American whiskey that began over 200 years ago continues today.
Renée Cebula is a cocktail historian. Her business, Raising the Bar, connects people to history through unique shopping experiences and interactive cocktail-themed classes and tours. raisingthebarstories.com // Insta: @badassbarware 129
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PIONEER IN CRAFT DYNAMITE! AN EXPLOSIVE DESIGN TO MAKE YOUR BOTTLE WANTED
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The magazine for craft distillers and their fans.