A Clear Alternative: The How and Why of Hard Seltzer

By: Erik Myers

It’s hard to deny that this past summer was the summer of hard seltzer. In fact, it was a summer that saw hard seltzer grow to more than $1 billion dollars in sales. In just the week of July 4 this past summer, White Claw and Truly seltzers combined sold over 100,000 barrels of product. That’s enough to put them in the Top 50 Craft Breweries for production over the whole year. It’s no surprise that craft breweries large and small are looking to tap into the apparent gold mine that is hard seltzer, but how they approach it doesn’t quite seem to stand up against the segment’s largest competitors, and that’s worth thinking about. At a recent industry panel in Charlotte, NC, several craft brewers who make seltzers spoke about their perspectives on this new slice of the industry.

But… Why?

  This might seem fairly obvious with the sales numbers that hard seltzers are putting up, but a closer look at the craft beer industry tells a slightly different story. Recently in an interview, the senior vice president of marketing for Mark Anthony Brands (the makers of White Claw) noted that though White Claw has incredible penetration in grocery stores and liquor stores nationwide, only about 20 percent of bars and restaurants are currently selling hard seltzers. For the average small craft brewer, the opposite is true – while the limited shelf space of grocery is locked behind the arcane process of distributor-led Planograms, inaccessible to most small breweries, they are nearly ubiquitous on draft systems in bars and restaurants eager to serve local beer. So, why chase a segment which shows so little relevance in their primary market?

  “After the surge of LaCroix in the non-alcoholic market, we took a hard look, and it’s what our market research showed our customers wanted,” said Colleen Quinn, of Craft Beer Alliance (CBA). Their market research showed something else interesting – that while most hard seltzers are marketed specifically toward young women, their targeted demographic tended to skew almost 50-50 male-female. It led to CBA’s decision to package their multiple seltzer brands in regular 12 ounce cans, rather than slim cans like their competitors.

  “I’m looking for one more reason to keep the customer in their seat,” says Mike Rollinson of Joymongers Brewery, a brewery that enjoys two taproom locations in Central North Carolina, but no off-premise distribution. “I don’t see it as craft. I’m not making a seltzer for beer drinkers. I’m making a seltzer for the one person in a group of 5 people who will pressure the group into leaving if there’s not something for them to drink.” Rollinson just started making seltzers this year as he saw the trend grow, noting that one of his business partners is on a Keto diet and now drinks his seltzer almost exclusively – as a healthy alternative to beer.

Clear or Colored – the Question of Craft

  While the two major market players, White Claw and Truly, are both crystal clear beverages, two of the producers on the panel noted that color helped them differentiate. Both Brian Quinn of Town Brewing Company and Lindsay Sprick of NoDa Brewing Company pointed to their process as an advantage over the big seltzer makers.

  “I can guarantee that nobody at White Claw was sitting down last week processing a ton of raw ginger,” Quinn noted with a smile. “We’re small enough that we can use natural ingredients as a base for these seltzers.” Those natural ingredients come with their own colors and – he thinks – customers want to see the presence of those ingredients in the product when they’re ordered. “When you get something that’s wild cherry flavored and it’s clear, you ask yourself: where’s the cherry in this?”

  Sprick, of NoDa, shared a similar feeling: “We stand out because we’re using the same ingredients that we use make our beer.” She felt that it was more true to the brand and brewing ethos of NoDa Brewing Company than a clear, sparkling beverage. NoDa’s Brizo Seltzer, unlike other seltzers represented on the panel, is barley-based, which lends even more color to the finished product than the others.

  Rollinson had a different take at Joymongers. “When I see a color, like red or blue or purple in a glass, that reads ‘sweet’ to me, and that’s not what this is.” He mentioned that because his primary customer is not one that’s seeking this for a fruit flavor, but rather as an alternative beverage or a more healthy choice, that the neutral color was a better choice. “The only people who have complained about it being clear were bartenders because they throw it out by mistake because they think it’s water.”

Regulatory Loopholes

  Interestingly, hard seltzers fall into a slight grey area of regulation from both the Trade and Tax Bureau (TTB) and the Food and Drug Administration (FDA). Hard seltzers are the product of fermenting sugar into alcohol and fall under the manufacturing umbrella of a brewery, but labeling considerations vary based on what sugar base is used as the basis of fermentation. A brewer who uses a barley base – even a very light brewer’s malt – still falls under the definition of a beer, requiring a pre-market Certificate of Label Approval (or COLA) and is restricted by certain advertising laws. A brewery who uses sugar as the base for their seltzer is not required to obtain TTB approval as it is not a malt beverage. However, they do fall under FDA labeling guidelines which require a nutrition panel and a list of ingredients.

  While it might seem attractive to a brewery to skip TTB approval and jump straight to FDA labeling because the FDA does not have pre-market approval requirements, it’s important to know that FDA labeling is required to be in compliance before sales and that manufacturers can be held liable to both financial and regulator consequences. Consult your lawyer for best practices.

  None of the panelists chose to share which path they had taken from a regulatory standpoint.

What’s in the Mix

  Clearly, there are as many ways to approach making hard seltzers as there are reasons to make it. Fermenting white sugar seemed to be the preferential approach to creating a fermentation base for hard seltzers. Of the panelists, NoDa was the only one using barley.

  Most of the panelists spoke of these seltzers as good gluten-free alternatives to beer and marketed their seltzers as either gluten-free or gluten-reduced. NoDa used ClarityFerm from White Labs to reduce gluten content in their barley-based seltzer but others simply brewed on their normal equipment directly after “CIP day” in order to guarantee no gluten would be present in the final product. Quinn of Town Brewing shared that lab results showed no traces of gluten in his products.

  From there, the small producers all had a similar strategy of using whole ingredients to flavor as they would for any flavored beer, whether that’s the addition of aseptic fruit puree or hand processing ginger for additions during fermentation. They seemed to feel that the use of “real ingredients” was a way to stand out versus large scale competitors from a flavor standpoint as well as an ethical one. They appeared to share the belief that it “felt more like craft.”

  Yeast was a large differentiator between the producers. While Rollinson at Joymongers used ale yeast to ferment his seltzer, making a note that harvested yeast seemed to perform much better than a fresh pitch, Quinn of Town used Distiller’s Yeast, seeking a strong, healthy fermentation that would get as dry as possible. Both mentioned the need for high amounts of yeast nutrients. “As it turns out,” Rollinson joked, “yeast doesn’t really like to digest straight glucose.”

Where It’s All Going

  All of the panelists agreed: hard seltzer is a trend that is doing nothing but growing, and they all agreed that their futures had more and varied seltzers in it. Each of them was excited to experiment in the market and push the bounds of craft’s involvement in the segment.

  The question remains for you – will we continue to see on-premise growth in a meaningful way that the craft market can take advantage of, or will hard seltzer grow only in larger and larger stacks in grocery stores? We’ll have to wait for the next White Claw Summer to find out.

The Rise of American Single Malt Whiskey

By: Becky Garrison

While both Scotch and American single malt whiskey possess some similarities in terms of taste, their origins are quite different. Scotch is a spirit born of tradition and known for its heterogeneity and consistency, with brands distinguished by their geography (the Highlands, the Lowlands, the Isle of Islay, Campbeltown, and the Speyside). Furthermore, the majority of Scotch distillers are distributed by four companies: Diageo, Pernod Ricard, William Grant and Sons, and Bacardi. A similar vibe besets its cousin Irish whiskey.

  Conversely, American single malt whiskey possesses a more pioneering spirit and is distinguished more by the style of whiskey than any particular geography. While the TTB has not formalized strict criteria for what constitutes an American single malt, the American Single Malt Whiskey Commission, founded in 2016, established a standard of identity for American single malt. Currently, over 140 distilleries have signed on as member producers of the ASMWC. 

  For a distiller to use the term “American single malt” to describe their whiskey, the ASMWC recommends that the spirit fit the following criteria:

•    Made from 100% malted barley.

•    Distilled entirely at one distillery.

•    Mashed, distilled, and matured in the U.S.

•    Matured in oak casks of a capacity not exceeding 700 liters.

•    Distilled to no more than 160 (U.S.) proof, or 80% alcohol by volume.

•    Bottled at 80 (U.S.) proof or more, or 40% alcohol by volume.

  While the ASMWC has not issued a specific recommendation on maturation time, producers are aging their American single malt whiskeys in barrels at a variety of ages, from three months to 10 years. Some American distillers get creative with the maturation process by experimenting with used casks from breweries, wineries and other distilleries. 

  Terms like “handcrafted” and “produced” may be found on a bottle by those distilleries engaged in producing mass-market spirits. Unless the bottle contains the word “distilled,” the product cannot be considered a product made from grain to bottle by a single distillery.   

  Before prohibition, one could find thousands of distilleries and breweries in the U.S., particularly along the Eastern seaboard. During this period, rye whiskey emerged as the dominant dark spirit. After prohibition, the whiskey movement took off in Kentucky and Tennessee, where bourbon became king. 

  While bourbon is part of the whiskey family, this product differs from American single malt in several ways. In addition to being made with at least 51% corn, the mash is distilled using a column still. The barley mash distilled for American single malt whiskey is typically done with a pot still, though a few distillers use a column still.

  Through consolidation and mergers, the quality and production of all American whiskey resembled that of mass-produced beer. However, the advent of the global food revolution in the 1950s and 60s, coupled with federal legalization of homebrewing in 1978, led to the implosion of the craft brewing industry. Concurrently, Americans became acquainted with beers, wines, and spirits hailing from Europe and the UK thanks to pioneers such as Charles Finkel, co-founder of Seattle based Pike Brewing Company, who introduced these products into the United States market. 

  Many distillers of American single malt, like Christian Krogstad of Portland, Oregon-based House Spirits Distillery and Jason Parker of Copperworks Distilling Company in Seattle, came out of this craft revolution, beginning their careers as brewers. Both distillers use a hundred percent malted barley and brew their wort using the same technique employed in brewing beer.

  While Krogstad waited for his whiskey to mature, he became known for distilling Aviation Gin. The first bottle of Aviation Gin came out in 2000, well before their first bottle of whiskey was released in 2008. In 2016, House Spirits Distillery sold Aviation Gin’s distribution rights so they could devote their energies to producing Westward American Single Malt Whiskey.

  Parker, Co-Founder and President of Copperworks Distilling, followed a similar trajectory of distilling gin and vodka until their single malt whiskey was ready for release. For the past three years, they’ve produced whiskey from single farm, single variety, and single vintage malts. Each batch is given a unique number and has a slightly different taste from other batches.

Traditional Scottish Style American Single Malt Whiskeys

  Other brands like McCarthy’s Single Malt Whiskey and Westland American Single Malt Whiskey are distilled using a traditional Scottish style. This style requires that the whiskey be made from a mash of malted barley, distilled at a single distillery using pot still distillation, and matured in oak casks.

  After a damp trip to the Isle of Islay where he visited several local distilleries as a way to avoid the rain, Steve McCarthy returned to Oregon where he had the distinction of being the first distiller to bring an American single malt to market. His whiskey, distilled in 1993 using 100% peated barley from Scotland, was released in 1996. While the mash used in most Scotch is distilled twice, the type of still they use allows them to reach desired proof in a single pass. That still is often referred to as a “hybrid pot still” or “eau-de-vie still” as it has a short multi-chambered column above the traditional pot. 

  According to Steve Hawley, Director of Marketing for Westland Distillery, their distillery was founded in 2010 with the ambition to add a new and uniquely American voice to the world of single malt whiskey. “When we began, we adopted the same basic processes used for generations in the whiskey-making of the old world, but we don’t simply seek to replicate the results. Instead, we work to create whiskeys that reflect the distinct qualities of our time, place, and culture here in the Pacific Northwest.” 

Developments in American Single Malts

  According to Adam Foy, Vice President of Business Development for Skagit Valley Malting, “Barley grown for yield is about sameness, whereas, we grow barley for distinction by searching the globe for unique and distinct barleys that provide varietal nuances.” Connecting the origins of the barley used in the mash to a single farm or variety adds another dimension to the term “single malt.”

  Distilleries like Copperworks partner with Skagit Valley Malting and other like-minded companies to craft what Parker refers to as non-commodity malts. “Instead of measuring our efficiency from farm-to-bottle, we measure the flavor from unique malts to bottle, and share these flavors as different whiskeys, rather than a standard release whiskey.”

  Currently, Copperworks is maturing whiskey that was produced using locally-grown malt from the Skagit Valley and infusing it with smoke from Washington-sourced peat. They brewed the malt into a beer with no hops, distilled, and matured in new, charred American Oak barrels with a number one char, the lightest of chars, so as not to overwhelm the peat flavors.

  Currently, Westland is working with partners on a holistic barley program that focuses on flavor and includes breeding unique varietals suited to the Pacific Northwest region. “We’re malting them using innovative new technologies, and building a sustainable—both agriculturally and economically—model for bringing those barleys to market for use in distilling,” Hawley said.

  A few distilleries have begun to experiment with imparting smoke instead of peat into their barley through the use of cherry wood, mesquite, or scrub oak. In particular, mesquite lends a natural smokey and spicy flavor without adding artificial flavorings found in commercial cinnamon whiskey.

  Then comes Wanderback Whiskey Company, a distillery with a unique production focus. They partner with various single malt producers in the United States to make their whiskey using a bespoke grain bill that’s grown in the Pacific Northwest. Then they age, blend, and bottle small batch releases on their family farm in Hood River, Oregon.

Pushing the Boundaries with Innovative Cocktails

  While Scottish tradition maintains that one should drink Scotch neat, adding only a drop or so of water to help bring out the flavor, some American distillers are blazing new territories by creating craft cocktails. At events, such as PROOF: Washington Distillers Festival, participants can sample a range of single malts, as well as unique cocktails while sitting in on educational sessions. A trek to Tankard & Tun, Pike Brewing Company’s Seafood Restaurant, features beer cocktails made with spirits from Copperworks Distilling. Historical tidbit: Parker was the first brewer for the Pike Brewing Company when it opened in 1989.

  In addition to offering tasting flights, House Spirits Distillery serves up a range of cocktails including a Boulevardier (a Negroni for whiskey lovers). Also, during their repeat appearances at Feast Portland, they showcase their traditional side by featuring Westward at one of Feast’s signature BBQ events, Smoked. But then they’ll display their more flamboyant side by demonstrating how a quality spirit can enhance the cocktail experience. For example, at Smoked 2019, they featured a S’Mores Old Fashioned made with Westaward American Single Malt Whiskey, graham cracker honey, chocolate bitters, and toasted marshmallow.

  As members of the ASMWC continue to win national and global awards and competitions, this commission continues to push for the formal establishment of a “single malt whiskey” category. Already, the American Distilling Institute has established the “American single malt whiskey” category for those whiskeys made according to ASMWC’s proposed statement of identity.

Boilers in the Distillery: Gentle Giants That Pack A Punch

By: Gerald Dlubala

Boilers are rarely glamorized in any distilling discussions. The end product is the star, whether swirled, stirred or shaken in the able hands of a local mixologist. However, any boiler manufacturer will tell you that a reliable boiler affects every facet of the distilling process, including the cost of production. During fermentation, the mash is heated with steam to transform the carbs to sugars. The wort gets removed and transferred to a fermentation vessel to cool and get ready for the introduction of yeast. Steam provided by a boiler generates a gentle, consistent heat, very conducive for vessel heating, temperature maintenance and successful fermentation. Once fermentation is complete, the product is moved to the still, using steam heat to separate and remove the impurities.

Distillery Environment Matters

  “You always have to be aware of any unique requirements due to installation environment,” says Mike Bonjo, Sales Manager and Brewer for Columbia Boiler Company.  “Boilers are mandated to be a certain distance away for safety, but in general, it’s best to have them within eyeshot. Low-pressure boilers generally provide enough energy for craft distilling. However, if the boiler is situated a long distance from the other equipment, high pressure reduces heat loss during long runs in between distillery equipment.”

  In addition, when it comes to boilers, the type of building where the distillery is located makes a difference.  “The current trend of renovating historic buildings into rustic craft distilleries and breweries is aesthetically very cool, but these old buildings require custom installations because of building materials, floor strength and utility availability,” says Bonjo. “Professional consultation is needed to determine floor strength, layout viability and fire ratings. Also, you never want to situate a steam boiler directly on those old wooden floors. We have custom stands and risers for these situations.” 

  Columbia’s boilers are popular because of their performance and compact design. Their flagship units—the MPH boiler series, manufactured to fit through a standard thirty-six-inch door opening, provide up to eighty horsepower. Columbia also offers the CT line, a vertically-designed, tubeless boiler created for the dry-cleaning industry, now repurposed for artisan distillers.

  “Our boilers are easy to install, easy to use and a breeze to service,” says Bonjo. “They are operable right out of the box and come with everything needed to get up and running. Anyone with a basic mechanical aptitude can operate and maintain our boilers. We use standard industry controls rather than custom or proprietary controls. Parts are standard, so you don’t have to find a certain distributor in the area and hope that they have your part in stock. We also feature a copper coil inserted into the boiler to carry and heat city water—to be used as potable water—for cleaning or any other domestic water situations around the distillery. We fire up and thoroughly test our units before shipping to the customer for, what ends up being, a plug and play installation. If there are issues, we can relay our test settings and compare them with the customer’s running settings to make sure the boiler is in an optimal run state.”

  Maintenance on Columbia boilers is minimal. In addition to the mandatory annual state inspections, the boilers should be “blown down” at the end of the day, flushing out the silt and sediment that naturally forms at the bottom of the boiler. If that sediment isn’t regularly flushed out, it congregates and sticks to the steel, forming scale. Over time, scale causes the affected steel to fail due to improper heat retention and metallurgical issues. Blowing down takes 10 to 15 seconds, transferring the water to a blowdown separator to cool the liquid before disposal, nullifying any potential damage to drains and plumbing lines. Monthly water chemistry level checks should be performed to keep it compatible with the steel. For steel boilers, the pH should remain a constant 10 to 11.

  “If by chance, the proper maintenance has not been kept up with, the tubes on our boilers can be replaced independently, saving money on repairs and reducing downtime,” says Bonjo.

Safety Is Always The Priority

  “Your boiler is the one piece of equipment in your distillery that is more powerful than dynamite,” says Dave Baughman, President of Allied Boiler & Supply Inc. “It can relocate your whole business in an instant.”

  Let that sink in, and you’ll understand Baughman’s emphasis on boiler safety before selling you a boiler.

  “Boilers are truly the heart of the distillery, but there’s a critical need for training in daily boiler operation,” says Baughman. “When I ask potential customers if they’ve had any training on boiler operation, even if it’s just about keeping daily operational boiler log sheets, their answers reflect a need for training. We don’t expect boiler experts in these craft industries. They know the biological processes of distilling and rely on others for boiler recommendations, and frankly, the competence out there is lacking. The end-user is being thrown to the sales wolves.”

  This incompetence may even extend to the sales wolves themselves, who are often aware of the national codes but may not be as educated on those closer to home.

  “[Distillers] may need certain, critical support equipment with their boiler, depending on the environment and local code requirements. Do they need water treatment? What type and how much? What about chemical injection systems, blowdown separators, boiler feedwater systems with steam preheat, or condensate return systems? These can all be critical components that may or may not be necessary. Sales representatives may follow national code, but if they’re not aware of the local regulations, you’ll end up with a boiler that’s not code compliant,” says Baughman.

  Distilling is a cost-driven industry, but Baughman believes decisions should still be made based on technical specifications related to distillery needs. Some boilers are better at heating, some better at boiling. Older cast iron sectionals are great at heating but inadequate for production environments. Vertical boiler units were introduced for the dry cleaning industry, and when that industry dried up, manufacturers started pushing those high-pressure units into the next expanding market. That happened to be brewing and distilling, even if it wasn’t a perfect fit.

  “My best advice is to be diligent in research, and never buy based on cost alone,” says Baughman. “Instead, buy based on the technical needs of your situation. For smaller batch distillers, low steam boilers are sufficient. Larger production distillers with continuous columns need more steam, so high-pressure boilers with regulators that hold a constant temperature for longer periods are beneficial.”

  Purchasing the boiler is only the beginning. Baughman tells Beverage Master Magazine boiler training is an absolute necessity because manufacturers have a legal and moral responsibility to sell safe units to trained users. Allied Boiler & Supply offers a three-day, no-cost, on-site boiler training school and startup with every boiler they sell. Water chemistry, a significant contributor to boiler failure, takes up one of those days.

  “Everyone worries about the effects of scale, but most failures are attributed to improper oxygen levels,” says Baughman. “It becomes a very aggressive situation when heated and must be treated by the use of a deaerator or with chemical injection systems. Water softeners won’t treat the oxygen component. Underwater injection systems or sodium sulfite are used and should be administered by professionals, along with consistent tests for pH, conductivity and oxygen levels.”

  All Allied’s boilers come equipped with troubleshooting display modules and forced draft systems, which are more efficient and less prone to backdrafts.

  “These things add to the bottom line cost, but they are legitimate safety features,” Baughman says. “Our after-sale support is unmatched in the industry. Every sale comes with two emergency phone numbers, one being a service employee and the other being mine. We are serious about becoming a partner with your company and will never just sell you a boiler to make a sale. There is too much at stake personally and professionally for both of us.”

  Baughman runs his business on a motto that his father taught him.

“Consider service ahead of reward, and the reward will come because of the service.”

Boiler Choice Based On Technical Specifications and Business Goals

  Correct sizing without upselling is always the best for the customer, so before getting a recommendation for a boiler from Jack Coe, President of Rite Engineering & Manufacturing Corporation and manufacturer of Rite Boilers, there will be some technical fact-finding.

  Affordable Distillery Equipment is an OEM of stills and packages Coe’s Rite Boilers with their stills. Affordable Distillery’s CEO Paul Hall says, “We are sticklers for right-sizing because it can take four-to-five years to recoup the boiler cost, but if you get too large of a boiler, you can end up paying for that system for the next ten to fifteen years. Every boiler situation is unique and has different needs depending on the equipment used and the business goals.”

  Rite Engineering offers multiple boiler lines that maintain their efficiency, provide one hundred percent access for inspection and cleaning to help avoid costly repairs, and remain field repairable.

  When deciding what boiler is best, Coe recommends looking to your existing equipment. “To determine if you need a low-pressure versus a high-pressure boiler, look at the equipment you already have or are planning to use and see what the highest duty application will be,” says Coe. “In the craft distillery, it’s usually the wort boil. Subsequent pieces of affected equipment should be labeled with a steam pressure recommendation. If they are all rated as 15 psi or less, you’re good to go with a low-pressure boiler. If pieces of equipment are rated to handle higher than 15 psi, then you can consider a faster, high-pressure boiler, but boilers can use large amounts of fuel, so be aware of that when choosing components.”

  Speaking of support components, Hall says, “You absolutely need a condensate return to bring the condensate back to the boiler, or else you’re constantly pumping fresh water into the system. Additionally, a blowdown system used at the end of the day or when you’re finished with the boiler session will hold the blowdown water until it cools down to 140 degrees or so. [This is the] temperature that municipal discharge systems feel is safe to allow down the drain lines into their sewers. If you’re not using a municipal system and just have your own discharge pool on the property, you don’t need this component. Each of these components can run an extra three to four thousand dollars on top of the boiler.”

  Hard water will no doubt shorten your boiler’s life span. If testing shows hard water in your system, Coe recommends a Zeolite salt exchange type, and steers customers away from a deionized or reverse osmosis systems, as they can lower water’s conductivity and pH to unsafe levels.

  “After that, boiler professionals need to be brought in for consistent cleaning, checks and inspections,” says Coe. “Some of these are mandated by codes and laws and are in place to prevent small issues from turning into big problems. These professionals can also [help with] monitoring water pH and treatment options.”

  Whatever boiler system you decide to work with, both Rite Engineering and Affordable Distillery Equipment recommend installing them in a separate boiler room when possible.

  “That way, the boiler fire is isolated and kept from any equipment, and you’ll have some type of vapor barrier,” says Hall. “By rule, distillery equipment is classified as a Class 1 Division 2 Hazardous Environment, meaning boiler placement must be at least six feet away from any still parts that are 18 inches or less off of the floor, and at minimum 24 inches away from any still parts above that 18-inch mark.”

Connected Closures: Meet the New Technology

By: Robin Dorhn-Simpson

Do you remember when microwaves came on the market? Or when computers replaced typewriters? How about the huge mobile cellphones the size of a shoebox? Technology is constantly changing. Just when we think we have it figured out, it changes. It can add much stress to our lives, or it can make it more enjoyable. Once you embrace it and see how relatively easy it is, the fun begins.

  Millennials have been raised around technology, making it very comfortable to them. They don’t have the fear that baby boomers sometimes experience when learning new technology. Since many businesses are focusing their marketing dollars on the millennial audience, technology in marketing is a natural progression. Many marketing studies on millennials state that, amongst other things, they want experiences. As a producer, are you satisfying their desire for something fresh, new and authentic? Are you connecting with them on their terms via mobile devices? Near Field Communication Technology can help producers do just that.

Near Field Communication

  Quizelet.com defines NFC as a short-range wireless connectivity standard that uses magnetic field induction to enable communication between devices when they are touched together or brought within a few centimeters of each other. Many consumers may already be familiar with this technology through their use of Google and Apple pay.

  Similar to Bluetooth technology, NFC communication is faster and sends information over radio waves. It takes less than one-tenth of a second to establish a connection between two devices.

  Smartphones are the most common form of NFC devices. Most Android smartphones and newer iPhones have the technology included. For older mobile phones, apps can be downloaded to allow these devices to read a variety of NFCs.

  NFC requires at least one transmitting device, and another to receive the signal. A range of devices can use the NFC standard and will be considered either passive or active. Active devices can send and receive data as well as communicate with one another. Passive devices often take the form of a tag or chip, sending information to active devices without needing a power source of their own.

What does all this mean for you?

  In August, Guala Closures, a company that has traditionally employed advanced technologies and connected closures, used NFC technology to add communication content into the cap of a Malibu rum bottle. The chip inside the enabled “smart cap” is so small it’s practically invisible. Each cap then has a 4-letter code, which acts as the proof of purchase inside the lid. 

  Tapping on this cap allows both the consumer and the brand to know more about one another. The producer will know where and when it was purchased. In return, the consumer has access to recipes, contests, and different communications offered by the brand. This will allow the relationship between producer and consumer to reach a new level.

  Many people today are concerned about companies accessing their personal information. Simon Yudelevich, General Manager for Guala Closures North America told Beverage Master Magazine about the concepts of connected closures.

  “When you tap your phone and connect, you give consent to the brand to gather information on when and where. When the consumer goes online to look at what this is all about, there is an explicit consent which requires the consumer to opt-in, in compliance with all applicable regulations,” said Yudelevich

  By committing to developing connected solutions in cooperation with its clients, Guala Closures help them learn more about their consumer habits and loyalty to their brands. In this framework, the company also deposited a patent of the solution that combines the NFC technology with aluminum closures.

Marketer’s Delight

  Since brand owners control the marketing of their product, they have an abundance of creative options with this new platform. The possibilities are endless.

  “By tapping the cap, you get access to great marketing content, which not only further strengthens the relationship between consumers and the brands they like, but also allows them to build a brand community of consumers via access to social media such as Facebook, etc.,” Yudelevich said. “Since the brand owner’s goal is also to engage the consumer, they can create recipes-of-the-month, which can be changed every day if wanted. They can create contests or ask the consumer to join their club. They can even ask the consumer to send a message to their friends about what they just purchased. Marketers can change the messages as often as they want. They can add, delete or amend the content. Since everything happens on the cloud, the changes are simple. They can tap, create video content whereby when the cap is tapped, a video uploads and the consumer can see how to use the product.”

  “Marketers want data from the consumer, including how much they paid to pay for the product. Businesses want the ability to track and trace where the product was purchased, as well as monitor anti-counterfeiting. This is already changing the face of marketing,” Yudelevich said.

  Malibu Rum has recently signed on with Guala Closures with limited-edition connected bottles currently circulating in Ohio and Texas. Marketers plan on including drink recipes and sweepstakes. Soon, consumers will be able to win prizes through a mobile game called Sunshine Slide.

  “Everyone’s excited with this new rollout for Malibu to develop these smart connected closures that enable the brand to get close to its consumers, Yudelevich said. “Once other companies see this new technology and its benefits, these closures for spirits and wine are going to be the leaders in direct-to-consumer marketing.”

Kilchoman Distillery Company Case Study

  In early 2018, Thinfilm Electronics of San Jose, California joined forces with Kilchoman Distillery Company, a producer of single malt Scotch on the island of Islay. Kilchoman distributes its whisky to 13 countries and wanted an effective way to interact with the end consumer. While they didn’t put their technology in the caps of bottles, they used NFC powered, interactive neck-tags for their Machir Bay and Sanaig Whiskey. Fully integrated with Thinfilm’s CNECT Cloud Platform, the tags were the digital touchpoint that consumers could tap to have an individual marketing channel.

  In a case study published at www.thinfilm.com, Thinfilm Electronics created a mobile-optimized product system where the CNECT Cloud Platform stored and managed all of the unique tag IDS. The tags allowed Kilchoman to track the time from “ship-to-shelf” across 13 countries as well as analyze item-level intelligence and consumer interaction data in real-time. Thinfilm produced a branded NFC scanner app called “Discover Kilchoman” available in Apple’s App Store.

  The results concluded that the end-to-end NFC mobile marketing solution was highly encouraging, with a 6.5% engagement rate. This rate is several times more effective than traditional digital marketing activities and created a way for Kilchoman to connect directly with consumers and build customer loyalty. It also mitigated the need for additional promotional support or omnichannel activities. 

  Compared to traditional digital marketing, the NFC display was 70 times more effective than email, search engines and social media. They concluded that there was a 35% virality rate (each bottle tapped by 1.35 consumers on average) and a 22% iOS engagement via the custom Kilchoman branded app. Finally, they were able to identify that it was an average of seven weeks “ship-to-shelf” time.

  Thanks to intelligent technology and the desire to connect with the end consumer, companies are now able to have a one-on-one relationship with those who love and use their products. Each brand has a unique story. Now they can make sure their customers know it.

  So, set yourself apart from the competition. While millennials are brand loyal, someone has to be the one they support. To gain loyalty and foster the next generation of consumers, have originality, offer a great experience, be authentic, have value, and keep the digital conversation going.

Fernie Distillers: Thinking Outside the Box

By: Adrienne Roman

The first licensed craft distillery in Fernie, East Kootenays, British Columbia, opened its doors July 1, 2018, and there’s a good reason why their vodka, gin and liqueurs are flying off the shelves. Husband and wife team Jillian Rutherford and Andrew Hayden dedicate themselves to expanding sustainable practices, preserving Fernie’s industrious history, and providing small-batch, high-quality spirits individually created with local, seasonal ingredients.

The Present Is The Key To The Past

  Fernie’s name originated with prospector William Fernie, founder of the Crows Nest Pass Coal Company, who, along with Colonel James Baker, was influential in the development of the first mine in Coal Creek, just east of Fernie, in 1897.

  By 1898, the Canadian Pacific Railway also came to Fernie, transporting coal and supplying goods. With the rapid growth in mining, logging quickly became the second-largest industry. Unfortunately, with its mainly wooden foundations, two tragic fires in 1904 and 1908 completely devastated the town, but it was rebuilt using brick and stone in 1910.

  Rutherford told Beverage Master Magazine how this relates to the distillery. “In Geology, looking at modern environments like beaches and reef systems helps to find and identify similar features in the rock record. The present is the key to the past. If we flip that around, we feel that Fernie’s past informs our present. We are here because of what Fernie used to be—a mining- and rail-influenced community—and it’s important to remember how we arrived here, not just what we are now. We decided to incorporate Fernie’s history in our branding because as great as the outdoor recreation is here, the town is more than a one-trick pony. We have history.”

A Focus on Fruit

  Collaborating with local talent who also support their community, Rutherford and Hayden understand the importance of initiatives in place that keep both the people and the wildlife of Fernie safe. With a large number of fruit trees in East Kootenays, local Initiatives like “Apple Capture” and “WildsafeBC” help to ensure appropriately controlled harvests. Fruit is picked and managed to avoid falling and rotting, which can attract large deer and bears to the area. The mash supply from the production of their vodka and gin also helps to feed local farm animals. 

Mixology Manifestos

  The bar and tasting lounge at Fernie Distillers has a welcoming atmosphere and unique cocktails, where traditional takes a sharp turn in favor of modern creations with a twist. “The big window into the production room gives our guests the opportunity to see the stills and other tanks,” Rutherford said.

  Plastic does not feature in any of their cocktail presentations. Instead, decorative garnishes are made from an array of fruit, including apples, kiwis, strawberries, lemons, oranges, and pineapples. “A really great garnish should be clever, it should elevate a drink, and it should enhance the carefully mixed flavors. It should surprise and entice, and most of all, it should look and taste fantastic. In short, it should be an integral part of the drink, not a limp afterthought,” Rutherford said.

  There are several interesting DIY garnish ideas listed on the Farewell Umbrellas blog post on their website. Their cocktail menu changes with the seasons and is known for its creative approaches.

  Andy Ward, Fernie Distillery’s bar manager, named the FD G&T as the most popular cocktail. Rutherford added, “It doesn’t sound exciting, but it’s so delicious, and a familiar and approachable choice. We get people from all walks of life visiting us, and not all are adventurous for the first drink. When they come back after a great first experience, they often branch out, maybe with a stinger or a martini.” The FD G&T is made with gin, lemon sherbet, lime juice, and house-made lavender bitters topped with tonic.

Tools of Transformation

  Recycled materials are seamlessly incorporated into a number of the distillery’s features.

  A section of the old Calgary Molson Brewery bottling conveyor belt acts as the front face of the bar. It was given to the distillery by a friend who reconditions brewery equipment. Repurposed doors are part of the decor. The bar shelves are refinished slabs of British Columbia Douglas fir, previously part of horseshoe pits where the patio now sits. Similarly, their bar top is salvaged British Columbia Douglas fir timbers from 1903, once used as power pole cross beams by AltaLink in Southern Alberta.

Sustainable Spirit

  True sustainability is much more than just a word. Visibly expanding its many branches through smaller steps, together with the implementation of new and innovative ideas, remains an absolute priority for the team at Fernie Distillers.

  They’re actively working to reduce their environmental impact in many ways, and hope that their efforts will influence others to follow suit. By locally sourcing ingredients and reducing their carbon transportation footprint, they’re building connections with their community, and in turn, supporting the economic structure of the area. The distillery has also gone green with their Yarai acrylic barware, and only use recycled paper bags for all the sales in their shop. Neighboring businesses have also abandoned plastic. Rutherford and Hayden believe that spreading the word about these initiatives will help create an environment where sustainable practices are increasingly accessible, better understood, and more easily implemented.

  A project in sustainability was Rutherford’s latest brainchild. She wondered what could be done with the distillery’s hundreds of continuously used barley bags. After speaking with the sewing room teacher at The Fernie Academy School, a progressive student project took flight. Starting in September 2019, students will work to reconfigure them into attractive reusable shopping bags, and 100% of the proceeds from the sales will go directly to the school.

Fernie Fog and No.9 Mine

  A Fernie Distillery best seller, Fernie Fog liqueur was born from the idea of creating a black tea and bergamot infused blend with just the right amount of demerara sugar and vanilla. “It’s versatile and unique, and has really struck a chord with our customers,” Rutherford said.

  Their No. 9 Mine Vodka is wheat-based and rich in flavor, acknowledging the history of the Fernie miners who toiled below ground during the mine’s prosperous operation. Although dismantled in 1958, the mine’s remnants still sit along the Coal Creek Heritage Trail. Visitors to the area can still view the conveyor building, decaying ventilation fans and blocked tunnel entrances. 

  Infused with juniper, citrus fruit, and botanicals, the distillery’s blog deems Fernie’s Prospector Gin, “a clean, pure spirit, which can be perfectly flavored by the distiller or mixologist, or enjoyed in its most honest and raw form.”

  The distillery produces new spirits and liqueurs seasonally. They recently released 5th and Park Damson Gin, made with locally grown damsons that are picked just 500 meters off the property in Fernie Gardens.

The Usual Suspects and The Oddballs

  There’s a little something for everyone at Fernie Distillers, from that refreshing daiquiri made with pineapple and green cardamom-infused vodka, to an old fashioned stinger on hand-cut ice. Looking for different and unusual? They’ve got that covered too. Try the vodka espresso, a smooth mix of their No. 9 Mine Vodka, Fernie Fog, cold brew coffee, demerara sugar, Miraculous Foamer bitters, house coffee, cacao bitters and nutmeg.

  Whether skiing the slopes in winter or biking the beauty of the Elk River Valley trails in the summer months, Fernie Distillers offers guests excellent service and products. Their success is fueled by the dedication of those who live and work in a vibrant and historic town dripping with myth and legend.

With less than 200 bottles per batch and one of the industry’s few female distillers at the helm, Fernie Distillers proudly recognizes and celebrates all that Fernie has to offer, one exceptional spirit at a time.

  Fernie Distillers is open every day of the week except Tuesday. Fall cocktail hours are 4-10 p.m. on weekdays and 2-10 p.m. on weekends throughout ski season.

For more information, visit their website at…https://www.ferniedistillers.com

https://www.ferniedistillers.com

ROI on Distillery Conferences

By: Donald Snyder, President Whiskey Systems Online

Another distillery conference season has come and gone. Distillers, weary from their travel across the country, are unpacking their conference tote bags filled with business cards and supplier goodies. The follow up vendor emails are slowing trickling in while the distillery owners dread their upcoming credit card bills. But for now, conference attendees reflect on everything they learned and have taken away from their adventures. The first quarter of the year contains some of the biggest craft distillery relevant conferences and expos including the American Craft Spirits Association (ACSA) Annual Distillers’ Convention & Vendor Trade Show, the American Distilling Institute’s (ADI) Annual Craft Spirits Conference and Vendor Expo, and the Wine and Spirits Wholesalers of America (WSWA) Convention and Exposition.

  The ACSA Convention and Vendor Trade show is usually the first major distiller conference of the year in either February or March. This year’s conference was in the wintery city of Minneapolis, Minnesota and appropriately themed “Distillers on Ice”. Next year’s conference will be in Portland, Oregon March 29-31, 2020. The conference is three-day opportunity for distilleries to connect with suppliers, attend educational breakout sessions, collect their awards from the spirits judging competition, and discuss the issues “du jour” such as lobbying efforts to continue the Federal Excise Tax reduction. The conference leadership is made up of elected volunteer board members and committee chairs from across the country.

  Mike Blaum, Co-owner and Chief Distiller at Blaum Bros. Distilling Co. in Galena, IL brought his entire distillery team to the ACSA conference this year and was very pleased with the show. Mike had several takeaways from the conference. “Besides the educational content and being exposed to new ideas, the networking with industry colleagues and opportunities to discover new vendors is always a highlight.” The travel and entrance fees for the conferences can add up but Mike believes there is significant return on investment for him and his team. “If we can all come home and apply the concepts we were exposed to, cut our costs or improve the value from suppliers, change our way of thinking or doing business, and improve safety, it’s easy to feel good about the ROI.”

  The ACSA conference entry fees for 2020 have not been announced but they are anticipated to be close to the 2019 fees. For the Minneapolis conference, the prices for ACSA Members were $625 per person (with additional attendees at $425 each) and non-members $825 per person (with additional attendees $625 each).

  The ADI Craft Spirits Conference and Vendor Expo is usually in March or April following the ACSA show. This year’s conference was in Denver, Colorado and had over 1,800 industry members in attendance. Next year’s show will be in New Orleans, Louisiana in April of 2020. The American Distilling Institute (ADI) is privately owned with conference leadership positions filled by full time employees. The ADI show is a week long event with several hands-on workshops, such as whiskey and rum distilling classes, before and after the three-day conference. Like the ACSA show, distillers can meet with suppliers on the vendor expo floor, attend educational sessions and paid workshops, and attend the Gala dinner to receive their awards from the spirits judging and tasting panel.

  Matt Beamer, Distiller at Sagaponack Farm Distillery in Sagaponack, NY attended the ADI Conference this year. Matt enjoyed the one-on-one interactions with industry members. “I would say the biggest takeaway from attending would be listening to the panel discussions on several topics. Being in these discussions with distillers discussing their personal experiences makes a huge difference. The face to face interactions go beyond a phone call or email. It takes theoretical knowledge and adds a personal experience to it and makes understanding the issue much more effective.”

  Matt spent time on the vendor expo floor as well. “Being at ADI and having face to face discussions with vendors is very helpful.  Phone and email conversations pale in comparison to direct conversation.” When asked about making the long trip to Denver, he reflected on being part of a bigger community. “There is nothing like being in the community of distillers. When we’re at ADI, we get a sense that we’re not on an Island, but instead in the very thick of the journey of being a craft distiller.”

  Matt and his team’s time away from the distillery, travel expenses and conference fees were high but he felt it was a sound investment. “As for return on investment, we come back excited, invigorated, and ready to incorporate what we learned to take us to the next level. Totally worth it.”

  The ADI Full Conference Pass fees for 2019 were $550 per person for ADI members (with $350 per additional attendee) and $750 per person for non-members (with $550 per additional attendee). The ADI Awards Gala dinner is an additional $50 per person. Additional paid workshops are also available. It is anticipated that the 2020 conference will have similar fees.

  The ACSA conference and ADI conferences provide many similar benefits such as a vendor and supplier expo and diverse educational workshops but there are many reasons to attend both. Some distillers choose to attend one versus the other while many distillers try to attend both conferences each year. Jared Himstedt, Master Distiller of Balcones Distilling in Waco, TX is one of the many distilleries who send teams to both conferences. “For me, the value falls into a couple of categories. The most enjoyable by far is the time with industry friends and colleagues. Every year there is always a new connection made or chance to deepen old ones, whether it’s serious discussion on the trade or just good laughs over drinks. Opportunities to discuss and brainstorm around legislative issues are super valuable to me.”

  Jared and the Balcones team are experienced distillers who have had some disappointments with the technical educational sessions at the conferences. “I always look forward to technical and research sessions with high hopes, but I feel like only a few deliver. There are only a rare few that live up to the expectations of delivering actual research. A lot have anecdotal and uncontrolled ‘experiments’ that leave me a bit disappointed. I look forward to those getting more dialed in over the years.”

  The Balcones team believes that the price to send the team to these conferences is an investment more then an expense. “We have no problem investing in the professional growth of our crew as long as they see the value in the experience. The   team does a good job of attending sessions relevant to their role at our distillery and bring a lot of good info back to the table.”

  The last major show that craft distillers attend in the first quarter of the year is the Wine and Spirits Wholesalers of America (WSWA) Show. The WSWA show is an opportunity for wineries and distilleries, big and small, to reserve a booth to showcase their products to distributors from across the country. Distributors walk around the show tasting products and meeting up-and-coming brand owners. If distributors like a product, they can decide to add it to their portfolio for distribution. The WSWA show is one of the biggest wine and spirits show in the country. Impressing a large distributor could mean a huge increase to sales for a growing craft distillery. This year the show was in Orlando, Florida and next year the show will be in Las Vegas, Nevada. The show alternates between these two cities every year.

  Nick Ladig, VP of Sales of Hotel Tango Whiskey, Inc. in Indianapolis, IN. attended the WSWA show in Orlando, but did not attend the ADI or ACSA conferences this year. Nick’s biggest take away from the WSWA show as both the opportunity for new   sales and keeping up with industry trends. “It was interesting to see the proliferation of new products chasing the trends (ex. canned cocktails, low abv) and the emergence of the new web-based tier in alcohol distribution and wholesalers becoming more disciplined when adding to their portfolios.”

  When asked why Hotel Tango Distillery did not attend the ADI or ACSA conferences, he felt increasing sales was priority for them right now. “We opted not to attend ADI/ACSA because they are more educational and internally focused versus WSWA which is more likely to lead to new business partners.”

  The WSWA pricing for distilleries, wineries, and brand owners to get a booth varies. For WSWA Members booths start at $2,800 for a 10’x10’ booth but go up to $11,900 for a 20’x20’ island booth. Larger suppliers may opt for a private suite or reserve entire conference rooms to showcase their brands. Distillers can pay for additional attendee tickets such as $275 per model and $675 for each additional non-member or spouse to attend.

  Tyrone President and Co-Founder of Islamorada Distillery in the Florida Keys attended both the WSWA and the ADI conferences this year. At the ADI conference Tyrone and his distillery team was able to take away education on good distilling practices. At the WSWA show, Tyrone was able to expose his brands to distributors of all sizes. “The WSWA show opened us up to industry contacts and smaller distributors that we wouldn’t have been able to connect with before. We got to talk to people in the industry that gave us excellent advice like not to be in a rush to get out of your home state and don’t grow too fast. We are a small startup distillery and competing against the large brands can be incredibly difficult.”

  Whether distillers are looking for hands-on workshops, educational breakout sessions, panel discussions with industry experts, connections to vendors, or exposure to distributors, the first quarter of the calendar year has multiple resources. Distillers who can raise the funds to travel to the ACSA, ADI, or WSWA shows, will usually find a considerable return on their investment.

The Sweet & The Sour – Challenges & Rewards in Making Flavored Spirits

By: Donald Snyder, Whiskey Resources Online

August/September 2016 Issue – Beverage Master Magazine

What do apple pie moonshine, birthday cake vodka, blueberry liqueur, absinthe, spiced rum, and cinnamon whiskey have in common? All are distilled spirit flavors, and they make up one the fastest growing segments in the industry. 

  The growth of these flavored varieties isn’t necessarily indicative of market expansion.  Vodka, with entries that include pumpkin pie, marshmallow and cookie dough, has seen stagnant sales in the U.S. since 2003.  Sales of vodka’s flavored varieties experienced steady growth for the same period, according to market research firm Euromonitor International, but not enough to grow volume overall, and new flavor releases started to decline in 2013.  Around the same time, flavored moonshine hit it big and a surge of new brands began vying for a piece of the Mason jar craze.  Now moonshine growth has slowed and flavored whiskey is on the rise, led by cinnamon whiskey and the new fruit and honey-flavored bourbons.

  The bottom line is the flavored spirit market offers opportunity, as consumers are always looking for something new.  But, this also makes it volatile and risky, rewarding the producer who can innovate and move to market quickly to benefit from the success of a new trend or flavor.  The good news is that small craft distilleries have a significant advantage over the larger producers in their ability to just that.

But, before considering an entry into the flavored market, let’s review some basic concepts that will improve your chances of success: flavor development, avoiding shelf-life problems, complying with the TTB, and leveraging a lower effective tax rate.

Flavor Development

  Many distilleries begin by mixing their spirits with flavors, juices, fruits, or any other unique and natural mixers they have on hand, and then market test with their friends, neighbors, and local bartenders. It’s not an easy or quick process, but many distilleries find success using this method. Several regional craft coffee-flavored liqueurs and vodkas were developed in-house by mixing two beverages their distillers were passionate about: coffee and alcohol.

  Another option is to utilize the services an experienced flavor house like Flavorman, Wild Flavors, or Mother Murphy. These flavor blenders and producers have decades of experience in testing and developing new flavored spirits, and they have it down to a science. Ask for a specific flavor and their teams of scientists and researchers will give you exactly what you are looking for.

  For example, the creators of cookie dough-flavored vodka didn’t soak vodka in freshly mixed cookie batter. The flavor essences were developed by an experienced flavoring company, and then shipped to the distillery to be blended and bottled.  They can assist you in creating a blending procedure, or provide you with distillery finished flavorings ready to blend. And, they can conduct shelf stability testing as a way to help ensure your product looks good on the shelf, or after being exposed to extreme temperatures.

  A third flavor development option involves partnering with an established craft distillery with experience launching a few of their own flavored offerings.  They can bring expertise in blending sugar, flavorings and colors with distilled spirits, and can help you develop your recipe.  They may also be able to source the blending ingredients, manage the government compliance and application process, and even bottle for you to help get your product out to market as fast as possible. Once you have the capacity and expertise to do it yourself, you can bring the process in-house.

Avoiding Shelf-Life Problems

  Introducing foreign objects like whole cherries, strawberries, cinnamon sticks, or other non-liquids has the potential for serious shelf-life issues. Before shipping anything with a foreign object, make sure the bottle sits in sunlight and in extreme temperatures for at least a month before you manufacture a large batch. You need to see what the product looks like over time, as fruit may oxidize and other ingredients can change in color.

  The same foreign objects that give your flavored spirit its unique qualities may also be visible in the bottle.  Many consumers are not used to sediment or objects floating in their bottles, as many large distilleries use chill-filtration to remove every last bit of sediment, barrel char, and haze from their spirits. Educating consumers on the role of residual sediment in full-flavored spirits may be challenging, but your continued success could depend on it.  Consider addressing the subject on your packaging or display, as well as in your other consumer communications.

  And, finally, do your blended fruits or juices have an expiration date, requiring bottling within a short period of time?  This is a shelf-life issue as well, albeit an internal one, and it is an important issue to address with purchasing, storage and quality control procedures before going into full production.

Tax and Trade Bureau

(TTB) Compliance

  Next on the agenda is ensuring compliance with the TTB. Your formula must be submitted for approval, along with the detailed list of ingredients, blending steps, and batch details. TTB approval may take 20-40 days and the agent may ask for a sample to evaluate, although this is not common. After the formula is approved, you can then apply for approval of the bottle label which may take another 30-50 days. The bottom line is that earning TTB approval is not a quick process, so be sure to allow for it in any product launch timeline.

  Compliance requirements continue beyond the approval of your formula and label, as each batch must be made within tolerance of the approved formula.  Meticulous batching records must be kept and should include the DSP/Plant Number, the TTB Formula Approval Number, the ingredients used, blending tank name, proofing notes, and other batch details.

  Each batch must also be proofed to ensure it is within tolerance before being bottled. The TTB requires that, if a flavored spirit contains solids in excess of 600 mg per 100 ml, the true bottle proof can be no higher than the stated label proof, and no lower than 0.5 Proof (or 0.25% ABV) below the label proof.  For flavored spirits, this may not be as easy as just measuring with a traditional hydrometer, as the spirits can be “obscured”.

  Spirits are considered obscured due to the change in density from the sugar and other solids, requiring an obscuration test utilizing a small desktop still to distill off the liquid from the sample, leaving only the syrups and solids behind. After the recovered distilled spirits are collected, water is added to make up for the original solids left behind, and it can then be proofed accurately with a hydrometer or density meter. The entire process can take anywhere from 2-4 hours per batch.

  An alternative is to send a finished sample to a TTB-approved lab to do the proofing, but it can take a few days to get the results. And there are some desktop density meters that can do obscuration testing, but these can be very expensive.

  It is crucial that a craft distillery proofs their flavored spirits correctly and in full compliance with regulations. TTB agents randomly pull spirits off liquor shelves across the country, and then test for proof and fill tolerance, and to ensure the approved formula was followed. If a bottle is found to be out of tolerance, the TTB will ask for the distiller’s batching and proofing records, and may issue fines, penalties, or additional taxes.

  Leveraging a Lower Effective Tax Rate

The final and most important consideration for flavored spirits is the opportunity to pay a lower effective tax rate. Distilled spirits are taxed at a standard federal excise tax rate of $13.50/proof gallon. However, with flavored or blended spirits, there are methods a distillery can use to lower that tax rate.

  The most common example is OTS (Other Than Standard) wine. This high proof wine can be transferred into a distillery and blended with spirits. The portion of the alcohol contributed from the OTS wine is taxed at the much lower rate of $1.57 per gallon. Another option is to use tax-paid flavorings that contain some alcohol, where up to 2.5% of the total proof gallons in the batch contributed by the tax-paid alcohol are taxed at 0%.

  An important warning: these calculations are not simple and managing a lower effective tax rate can be challenging. A craft distillery interested in developing a flavored spirit with a lower effective tax rate would be wise to consult with an experienced flavor house or supplier for guidance.

  In summary, the flavored spirits market continues to expand and innovate, but the same demand for innovation also introduces volatility and risk.  A distiller looking to compete in the category should spend time in research and preparation, so that its sour pitfalls can be avoided, and the sweet rewards can be enjoyed.

Finding A Distiller

By: Donald Snyder, Whiskey Resources Online

April/May 2016 Issue – Beverage Master Magazine

What do a former chef, police officer, wine taster, lawyer, home brewer, fireman, general contractor, and farmer all have in common? They all have become award winning distillers. With new craft distilleries opening every month, how does a startup find the right individual to run their stills? Given the shortage of experienced distillers, looking for the right candidate outside the industry may be the only option. What core skill sets would make a good distiller? What skills are crucial to running the day-to-day operations of a craft distillery? After the right candidate is found, how does this person begin a lifetime of learning?

  A quick scan of the American Distilling Institute (ADI) Online Forums shows “Help Wanted” posts looking for distillers outpace the “Job Wanted” posts by almost 3 to 1 (http://adiforums.com/). Individuals with distillation experience, or even fermentation and brewery experience, are in high demand right now. Given the shortage of available experienced distiller candidates, some craft distilleries are connecting with professional recruitment services normally only used by larger distilleries. Even then, finding someone with real-world (and legal) distillation experience can be a challenge. 

  In the end, most startup craft distilleries will not be able to recruit an experienced head distiller. However, there are some key skill sets to look for when selecting this crucial member of the team. The most important and fundamental skill an aspiring distiller must have is a good palette. The ability to taste distilled spirits and identify subtle differences is critical. All the most advanced automated control systems in the world cannot replace the importance of being able to taste and smell spirits to make the correct cuts. The head distiller must also be able to evaluate the quality and flavors of spirits during barrel aging, determine what batches to blend, and even ensure the correct profile before the spirits are bottled. These skills sharpen with experience and training but must build on a core ability to taste and smell. Sherman Owen, Distillery Consultant and Owner of Artisan Resources LLC, says, “If you can taste the difference between Hunt’s and Heinz ketchup, you can learn to be a distiller.”

  Besides having a strong palette, an aspiring distiller must be driven and have a strong work ethic. Eight-hour work days are a rarity in most craft distilleries. If there is an equipment breakdown, it may take twelve or more hours to distill a batch of spirits. Distilling vodka or gin may take a full day or beyond to completely finish. A distiller must be willing to stay with a project no matter what.

  Another key skill set is to have a reasonable mechanical aptitude. If something is not running correctly, can they start to investigate what went wrong? Does the aspiring distiller have any experience fixing basic mechanical issues? Most craft distilleries do not have a full time maintenance staff. Instead of making the expensive call to bring in a mechanic or equipment vendor, can the distiller safely grab the right tools to troubleshoot the issue? A distiller doesn’t have to be able to completely rebuild a pump motor, but they should be able to identify if the pump stopped working because of a clog in the hose. 

  A distiller must not be afraid to get dirty. Distilling can be strenuous work, even with automated handling equipment and forklifts. Over half a distiller’s time will be devoted to cleaning and sanitizing. Commercial brewers can make good distillers not only because of their understanding of fermentation and alcohol regulations, but because of a brewery’s rigorous cleaning requirements. Grain left in an unrinsed fermenter is a magnet for bacterial infection. Once a distillery gets a bacterial infection, it can be very difficult to eliminate. If a bad bacterial infection gets in your fermenter due to a lack of cleaning discipline, it can stall your fermentation and kill your yeast. A distiller must be diligent to balance their time between running the distillery operations and cleaning up after each day. 

  Distillers must be open to learning new things. A distiller is going to learn something new every day. If a distilling candidate does not have distillation experience, they will be inundated with new experiences for the first several months. However, the learning never really stops. New distillers need to be like a sponge, learning as much as possible about all aspects of the industry. They should be open-minded about experimenting with new materials and tools. If there are issues with fermentation, they should learn what variables can be tweaked. Even the most experienced distillers will make mistakes, but the most successful distillers will learn from them and prevent them from happening again. 

  One of the many things that makes the distilling industry unique from most other small businesses is that it is highly regulated and taxed by the federal government, specifically the Tax and Trade Bureau (TTB). Distillers must be organized and be able to keep copious notes. They must be able to learn and understand federal and state regulations to ensure compliance. If a distillery is audited and the distiller did not keep sufficient notes, the business could be heavily fined or shut down. The distiller’s role is crucial to ensure everything is organized and audit-ready. There are online systems to help track distillery production and federal excise tax liabilities, but the distiller needs to be disciplined and organized enough to enter the day’s transactions. It is also critical that an aspiring distiller who is thinking about getting into the industry knows that stealing or “bootlegging” cases from a distillery is a felony. This is a very important conversation to have with anyone thinking about getting into the business.  

  An aspiring distiller must be a leader. Owners and managers will lean on the head distiller to keep the pace of the team and distillery operations. Upstream, the distiller must ensure they have enough raw materials to cook, mash, ferment and distill. Downstream, the distiller must ensure they have enough empty tanks to hold the spirits. The distiller will drive the supply of spirits for filling barrels, batching recipes, proofing and blending, and even preparing for bottling. Each operation requires coordination, planning, materials, and labor. For many craft distilleries, it is the head distiller that provides the leadership that keeps all the working parts in sync. 

  A distiller must have charisma. Tourists, fans, locals, and other customers will patron a distillery for a chance to meet the distiller. When there are tastings at bars, liquor stores, distributors, or other events, the distiller should be there. To have a drink and chat with a head distiller is a highly coveted event along the bourbon trail in Kentucky. Consumers seek this unique experience from their local craft distilleries as well. Having a head distiller who is approachable and accessible will go a long way to create raving fans. They also must be passionate about what they are making. That passion and excitement will carry through when consumers come in for a tour. 

  Finally, a new distiller must completely understand the competitive landscape. Visit as many distilleries as possible, large and small. Build a good relationship with the surrounding craft distilleries. Go to a large liquor store and buy as many distilled spirits as possible and taste them all. Identify what is good and what can be improved. Find where your products fit into the mix regionally and potentially nationally. How do you want your product to taste? Can you tell the differences between similar product types? Subscribe to magazines with tasting notes of spirits. Research the award winning distilleries. Make the rounds and learn about the industry. 

  After finding the right candidate, where to begin a new distiller’s training? The best place to start is at a class focused on craft distillery operations. There are several classes available throughout the year including Six & Twenty’s Distillery Management Course in Piedmont, SC (http://www.letsdistill.com/), Camp Distillery at MB Roland in Pembroke, KY (http://mbroland.com/camp-distillery/), various American Distilling Institute’s (ADI) Workshops across the country (http://distilling.com/events/distilling-workshops/), and many others. New distillers should attend the two major annual distillery conferences; American Craft Spirits Association (ACSA) and ADI. The ACSA conference is a great opportunity to network with established distillers and learn about issues impacting the industry. The ADI conference is a great source of education about the distilling industry for all levels of experience. Talk with vendors to see what the latest technology can offer the distilling world. Can the new distiller mentor or shadow at another distillery for a week? This could be some of the best education available. 

  With hundreds of new craft distilleries opening every year, it will be a long time before there are enough experienced distilling professionals to fill every need. However, if a passionate, hardworking, organized, and eager individual with a strong palette has the drive, they can make a fantastic distiller. The head distiller is the true face of the distillery so they must be a team leader. Once the right individual is found, the lifetime of education begins. Taking classes, networking at conferences, and meeting fellow distillers can give a new distiller the foundations to grow on. After a lifetime of education, fine tuning your skills and experimentation with new techniques, you too can become a master of your craft.

When the State Gives Lemons

By: Donald Snyder, President, Whiskey Systems Online

June/July 2017 Issue – Beverage Master Magazine

With the passing of the 21st amendment, the prohibition of alcohol in the United States was officially repealed. Each state was given the power to regulate and control the distribution of alcohol within their borders. Today, every state handles the sales of alcohol a little differently, including setting limitations on what craft distilleries can do in their gift shops and tasting rooms. Some states are more “craft friendly” than others by allowing sampling, cocktail and bottle sales, direct distribution, paid tours, and other profitable options. However, every state imposes some restrictions. When the state imposes restrictions, how can distillers work within the laws to increase their bottom line?

Florida

  Recently the state of Florida passed a bill to increase the number of bottles craft distilleries can sell out of their tasting rooms; from two bottles per person, per brand, per year to six. Other restrictions in Florida include no drinks or cocktail sales by the glass, no direct sales to bars or retailers, and all products must be distilled on site. How does a new craft distillery in Florida get consumers to experience their brand? St. Augustine Distillery has developed a unique business model to work within the state laws.

  Philip McDaniel, CEO of St. Augustine Distillery has focused on foot traffic.

  “We’ve located in a high-traffic destination which allows us to get a high volume of visitors,” he said.

  Because the law limits sales per brand, Florida craft distilleries are also focusing on new product innovation. If a Florida distillery has 10 different brands, they can now sell up to 60 bottles per person per year. 

New York

  In contrast, New York offers far fewer restrictions on craft distilleries with their Farm Distillery license. As long as 75% of the spirits come from New York produce and grains, craft distilleries can do on-site tastings, serve cocktails, and sell bottles of their spirits in their tasting room.

  Jason Barrett, President and Head Distiller of Black Button Distillery in Rochester, New York enjoys the flexibility the state offers.

  “We can only make cocktails with New York labeled spirits but overall, we are very lucky,” Barrett said.

  Black Button Distillery has built a bar in their tasting room to take full advantage of cocktail sales and is one of the most popular happy-hour spots in Rochester.

Texas

  Texas has some very interesting restrictions that limit bottle sales from the distillery gift shop to two bottles per person every 30 days. The time limit doesn’t reset every calendar month so every consumer has a different 30-day rolling window. Craft distilleries are responsible for maintaining a database of every consumers’ purchase to stay in full compliance with the law.

  Texas recently passed a law allowing cocktail sales in the distillery, which has been a big benefit for distillers like Robert Likarish, founder of Ironroot Republic Distillery in Denison, Texas.

  “The cocktail lounge was integral to our survival the first couple of years. We relied on it heavily while we built our distribution network and waited for our whiskey to age. It is still an important way for us to connect with our community and visitors to the distillery,” said Likarish.

  Ironroot Republic Distillery was recently awarded “Best Corn Whiskey in the World” at the San Francisco International Spirits Competition, which has helped draw new customers into the tasting room.

South Carolina

  South Carolina allows for sampling and bottle sales from a craft distillery with very specific restrictions. Distilleries can provide undiluted, unmixed samples in the amount of 1.5 ounces per person, per day in their tasting rooms. Samples can be free or the distillery may charge for them, which can be a decent revenue generator in an area with heavy foot traffic. Customers can purchase up to three 750 ml bottles per day at distilleries but the products must have a higher price point than the surrounding market. Distilleries cannot serve food or make cocktails, and their business hours must mirror those of retail liquor stores by closing at 7 pm.

  David Raad, owner and distiller at Six & Twenty Distillery in Piedmont, South Carolina is generally positive about the state laws.

  “South Carolina is a fairly forward-leaning state when it comes to distillery tastings, sales, and customer engagement,” said Raad.

  As an additional source of revenue, Six & Twenty offers classes for aspiring distillers to learn the art, science, and challenges of running a distillery before they start their own.

California

  Until recently, California was one of the most restrictive states in the country – forbidding all bottle sales out of craft distillery gift shops. Recent legislation has softened the restrictions considerably making it much easier for distillers to get their product into consumers’ hands. Distilleries can now sell up to 2.25 liters (three 750ml bottles) per person, per day and charge for tours. Self-distribution is prohibited, but craft distillers can open an offsite tasting room as long as it is also a restaurant. There is a cap of 100,000 gallons a year (brandy excluded) and 65% of their spirits must come off of their own still.

  Jim Harrelson, Owner of Do Good Distillery in Modesto, California, and President of the California Distiller’s Guild, has helped shape recent legislation regarding bottle sales and off-site tasting locations.

  “The old method would require the distiller to sell their product to a wholesaler and buy it back.  I know several people who were required to do this and their product travels hundreds of miles on a truck to make a five foot journey,” said Harrelson.

West Virginia

  West Virginia allows bottle sales to customers from a craft distillery’s gift shop with an interesting catch. Distillers must pay a percentage of their gift shop sales directly to a local liquor store called a Market Zone Tax.

  John Little, CEO of Smooth Ambler in Maxwelton, West Virginia explained how recent changes to the Market Zone Tax have improved his bottom line.

  “We used to pay a 28% markup to the state and 10% of all retail sales went to the local retailers via a tax called a market zone tax. Now, we only pay 5% markup to the state for items sold in the gift shop and only 2% for the market zone tax. It’s changed our retail business.”

  Distilleries in West Virginia cannot charge for samples or sell cocktails. But, distilleries can rent the facility and serve samples as long as they abide by the three ounces per person rule. This allows distilleries to have private parties which can be a nice source of revenue. Micro-distilleries have a discounted state license fee but have lots of regulations related to the percentage of grain from West Virginia and have a limit on production.

  Little is happy with his choice to pay for the full distillery permit.

  “While we’d meet the percentage of grain out of West Virginia, currently about 90% of our grain is from West Virginia, we didn’t want to have a cap on production. So, we have a full distillery permit. The West Virginia ABC treats us very well and is eager to help however they can, legally,” Little said.

Tennessee

  One of the states with the loosest restrictions on liquor sales in distillery tasting rooms is Tennessee. The current limit per person per visit is 25 – 750ml bottles. This limit is hardly ever reached by most individuals, but, if a consumer does their daily limit and want more, they can always come back the next day. The catch for the distiller, however, is that the bottles must first be sold by the distillery to a distributor and then bought back. This takes a small bite out of the distiller’s margin, but it is a relatively small price to pay for almost unlimited bottle sales at full retail price.

  Sampling is also permitted in Tennessee, and many distilleries take advantage. Consumers who visit the Ole Smoky Moonshine Distillery in Gatlinburg, Tennessee can sample 0.25 oz of up to thirteen different spirits.

  Tennessee recently passed legislation to permit cocktail sales, a law which took effect in July 2016. Andy Nelson, owner of Nelson’s Greenbrier Distillery in Nashville, Tennessee is happy with the change.

  “The State of Tennessee just passed a law allowing distilleries to sell cocktails out of their tasting rooms and that is very exciting for us. Any alcohol contained in the cocktails must be produced on the distillery premises so it can be a bit limiting but great progress nonetheless. We are right in the middle of trying to figure out a cocktail program for the distillery. We know that we may only get one chance at a first impression so we want to be sure we do it right from the beginning,” said Nelson.

Ohio

  One of the most notoriously restrictive states for distilleries is Ohio. Bottles can be sold from a distiller’s gift shop but there is a significant catch.

  James Bagford, Distiller at Flat Rock Spirits Distillery in Dayton, Ohio, described the process.

  “When a state agency store sells a bottle, they receive six percent of the retail price. When distilleries sell a bottle, the state gets to keep that six percent. So, we actually lose money when selling a bottle from the tasting room after we pay for credit card processing fees, bags, etc. The main advantage of having the tasting room is being able to connect with customers, tell them about making our product, and provide a sample before they commit to purchasing a whole bottle.”

  In November of 2016, Ohio passed legislation to allow distilleries to obtain an A1A permit, previously only available to breweries and wineries. The permit allows distilleries that produce under 100,000 gallons per year to sell their spirits, spirits produced by others, beer, and wine for on-premise consumption, as long as they have a kitchen and the ability to serve food during normal business hours.

Montana

  Montana is a growing craft spirits market spurred by craft-friendly laws. Distilleries can sell and serve two ounces of distilled spirit samples per person per day, which can be in the form of cocktails. They can sell up to 1.75 liters per person per day for offsite consumption, and self-distribute to state liquor stores. In addition, Montana distilleries can provide free or paid tours. 

  Distilleries are not responsible for paying the state mandated 20% markup on products moved through the tasting room. The only real restrictions placed on distillers are that of the spirits sold in the tasting room, 90% must have been produced in-state and can only be served between the hours of 10:00 am and 8:00 pm.

  Courtney McKee, Founder and Owner of Headframe Spirits in Butte, Montana is very happy she’s located her distillery in the state.

  “All in, being a distillery in Montana is fantastic. We’ve had a lot of influence over expanding the privilege of having a tasting room and we don’t think there’s a better state to do business in than Montana.”

Colorado

  Hands down, the state with the fewest restrictions on craft distillery tasting rooms is Colorado. Distilleries in dsColorado have every benefit they could ask for including unlimited bottle sales, no limits on sample or cocktail sales, permission to sell directly to retailers and liquor stores (direct distribution), can offer paid or unpaid tours, can have two separate offsite tasting rooms, and now get a “distillery pub” license.

  In exchange for these benefits, the state imposes a $2.85 per proof gallon excise tax (roughly $0.48/bottle) which is relatively insignificant when selling bottles and cocktails at full retail price.

  Kristian Naslund, owner of Dancing Pines Distillery in Loveland, Colorado enjoys all the benefits of being in Colorado.

  “We can sell anything that contains alcohol that we make, in any form – samples, cocktails, etc. We can sell to anyone and self-distribute. Overall, Colorado is a great state to run a distillery.”

  When it comes to operating a craft distillery tasting room, every state has their unique advantages and restrictions. No state is perfect, although some states are more craft-friendly then others. Whatever the restrictions are in a state, there are always opportunities to tweak the business model to drive a profit. Whether it is building a visitor-friendly distillery to maximize bottle sales from foot traffic, developing and innovating new brands to work within sales restrictions, building a bar to maximize profit from cocktail sales, designing an inviting tasting room to serve samples, or just focusing on efficiency and cost reductions for a pure distribution model, there is an opportunity to make money in every state. If the state gives lemons, make lemonade flavored vodka and sell as much of it as possible.

Turning Data Straw into Wisdom Gold By: Donald Snyder, President Whiskey Systems Online

By: Donald Snyder, President Whiskey Systems Online

June/July 2018 Issue – Beverage Master Magazine

In the story “Rumpelstiltskin,” the miller’s daughter has a seemingly impossible task; turn a room full of straw into gold. With the help of a little magic, the abundant straw, which has little or no value on its own, is turned into gold, a much more valuable commodity. For most craft distillers, they are surrounded by the copious amount of data that they would like to spin into business intelligence gold.

  From raw material reordering strategies, to cost per case, to sales trends, there is ample data available. Without an easy to use data dashboard, many decisions are made on the fly. By tracking the right data and filtering it into appropriate metrics, a distiller can make smart, data-based decisions to bring their distillery to the next level.

  The idea behind business intelligence and data dashboarding is simple: measure and track appropriate data points. Distillers can then use technology to filter and sort that data into metrics, charts, and summary dashboards; visual controls to identify when trends are out of acceptable ranges, and summary data to make smart decisions that drive the business in the right direction. For example, a list of all a distiller’s current raw materials on-hand isn’t the best way to re-order raw materials.

  However, combine current raw material inventories with vendor lead times, volume price discounts, average daily usage, and safety stock levels, and a distiller can be armed with a visual go/no-go strategy to order materials and ensure minimal out of stocks. Better yet, after setting up the dashboard, raw material reordering can be safely delegated to employees, meaning one less thing on the head distiller’s or manager’s to-do list. 

  Collecting data is not always easy or free. Every time an employee writes down data or enters data into a spreadsheet or system that is time away from doing other tasks. Identifying the right data to track, as well as monitoring and recording TTB required production and batch data is critically important. However, for employees who are writing or logging non-compliance related data points, a challenge if the data collected is value-added and is part of a mission-critical metric. As an alternative to manually recording data, invest in technology to simplify data collection and archiving.

Common Metrics to Track

  Not every business or distillery will be tracking the same metrics or key performance indicators (KPI). For example, a distillery who sources finished spirits is not as concerned with fermentation conversion efficiency as they are about tracking their bottling and filtering loss. The best metrics and KPI’s to help drive business to the next level involve data that is easy to collect and accessible; can be visually tracked daily or weekly; and where owners can make data-based changes to the process that will have a meaningful impact. A fantastic KPI is fermentation grain conversion efficiency (proof gallons yielded per bushel of grain used). The data is easy to track, it’s easy to plot the data points and see trends, and owners can make meaningful impacts to the process for positive change. In the end, an improvement to mashing efficiency means more output from the same investment of grain, which will benefit the bottom line.

  The most popular metric that distilleries track is the cost per case, as it gives owners a clear visual indicator of the profitability of their brand. The challenge with this metric is collecting the input data, including tracking all the costs from grain, packaging materials, labor, and even taxes. Using a distillery management system or cost accounting system can simplify the data collection. Once the cost data is summarized, the metric is easy to plot, trend, and compare against a standard. If a brand’s cost per case exceeds the standard, an owner can make process improvements to make positive changes. Every dollar of cost removed from a case means another dollar in profit for the company.

  Sales trends is another metric that distillers use to track company performance. Raw sales by customer data are usually available, but can often be overwhelming to digest. How is a specific brand performing month over month? Are any brands decreasing in sales? If sales are seasonal, compare brand shipments year-to-year to get a better picture of growth this season versus the same season last year. Are any customers trending down on orders? Looking at every combination of brand and consumer sales trends month-to-month or year-to-year could be hundreds of charts. To save time and resources, leverage a data dashboard or technology that can send an alert when specific parameters have been breached. If a brand or customer is trending unexpectedly downward, stakeholders can take action to help steer the ship back on track.

  The most overlooked metrics are ones that impact a distiller’s supply chain and logistics. With so many suppliers providing goods and services to the craft beverage industry, distillers have the benefit of holding their vendors accountable for poor performance. How often are deliveries made late or received after the agreed upon due date? How often does a late material shipment impact the production schedule? What is the supplier’s defect ratio? On a pallet of glass, how many bottles are broken or cracked? Supplier reliability can be crucial to an efficient distillery. If anything, tracking this metric can open conversations with suppliers on mutual expectations.

  Tracking and monitoring adjustments to inventory is an excellent metric to determine losses to your bottom line. How often is a physical inventory taken that doesn’t match the expected inventory? Track adjustments made to raw materials, tanks, barrels, and even finished cased goods. Is inventory missing often? Are employees using more of raw material than expected? Did the supplier ship an order short? Are products being broken but not reported? Are operations being done but not logged? Is there an employee theft issue? Tracking how often adjustments are made to inventory doesn’t always answer the cause of the problem, but it opens the opportunity to investigate and make meaningful decisions to minimize losses. 

One Bite at a Time

  Once a distillery has decided that it would like to start collecting and tracking data, the task can seem overwhelming. But just like eating an elephant, take one bite at a time. Identify one pain point or in-efficiency in the distillery and identify data that can help solve the problem. For those distillers with a math background, consider taking a green belt Six Sigma class to learn how to collect data from a process, identify outliers, and make meaningful changes to improve performance. Also, consider the investment in technology, such as business intelligence platforms, that will help collect and aggregate data into useful dashboards.

  A distiller will have thousands of potential points of data to collect, but tracking everything is not possible. Surrounded by data straw, distillers should look for a way to turn it into gold. Once a distiller or business owner has identified metrics and KPI’s relevant to the business and set up automated dashboards, they can use the data to make smart, data-based decisions. No one has a magic straw-spinning wheel, but every dollar saved by making intelligent choices means potential gold for the bottom line.