Inside the Heritage Distilling Company

people inside a winery

By: Gerald Dlubala

At six years old, Justin Stiefel, CEO of Heritage Distilling Company (HDC), was watching reruns of MASH with his father and wanted to know what the contraption was that the characters were constantly hanging around and pouring drinks from in their army tent. That contraption was a hand-made still, and among other things, it fueled Stiefel’s interest in chemistry and engineering. His interest culminated in Stiefel submitting a working model of a still for his seventh-grade chemistry class experiment. While he obviously couldn’t partake in any experiments from his submission, his teacher happily accepted the challenge, deeming it a worthy working model and giving Stiefel top grades for his project.

  “That accomplishment felt good,” said Stiefel. “I became interested in chemistry in that process, and since distilling is a chemical process at its basic level, my interest in distilling naturally grew.”

  After adding a degree in chemical engineering, he and his wife Jennifer, president of HDC, founded Heritage Distilling Company in 2011 while sitting around a campfire with whiskey, cigars, good friends and family. The name Heritage came from Stiefel’s belief that no matter who we are, where we are or where we’re from, our story, state or background, we all have a shared heritage as a country and an individual heritage based on our experiences. So the word “heritage” captures all those spirits and everything around us into one customer experience that we provide.

  Later, as he and Jennifer both gained experience working in the U.S. Senate, Justin attended Law School and was ultimately put in charge of negotiating important issues and subsets related to native tribes, including reviewing past policies, academic advancement, job creation, investment issues and more.

  “Subsequently, Jennifer and I  enjoyed visiting the breweries and wineries for the relaxing vibe and experience, but it was never legal at that point to open distilleries until 2009 when the state of Washington legalized the process. It was noticeable from the brewery and winery experiences what benefits were available in agricultural and economic factors using local resources by allowing folks like us to open craft distilleries. Then, in 2011, when we moved back to Washington, where we grew up, Washington voters approved privatizing liquor distribution systems.”

  The Stiefels’ approach to opening a craft distillery is first to consider what consumers want rather than what they prefer to drink.

  “A distiller can’t fall in love with their own products,” said Justin. “If you’re opening a brewery, winery, or distillery because you love your beer, wine or spirits, that can be a recipe for disaster. If you enjoy the product that much, be satisfied with being a consumer and drink the things you like. We use a consumer-led, high-technology approach to every aspect of our distilling process, start to finish. We want to focus on what compels a consumer to choose any particular product because you only get that one shot with a consumer to trigger repeat purchases. No matter our approach, it always started and ended with the product’s taste and flavor profile. Using this approach, we’ve become the most awarded craft distillery for nine years running, per the American Distilling Institute.”

  “We like to say that if it isn’t in the bottle, it doesn’t belong on the shelf,” said Jennifer. “The final products are determined in double-blind taste tests, and our spirits’ taste profiles can take up to two years to reach the point of release. We include natural ingredients and processes, including our grain and mash, and tailor them to the consumer’s needs. We have experienced, trustworthy palettes and pride ourselves on our spirits’ taste, flavors and profiles. We have internal and external protocols for testing, including blind taste tests with unknowing consumers. Those consumers are the final gatekeepers of our products, and they’ll let us know when our product is ready. We import all of our distilling equipment from Italy simply because we’ve found that equipment produces the most amazing flavor profiles for us.”

  Stiefel tells Beverage Master Magazine that the six distilleries and tasting rooms HDC owns throughout Washington and Oregon serve as testing grounds for all products, including their homemade RTDs (Ready to Drink).

  “We get our consumers in the door, have them do a taste trial, and hopefully convert those tastings to purchases or membership program subscriptions,” said Stiefel. “For example, we offered free samples of our newly launched RTDs in our tasting rooms in return for an in-house completion of a 27-part questionnaire regarding their honest thoughts on the products. Our guests took an average of 27 minutes to complete those questionnaires. They provided informative and thoughtful responses and proved they were interested in helping us make product decisions and being part of the consumer journey with us.”

  Stiefel says that HDC has streamlined its processes and protocols for consistency, record keeping, compliance, and general tracking in case of a problem. They can track back to the particular release’s specifics and find the issue’s where, when and why.

  “It’s a personal development journey as well as a consumer journey,” said Steifel. “We have 10 years of experience in consistent production, successful policies and responsible behaviors. And we believe everyone opening a craft distillery is obliged to the industry, striving to provide excellence and total responsibility within this still-young industry.

Tribal Beverage Network: Turnkey Solutions with Individual Branding

  “There are 270 tribal, sovereign nations in the lower 48 states,” said Stiefel. “Because of our record of successful practices and responsible policies in opening craft distilleries, the Chehalis Tribe in Southwest Washington approached us to see if we would help them open a craft brewery and taproom with a new hotel development they had in the works. We explained that we are craft spirits producers, not brewery professionals. Additionally, we explained that, in our informed opinion, the craft brewery market is beginning to downsize, so if they wanted to pursue that market, we recommended that they go with a dual component facility that includes craft spirits.”

  The Chehalis Tribe agreed, and in partnership with HDC, they were on their way to an exciting and extensive 25 million, 36,000-square-foot project when the unthinkable occurred.

  “We were due for groundbreaking in February 2018 and 24 hours away from issuing the contract, complete with equipment on site ready to begin when we were issued a letter halting the project,” said Stiefel. “Citing a 1934 statute from the Andrew Jackson era, the letter stated that a distillery cannot be built on tribal land, and if it were, we would not only be subject to a $1,000 fine (a great amount back then), but the government had the right to destroy all related equipment, including the stills legally.”

  “Fast forward 184 years, and we now see that many tribes own and operate casinos, bingo halls, golf courses, resorts, entertainment venues and arenas,” said Stiefel. “In fact, there are currently 524 tribally owned casinos in the lower 48 states, including some of the biggest properties and wine and beer distributors in their respective cities. They are the largest operators in their respective areas except for some Vegas casinos, but in many cases, tribal casinos are bigger than their Vegas counterparts. So, we felt that this 1934 era statute was no longer applicable and decided to do something about it.”

  In April, the Stiefels introduced a bill to repeal the antiquated statute, and it was passed and signed into law by December of the same year. Their argument was simple and on point. Craft distilling is poised to take off nationally, yet only Indians are not allowed to participate in the benefits, which seems quite racist.

  “It was an extremely proud moment for us,” said Stiefel. “Our project with the Chehalis Tribe, Heritage Distilling at Talking Cedar, opened in 2020. As a result, HDC is working with five more tribes and soon a sixth to open craft distilleries in multiple locations, including Oklahoma, Arizona, Washington, Oregon and Idaho. We’re also involved in talks with tribes across the U.S. in Wisconsin and along the East Coast.”

  Talking Cedar is a destination brewery, distillery, taproom, tasting room and restaurant, and it also serves as the hub of HDC’s Northwest operations. All craft beverages at Talking Cedar are made on the premises by the Chehalis Indian Tribe and Heritage Distilling Company. Here, the HDC’s liquid base is distilled before being transferred to the individual tribal distilleries for final finishing, aging and any maturation necessary to get the final product the tribe deems worthy enough to reflect their heritage.

  “Tribal distilleries sound like a cool venture,” said Stiefel. “But the process is costly, time-consuming and time-sensitive regarding the reports involving the TTB (Alcohol Tax and Trade Bureau). With our franchise-like, autonomous hub and spoke model, we help the tribes set up a small bottling operation with different production levels, aging and maturation levels. By getting the liquid base from Talking Cedar, we accelerate the process of perfecting spirits, putting the necessary, timely information before the TTB and gaining important brand consistency. We also negate the enormous expenditure involved in the engineering process needed to size each distillery’s equipment. It’s similar to how the tribes handle their casino openings, partnering with and using the management operations of larger casino operators for new products, support and marketing. Day one is often good because of the grand opening; we are there from the beginning. But by day two, you better be hustling and educating the consumer. Branding and marketing often get overlooked but can be a huge expense. HDC provides a marketing budget and team to create a halo marketing effort to drive customers to the locations and get products out the door.”

  Through HDC’s cohesive brand advantage, tribes receive pre-opening design and construction assistance, hiring help and applicable compliance and trademark assistance. HDC is there from before opening and along the way to help with product development, new marketing support, trademark research and support and TTB compliance reporting. The entire process is streamlined to get to the ribbon cutting and being ready to go with a full-scale operation, complete with a distinctive, retail-branded location (similar to Starbucks locations nestled in or next to grocers, retail outlets or hotels) and fully constructed tasting rooms, complete with 20 different flavored spirits.

  “Simultaneously, we are working with the tribes on what they want their products to be and signify to the consumer,” said Jennifer. “Each tribe has its own story comprised of its journey and history. When you visit their cultural centers, you see the beautiful and distinctive artwork, stories and historical imagery attached to the different tribes. These are all things that are not only important but need to be ingrained into their brand. You see the word ‘heritage’ used repeatedly, making HDC the perfect anchor partner.”

  “As an experienced partner, we can help limit mistakes that may typically happen throughout the initial distilling journey while also providing the tribes the immediate opportunity to start aging and creating their unique products,” said Jennifer. “The tribes can promote and label their distinctive products while receiving unmatched support from our Heritage brand portfolio. Visitors can expect to be immersed and recognize each tribe’s distinctively branded spirits, including the grains, flavor profiles, and cultural attributes that reflect their heritage, culture and history.”

  Stiefel says craft distilleries are significant earning opportunities for tribes when their revenues from tobacco and fuel are disappearing. Additionally, the current visitor demographic for these casinos is between 50 and 70 years of age. If the casino owners don’t have a plan for complementing and replacing the older demographic, revenues will naturally dwindle to the detriment of the business. Quality craft cocktails are a proven successful way to capture margin and tax revenue while gaining increased and repeat business from the desired 20- to 30-year-old consumer demographic.

  “And the best thing about these tribal spirits is that they can go national when they become popular and resonate with consumers outside the distillery’s four walls,” said Stiefel. “We have a national distribution agreement with the largest U.S. distributor. They are always hungry for these types of unique products. We’d love to see multiple tribal products hit multiple markets across our states, regions and nation. It would truly be a fantastic and monumental day for tribal-produced brands.”

Head to Tribal Beverage Network for more information.

From Publicly Traded Status to Special Whiskey Releases, HDC Barrels Towards the Future

  “With respect to our future, we’re looking at adding and nurturing more tribal partnerships and locations while focusing on our core wholesale products and expanding distribution out of the Northwest,” said Stiefel. “But while all of these other events have been happening, we’ve also been secretly distilling and aging whiskeys of our own over the last ten years and are releasing our line of Stiefel Select line of Ultra-premium single barrel picks, including a four-grain bourbon, a high rye bourbon, wheated bourbon, 100-percent rye whiskey, unmalted, which is very difficult to make, some single malt selections and some 100-percent wheat whiskeys. We didn’t want to be one of those distilleries promising to release something special in the future. We want to announce it when it’s ready to cut the ribbon and be consumed. So we decided that 2022, our 10th anniversary, was a great time to start releasing these in-house produced spirits to select markets in partnerships with retailers or directly to the consumer. Last year was five barrels, with a goal of 100 barrels released this year. They are all single barrel selections, with a few being small-batch, where we take the same barrel from the same distillation day and make a small batch, maybe a three-barrel combination individually numbered.”

  But the biggest news is that Heritage Distilling Holding Company has entered into a business combination transaction with Better World Acquisition Corporation to become a publicly traded company. Heritage Distilling Group will be the corporate name of the newly public company and will be traded on the NASDAQ in the late second quarter under the ticker symbol CASK.

  By the time you read this, the S-4 SEC form will have been filed, detailing an impressive, world-class board of directors that includes many well-recognized names from major corporations.

  “No one in the craft space can claim this type of expertise on their board,” said Stiefel. “I want to say that this board has previously handled over 150 billion in annual revenues and is simply unmatched in expertise and knowledge related to operational expertise, marketing excellence, consumer-based product development, global general counsel experience, extensive mergers and acquisitions experience and tribal economic development.”

Beverage Development on a Bootstrap Budget

man in glasses thinking

By: Jorge Olson — Co-founder & CMO of Hempacco and Green Globe International

Starting a beverage business can be a daunting undertaking, especially for the uninitiated. One of the biggest challenges for someone wanting to bring their beverage idea to the market can be budget. The cost of starting and scaling any business can be high, and when one is developing a new consumable product, the costs can be astronomical if they are not privy to the ways of bootstrapping their new business.

  Regardless of the reason one has behind bootstrapping their business, it is a valid way of building any new venture from the ground up. By being savvy with one’s budget and careful to avoid overspending pitfalls, anyone can build a wildly successful beverage business.

Bringing One’s Vision to Life

  Any great beverage company needs to start with an idea. If one wants to build a business around a beverage, the idea needs to be solid, and it needs to be able to be created with consistency, meaning the formula being used should be set before bringing a beverage to the market. Seeking out the opinions and assistance of industry experts can help one avoid costly formulation mistakes. New entrepreneurs should also do their due diligence in researching the market and ensuring their beverage idea has a strong place in the market. While friends and family may all love what an entrepreneur comes up with, that particular product may not translate to a beverage that could find traction with the market at large.

  The formulation stage could lead to out-of-control costs if one is not going in well-researched and prepared. There can be a good amount of information online to help one research the industry, as well as quite a few books and workshops available that can help people with their beginning stages of business building — all for an affordable cost.

Estimating Startup Costs

  Even when one is bootstrapping a business, costs can very often exceed expectations. When diving into initial market research, a new beverage business entrepreneur needs to be realistic about how much it will cost to bring their beverage to the masses.

  To professionally formulate a beverage can cost upwards of $20,000 to $45,000. If one is planning multiple SKUs (stock-keeping units), costs can compound quickly. There are packaging costs, ingredients, shipping, and stocking costs to consider, all of which will add dollars to one’s budget and cut into their profits.

  Bootstrapping this amount requires careful planning and budgeting. Many entrepreneurs have started small and put any money they make back into their businesses. They set up booths at farmer’s markets and sell their beverages piecemeal to raise capital for professional formulation and growing the brand. Though this approach can take time, it is a great way to slowly build a brand without accruing any significant debt.

  Any business, regardless of budget, will often seek out cost-saving measures when it can. Overspending on aspects of the business that do not ultimately move the needle can spell disaster for any startup. Areas where a beverage startup can save include seeking out inexpensive ingredients, packaging options, or distribution avenues.

  Being that costs will rise as the business expands, how does one fund their business if they wish to create a national (or international) beverage brand? Several options are available, from personal loans, investors, and small business loans. Whatever funding options one chooses, entrepreneurs should always weigh all pros and cons to ensure the selected option is the right fit.

Finding the Right Source of Capital

  Any startup is going to need funding, and there are a number of options for receiving this funding. Bootstrapping typically involves forging relationships directly with retailers in order to get your beverage on shelves. This approach can be a slow burn but ultimately successful, depending on how much pavement-pounding you are willing to do on your startup’s behalf. When one doesn’t have the financial resources to fund thousands of dollars of marketing or development costs, that momentum has to be built bit by bit. Those entering the market with a bootstrap mentality must understand that patience is a virtue and that building the brand will take more time.

  Even if one begins with a bootstrap mentality, the fundraising stage may get to a point where one also wants to consider the investor route. However, finding the right investor deal for an idea can also be a long road. Going into pitch meetings with a robust business plan and vision for the future of the product can help entrepreneurs land the best investor partnership for their venture. Any pitch meeting should include samples of your beverage and an idea of how the packaging and the marketing will look.

  One of the best ideas for a small startup is to consider a larger pool of smaller investors instead of putting all of their eggs in the angel investor basket. For example, instead of trying to secure a few million dollars from one investor, work on securing $10,000 in investments from a collection of smaller investors. With those combined investments, one will not only have enough money to get their beverage idea off the ground but will also have a built-in support system from a variety of enthusiastic backers. Smaller investors ride out shifts in the stock market easier than large investment firms and venture capitalists. Individual investors also may request less control over a business than large investors often require.

  Finding the right investor(s) or funding route can make or break a new beverage business. As such, one should consider all options before choosing how they plan to fund their startup.

  With over 2,400 beverage companies operating in the US alone, startups will really need to communicate what makes their product special in order to court solid investment opportunities. Coming at the investor search with passion and an educated approach to the market will increase a startup’s chances of landing dedicated investors in it for the long haul.

The Beverage Industry has Changed

  The pandemic changed many industries, and the beverage industry has not escaped the post-Covid shift towards more direct-to-consumer sales and social media marketing. When the world shut down, beverage entrepreneurs could no longer visit investors or retail partners in person.

  With this in mind, those now seeking to step into the beverage industry with a great idea need to consider how reaching a target market has changed. Anyone looking to break into the somewhat crowded beverage market should work on establishing an online presence right away. Today, word-of-mouth marketing includes chatter online, meaning entrepreneurs could be leaving a lot of money on the table by failing to put effort into their digital marketing presence.

  Any startup should have a website that can be built for a small out-of-pocket cost. The brand’s website is its handshake and introduction to the market and should reflect its feel and personality. Along with a website, the brand’s social media profiles should tie into the entrepreneur’s overall marketing approach. Engaging with one’s target market is a low-cost way to build a buzz around their beverage.

  When building an online presence, one needs to consider what message their beverage and brand are sending. For instance, is the brand being built based on natural ingredients and a sustainable manufacturing approach? If so, its marketing is going to be different from a brand seeking to bring an energy drink to the market.

  Marketing is all about tapping into who the entrepreneur is as a brand, as a business founder, and who their consumers are. Authentic connection with one’s market can go a long way in building a brand, especially when one is not starting with a large amount of capital.

Fight Off Failure

  A staggering 42% of startups fail. With those numbers, it’s a wonder why anyone dives into the murky waters of entrepreneurship. Still, many do and succeed, but not without some hard work and research.

  For instance, many startups fail because they don’t research their target market. They bring a product to the market that no one is interested in or too closely resembles another product. Other startups simply run out of money, which is why it is so important to have patience while one is bootstrapping, thoughtfully invest capital, and seek out partnerships with investors that best align with the product and brand being brought to market.

  Bootstrapping any business starts with believing in a vision, first and foremost. When one is self-funding their startup, the passion for and belief in their product keeps them moving through the most difficult steps of the scaling process.

  The entire concept of bootstrapping is about hard work and perseverance. If market research tells the entrepreneur that their beverage idea is a winner, then it is time for them to roll up their sleeves and get in the trenches. This willingness to get one’s hands dirty sends a message that they are willing to stick with their idea, put in the hard work, and do what it takes to see their beverage hit shelves.

  Starting any business is not for the faint of heart. Bootstrapping a business could be considered insanity by some, given the difficulty of that journey. However, when the business ultimately succeeds and people all over the country — or even the world — are enjoying the beverage you created, all the hard work of bootstrapping will have been worth it.

  Jorge S. Olson is the author of “Build Your Beverage Empire.” He’s a beverage industry mentor and consultant who has launched over 1,000 consumer packaged goods and worked with over 100 beverage entrepreneurs, large and small. Jorge has owned companies in the beverage industry, wholesale distribution, import and export, and beverage development and sales. His over 300,000 newsletter subscribers share his insight into beverages, marketing, and growth. Jorge now mentors beverage executives and lives in San Diego, California.

How to Recession Proof Your Beverage Business

recession proof statement

By: Raj Tulshan, founder of Loanmantra.com

Despite a recent pandemic, record-high inflation, and several years of economic uncertainty, entrepreneurship continues to thrive, with more than 31 million entrepreneurs in the U.S. In fact, Americans’ confidence in small businesses has reached record highs, even exceeding confidence in the military, the medical system, public schools, and the U.S. Supreme Court. But is your business recession-proof?

  Since World War II, the U.S. has experienced 12 recessions, averaging one every six years. Recessions are more common than most people realize, and most people will encounter several over the course of their careers. Therefore, it’s crucial for business owners to prepare to survive the next (inevitable) recession.

  A recession is defined as a significant decline in economic activity – including gross domestic product (GDP), income, employment, industrial production, and wholesale-retail sales – and can last anywhere from two and 18 months. While recessions are common, they can be incredibly stressful for business owners, who will very likely experience some business disruptions. The key to surviving the disruption is to plan, differentiate your business from the competition, cut spending, and create additional revenue streams.

  In addition, here are ten tips to survive – and thrive – during a recession.

1. A downturn doesn’t mean doom and gloom for every business. Nearly 75% of public companies with $50 million or more in annual sales had declining revenue growth during the last four economic downturns, but 14% actually accelerated revenue growth and increased profitability. The different outcomes depended largely on the type of products or services the companies sold and how well (or poorly) they met customers’ needs. Remember that even during economic downturns, customers still buy essentials (e.g., food, utilities, household items, etc.) and need certain services (e.g., healthcare, car repairs, etc.). “Recession-proof” your business, providing what people will continuously need, to maintain sales.

2. Plan for a recession. Ebbs and flows are a normal part of the business cycle, so plan accordingly. Focus on maintaining revenue, preserving cash flow, and generating demand. For instance, running out of cash is a major concern for business owners, so assess your cash balances, expenses, and incoming cash flow. Work within your budget. Track your key performance indicators and adjust if you aren’t meeting target metrics. Pay down debt. Reduce financial waste.

3. Prepare for the unexpected. You’ve likely heard the advice to establish an emergency fund to cover personal expenses, and this is a wise move for businesses, as well. Create an emergency fund that can cover up to six months of essential costs, including payroll, inventory, rent, and utilities. Proactively collect outstanding receivables. Talk to a financial advisor about whether you should consider revolving loans, alternative financing, small business loans, and/or other options.

4. Operate efficiently. Reducing operating expenses can be a challenging task, especially as you must continue providing extraordinary products and services. Whatever expenses you cut should be invisible to customers. Determine where you can make small tweaks that can add up to big reductions, such as leveraging early pay discounts from suppliers, automating manual tasks, and renegotiating supplier contracts.

5. Multiply revenue opportunities. This strategy will require some creative thinking. Brainstorm ways to capture new revenue without making any major investments. For instance, expand your brick-and-mortar retail store’s reach by selling goods online. Adjust your business model. For example, a bakery could start offering take-home kits for birthday parties. Or a bar could sell merchandise and specialized beer onsite and online, in addition to selling drinks and food.

6. Modify offerings. Adjust what you’re selling to make it more attractive to customers and prospects during tough economic times. Think of how restaurants changed their business models during the COVID pandemic to sell to people when they couldn’t dine onsite. To adjust to the changing climate, restaurants started offering more delivery, takeout, and curbside pickup options. And, as more people worked from home, clothing retailers adjusted, offering more loungewear instead of formal suits. During a recession, pivot accordingly. In addition to altering your business model, consider changing your pricing structure and offering more incentives to entice people to buy, even if they have less disposable income during a recession.

7. Strengthen relationships. Acquiring a new customer can cost five times more than retaining an existing customer. Create and maintain strong customer relationships. Understand their changing needs and give them what they want. Offer the “value add” that they can’t get from your competitors, whether that’s free shipping, personal shopping, or a willingness to place special orders on their behalf. At the same time don’t forget your valued vendors, partners and associates. When times get tough those relationships could save the business. Or you could help save someone else’s business. Whether it’s extra time on a delivery due to supply chain issues or just a pep talk, remembering those relationships is essential.

8. Stretch your tech. Most businesses purchase technology to be more efficient and productive but haven’t taken the time to maximize the full benefits of the system or appoint an expert that can fully leverage its benefits. Before you are investing in new systems, stretch your current tech. Tech tools can also help you change distribution methods, such as pivoting from in-person tutoring, which limits you to a specific geographic radius, to online tutoring, which expands your reach.

9. Continue marketing. You may consider cutting marketing to save a few bucks but resist that urge. To maintain revenue, you’ll need to stay in front of your key audiences with social media efforts, online ads, positive news stories, compelling blogs, etc. Launch (or continue) loyalty campaigns to recapture past customers and increase touchpoints with your current customer base. Target your messages to align with customer pain points in an uncomfortable economic climate. Spotlight loyalty programs. Incentivize customers and prospects with discounts, BOGO, and other deals. Maintaining visibility via marketing can help you increase market share, particularly if your competitors pause their efforts.

10. Insulate Finances. Consult financial experts, like those at Loanmantra.com, to develop a plan to become recession-proof. They’ll help you determine how to cut costs, adjust your business model, and secure any necessary loans. If you need a loan to boost your company’s financial health, they’ll help you calculate how much of a loan you’ll need (and qualify for). Financial experts can advise you on all aspects of the loan, including the application process and what types of information you’ll be required to provide.

Raj Tulshan is the founder and managing member of Loanmantra.com, a one-stop FinTech business portal that democratizes the loan process by providing corporate sized services and access to entrepreneurs, small and medium sized businesses. Connect with Raj and Team Loan Mantra at 1.855. 700.BLUE (2583) or info@loanmantra.com.

OH! Canada

people dining outside

By: Tod Stewart

Dubbed the Great White North, Canada has stereotypically been viewed as a country perpetually shrouded in snow – where herds of caribou and roaming packs of wild wolves play survival games in the streets, where the inhabitants (clad in parkas and donning toques and snowshoes) emerge from their igloos to dine on seal blubber and polar bear meat. And beer.

  Okay, that’s pushing it a bit far. Anyone who lives in all but the most northern reaches can regale you with stories of asphalt-melting, paint-peeling summer heat. Interior British Columbia’s Okanagan Valley has literally caught fire on some occasions, with daytime temperatures reaching higher than 120 degrees Fahrenheit. In Winnipeg, Manitoba, you’re more likely to be eaten alive by ravenous hordes of summer mosquitos than a murderous hibernation-starved grizzly. No, the country’s really not a wasteland of frozen tundra. That being said, when it comes to the distribution and sale of beverage alcohol products, Canada has a ways to go before it really emerges from the Dark Ages.

  For example, there are antiquated liquor laws that haven’t changed dramatically since being imposed in the 1920s, combined with an inability to shake off the chains of the Ghost of Prohibition Past. Health Canada has recently proclaimed that no amount of alcohol is safe, and any more than two drinks per week – yes, you read that correctly – increases your odds of being dead). Additionally, federal and provincial government bodies have gotten rather intoxicated on the gold they have mined from drinkers. All of these things together to create an odd cocktail of private, public and government interests. So, how does this all affect a producer – perhaps you – who wants to break into the Canadian market?

  First, it’s important to understand that alcohol importation, distribution and, ultimately, sales are pretty much the sole domain of government liquor monopolies (“liquor boards”). Each province behaves somewhat differently in its approach, but all function in a fundamentally similar way. Let’s focus on Ontario (mainly because that’s where I live, and my knowledge of “the system” here is probably better than the workings of other provinces).

  Second, it’s equally important to understand that provincial liquor boards exist to feed provincial government coffers. That’s it. That’s all. This wasn’t always the case. The Liquor Control Board of Ontario (LCBO), for example, was originally envisioned as a transitional mechanism to ease the province from prohibition (via a system of “controls” – many of which would likely today seem in violation of personal privacy if not being downright racist) back into the private retail sector. It wasn’t supposed to be still with us today. Of course, the original mandate was rethought over time as successive governments realized that in controlling booze sales, they had given birth to a proverbial golden revenue goose.

  The upshot of this is that, though you may be convinced you’ve developed the most wondrous elixir thus far known to man (confirmed by family and friends), it really means nothing to the liquor board. What matters is how much money your concoction will rake in if the decision is made to give it a shot in the market. As with many other businesses, the salaries and bonuses of LCBO executives (which are substantial) are directly tied to “corporate performance” (read, sales numbers). If you can’t help them, they can’t help you.

  There’s a saying: “If you want to make a small fortune in the wine industry, it’s best to start with a large one.” The same is true with trying to break into the Ontario market. Having a decent chest of loot socked away to market and promote your product – primarily through LCBO-controlled programs that you will be “strongly encouraged” to participate in – will significantly up the shelf space ante.

  “Okay,” you say, “I get it. It’s all just business…but I still want a piece of Ontario action and I’ve got the resources to give it a serious go. So, how do I do it?”

  Assuming you are a producer of “craft” products and don’t have a global corporation with an international sales force to help you, you will need someone in Ontario to act on your behalf. A “manufacturer’s representative” (aka, an “agent”) essentially acts as your sales and marketing (and often PR and government relations) wing in Ontario. A good agent likely has a decent working relationship with LCBO buyers (and possibly LCBO executives), knows how to navigate the system and work through the reams of often byzantine paperwork, knows which LCBO sales channel (and there are several) would work best for you, knows the market, can assist with pricing decisions and – perhaps most importantly – has the patience of a saint and the tenacity of a limpet. While you may luck out and get a bite on your first cast into LCBO waters, this typically isn’t the case.

  Suppliers often become frustrated and blame their agents for the lack of LCBO purchase orders. Truth be told, it’s very rarely a failure on the agent’s part. Even the most seasoned of them are often left scratching their heads when it comes to explaining why a product was rejected, though there’s really no mystery (see “provincial liquor boards” paragraph five above).

  Agents come in various shapes and sizes, from a one-person shop servicing Ontario only to corporations representing producers in each province and territory. Each type has its upside and down. Larger agents have a greater range, bigger budgets and more salespeople in the field. It’s also no secret that the LCBO tends to favor larger agencies when it comes to new and subsequent listings. The downside is that, as a craft producer, you may not have the volume of product to meet a large agent’s financial needs. Also, large agents often give the most attention to the suppliers in their portfolio that generate the most income. This might not be you.

  A smaller agency, while not having the range or resources of the big guys, typically has a smaller portfolio and can dedicate resources to building your individual brand in the market. In any case, any agency will be projecting a bottom line and weighing the effort needed to reach it before taking on any new supplier.

  Having an agent (of whatever size) doesn’t mean you can simply sign an agreement and then sit back and watch the revenue roll in. You and your agent must present a marketing plan to convince LCBO buyers to take a chance on an unknown brand. This chance will be better if your marketing plan includes numerous accolades and high scores from critics and the media.

  Once accepted, you still have to physically get your goods into the province. Large orders – or orders within reach of convenient co-loading ports – are usually easy to deal with. In fact, the LCBO will take care of most of the shipping and customs clearance responsibilities (while marking up any incurred costs and applying that to the cost of your shipment). Looking to ship in five cases of craft spirit from upstate New York? Though Ontario might literally be just across the lake, getting these cases into the province can pose challenges and requires that you, the supplier, do some homework before attempting to ship.

  Of course, once the goods do arrive, it’s not like the items are immediately shipped out to stores or offered for online purchase. The LCBO chemically analyzes all beverage alcohol products destined for sale in the province. It also holds the agent and supplier to specific labeling requirements (details here: https://www.doingbusinesswithlcbo.com/content/dbwl/en/basepage/home/quality-assurance/quality-assurance-policies—guidelines/labelling/-lcbo-product-packaging-standards-and-guidelines-for-chemical-an.html). Lab testing isn’t provided free of charge. If your product fails well, you have the option of having it shipped back (on your dime) or destroyed (also on your dime). If “corrective labeling” is required to make your labels compliant, you’ll be charged for that, too. Be forewarned, the time it takes to have your stuff available for sale once it landed can be frustratingly long, and the reasons given (or typically not given) for the delay will almost be guaranteed to cause further frustration.

  You might also be (unpleasantly) surprised to find out what the retail price of your product will be once it’s available for sale (though, to be fair, you will know this before you even decide whether a sale to Ontario is worth the bother). To quote the LCBO’s website: “The price that is seen in a store or online is a combination of the supplier’s price plus import duties, freight, levies, a standard markup, HST and container deposit.”  The “standard markup” on spirits is a modest 139.7 percent. The Harmonized Sales Tax (HST) is 13 percent. All of these costs are passed on to the end consumer.

  Things aren’t much easier if you’re a craft brewer. You might have heard of The Beer Store (TBS) and think this might be a way around the burdensome LCBO process. Think again. TBS is simply another monopoly, only rather than being run by the government, Canada’s three big brewers run it. If you think they are interested in offering competing products on their store shelves, keep dreaming. As with distillers, foreign brewers really have no choice but to deal with the LCBO.

  Finally (at least as far as this story goes), getting your product into the LCBO system is no guarantee it’ll stay there. You’ll be expected to meet sales quotas. If you do, reorders are likely – probably in larger amounts than your initial order. If it looks like you can’t, well, you can always try throwing more money into marketing, promotion and advertising. But in the end, if the consumer judges your product to be a dog or has no interest in trying it, it’s off the shelf – which is really no different from most retail products.

  Believe it or not, I’m not trying to discourage any beer or spirits producer reading this from trying to get a toehold in the Ontario – or Canadian – market. Personally, I’d love to be able to sample your wares. It won’t be easy, but it could be worth it, given the adult populations of major centers. Look on the bright side, if things go well, you might be able to unload your entire annual production on one customer – and with that customer being a government agency, payment is hardly ever an issue. Or you might decide that the LCBO is just another four-letter word.

Taking it Easy with Light Spirits

keep calm and stay sober

By: Hanifa Sekandi

You want to be the life of the party, but you do not want the party to take the life out of you. So you are on the hunt for a middle ground where you can entertain and imbibe with friends yet feel refreshed in the morning. So far, you have tried mocktails and light cocktails with just a splash or two of tequila. Globally, you are not alone. Just like you, people are looking for lighter spirits that maintain a robust flavor profile. Luckily, the industry is catching on. Spirits, ready-to-drink bever-ages and beer brands create must-have light spirits and drinks to keep the party going without tip-ping the scales.

  This change is a major innovation in an industry where consumers desire more than just the same thing packaged differently. Light spirits attract discerning beverage enthusiasts who seek a healthier lifestyle or simply to consume less alcohol. However, craftsmanship and ingredient still matter, and consumers are not ready to compromise quality. Brands who plan to enter this burgeoning, niche market must understand consumer demand and how and what to bring to the shelves.

What is a Light Spirit?

  When discussing light spirits, it sounds like we are talking about the paranormal. Alas, we are not. However, it does seem like magic when thinking about a once hard liquor becoming less potent.

  So, what is a light spirit? A light spirit, also known as a spirit drink, is an alcoholic beverage that contains a low alcohol percentage between 0.05% and 1.2%. This percentage scale is not consistent across the board and is dependent on the alcohol type. Some lighter alcohols are referred to as “re-duced alcoholic” beverages since they contain higher alcohol content than light spirits. Anything above a 5% ABV is considered a reduced or moderate alcoholic beverage. Moderate alcohol drinks contain approximately 9.5% ABV. This percentage scales up to 20% ABV for spirits, far below the higher alcohol range for spirits with a legal minimum of 40% ABV.

  As the market gains momentum, lighter spirits will provide consumers an outlet to create and im-bibe quality cocktails and drinks that still taste as good as their full alcohol counterparts. One could consider lighter Scotches, whiskeys and gins as the rebellious offspring of the spirit world, having one foot in tradition and the other in modernity. An example is Scotlands’s Whyte & Mackay Light with a 20% ABV. This smooth, earthy spirit is aged in bourbon and Sherry casks. The fact that it can be enjoyed neat or over ice is a true test for a moderate spirit.

  This trend has seen gains in North America and across the globe. A study conducted on alcohol consumption in the U.K. found that Brittons are either reducing their alcohol intake or opting for no or low alcohol alternatives. According to the study, by 2030, there will be a decrease in alcohol consumption per adult by 11 liters. The change is predominantly led by individuals 18-24 in the U.K. and 25-34 in the U.S.

  The results provide perhaps an unexpected pivot from previous generations who viewed these years as a time when drinks were endless and throwing caution to the wind was the norm. The “vi-va forever” celebration no longer fits the ideals of many younger imbibers. Light spirits seem like an appropriate transition for these consumers, who have less desire for wild nights of binge drink-ing.

  Globally, the light spirit trend is set to grow 34%, a significant marker since product selection in this category can be limited. This growth possibility opens the door for some brands to change fo-cus and become light spirits producers.

  Two things that cannot be compromised when crafting lighter spirits are that they must be premium quality, and they must blend in. It is not about standing out. It is about being a welcome addition to a bar cart or restaurant menu selection. The pleasant surprise for a low ABV spirit should be that there is no compromise on taste, so much so you cannot tell the difference between it and its higher alcohol counterpart.

Taking it Light & Easy Around the Globe: South Korea

  Change in every industry is inevitable. The transition to lower alcohol spirits has been slowly happening over the last ten years. Notably, in 2015, Diageo debuted a 35% ABV “spirit drink” – W Ice by Windsor – in South Korea. The spirit was the first low ABV whisky.

  What spurred this change in South Korea? Simply, whisky is no longer the desired spirit. There was a time in South Korea when Scotch was the drink of choice and often used to make a popular drink called poktanju, a combination of beer and Scotch. Another reason for this change, similar to other countries around the world, is affordability. Younger consumers in South Korea want inex-pensive spirits. In addition, spirits synonymous with youth appeal to this generation. Although there has been a shift and the younger generation is finding interest in what was once considered an “old man’s” drink, the creation of spirits that appeal to younger consumers has taken hold as brands observe the popularity of vodka.

  As a result, the goal of whisky brands in South Korea is to entice people to see it as a viable drink choice by lowering the alcohol content and promoting it under the guise of light and conscious im-bibing.

The Sensible Imbiber

  Taking something old and giving it a new image needs to encompass more than beautiful packaging. A complete product delineation needs to be undertaken to make spirits appear new and fresh. The central premise must sit within the ideal of living a healthier lifestyle. Drinking just one glass of spirit neat or over ice and not feeling the effects also signifies the end of an era of binge drinking, ushering in a new time of sensible imbibing. For the light spirits consumer, drinking is about living life while not feeling pressured to be anything other than yourself. It is not about standing out or being the life of the party. Instead, it is about connection and requires one to slow down and experience moments that build memories worth remembering.

From the Ground Up: Building a Brewery

Expertise Now Rescues Craft Brewers from Costly Headaches Later

brewing materials in a convention

 By: Cheryl Gray

Quality, precision and productivity are just some of the elements that factor in when deciding what brewery equipment to install.

  Whether for a start-up or an expanding operation, equipment is a major investment, and there are companies whose expertise is to help guide their brewery clients toward making that investment pay off.

  One of them is Craftmaster Stainless, a full-service stainless equipment provider that provides an expansive list of products for breweries, wineries and distilleries. The California-based company has clients across the United States and Canada. The company prides itself on the detail and finishing of every product its manufactures, as well as the customer service it provides before and after the sale.

  Mackenzie Sant is a sales and equipment specialist for Craftmaster Stainless. He says that learning about craft brewing from the ground up introduced him to the company’s products. The team behind Craftmaster Stainless, Sant explains, has multiple years in brewing, technical detail and customer service. That experience supports the company’s ability to translate a client’s equipment wish list into a customized experience. It is just one of the company’s assets that Sant believes puts Craftmaster Stainless ahead of its competitors.

  “We offer every piece of equipment someone needs to start a brewery. We want to be your one-stop shop. We won’t furnish your taproom or install your walk-in cooler, but we have all the equipment you need to upscale that popular homebrew batch or to upgrade from the ugly  brewhouse you have been brewing in for four years. We wish we could have in-person meetings with everyone shopping for a new brewery, but a phone call works wonders. Tell us your business plan, what styles of beer you want to brew and projected production numbers, and we can spec out the equipment you need. We work closely with other manufacturers and suppliers in the U.S. to source equipment that we don’t produce, from the start of the brew day milling the grain, to chilling and carbonating before pouring a crispy pint.”

  And just what does a newly-minted brewing operation need? Sant provides a checklist of essentials, beginning with a business plan and a building followed by must-have equipment, such as a mill/auger for crushing and transporting the grain to the mash tun, a mash tun/lauter tun for converting complex malt sugars into fermentable sugars and a kettle for “cooking” unfermented beer (wort), as well as for adding hops/adjuncts and pasteurizing the liquid to ensure a clean fermentation.

  Sant adds that additional essentials include a heat exchanger to cool the wort down to fermentation temperatures, pumps for cleaning or transferring liquids, unitanks/conical fermenters for the bulk of fermentation, brite tanks for conditioning, clarification and carbonation and, lastly, a glycol chiller for controlling fermentation and conditioning temperatures. The latter, Sant advises pairs well with a cellar control panel to control each tank.

  Regarding some of the most popular items on the product list for Craftmaster Stainless, Sant points to a number of items that highlight the company’s unique feel for what breweries need, including one piece of equipment that takes the tedium out of a very mundane but necessary chore.

  “I would say our keg washer is the most popular piece of equipment at the moment. I think I speak for most brewers when I say that keg washing is probably one of the most repetitive jobs in the industry. This machine makes that job easy. It is seriously your best ‘employee.’ Once again, our customer service is always there to help with any trouble shooting. We understand downtime is not profitable, so we are always available to help. I would say our brewhouses are popular as well. They look great and they get the job done. Our level of customization on our brewhouses will catch your eye. We do have a couple other products releasing this year that will steal the spotlight for a while.”

  The company’s new product launches include the Craftmaster Stainless Semi-Auto ‘Keggernaut’ Keg Washer and another new equipment item.

  “We just released our Three Gallon Hop Doser. The Hop Doser is a great attribute in our equipment line up. When introducing hops into the brewing process, you don’t want to introduce oxygen. This hop doser allows you to dry hop without oxygen ingress. It can be used for other adjuncts as well, so use your imagination. Keep an eye out for equipment to come. There is so much technology in the industry that isn’t being used, and we have big plans for the future, while staying competitive.”

  From Lincoln, Nebraska, is ABE Equipment Company, which designs and manufactures a variety of equipment for breweries. The company’s brewhouse equipment is custom-built, paying special attention to solving problem areas such as low ceilings, tight spaces, ventilation barriers and utility requirements. Ashlei Howell is the marketing manager for the firm’s parent company, Norland International.

  “Our sweet spot is the 1,000 BBL to 5,000 BBL per year brewery. Our products cater to much larger breweries, and much of our equipment can be used on a much smaller scale, but the niche we serve will be a bit on the higher production end.

  We pride ourselves on being able to offer a complete solution at a fair price. We handle everything from grain to glass. Everything is designed and assembled in Lincoln, Nebraska, and we employ over 130 hardworking Americans to make our suite of products. Our dedicated customer service technicians train our customers and make themselves available nearly anytime to answer questions.”

  When it comes to introducing new products to the market, Howell explains that ABE Equipment Company is focused on what will increase its clients’ bottom line.

  “Our newly released products have changed how breweries and distilleries package their product. The new CraftCan Go is a small footprint, one operator and a dual-purpose (atmospheric and counter pressure) canning machine. Breweries are packaging so much more than just beer in today’s environment.

  A canning line capable of making beer, coffee, seltzer, tea, and anything else that may be high or low in carbonation adds versatility to the brewery. It sets that particular machine apart from anything else on the market.

  The Patriot Fill Station allows companies to package virtually any beverage on a budget. It is a manual fill station allowing the user to package around eight bottles per minute. This machine can handle alcohol, syrups, oils and many more viscous or non-viscous liquids. With so many craft beverage companies coming to the market, having an affordable machine to get a product into a package at a reasonable price is a must for any beverage company wanting to stay ahead  of the game.”

  Howell offers input on some advanced equipment choices for breweries to consider.

  “There are numerous products a brewery can add to its lineup to optimize production, save time, cut costs and much more. A yeast brink allows breweries to reuse yeast and can easily be added to your equipment lineup. If harvested and stored correctly, you can sometimes yield up to 10 generations of yeast, spreading the cost across multiple brews. With rising grain costs, adding a bulk grain silo is becoming a more economical option for breweries. Buying in bulk saves time when brewing, but you can cut significant costs when ordering large amounts of grain at a time. The ROI on a silo is easier to prove now more than ever. There are also a variety of smaller, simpler items, such as brite tank monitors, CIP carts, and brewhouse automation options that help improve production within a brewery.”

  MISCO Refractometer and its 70-year history have earned a place in the specialty field of refractometry. Refractometers in the brewing industry are among the equipment needs experts say breweries should have on their checklist of items designed to ensure quality control. As the singular item that the company manufactures, MISCO offers a wide range of refractometer choices for different industries, but one specifically designed for brewing. The company says that its MISCO Digital Beer Refractometer deploys a patented design specific to wort and eliminates the need to use a refractometer correction factor when placing measurements into beer calculators.

  Another advanced equipment option for breweries is a set of sieve plates for the mill. According to experts like Sant, even a one percent efficiency loss in this area could cost hundreds of thousands of dollars in a single year. Along with this, brewers may want to consider keg washers along with portable and inline flow meters. Sant recommends breweries make equipment choices with long-term gain in mind.

  “Can you save money in the beginning by cutting cost on your equipment? Absolutely. But what about labor cost, repair cost for failing equipment and bad batch efficiency? The list goes on. Spend less time worrying about the equipment and more time worrying about the beer you are creating. A popular beer podcast said that every 10 minutes you save brewing is a cold beer at the end of the day. Spend that extra time focusing on different aspects of the process.”

Proper Tank Selection Begins With Business and Production Goals

2 huge brewing machine

By: Gerald Dlubala

From start to finish, a well-equipped brewhouse or distillery is a complex linked chain of equipment, including specialized tanks and storage vessels, each important to the final product. But brewery and distillery experts agree that before finalizing any decisions on the purchase or upgrade of your tanks and tank accessories, it’s critical that the equipment manufacturers know your business and production goals, both now and in the future, so that they can recommend the proper vessels for your needs.

It’s in Their Name: Quality Tank Solutions

  To help sort through all of the possibilities, Jimmi Sukys, owner of Quality Tank Solutions (QTS), says that it’s critical to research and choose a manufacturer that carries an excellent reputation in your industry with the equipment they manufacture or import and with the knowledge and service capabilities for support of those products. Quality Tank Solutions brings over 50 years of expertise in the stainless-steel industry, providing sanitary liquid solutions to the brewing, food and beverage, dairy and pharmaceutical industries. QTS builds lifelong partnerships because of its willingness to work alongside each customer from start to finish and beyond. They offer everything a craft beverage producer needs in quality, right-sized equipment and accessories.

  “Before we even get to the tanks, a producer should know the production goals that match and support their business plan,” said Sukys. “From there, we can determine the size and quantity of necessary equipment, develop a plan for future growth and plan for the type and size of the facility that will support this plan. Of course, there are exceptions. For example, when a craft producer finds their perfect location, say, a great space for a taproom, we work backward using the available space. A quality manufacturer helps clients determine the optimal equipment size for their production space and provides the production capabilities of that recommended equipment.”

  “The first step is knowing the process or function required of the tank in question,” said Sukys. “A quality manufacturer should ask questions to be sure they design and offer a proper vessel for your needs. For example, is it a process tank, and if so, what will the process involve? What type of products will you be mixing, adding, heating or cooling, and to what extremes? The more details you provide to a manufacturer, the more value you get from your tank purchase.”

  Sukys said that knowing the size of batches is critical as well. Too small of a tank limits production. Conversely, going too big with a goal of doing double or triple batches or more can raise issues when wanting to do only a single batch. Most tanks are not designed to heat or cool less than maximum volume production batches efficiently. Smaller batches may not hold temperatures correctly or cause stratification. A manufacturer that understands these limitations can be beneficial in presenting options that work for the producer’s needs.

  “Stainless steel has become the standard choice of construction,” said Sukys. “Stainless steel tanks can withstand decades of use when properly maintained. The range of temperatures in stainless steel tanks is much greater than other material choices, allowing a craft producer to use them for a wider range of processes. Welded ports replace screw-on fittings, which may need more maintenance. Additionally, stainless steel offers superior sanitation capabilities and can withstand aggressive cleaning with different chemicals. Quality manufacturers provide maintenance schedules for any equipment they provide.”

  Sukys told Beverage Master Magazine that any other accessories and equipment needed, like boilers and chillers, will depend on what the beverage producer plans to offer. Budgets must also include more minor things that add up, like hoses, gaskets, extra clamps, and fittings. He recommends using a manufacturer that helps with recommendations on what is necessary for startup and what additional equipment is good to have on hand. It’s common for equipment manufacturers to have accessories available to the beverage producer.

“The most important aspect of all of this is to choose a quality manufacturer that keeps current on the evolvement of the beverage industry and has the capability and expertise to design equipment that allows you to produce better beverages consistently,” said Sukys. “A strong warranty and service department is critical for peace of mind and knowing that you have a partner to have your back if unforeseen things happen. And remember that as your business and production goals grow, so do your equipment needs. The industry is constantly evolving, and better design of tanks and auxiliary equipment can help save energy, raw materials and production time. Finally, American-made equipment always has a higher resale value than Asian imports. That can be important when it comes time to resell your smaller tanks to replace them with larger capacity models.”

  For questions, consultations, and more information on Quality Tank Solutions, visit www.qts4u.com.

Flexibility, Efficiency and Cost Effectiveness: Paul Mueller Company

  Since 1940, the Paul Mueller Company has provided experienced help and demonstrated expertise in the processing equipment industry. Their reputation as being not only a quality manufacturer of brewing-related vessels and equipment but also a true partner of craft beverage producers is demonstrated through their equipment and industry knowledge and their respectfulness of client schedules and available workspaces to provide seamless transitions and minimal disruptions or interruptions, whether you’re purchasing new systems or replacing outdated or undersized equipment.

  “The first thing we should look at, as far as necessary equipment and proper sizing, is the planned production, and then work back from there,” said Jon Sprenger, regional sales manager for the Paul Mueller Company. “We find the best way to do this is to consider what your business will look like and what production levels you expect to attain in five years. That number is critical because bottlenecks in brewing and production are generally about available cellar space rather than brewhouse issues. You can brew beer around the clock, but you’re at a dead end if you don’t have the cellar space.”

  Sprenger also said that equipment like tanks could depend on the heat source chosen for the production space. Steam and direct fire are the two most popular, with steam being the easiest way to brew. The boiler can be pricey upfront. Conversely, with direct fire, you’ll be paying regular monthly payments for natural gas on a utility payment plan. It depends on available capital and the owner’s perspective from a cost standpoint.

  Along with this, Sprenger adds that an owner has to consider if they want to distribute their products or remain true to being a craft taproom. How do you want to handle your packaging? A quality equipment manufacturer will use this information to develop a successful equipment plan that incorporates the entire business model, not just presently but also with an eye toward the future.

  “And we can achieve that in different ways,” said Sprenger. “Consuming beer is like eating food. You do it first with your eyes. So many times, older, trendier and historic spaces have become desired locations for breweries and taprooms. That’s okay, and we can fill an already acquired space, or we can look at a producer’s projections and recommend comfortable square footage estimates to fulfill those goals. Either way of building a system is acceptable and falls under the umbrella of what we can do. Most manufacturers, including us, offer layout services and work with the available contractors and architects to develop a successful system. Stainless steel is advantageous simply because of its longevity. It’s built to last with simple and easy maintenance and cleaning capability. When compared to oak, which is difficult in this day and age to brew beer in, it becomes an easy and economically sound decision to go with stainless products just based on ease of cleaning and maintenance, lifespan and consistency in product endpoint and taste.”

  Sprenger tells Beverage Master Magazine that Mueller offers everything for a complete brewing system that falls in between the raw ingredients and the end glass.

  “We understand that it’s a lot easier and less time-consuming for beverage producers to deal with as few vendors as possible, so we offer all the necessary related equipment and accessories that they’ll need to complete their brewing system. That being said, we also easily adapt or integrate our products into any existing equipment that a craft producer already has in place. All of our equipment is customizable and will comfortably fit where it is supposed to go using as little movement as possible. Our equipment and installation successes are great marketing tools as well. Like consumers, we love to see our tanks on display in taprooms because they are also on display to other industry professionals that visit, including other brewers.”

Saving Money, Increasing Efficiency With Mueller’s Serving Beer Tank

  “One thing we’re excited about, and brewers should be too, is our serving beer tanks,” said Sprenger. “They’re a great alternative to kegs, and they don’t require the cleaning or CO2 that kegs demand. Beer goes into a mylar or polymer, food-grade bag inside a pressurized tank using only compressed air. The serving beer tanks don’t require cleaning because the replaceable bag protects the stainless steel from ever contacting the enclosed product. The use of compressed air negates the use of CO2, and we all know about the cost and shortage issues there. They come in various sizes and are perfect for taprooms. The tanks are completely mobile, easily transported outside for parking lot events, off-site festivals or stacked above your bar or in cold rooms for an awesome visual experience. The uses and locations are endless, and our serving beer tanks provide ultimate flexibility, space savings and costs incurred with keg ownership. In addition, the serving beer tanks offer a self-cooling, streamlined process of serving beer directly from the tank that promotes longer shelf life and fresher beer. We do recognize the need for kegs for distribution and other uses, but our serving beer tanks give brewers a cost savings option to replace kegs where available.”

  Mueller’s serving beer tanks show well in a copper or stainless finish, are ASME (American Society of Mechanical Engineers) code-rated and can easily push beer several hundred feet with no issues and serve multiple draft towers at once.

  For those looking for a complete system, Mueller offers their Beer Genius brewery system, a space-saving craft brewery package customized for your space and featuring their serving beer tanks, making everything from buy to brew easy and efficient with expert help and advice along the way.

  “We work with brewers through these types of things daily,” said Sprenger. “It’s critical to think through expected future growth. If you think you’ll need a size five tank, get a seven. The small extra cost will surely be less than the headache accompanied by a misjudgment in equipment sizing. Always consider your cellar tank needs, including brite and fermenter tanks, to accomplish your desired production goals. It’s always worth the effort.”

For questions, a consultation or more information on Paul Mueller or their serving beer tanks, go to www.paulmueller.com.

In the Market for Quality Parts and Accessories

  Many top tank and equipment manufacturers rely on parts and accessories from Gould Stainless Products. Gould Stainless Products sells everything you need except the tank and is a leading wholesale importer and distributor of stainless-steel sanitary tank accessories. Since 1991, Gould Stainless Products has filled the need for sanitary fittings, valves, pumps, tank manways and related accessories for the brewing, distilling and winemaking industries.

  Their extensive catalog is available online and by mail order. You can order a single, threaded joint, sight glass or replacement fitting up through stainless tubing lengths and replacement manways in various shapes, sizes and closure choices compatible with your existing system equipment.

   For more information and to view the extensive line of products that Gould Stainless Products offers, go to www.gouldstainless.com/home

S & B Farms Distillery 

man and woman in a bar

By: Gerald Dlubala

Some distilleries begin with a vision or dream that ultimately comes to fruition after years of systematic, careful research and planning. Some get their start by currently employed, industry-trained distillery professionals that feel they have something unique and personal to offer the distilled spirits world. However, few business plans begin with a strategy that includes jumping in with both feet without prior distilling knowledge. Yet for owners Sara and Brian Winkleman of S & B Farms Distillery in Bancroft, Iowa, this was the chosen path to an award-winning, sought-after line of spirits that continue to impress even the most discerning of bourbon and whiskey drinkers.

  The path to distilling started with a simple request from a friend to use Winkleman’s Iowa-grown corn, raised in the rich, nutrient-rich soil widely known to produce exceptional quality crops, to create a quality moonshine. Sara became intrigued as she watched the process of turning their family farm’s corn into moonshine at a Georgia distillery and never looked back. The distilling process piqued her interest, transformed into a fascination and finally resulted in a full-blown infatuation that flared up in her like the burner on a moonshiner’s still. She was hooked, and although her background in cosmetology and her family’s farming experiences hadn’t provided the expertise typically needed to jump into the distilling business, Winkleman would not be denied. She jumped in with both feet for what she described as a turn-and-burn learning experience that would culminate with an award-winning destination distillery that continues to grow and evolve.

  “It was not an easy path that I chose, that’s for sure,” said Winkleman. “I really was clueless about the industry, regulations and the whole nine yards. Mentors were critical, and I have to mention Mike Norman, who initially got us into the process, and Dwight Bearden, who helped us with the technical aspects. Our mentors were everything to us. We brought Mike Norman (yes, that Mike Norman) back to Iowa to teach us the most critical and crucial things we needed to know and fully understand. His experience and knowledge were an invaluable part of my passion and infatuation with distilling. At that point, my only way was forward. Having the ability to be taught and learn from a professional using a complete, hands-on approach was a blessing. We had immediate access to all the critical and hidden skills and trade secrets you can’t acquire from books or training videos, like recognizing the right textures and aromas. It can take some distillers years to learn these things without professional help or mentoring.”

  S & B Farms Distillery is 17 miles from the Winkleman family farm, where all the corn used in their distillery is still grown. The farm also has cattle, hogs, soybeans, peas and green beans for the nationally recognized Green Giant brand. The field corn is milled on-site weekly, providing the freshest ingredients to use in their spirits, with used mash returned to the farm for the cattle.

  “Our distillery, market and tasting room are about 17 miles from the farm,” said Winkleman. “The location was originally a dentist’s office with 13 small, divided rooms constructed of cinder block that we gutted and reconfigured into a distillery production area, tasting room and retail space. Our main and immediate focus at this point was production capability.”

  As daunting of a task as it all seemed, trying to accomplish it was admittedly overwhelming at times.

  “Networking was everything,” said Winkleman. “And truth be told, I had to walk away for a couple of weeks just to get some mental downtime and refocus. We had the distilling side of the business, but we also had to address the federally regulated side. And Iowa is a controlled state with a different set of rules than other areas. So again, networking played a major role in our success, this time with native distillers, so we could learn how to navigate Iowa’s regulations. We counted on many awesome people and had amazing support, creating a family atmosphere and team system.”

  S & B Farms Distillery officially opened in 2018, only a couple of short years after the initial spark of curiosity and twinkle in Sara’s eye. The first products offered to consumers included a spicy pineapple jalapeno moonshine named Field Fire, a bold-spiced savory spirit, and Private First Class, named in honor of Sara’s grandfather, Ray Baade, a World War II veteran and one of her biggest supporters along the distilling journey. There was also their Hog Wild Cinnamon, providing a fresh take on the beloved red-hot candies.

  “We never thought about growth potential at the start,” said Winkleman. “Honestly, I just concentrated on trying to hit that sweet spot across the board by producing something that we thought had a pleasing flavor and aroma but also appealed to the tastes and appreciation of consumers. It started great, with immediately positive feedback. We knew we had production where we wanted it to be, and then, of course, the pandemic hit and changed everything. So, like many distilleries, we pivoted to making sanitizers and secured the business of 15 Iowa counties, along with part of Iowa State University.”

  Ironically, this COVID-mandated pivot in their business led S & B Farms Distillery to win the 2020 Iowa Farm Bureau’s Renew Rural Iowa (RRI) Award while they grew their network of business contacts across the state.

  “Ironically, the whole COVID situation became a bit of a blessing for our business,” said Winkleman. “Our network grew through the sanitizer business. That growth led us to work with knowledgeable people that helped us develop and formulate a solid, workable business plan, find accessible funding, and source local, quality ingredients without the price-gouging that was going on with some suppliers. To this day, we maintain these awesome relationships to consistently review our business plans and change them to include things we never thought of initially, like how to bring our daughter into the business when the time comes.”

  The pandemic brought about a nationwide call to support local businesses when possible. That call to action, combined with the surge in consumers buying alcohol for home consumption, meant the demand for S & B Farms products increased while it cut spirits production to meet sanitizer demands. 

  “With the focus on local support, customers started purchasing more of our products for home use,” said Winkleman. “As that happened, our sales increased. In addition, our Sir Winston Peach Whiskey became wildly popular and was chosen by Casey’s to sell in their stores, further increasing visibility, sales and demand. As a result, we quickly outgrew our small production space and went through a 7,000-square-foot expansion in 2020. We added another still and four fermenters, essentially doubling our production capabilities. We blend, label and bottle on-premises in our controlled environment. I learned the hard way that the steam and humidity put off by the stills can affect proof, which has to be right on. One thing with me is that when I make a mistake, I will never make that again. It’s a learning experience and a teaching lesson.”

  If you, like I, were wondering how someone with little to no distilling knowledge or experience goes from deciding to make distilled spirits to an award-winning destination distillery within just a couple of years, Winkleman says it was a true turn-and-burn type process where a lot of things went in their favor once they started. With the help of friends and acquaintances and being the lucky winner of a government draw that helped small businesses get permitted, Winkleman’s business and licensing paperwork was immediately reviewed, deemed correct and accepted for approval. That meant that work could begin immediately instead of having the traditional, more extended wait period that usually occurs.

  “We were very blessed and fortunate to be able to open that quickly,” said Winkleman. “I don’t take that for granted. When I left Georgia, I jumped in with both feet to learn and digest all the needed information. There were many 16-hour days of research and learning, not just the process but what type of equipment we needed, how to locate and get that equipment and how to install it. Shop talk with my mentors was crucial and is still as important today as it was back then. It still happens regularly, and I’m truly grateful to have that knowledge base at my disposal.”

Products Reflect Personal Connections

  S & B Farms Distillery offers a range of products to please a wide range of palettes. S & B Farm’s Field Fire, Private First Class and Hog Wild accompany the Sir Winston line of spirits, named for their canine family member. Consumers will enjoy the easy-going, laid-back Sir Winston Wheat Whiskey, the classically flavored Sir Winston Bourbon with notes of vanilla, fresh oak and caramel and Sir Winston Peach or Apple for flavored spirit aficionados.

  As initially demonstrated by the release of Private First Class, Winkleman has always held great respect for military veterans. That respect and support continue with a non-profit she is starting called “Beyond The Still” to provide support and give back to veterans.

  “We bought an old house and property across from our distillery with a vision to transform it into a true veteran’s memorial park, honoring all military veterans within a large memorial area,” said Winkleman. “We estimate that it will take four to five years to complete. Additionally, we continue to offer Coming Home Bourbon, an annual special release that occurs every Veteran’s Day. As you can expect, it is very much in demand and sells out quickly.”

Priority on Flavor Leads to Awards

  Winkleman spends a lot of time on her recipes before handing them off to her husband, Brian, for distilling. She tells Beverage Master Magazine that it takes a lot of trial and error, with the ultimate goal of developing a taste that is both satisfying and remarkable in its palette-pleasing qualities. Until she hits on a flavor profile that she deems superior, she doesn’t settle. This way of coming up with her flavor profiles has been very successful, with S & B Farms Distillery winning numerous awards early-on, the latest being a gold medal for their Private First Class at the 2022 Las Vegas Spirits Awards.

Previous Awards and Recognition:

Private First Class – Spiced Spirit

•    2020 USA Spirits Ratings – Silver Medal

•    2019 North American Bourbon and Whiskey Competition – Bronze Medal

•    2019 Denver International Spirits Competition – Silver Medal

Sir Winston Bourbon

•    Sir Winston Bourbon Barrel Proof – 2021 North American Bourbon and Whiskey Competition – Silver Medal

•    Sir Winston Bourbon 93 Proof – 2021 John Barleycorn Award – Gold Medal

•    Sir Winston Barrel Proof – 2020 American Distilling Institute (ADI) Judging of Craft Spirits Awards – Silver Medal

•    Sir Winston Bourbon 93 Proof – 2020 Las Vegas Global Wine and Spirits Awards – Gold Medal

•    Sir Winston Barrel Proof – 2020 USA Ratings – Gold Medal

•    Sir Winston Bourbon 93 Proof – 2019 Great American International Spirits Competition – Bronze Medal

•    Sir Winston Barrel Proof – 2019 North American Bourbon and Whiskey Competition – Bronze Medal

Sir Winston Wheat Whiskey

•    2021 John Barleycorn Award – Silver Medal

•    2021 21st Annual Finger Lakes International Wine and Spirits Competition – Silver Medal

•    2021 North American Bourbon and Whiskey Competition – Bronze Medal

•    2021 Denver International Spirits Competition – Gold Medal

•    2020 USA Spirits Ratings – Bronze Medal

Sir Winston Peach

•    2022 Las Vegas Global Spirit Awards – Gold Medal

•    2021 21st Annual Finger Lakes International Wine and Spirits Competition – Silver Medal

•    2020 Denver International Spirits Competition – Silver Medal

•    2020 USA Spirits Ratings – Silver Medal

Hog Wild Cinnamon

•    2020 USA Spirits Ratings – Silver

•    2019 USA Spirits Ratings – Bronze

Field Fire – Spicy Pineapple Jalapeño Moonshine

•    2021 21st Annual Finger Lakes International Wine and Spirits Competition – Silver Medal

Looking Toward Expansion and

Possible Product Additions

  “Well, we’ve already maxed out our production capabilities and outgrown our latest 7,000-square-foot production expansion,” said Winkleman. “More expansion will come soon, although we haven’t detailed those plans yet. But it’s coming.”

  When asked if she would branch out into perhaps a gin or vodka, Winkleman hesitated a bit and said that currently, there really are no plans to pursue a vodka. But then a spark came through in our conversation that I expected accompanied a twinkle in her eye. “There is, though, perhaps an interest in a rum that’s been running through my mind.”

  And by now, I think we all know where that will lead.

For more information please contact…

 S & B Farms Distillery

212 E Ramsey St. Bancroft, IA 50517

Email:  sbrfarmsdistillery@gmail.com

Website:  https://sbfarmsdistillery.com

Start Your Brand Sooner

woman signing contract

By: Kris Bohm, owner of Distillery Now Consulting

There is nearly a new beverage alcohol business opening every day in North America. Craft beer, wine and spirits are growing immensely in popularity and many people are entering the industry with hope to capitalize on this opportunity. Starting a new business and entering the beverage alcohol industry is challenging to do well and succeed at it. Many new entrants start by building a business that handles all aspects from manufacturing, branding, packaging, marketing, sales, and even distribution. For a new entrant to the business, learning all these aspects of business and succeeding at them is a huge challenge that requires a team of experts. There is an alternative way to get a new beverage alcohol business started without nearly as many challenges to overcome from day one. This alternative is called co packing. It is possible to work with a manufacturer who will make your product for you. By contracting out the production of your product you can focus on the two most critical aspects of a beverage business which is sales and marketing.

What is Co-packing

  Co-packing comes in many shapes and sizes. In essence a co-packer is a facility that produces beverages that offers services to manufacture products for other brands. Essentially you can contract a manufacturer to make your product for you. This can be beer, wine, distilled spirits, ready to drink cocktails or nearly anything else.

  Co-packers offer the opportunity to launch a brand for far less capital outlay than the common path which is building your own manufacturing facility. By removing the capital intensive aspects of manufacturing a product, the owners of a new product gain the freedom to focus on the marketing and sale of their product.

How Copacking Works

  If one would like to create a brand new product and bring it to market the copacker does the manufacturing for you. You can bring an idea for a product to a manufacturer and they will create the product for you. Let’s explore the process step by step you would take to bring a new brand of vodka to market through a co-packer.

•    The first step is to find a co-packer that is a good fit for you.

•    Search for companies that offer co packaging services as not all manufacturers co-pack.

•    Once you have found a company to work with, the next step is to find out the constraints of the copacker.

•    Copackers will have constraints on certain sizes and shapes of bottles, corks and labels that they can work with, understanding these constraints is essential to the design phase.

•    Determine what type of packaging will work with your co-packer.

•    Select packaging the works and fits for your brand and your copacker.

•    Design your brand, including logos, names and artwork.

•    Take a break and have a drink.

•    While you are stopping for a drink, now is a good time to consider the liquid in the bottle. You need to select what the product will taste like and where it will come from.

•    Select the sources and recipes for the liquid that will become your product.

•    Sign a contract with your co-packer and put the pieces together.

•    Have your copacker manufacture the product.

•    Launch your brand.

  Just like that you now have your very own brand new shiny brand of vodka and in most cases now have several pallets of vodka to sell. These steps all sound quite simple, but there are many layers of work underneath this list. Beneath every step there are decisions and details that are critical to the product. Let’s explore some of these key steps and how to best make those decisions.

  The liquid in the bottle is important but more important than the liquid is the brand itself. Putting in work to create a professional looking brand along with label artwork and selecting design elements are all crucial steps to creating a successful brand. Unless you have extensive experience in beverage branding and marketing the creation of a new brand is best handled by people who have experience in the industry. The look and feel of your new product is the biggest opportunity to get consumers to consider trying the product. If you take a minute and walk through your local liquor story you will likely find a few bottles that do not look professional or polished. These not so great looking products are often born out of someone starting a new product without any experience or professionals on their team with alcohol branding and design experience. Hiring a professional at this stage is a good investment to help your brand put its best foot forward. The next step is selecting the liquid that goes into your bottle. There is an abundance of distilleries that will sell spirits to you in bulk that can be packaged up into your own brand. Whether its Vodka, Gin, Rum or Whiskey, all types of spirits can be bought in bulk. Tasting a variety of bulk spirits and looking closely at cost is key to selecting your spirits.

  At this point you should have all the pieces designed and selected including the bottle, label, cork, case, spirits and brand. With this all lined out your copacker can go to work and produce your product.

  There are strong arguments that co-packing is the smart path to launch a brand and some folks will say that co-packing is not the best choice. Let’s compare and contrast the pros and cons of co-packing, as knowing the good and the bad can give you the knowledge needed to weigh your options and make the best choice possible.

The Case for Co-packing

  It takes extensive time and financial resources to launch a brand. Much of the resources needed to launch successfully must be committed to marketing and sales to get a brand into the market and onto store shelves. Co-packing allows new brands to conserve money, time and energy that would be put into manufacturing and direct that energy into sales and marketing. This approach affords a new entrant into beverage alcohol the chance to learn the nuances of the business with much less overhead. Mistakes are expensive to make and outsourcing the production work of a new brand ensures that you will make less mistakes when it comes to producing the product. The strong advantage of not producing the product is you do not have to carry the high overhead of funding a manufacturing facility.

The Case Against Co-packing

  Co-packing is expensive. If you are paying a company to manufacture your product, it will cost more per unit to produce a product than it would if you took the manufacturing process under your wing. Co-packers markup the cost of producing a product to cover their costs of overhead, labor and to turn a profit. Another argument against co-packing is control. When a co-packer is producing your product you will not have direct control over every aspect of the manufacturing process. It is easy to make mistakes that might not be made if the manufacturing is handled in house. A key step to mitigating this risk is working with your co-packer to define their quality control in the manufacturing process to protect against mistakes.

What Should a New Brand Do?

  It is not an easy question to answer what is the best way for each individual business to create and launch a new product. Many factors must be considered to make an informed decision. While co-packing is perfect for some it can be a bad fit for others. A consultant or person with extensive industry experience is the best way to make an informed decision on how to launch.

  Creating a new brand can be a challenging and also extremely rewarding business endeavor. Doing it the right way and finding success will make it that much more rewarding.

Make Your Product Stand Out in a Crowded Marketplace

stacks of beer in a store
Barrel Chest Beer & Wine Store – Roanoke, VA

By: Scott MacKenzie, Founder and CEO of Gaslight Studios

Walk into the local supermarket or liquor store and its beer and wine sections all have one thing in common – a diverse array of macro, micro and craft beers all competing for the customers’ attention.

  With all this visual noise, how can you ensure that your beer will stand out in a crowded and highly competitive marketplace? While product quality and taste are important, it is not always  a guarantee for success. Often, success comes from a combination of factors that are led by an impactful visual identity that connects with your target audience.

  Developing a successful brand is not simply designing an eye-catching label or logo. It requires the development of a powerful narrative that authentically connects with and motivates your existing and potential customers. What is your brand story? What promise are you making? What are your key attributes and fundamental pillars? What is your brand personality? Are you refined and sophisticated? Are you bold, edgy and sarcastic? Are you heartfelt, understanding and caring? Maybe you are a combination of all these traits.

  Brands aren’t born iconic, but they do need to be strategically and meticulously crafted and launched with intention so as to allow for the opportunity to become widely recognized and well-established. With this in mind, the first step in developing your brand is understanding who you are, what you stand for and what values you wish to convey. As you solidify these fundamental tenets, you also need to dive head-first into the world of your customer base. Who are you selling to and what are their wants, needs, preferences and expectations?

  Does this all sound overwhelming?  Fortunately, it doesn’t need to be. Whether you’re preparing to launch your first craft beer brand, opening a brewpub or taproom, or have been in the beverage business for years and decided now is the time for a thoughtful re-branding, it’s imperative that you do your due diligence to guarantee that the brand you cultivate is the correct brand for the market. And how do you do that?

Understand the Sandbox You’re Playing In

  Knowledge is power. Gather all available data on your marketplace, customer base, competition and if you’re an existing brand, your own history of successes and failures. What is your consumer looking for? What are your competitors providing? What is the market demanding and missing? Conducting extensive discovery and market research will allow you to make more informed and better decisions as you craft your own brand.  Nothing happens in a vacuum and ignoring external factors as you cultivate your own image is a recipe for failure.

Beware the Lure of Trends

  Trends come and go, so while you can ride the trend train in some of your marketing efforts, it’s best to ignore that tempting, low-hanging fruit as you develop your core identity.  If what is popular in the moment is fundamentally tied into the foundation of your brand, the minute those trends go out of fashion, your brand will feel old and outdated. Brands that last feel timeless.

Strike the Right Balance – Be Different – Feel Familiar

  Your brand needs to stand out from the crowd, but it should also feel like it belongs. Be new and fresh and different, but not to the point that it feels completely out of place. Strong brands differentiate themselves from the competition but also evoke a sense of familiarity and connectedness.

Don’t Try and Be Everything to Everyone

  Know who you are and connect with your target customer base where they live through a sense of shared values and common sensibilities. While you want to cast the widest net possible to maximize potential sales, you also need to drive in the appropriate lane and take the right route to get where you want to go.  Sometimes, trying to create a ubiquitous brand that is everything to everyone makes you nothing to no one.

Verbalize and Agree Upon Your Company Goals

  It is essential that you and your branding team are on the same page. Work together to ensure a mutual understanding of your short and long-term company goals. Do you want to always be a local or regional brand? Do you have lofty goals of national and international sales? Do you want to maintain an existing customer base while opening new markets? While this may not necessarily influence your brand narrative, it’s important to fully understand the factors that require consideration.

Set Brand Boundaries

  To guarantee that the brand remains consistent over time, it is important to develop strong brand guidelines that will ensure proper representation of the brand through the various channels of execution over the life of the brand, such as advertising, public relations, digital, signage, etc. If these brand boundaries are not firmly established, the brand can easily veer off course as you implement new campaigns and diversify your product offerings.

Remember

  Crafting a new brand takes the same level of care and attention to detail as making an award-winning double IPA. It also requires slight adjustments throughout the development process to ensure that the end result is what you want and need. So, assemble the right team, get crafting and never underestimate the power of a good tagline.