Smooth Ambler Distillery – Maxwelton, WV Photo Credit: Donald Snyder
Ask any established craft distiller what they would have done differently and you will get a common answer, “How much time do you have?” For most new distillers starting from scratch in the last few years, it was a learn-as-you-go venture paved with blood, sweat, and tears. The promise of high margins in an exciting and rapidly growing industry with local laws now changing to be more “craft friendly”, the draw to join the liquor industry today is almost intoxicating. Today, new craft distillers are starting up following in the footsteps and standing on the shoulders of those who came before them to bring something new and unique to the market.
There are over 800 active micro distillers in America and dozens more opening every month. Domestic and international consumers have developed a palette for unique distilled spirits and have not seemed to quench their thirst for all things different and local. If that wasn’t a big enough reason to join the party, there is now a wealth of resources available to get started without repeating the painful road paved by others.
An aspiring distiller today does not need to look very hard to find resources to help them start up a new distillery. There are distillation classes across the country offering everything from a hands-on introduction to the distilling industry, chemistry-based fermentation and mashing lessons, blending and product development classes, to advanced distilling techniques classes for those looking to sharpen their craft. As a lecturer at both the Moonshine University in Louisville, KY and at the Six & Twenty Distilling class in Greenville, SC, I get to give people a taste of the industry before they decide to jump in with their hard earned money. Being able to touch, look, and feel for a few thousand dollars can be well worth it.
Another hands-on and
immersive way to learn about the spir
its business are the annual craft distillery conferences with break out
informative sessions for all levels of experience. The American Distilling
Institute (ADI) and the American Craft Spirits Association (ACSA) both have
annual conferences where all the players in the industry converge to discuss
current market trends and distillation issues of the day. For new players in
the business, the biggest advantage of these conferences are the vendor booths
which are a literal one-stop-shop for all the suppliers you will need to start
a craft distillery. Imagine having every major glass bottle supplier, chiller
and equipment vendor, grain sources, and even the Tax and Trade Bureau (TTB)
all represented and able to answer your questions in one space. I hear the
established craft distillers groan every year having had to research and hunt
them all down one by one.
However, even before an
aspiring distiller books an air plane ticket to a conference or to a class,
there are now vast repositories of information available on-line. There are
several popular and active forums and blogs on-line with communities of
distillers sharing their experiences and responding to questions. One of the
most active is the ADI Forum where new and established distillers talk about
the issues du jour and share techniques. There are active home distilling
forums with resources as well but I’ll remind everyone that distilling spirits
without a federal permit is currently against the law.
Finally, once a person is
ready to start a distillery, there are now a plethora of consultants with years
of experience in the distilled spirits industry. There are consultants for
every specialty, issue and budget. There are consultants like Richard Wolf of
Wolf Consulting who can help prepare a solid business model including cash
flow, cost of good sold (COGS) and profit projections to help articulate capital
needs and find investors. Consultants like Jim McCoy, who retired from the TTB
after 32 years, can help navigate the licensing, federal permitting, or audit
headaches and assist with label or formula approval. Sherman Owen of Artisan
Resources can help with developing a mash bill, fermenting, distilling,
equipment sourcing and may other tactical operational issues. There are retired
master distillers who worked for the large distilleries who can help teach the
up and comers how to make a high quality product while leveraging their
connections in the industry. Nancy Fraley of Fraley Nosing Services can help
with blending and differentiating your product in a crowded market space. There
are even “one-stop-shop” consultants who act like a general contractor that can
walk a distillery from concept to reality while bringing in specialized
consultants and network resources as needed.
With all that said, even
with all the incredible resources available, it can still be a hard and
expensive road to travel. A typical new craft distillery will require hundreds
of thousands of dollars in equipment and investment. Older buildings will need
expensive renovations to be both visually appealing and up to local code to
operate a still. A green field distillery built from scratch sized to expand
could easily cost a half million dollars or more. For distilleries hoping to
make an aged product such as a bourbon, they must prepare to spend a thousand
dollars per barrel in raw materials, labor, and other conversion costs and see
no return on that capital until it is dumped and bottled. Cash flow and
operational reserves for a startup distillery can easily trip up even the best
business model. It is possible to start a distillery on a “shoe string” budget,
but it is a tough road to travel.
If you are considering opening a craft distillery, know that there have never been more resources at your disposal. It is not an easy or cheap road to go down but the return can be big. Reach out to a local craft distiller, make a connection with a consultant for an introduction, or be an active participant on-line and you will be well armed to decide if your next business card will say Master Distiller.
Competition is fierce! With the number of craft breweries
and brewpubs continually on the rise year-over-year, it should come as no
surprise that current bar owners and operators must focus on more than just
word of mouth, radio ads or the occasional 30 seconds of air time on the local
network to create buzz about their business. Developing a marketing plan to
maintain visibility and relevance is key to both the initial and ongoing
success of your business.
But not just any marketing strategy will do.
A robust and diverse digital
marketing plan, one that also leverages
mobile technology, will play a significant role with effectively attracting and
retaining customers. Utilizing loyalty apps and a variety of marketing
automation initiatives will ultimately allow you to spend less time and
money on your overall marketing efforts, while simplifying and maintaining your
path for continued growth and success.
All of this
speaks to the advancement of technology within this space. As such, it should
come as no surprise that the role of technology continues to be on the rise,
both in terms of what is in the hands of you and your loyal customers – on
their phones and through a more personalized interface with your business – as
well as the technology your business may currently be utilizing.
The increased
involvement of technology is very much a generational change and one that craft
brewery and bar owners are recognizing as a means to become better and more
productive at what they do. The old saying, “work smarter, not harder” rings
true across the board.
Align yourself with mobile technology and mobile marketing
By 2020, 77% of the US population will be using
mobile technology daily. It’s the go-to technology for personalized
communications. Adding to this impressive statistic is the notion that thirty-five percent of smartphone users are
already claiming to use their phones more than 50 times a day—this is where craft
brewery and bar owners and operators can make the biggest impact. Personal means connecting with customer routines,
moods and of course, discerning taste buds. Data makes it possible—mobile makes
it deliverable.
Most consumers expect information to be available at their fingertips. The
vast majority of consumers are searching for information about a particular
business on their smartphone, with 84% of them contacting that
business as a result. An app with your menus, reservation, ordering, payment
and delivery capabilities maintain accessibility and convenience. And
convenience is a big part of the overall experience that customers are looking
for. If too much is being asked of your customers they may abandon your
business before ever stepping through the front door.
Attracting new customers, building
loyalty and running a variety of continuous promotions requires a heavy
investment of time and energy. An automated marketing strategy allows you to
focus on what you do best—providing great craft brews and exceptional service.
Capture your guests at every touch point with pre-scheduled communications,
photo push messaging, social media posts and more. Utilizing a robust app for your business allows you to
capture more first-time guests, make your regular guests feel like insiders and
remind customers who haven’t visited with you in a while why they should
consider returning.
Utilizing technology does not necessarily equate to an
entirely new business plan. However, it does mean that you now have an option
to execute your current plan better, while also being able to expand and grow
them quicker. An example of this is identifying those efforts that you may
currently be doing with email, paper punch cards or in-house only promotions
and taking that to a mobile and digital platform as a means to obtain more
control and visibility for everyone involved – customers and owners alike.
An app has the ability to
act as your personal, day-to-day assistant. If you don’t have the time or money
to hire and manage another employee, it might be time to look at technology as
the employee that never gets tired. With it you can send your loyal customers
birthday wishes, offers and alerts, giving them the personalized experience
they prefer and deserve. With an automated marketing strategy, you can create a
series of push notifications triggered by their activity. Notifications can be
sent right away, pre-scheduled or programmed to be delivered in certain
scenarios. Either way, it communicates why your business is the perfect option
for that moment.
Being social
with your media
Customers love to see what is offered
before deciding where to go. Show them, don’t just tell them. Instagram and
Pinterest are fantastic options for enticing people with tasty-looking and
thirst-quenching photos. It’s also beneficial to develop short, unique videos –
such as a quick recipe or a behind-the-scenes look at your brewery. And don’t
forget to use trending hashtags to increase post visibility. For example,
include #happyhour, #newbrew, or #foodielife, along with the name of your craft
brewery or bar. All of this will help keep your establishment top of mind with both
your regulars and first time customers.
Your customers are always
looking online to get ideas when thinking about visiting a new business. To
ease this process, make sure that all of your social profiles are up to date
and easy to read, as well as portray your business with the correct ambiance. It’s
not uncommon for new customers to be hesitant about visiting the unknown. Your
social presence needs to provide a compelling reason for them to engage with
you. However, never sell your business through a clouded social media lens. Customers
expecting one experience based on how your business is represented on social
media, only to walk in to something entirely different, will likely result in
negatively affecting your business as a whole.
Your social media
promotional efforts should also be backed up with an engaging customer-facing
website in order to complete the experience. This will further provide your
customers with an even better idea as to what they can expect when choosing
your business over the competition. Think of a great website as a first
handshake, before they commit to visiting your business for the first time.
Your website must be mobile friendly so that it can easily be viewed from your
phone without distorting the message or making the experience inferior in any
way.
Technology that’s
here to stay
This growing
trend in technology is a strong reflection as to how business owners are
looking to maintain their operations with their distributor – online,
expedited, quick-to-answer and respond and capable of addressing all of your
needs through a variety of technological channels and initiatives. It would be
unfair and, quite frankly, unacceptable, for a distributor to suggest that you
engage with your customers through the advancements of technology if they
themselves are not capable of providing the same level of service to meet your
day-to-day business needs. Technology will continue to impact and affect buyer
behavior. This can be seen both from the customers that frequent your
establishment, as well as the way that you engage (or want to engage) with
them.
Consumer preferences are changing
faster than ever, dictating how your business must respond. The distributor
that you have chosen to partner with should be in the business of delivering value.
When they deliver on value, it demonstrates an understanding of what is truly
important. A distributor capable
of delivering value and unforgettable experiences is infectious, and it will help
you, in turn, deliver unforgettable experiences to your own customers.
A thoughtful and in-the-know distributor should always have the pulse
of what consumers want as a means to help you innovate and continually reinvent
yourself in order to remain relevant in a highly competitive landscape. When
they can adapt and respond with speed and agility, they help you to keep pace, stay
relevant and often outpace your competition. Ultimately,
their business should be dedicated to helping you succeed with yours, utilizing
non-traditional methods to better serve your needs through more interesting and
engaging uses of product management, technology and education. While it’s true
that people do business with people they like, they also look to do business
with the people that are committed and able to execute. Finding a distributor
that can serve you better and become a comprehensive, go-to resource for all of
your business needs is the end game.
Technology is advancing faster than ever before and it’s here to stay. As a business owner, your digital media strategy should be flexible to more easily respond to what does and doesn’t work. Discover how your customers found out about you to gauge where they’re spending time online in order to maximize those platforms. Cross-link all of your online profiles and link your website to your mobile app and social media pages. In doing so, you’ll be able to strategically cover more ground while building a base of followers on their preferred platform. The end result will likely translate to an increase in new traffic, while also building upon an established foundation of regulars.
It’s hard to deny that this past summer was the summer of hard
seltzer. In fact, it was a summer that saw hard seltzer grow to more than $1
billion dollars in sales. In just the week of July 4 this past summer, White
Claw and Truly seltzers combined sold over 100,000 barrels of product. That’s
enough to put them in the Top 50 Craft Breweries for production over the whole
year. It’s no surprise that craft breweries large and small are looking to tap
into the apparent gold mine that is hard seltzer, but how they approach it
doesn’t quite seem to stand up against the segment’s largest competitors, and
that’s worth thinking about. At a recent industry panel in Charlotte, NC,
several craft brewers who make seltzers spoke about their perspectives on this
new slice of the industry.
But… Why?
This might seem fairly
obvious with the sales numbers that hard seltzers are putting up, but a closer
look at the craft beer industry tells a slightly different story. Recently in
an interview, the senior vice president of marketing for Mark Anthony Brands
(the makers of White Claw) noted that though White Claw has incredible
penetration in grocery stores and liquor stores nationwide, only about 20 percent
of bars and restaurants are currently selling hard seltzers. For the average
small craft brewer, the opposite is true – while the limited shelf space of
grocery is locked behind the arcane process of distributor-led Planograms,
inaccessible to most small breweries, they are nearly ubiquitous on draft
systems in bars and restaurants eager to serve local beer. So, why chase a
segment which shows so little relevance in their primary market?
“After the surge of
LaCroix in the non-alcoholic market, we took a hard look, and it’s what our
market research showed our customers wanted,” said Colleen Quinn, of Craft Beer
Alliance (CBA). Their market research showed something else interesting – that
while most hard seltzers are marketed specifically toward young women, their
targeted demographic tended to skew almost 50-50 male-female. It led to CBA’s
decision to package their multiple seltzer brands in regular 12 ounce cans,
rather than slim cans like their competitors.
“I’m looking for one more
reason to keep the customer in their seat,” says Mike Rollinson of Joymongers
Brewery, a brewery that enjoys two taproom locations in Central North Carolina,
but no off-premise distribution. “I don’t see it as craft. I’m not making a
seltzer for beer drinkers. I’m making a seltzer for the one person in a group
of 5 people who will pressure the group into leaving if there’s not something
for them to drink.” Rollinson just started making seltzers this year as he saw
the trend grow, noting that one of his business partners is on a Keto diet and
now drinks his seltzer almost exclusively – as a healthy alternative to beer.
Clear or Colored – the Question of Craft
While the two major market
players, White Claw and Truly, are both crystal clear beverages, two of the producers
on the panel noted that color helped them differentiate. Both Brian Quinn of
Town Brewing Company and Lindsay Sprick of NoDa Brewing Company pointed to
their process as an advantage over the big seltzer makers.
“I can guarantee that
nobody at White Claw was sitting down last week processing a ton of raw
ginger,” Quinn noted with a smile. “We’re small enough that we can use natural
ingredients as a base for these seltzers.” Those natural ingredients come with
their own colors and – he thinks – customers want to see the presence of those
ingredients in the product when they’re ordered. “When you get something that’s
wild cherry flavored and it’s clear, you ask yourself: where’s the cherry in
this?”
Sprick, of NoDa, shared a
similar feeling: “We stand out because we’re using the same ingredients that we
use make our beer.” She felt that it was more true to the brand and brewing
ethos of NoDa Brewing Company than a clear, sparkling beverage. NoDa’s Brizo
Seltzer, unlike other seltzers represented on the panel, is barley-based, which
lends even more color to the finished product than the others.
Rollinson had a different
take at Joymongers. “When I see a color, like red or blue or purple in a glass,
that reads ‘sweet’ to me, and that’s not what this is.” He mentioned that
because his primary customer is not one that’s seeking this for a fruit flavor,
but rather as an alternative beverage or a more healthy choice, that the
neutral color was a better choice. “The only people who have complained about
it being clear were bartenders because they throw it out by mistake because
they think it’s water.”
Regulatory Loopholes
Interestingly, hard
seltzers fall into a slight grey area of regulation from both the Trade and Tax
Bureau (TTB) and the Food and Drug Administration (FDA). Hard seltzers are the
product of fermenting sugar into alcohol and fall under the manufacturing umbrella
of a brewery, but labeling considerations vary based on what sugar base is used
as the basis of fermentation. A brewer who uses a barley base – even a very
light brewer’s malt – still falls under the definition of a beer, requiring a
pre-market Certificate of Label Approval (or COLA) and is restricted by certain
advertising laws. A brewery who uses sugar as the base for their seltzer is not
required to obtain TTB approval as it is not a malt beverage. However, they do
fall under FDA labeling guidelines which require a nutrition panel and a list
of ingredients.
While it might seem
attractive to a brewery to skip TTB approval and jump straight to FDA labeling
because the FDA does not have pre-market approval requirements, it’s important
to know that FDA labeling is required to be in compliance before sales and that
manufacturers can be held liable to both financial and regulator consequences.
Consult your lawyer for best practices.
None of the panelists
chose to share which path they had taken from a regulatory standpoint.
What’s in the Mix
Clearly, there are as many
ways to approach making hard seltzers as there are reasons to make it.
Fermenting white sugar seemed to be the preferential approach to creating a
fermentation base for hard seltzers. Of the panelists, NoDa was the only one
using barley.
Most of the panelists
spoke of these seltzers as good gluten-free alternatives to beer and marketed
their seltzers as either gluten-free or gluten-reduced. NoDa used ClarityFerm
from White Labs to reduce gluten content in their barley-based seltzer but
others simply brewed on their normal equipment directly after “CIP day” in
order to guarantee no gluten would be present in the final product. Quinn of
Town Brewing shared that lab results showed no traces of gluten in his
products.
From there, the small
producers all had a similar strategy of using whole ingredients to flavor as
they would for any flavored beer, whether that’s the addition of aseptic fruit
puree or hand processing ginger for additions during fermentation. They seemed
to feel that the use of “real ingredients” was a way to stand out versus large
scale competitors from a flavor standpoint as well as an ethical one. They
appeared to share the belief that it “felt more like craft.”
Yeast was a large
differentiator between the producers. While Rollinson at Joymongers used ale
yeast to ferment his seltzer, making a note that harvested yeast seemed to
perform much better than a fresh pitch, Quinn of Town used Distiller’s Yeast,
seeking a strong, healthy fermentation that would get as dry as possible. Both
mentioned the need for high amounts of yeast nutrients. “As it turns out,”
Rollinson joked, “yeast doesn’t really like to digest straight glucose.”
Where It’s All Going
All of the panelists
agreed: hard seltzer is a trend that is doing nothing but growing, and they all
agreed that their futures had more and varied seltzers in it. Each of them was
excited to experiment in the market and push the bounds of craft’s involvement
in the segment.
The question remains for
you – will we continue to see on-premise growth in a meaningful way that the
craft market can take advantage of, or will hard seltzer grow only in larger
and larger stacks in grocery stores? We’ll have to wait for the next White Claw
Summer to find out.
While both Scotch and American single malt whiskey possess some
similarities in terms of taste, their origins are quite different. Scotch is a
spirit born of tradition and known for its heterogeneity and consistency, with
brands distinguished by their geography (the Highlands, the Lowlands, the Isle
of Islay, Campbeltown, and the Speyside). Furthermore, the majority of Scotch
distillers are distributed by four companies: Diageo, Pernod Ricard, William
Grant and Sons, and Bacardi. A similar vibe besets its cousin Irish whiskey.
Conversely, American
single malt whiskey possesses a more pioneering spirit and is distinguished
more by the style of whiskey than any particular geography. While the TTB has
not formalized strict criteria for what constitutes an American single malt,
the American Single Malt Whiskey Commission, founded in 2016, established a
standard of identity for American single malt. Currently, over 140 distilleries
have signed on as member producers of the ASMWC.
For a distiller to use the
term “American single malt” to describe their whiskey, the ASMWC recommends
that the spirit fit the following criteria:
• Made from 100% malted
barley.
• Distilled entirely at
one distillery.
• Mashed, distilled, and
matured in the U.S.
• Matured in oak casks of
a capacity not exceeding 700 liters.
• Distilled to no more
than 160 (U.S.) proof, or 80% alcohol by volume.
• Bottled at 80 (U.S.)
proof or more, or 40% alcohol by volume.
While the ASMWC has not
issued a specific recommendation on maturation time, producers are aging their
American single malt whiskeys in barrels at a variety of ages, from three
months to 10 years. Some American distillers get creative with the maturation
process by experimenting with used casks from breweries, wineries and other
distilleries.
Terms like “handcrafted”
and “produced” may be found on a bottle by those distilleries engaged in
producing mass-market spirits. Unless the bottle contains the word “distilled,”
the product cannot be considered a product made from grain to bottle by a
single distillery.
Before prohibition, one
could find thousands of distilleries and breweries in the U.S., particularly
along the Eastern seaboard. During this period, rye whiskey emerged as the
dominant dark spirit. After prohibition, the whiskey movement took off in Kentucky
and Tennessee, where bourbon became king.
While bourbon is part of
the whiskey family, this product differs from American single malt in several
ways. In addition to being made with at least 51% corn, the mash is distilled
using a column still. The barley mash distilled for American single malt
whiskey is typically done with a pot still, though a few distillers use a
column still.
Through consolidation and
mergers, the quality and production of all American whiskey resembled that of
mass-produced beer. However, the advent of the global food revolution in the
1950s and 60s, coupled with federal legalization of homebrewing in 1978, led to
the implosion of the craft brewing industry. Concurrently, Americans became
acquainted with beers, wines, and spirits hailing from Europe and the UK thanks
to pioneers such as Charles Finkel, co-founder of Seattle based Pike Brewing
Company, who introduced these products into the United States market.
Many distillers of
American single malt, like Christian Krogstad of Portland, Oregon-based House
Spirits Distillery and Jason Parker of Copperworks Distilling Company in
Seattle, came out of this craft revolution, beginning their careers as brewers.
Both distillers use a hundred percent malted barley and brew their wort using
the same technique employed in brewing beer.
While Krogstad waited for
his whiskey to mature, he became known for distilling Aviation Gin. The first
bottle of Aviation Gin came out in 2000, well before their first bottle of
whiskey was released in 2008. In 2016, House Spirits Distillery sold Aviation
Gin’s distribution rights so they could devote their energies to producing
Westward American Single Malt Whiskey.
Parker, Co-Founder and
President of Copperworks Distilling, followed a similar trajectory of
distilling gin and vodka until their single malt whiskey was ready for release.
For the past three years, they’ve produced whiskey from single farm, single
variety, and single vintage malts. Each batch is given a unique number and has
a slightly different taste from other batches.
Traditional Scottish Style American Single Malt Whiskeys
Other brands like
McCarthy’s Single Malt Whiskey and Westland American Single Malt Whiskey are
distilled using a traditional Scottish style. This style requires that the
whiskey be made from a mash of malted barley, distilled at a single distillery
using pot still distillation, and matured in oak casks.
After a damp trip to the
Isle of Islay where he visited several local distilleries as a way to avoid the
rain, Steve McCarthy returned to Oregon where he had the distinction of being
the first distiller to bring an American single malt to market. His whiskey,
distilled in 1993 using 100% peated barley from Scotland, was released in 1996.
While the mash used in most Scotch is distilled twice, the type of still they
use allows them to reach desired proof in a single pass. That still is often
referred to as a “hybrid pot still” or “eau-de-vie still” as it has a short
multi-chambered column above the traditional pot.
According to Steve Hawley,
Director of Marketing for Westland Distillery, their distillery was founded in
2010 with the ambition to add a new and uniquely American voice to the world of
single malt whiskey. “When we began, we adopted the same basic processes used
for generations in the whiskey-making of the old world, but we don’t simply
seek to replicate the results. Instead, we work to create whiskeys that reflect
the distinct qualities of our time, place, and culture here in the Pacific Northwest.”
Developments in American Single
Malts
According to Adam Foy,
Vice President of Business Development for Skagit Valley Malting, “Barley grown
for yield is about sameness, whereas, we grow barley for distinction by
searching the globe for unique and distinct barleys that provide varietal
nuances.” Connecting the origins of the barley used in the mash to a single
farm or variety adds another dimension to the term “single malt.”
Distilleries like
Copperworks partner with Skagit Valley Malting and other like-minded companies
to craft what Parker refers to as non-commodity malts. “Instead of measuring
our efficiency from farm-to-bottle, we measure the flavor from unique malts to
bottle, and share these flavors as different whiskeys, rather than a standard
release whiskey.”
Currently, Copperworks is
maturing whiskey that was produced using locally-grown malt from the Skagit
Valley and infusing it with smoke from Washington-sourced peat. They brewed the
malt into a beer with no hops, distilled, and matured in new, charred American
Oak barrels with a number one char, the lightest of chars, so as not to
overwhelm the peat flavors.
Currently, Westland is
working with partners on a holistic barley program that focuses on flavor and
includes breeding unique varietals suited to the Pacific Northwest region.
“We’re malting them using innovative new technologies, and building a
sustainable—both agriculturally and economically—model for bringing those
barleys to market for use in distilling,” Hawley said.
A few distilleries have
begun to experiment with imparting smoke instead of peat into their barley
through the use of cherry wood, mesquite, or scrub oak. In particular, mesquite
lends a natural smokey and spicy flavor without adding artificial flavorings
found in commercial cinnamon whiskey.
Then comes Wanderback
Whiskey Company, a distillery with a unique production focus. They partner with
various single malt producers in the United States to make their whiskey using
a bespoke grain bill that’s grown in the Pacific Northwest. Then they age,
blend, and bottle small batch releases on their family farm in Hood River,
Oregon.
Pushing the Boundaries with Innovative Cocktails
While Scottish tradition
maintains that one should drink Scotch neat, adding only a drop or so of water
to help bring out the flavor, some American distillers are blazing new
territories by creating craft cocktails. At events, such as PROOF: Washington
Distillers Festival, participants can sample a range of single malts, as well
as unique cocktails while sitting in on educational sessions. A trek to Tankard
& Tun, Pike Brewing Company’s Seafood Restaurant, features beer cocktails
made with spirits from Copperworks Distilling. Historical tidbit: Parker was
the first brewer for the Pike Brewing Company when it opened in 1989.
In addition to offering
tasting flights, House Spirits Distillery serves up a range of cocktails
including a Boulevardier (a Negroni for whiskey lovers). Also, during their
repeat appearances at Feast Portland, they showcase their traditional side by
featuring Westward at one of Feast’s signature BBQ events, Smoked. But then
they’ll display their more flamboyant side by demonstrating how a quality
spirit can enhance the cocktail experience. For example, at Smoked 2019, they
featured a S’Mores Old Fashioned made with Westaward American Single Malt
Whiskey, graham cracker honey, chocolate bitters, and toasted marshmallow.
As members of the ASMWC continue to win
national and global awards and competitions, this commission continues to push
for the formal establishment of a “single malt whiskey” category. Already, the
American Distilling Institute has established the “American single malt
whiskey” category for those whiskeys made according to ASMWC’s proposed
statement of identity.
Boilers are rarely glamorized in any distilling discussions. The
end product is the star, whether swirled, stirred or shaken in the able hands
of a local mixologist. However, any boiler manufacturer will tell you that a
reliable boiler affects every facet of the distilling process, including the
cost of production. During fermentation, the mash is heated with steam to
transform the carbs to sugars. The wort gets removed and transferred to a
fermentation vessel to cool and get ready for the introduction of yeast. Steam
provided by a boiler generates a gentle, consistent heat, very conducive for
vessel heating, temperature maintenance and successful fermentation. Once
fermentation is complete, the product is moved to the still, using steam heat
to separate and remove the impurities.
Distillery Environment Matters
“You always have to be aware of any unique requirements due to installation environment,” says Mike Bonjo, Sales Manager and Brewer for Columbia Boiler Company. “Boilers are mandated to be a certain distance away for safety, but in general, it’s best to have them within eyeshot. Low-pressure boilers generally provide enough energy for craft distilling. However, if the boiler is situated a long distance from the other equipment, high pressure reduces heat loss during long runs in between distillery equipment.”
In addition, when it comes
to boilers, the type of building where the distillery is located makes a
difference. “The current trend of
renovating historic buildings into rustic craft distilleries and breweries is
aesthetically very cool, but these old buildings require custom installations
because of building materials, floor strength and utility availability,” says
Bonjo. “Professional consultation is needed to determine floor strength, layout
viability and fire ratings. Also, you never want to situate a steam boiler
directly on those old wooden floors. We have custom stands and risers for these
situations.”
Columbia’s boilers are
popular because of their performance and compact design. Their flagship
units—the MPH boiler series, manufactured to fit through a standard
thirty-six-inch door opening, provide up to eighty horsepower. Columbia also
offers the CT line, a vertically-designed, tubeless boiler created for the
dry-cleaning industry, now repurposed for artisan distillers.
“Our boilers are easy to
install, easy to use and a breeze to service,” says Bonjo. “They are operable
right out of the box and come with everything needed to get up and running.
Anyone with a basic mechanical aptitude can operate and maintain our boilers.
We use standard industry controls rather than custom or proprietary controls.
Parts are standard, so you don’t have to find a certain distributor in the area
and hope that they have your part in stock. We also feature a copper coil
inserted into the boiler to carry and heat city water—to be used as potable
water—for cleaning or any other domestic water situations around the
distillery. We fire up and thoroughly test our units before shipping to the
customer for, what ends up being, a plug and play installation. If there are
issues, we can relay our test settings and compare them with the customer’s
running settings to make sure the boiler is in an optimal run state.”
Maintenance on Columbia
boilers is minimal. In addition to the mandatory annual state inspections, the
boilers should be “blown down” at the end of the day, flushing out the silt and
sediment that naturally forms at the bottom of the boiler. If that sediment
isn’t regularly flushed out, it congregates and sticks to the steel, forming
scale. Over time, scale causes the affected steel to fail due to improper heat
retention and metallurgical issues. Blowing down takes 10 to 15 seconds,
transferring the water to a blowdown separator to cool the liquid before
disposal, nullifying any potential damage to drains and plumbing lines. Monthly
water chemistry level checks should be performed to keep it compatible with the
steel. For steel boilers, the pH should remain a constant 10 to 11.
“If by chance, the proper
maintenance has not been kept up with, the tubes on our boilers can be replaced
independently, saving money on repairs and reducing downtime,” says Bonjo.
Safety Is Always The Priority
“Your boiler is the one piece of equipment in your distillery that is more powerful than dynamite,” says Dave Baughman, President of Allied Boiler & Supply Inc. “It can relocate your whole business in an instant.”
Let that sink in, and
you’ll understand Baughman’s emphasis on boiler safety before selling you a boiler.
“Boilers are truly the
heart of the distillery, but there’s a critical need for training in daily
boiler operation,” says Baughman. “When I ask potential customers if they’ve
had any training on boiler operation, even if it’s just about keeping daily operational
boiler log sheets, their answers reflect a need for training. We don’t expect
boiler experts in these craft industries. They know the biological processes of
distilling and rely on others for boiler recommendations, and frankly, the
competence out there is lacking. The end-user is being thrown to the sales
wolves.”
This incompetence may even
extend to the sales wolves themselves, who are often aware of the national
codes but may not be as educated on those closer to home.
“[Distillers] may need
certain, critical support equipment with their boiler, depending on the
environment and local code requirements. Do they need water treatment? What
type and how much? What about chemical injection systems, blowdown separators,
boiler feedwater systems with steam preheat, or condensate return systems?
These can all be critical components that may or may not be necessary. Sales
representatives may follow national code, but if they’re not aware of the local
regulations, you’ll end up with a boiler that’s not code compliant,” says
Baughman.
Distilling is a
cost-driven industry, but Baughman believes decisions should still be made
based on technical specifications related to distillery needs. Some boilers are
better at heating, some better at boiling. Older cast iron sectionals are great
at heating but inadequate for production environments. Vertical boiler units
were introduced for the dry cleaning industry, and when that industry dried up,
manufacturers started pushing those high-pressure units into the next expanding
market. That happened to be brewing and distilling, even if it wasn’t a perfect
fit.
“My best advice is to be
diligent in research, and never buy based on cost alone,” says Baughman.
“Instead, buy based on the technical needs of your situation. For smaller batch
distillers, low steam boilers are sufficient. Larger production distillers with
continuous columns need more steam, so high-pressure boilers with regulators
that hold a constant temperature for longer periods are beneficial.”
Purchasing the boiler is
only the beginning. Baughman tells Beverage Master Magazine boiler training is an
absolute necessity because manufacturers have a legal and moral responsibility
to sell safe units to trained users. Allied Boiler & Supply offers a three-day,
no-cost, on-site boiler training school and startup with every boiler they
sell. Water chemistry, a significant contributor to boiler failure, takes up
one of those days.
“Everyone worries about
the effects of scale, but most failures are attributed to improper oxygen
levels,” says Baughman. “It becomes a very aggressive situation when heated and
must be treated by the use of a deaerator or with chemical injection systems.
Water softeners won’t treat the oxygen component. Underwater injection systems
or sodium sulfite are used and should be administered by professionals, along
with consistent tests for pH, conductivity and oxygen levels.”
All Allied’s boilers come
equipped with troubleshooting display modules and forced draft systems, which
are more efficient and less prone to backdrafts.
“These things add to the
bottom line cost, but they are legitimate safety features,” Baughman says. “Our
after-sale support is unmatched in the industry. Every sale comes with two
emergency phone numbers, one being a service employee and the other being mine.
We are serious about becoming a partner with your company and will never just
sell you a boiler to make a sale. There is too much at stake personally and
professionally for both of us.”
Baughman runs his business
on a motto that his father taught him.
“Consider service ahead of reward, and the reward will come
because of the service.”
Boiler Choice Based On Technical
Specifications and Business Goals
Correct sizing without
upselling is always the best for the customer, so before getting a
recommendation for a boiler from Jack Coe, President of Rite Engineering &
Manufacturing Corporation and manufacturer of Rite Boilers, there will be some
technical fact-finding.
Affordable Distillery
Equipment is an OEM of stills and packages Coe’s Rite Boilers with their
stills. Affordable Distillery’s CEO Paul Hall says, “We are sticklers for
right-sizing because it can take four-to-five years to recoup the boiler cost,
but if you get too large of a boiler, you can end up paying for that system for
the next ten to fifteen years. Every boiler situation is unique and has
different needs depending on the equipment used and the business goals.”
Rite Engineering offers multiple boiler lines that maintain their efficiency, provide one hundred percent access for inspection and cleaning to help avoid costly repairs, and remain field repairable.
When deciding what boiler
is best, Coe recommends looking to your existing equipment. “To determine if
you need a low-pressure versus a high-pressure boiler, look at the equipment
you already have or are planning to use and see what the highest duty
application will be,” says Coe. “In the craft distillery, it’s usually the wort
boil. Subsequent pieces of affected equipment should be labeled with a steam
pressure recommendation. If they are all rated as 15 psi or less, you’re good
to go with a low-pressure boiler. If pieces of equipment are rated to handle
higher than 15 psi, then you can consider a faster, high-pressure boiler, but
boilers can use large amounts of fuel, so be aware of that when choosing
components.”
Speaking of support
components, Hall says, “You absolutely need a condensate return to bring the
condensate back to the boiler, or else you’re constantly pumping fresh water
into the system. Additionally, a blowdown system used at the end of the day or
when you’re finished with the boiler session will hold the blowdown water until
it cools down to 140 degrees or so. [This is the] temperature that municipal
discharge systems feel is safe to allow down the drain lines into their sewers.
If you’re not using a municipal system and just have your own discharge pool on
the property, you don’t need this component. Each of these components can run
an extra three to four thousand dollars on top of the boiler.”
Hard water will no doubt
shorten your boiler’s life span. If testing shows hard water in your system,
Coe recommends a Zeolite salt exchange type, and steers customers away from a
deionized or reverse osmosis systems, as they can lower water’s conductivity
and pH to unsafe levels.
“After that, boiler
professionals need to be brought in for consistent cleaning, checks and
inspections,” says Coe. “Some of these are mandated by codes and laws and are
in place to prevent small issues from turning into big problems. These
professionals can also [help with] monitoring water pH and treatment options.”
Whatever boiler system you
decide to work with, both Rite Engineering and Affordable Distillery Equipment
recommend installing them in a separate boiler room when possible.
“That way, the boiler fire
is isolated and kept from any equipment, and you’ll have some type of vapor
barrier,” says Hall. “By rule, distillery equipment is classified as a Class 1
Division 2 Hazardous Environment, meaning boiler placement must be at least six
feet away from any still parts that are 18 inches or less off of the floor, and
at minimum 24 inches away from any still parts above that 18-inch mark.”
Do you remember when microwaves came on the market? Or when
computers replaced typewriters? How about the huge mobile cellphones the size
of a shoebox? Technology is constantly changing. Just when we think we have it
figured out, it changes. It can add much stress to our lives, or it can make it
more enjoyable. Once you embrace it and see how relatively easy it is, the fun
begins.
Millennials have been
raised around technology, making it very comfortable to them. They don’t have
the fear that baby boomers sometimes experience when learning new technology.
Since many businesses are focusing their marketing dollars on the millennial
audience, technology in marketing is a natural progression. Many marketing
studies on millennials state that, amongst other things, they want experiences.
As a producer, are you satisfying their desire for something fresh, new and
authentic? Are you connecting with them on their terms via mobile devices? Near
Field Communication Technology can help producers do just that.
Near Field Communication
Quizelet.com defines NFC
as a short-range wireless connectivity standard that uses magnetic field
induction to enable communication between devices when they are touched
together or brought within a few centimeters of each other. Many consumers may
already be familiar with this technology through their use of Google and Apple
pay.
Similar to Bluetooth
technology, NFC communication is faster and sends information over radio waves.
It takes less than one-tenth of a second to establish a connection between two
devices.
Smartphones are the most
common form of NFC devices. Most Android smartphones and newer iPhones have the
technology included. For older mobile phones, apps can be downloaded to allow
these devices to read a variety of NFCs.
NFC requires at least one
transmitting device, and another to receive the signal. A range of devices can
use the NFC standard and will be considered either passive or active. Active
devices can send and receive data as well as communicate with one another.
Passive devices often take the form of a tag or chip, sending information to
active devices without needing a power source of their own.
What does all this mean for you?
In August, Guala Closures,
a company that has traditionally employed advanced technologies and connected
closures, used NFC technology to add communication content into the cap of a
Malibu rum bottle. The chip inside the enabled “smart cap” is so small it’s
practically invisible. Each cap then has a 4-letter code, which acts as the
proof of purchase inside the lid.
Tapping on this cap allows
both the consumer and the brand to know more about one another. The producer
will know where and when it was purchased. In return, the consumer has access
to recipes, contests, and different communications offered by the brand. This
will allow the relationship between producer and consumer to reach a new level.
Many people today are
concerned about companies accessing their personal information. Simon
Yudelevich, General Manager for Guala Closures North America told Beverage Master Magazine about the concepts of connected closures.
“When you tap your phone
and connect, you give consent to the brand to gather information on when and
where. When the consumer goes online to look at what this is all about, there
is an explicit consent which requires the consumer to opt-in, in compliance
with all applicable regulations,” said Yudelevich
By committing to
developing connected solutions in cooperation with its clients, Guala Closures
help them learn more about their consumer habits and loyalty to their brands.
In this framework, the company also deposited a patent of the solution that
combines the NFC technology with aluminum closures.
Marketer’s Delight
Since brand owners control
the marketing of their product, they have an abundance of creative options with
this new platform. The possibilities are endless.
“By tapping the cap, you
get access to great marketing content, which not only further strengthens the
relationship between consumers and the brands they like, but also allows them
to build a brand community of consumers via access to social media such as
Facebook, etc.,” Yudelevich said. “Since the brand owner’s goal is also to
engage the consumer, they can create recipes-of-the-month, which can be changed
every day if wanted. They can create contests or ask the consumer to join their
club. They can even ask the consumer to send a message to their friends about
what they just purchased. Marketers can change the messages as often as they
want. They can add, delete or amend the content. Since everything happens on
the cloud, the changes are simple. They can tap, create video content whereby
when the cap is tapped, a video uploads and the consumer can see how to use the
product.”
“Marketers want data from
the consumer, including how much they paid to pay for the product. Businesses
want the ability to track and trace where the product was purchased, as well as
monitor anti-counterfeiting. This is already changing the face of marketing,”
Yudelevich said.
Malibu Rum has recently
signed on with Guala Closures with limited-edition connected bottles currently
circulating in Ohio and Texas. Marketers plan on including drink recipes and
sweepstakes. Soon, consumers will be able to win prizes through a mobile game
called Sunshine Slide.
“Everyone’s excited with
this new rollout for Malibu to develop these smart connected closures that
enable the brand to get close to its consumers, Yudelevich said. “Once other
companies see this new technology and its benefits, these closures for spirits
and wine are going to be the leaders in direct-to-consumer marketing.”
Kilchoman Distillery Company
Case Study
In early 2018, Thinfilm
Electronics of San Jose, California joined forces with Kilchoman Distillery
Company, a producer of single malt Scotch on the island of Islay. Kilchoman
distributes its whisky to 13 countries and wanted an effective way to interact
with the end consumer. While they didn’t put their technology in the caps of
bottles, they used NFC powered, interactive neck-tags for their Machir Bay and
Sanaig Whiskey. Fully integrated with Thinfilm’s CNECT Cloud Platform, the tags
were the digital touchpoint that consumers could tap to have an individual
marketing channel.
In a case study published
at www.thinfilm.com, Thinfilm Electronics created a mobile-optimized product
system where the CNECT Cloud Platform stored and managed all of the unique tag
IDS. The tags allowed Kilchoman to track the time from “ship-to-shelf” across
13 countries as well as analyze item-level intelligence and consumer
interaction data in real-time. Thinfilm produced a branded NFC scanner app
called “Discover Kilchoman” available in Apple’s App Store.
The results concluded that
the end-to-end NFC mobile marketing solution was highly encouraging, with a
6.5% engagement rate. This rate is several times more effective than
traditional digital marketing activities and created a way for Kilchoman to
connect directly with consumers and build customer loyalty. It also mitigated
the need for additional promotional support or omnichannel activities.
Compared to traditional
digital marketing, the NFC display was 70 times more effective than email,
search engines and social media. They concluded that there was a 35% virality
rate (each bottle tapped by 1.35 consumers on average) and a 22% iOS engagement
via the custom Kilchoman branded app. Finally, they were able to identify that
it was an average of seven weeks “ship-to-shelf” time.
Thanks to intelligent
technology and the desire to connect with the end consumer, companies are now
able to have a one-on-one relationship with those who love and use their
products. Each brand has a unique story. Now they can make sure their customers
know it.
So, set yourself apart
from the competition. While millennials are brand loyal, someone has to be the
one they support. To gain loyalty and foster the next generation of consumers,
have originality, offer a great experience, be authentic, have value, and keep
the digital conversation going.
The first licensed craft distillery in Fernie, East Kootenays,
British Columbia, opened its doors July 1, 2018, and there’s a good reason why
their vodka, gin and liqueurs are flying off the shelves. Husband and wife team
Jillian Rutherford and Andrew Hayden dedicate themselves to expanding
sustainable practices, preserving Fernie’s industrious history, and providing
small-batch, high-quality spirits individually created with local, seasonal
ingredients.
The Present Is The Key To The
Past
Fernie’s name originated
with prospector William Fernie, founder of the Crows Nest Pass Coal Company,
who, along with Colonel James Baker, was influential in the development of the
first mine in Coal Creek, just east of Fernie, in 1897.
By 1898, the Canadian
Pacific Railway also came to Fernie, transporting coal and supplying goods.
With the rapid growth in mining, logging quickly became the second-largest
industry. Unfortunately, with its mainly wooden foundations, two tragic fires
in 1904 and 1908 completely devastated the town, but it was rebuilt using brick
and stone in 1910.
Rutherford told Beverage Master Magazine how this relates to the distillery. “In Geology, looking at
modern environments like beaches and reef systems helps to find and identify
similar features in the rock record. The present is the key to the past. If we
flip that around, we feel that Fernie’s past informs our present. We are here
because of what Fernie used to be—a mining- and rail-influenced community—and
it’s important to remember how we arrived here, not just what we are now. We
decided to incorporate Fernie’s history in our branding because as great as the
outdoor recreation is here, the town is more than a one-trick pony. We have
history.”
A Focus on Fruit
Collaborating with local
talent who also support their community, Rutherford and Hayden understand the
importance of initiatives in place that keep both the people and the wildlife
of Fernie safe. With a large number of fruit trees in East Kootenays, local
Initiatives like “Apple Capture” and “WildsafeBC” help to ensure appropriately
controlled harvests. Fruit is picked and managed to avoid falling and rotting,
which can attract large deer and bears to the area. The mash supply from the
production of their vodka and gin also helps to feed local farm animals.
Mixology Manifestos
The bar and tasting lounge
at Fernie Distillers has a welcoming atmosphere and unique cocktails, where
traditional takes a sharp turn in favor of modern creations with a twist. “The
big window into the production room gives our guests the opportunity to see the
stills and other tanks,” Rutherford said.
Plastic does not feature in any of their cocktail presentations. Instead, decorative garnishes are made from an array of fruit, including apples, kiwis, strawberries, lemons, oranges, and pineapples. “A really great garnish should be clever, it should elevate a drink, and it should enhance the carefully mixed flavors. It should surprise and entice, and most of all, it should look and taste fantastic. In short, it should be an integral part of the drink, not a limp afterthought,” Rutherford said.
There are several
interesting DIY garnish ideas listed on the Farewell Umbrellas blog post on
their website. Their cocktail menu changes with the seasons and is known for
its creative approaches.
Andy Ward, Fernie
Distillery’s bar manager, named the FD G&T as the most popular cocktail.
Rutherford added, “It doesn’t sound exciting, but it’s so delicious, and a
familiar and approachable choice. We get people from all walks of life visiting
us, and not all are adventurous for the first drink. When they come back after
a great first experience, they often branch out, maybe with a stinger or a
martini.” The FD G&T is made with gin, lemon sherbet, lime juice, and
house-made lavender bitters topped with tonic.
Tools of Transformation
Recycled materials are
seamlessly incorporated into a number of the distillery’s features.
A section of the old
Calgary Molson Brewery bottling conveyor belt acts as the front face of the
bar. It was given to the distillery by a friend who reconditions brewery
equipment. Repurposed doors are part of the decor. The bar shelves are
refinished slabs of British Columbia Douglas fir, previously part of horseshoe
pits where the patio now sits. Similarly, their bar top is salvaged British Columbia
Douglas fir timbers from 1903, once used as power pole cross beams by AltaLink
in Southern Alberta.
Sustainable Spirit
True sustainability is
much more than just a word. Visibly expanding its many branches through smaller
steps, together with the implementation of new and innovative ideas, remains an
absolute priority for the team at Fernie Distillers.
They’re actively working to reduce their environmental impact in many ways, and hope that their efforts will influence others to follow suit. By locally sourcing ingredients and reducing their carbon transportation footprint, they’re building connections with their community, and in turn, supporting the economic structure of the area. The distillery has also gone green with their Yarai acrylic barware, and only use recycled paper bags for all the sales in their shop. Neighboring businesses have also abandoned plastic. Rutherford and Hayden believe that spreading the word about these initiatives will help create an environment where sustainable practices are increasingly accessible, better understood, and more easily implemented.
A project in
sustainability was Rutherford’s latest brainchild. She wondered what could be
done with the distillery’s hundreds of continuously used barley bags. After
speaking with the sewing room teacher at The Fernie Academy School, a
progressive student project took flight. Starting in September 2019, students
will work to reconfigure them into attractive reusable shopping bags, and 100%
of the proceeds from the sales will go directly to the school.
Fernie Fog and No.9 Mine
A Fernie Distillery best
seller, Fernie Fog liqueur was born from the idea of creating a black tea and
bergamot infused blend with just the right amount of demerara sugar and
vanilla. “It’s versatile and unique, and has really struck a chord with our
customers,” Rutherford said.
Their No. 9 Mine Vodka is
wheat-based and rich in flavor, acknowledging the history of the Fernie miners
who toiled below ground during the mine’s prosperous operation. Although
dismantled in 1958, the mine’s remnants still sit along the Coal Creek Heritage
Trail. Visitors to the area can still view the conveyor building, decaying
ventilation fans and blocked tunnel entrances.
Infused with juniper, citrus fruit, and botanicals, the distillery’s blog deems Fernie’s Prospector Gin, “a clean, pure spirit, which can be perfectly flavored by the distiller or mixologist, or enjoyed in its most honest and raw form.”
The distillery produces
new spirits and liqueurs seasonally. They recently released 5th and Park Damson
Gin, made with locally grown damsons that are picked just 500 meters off the
property in Fernie Gardens.
The Usual Suspects and The
Oddballs
There’s a little something
for everyone at Fernie Distillers, from that refreshing daiquiri made with
pineapple and green cardamom-infused vodka, to an old fashioned stinger on
hand-cut ice. Looking for different and unusual? They’ve got that covered too.
Try the vodka espresso, a smooth mix of their No. 9 Mine Vodka, Fernie Fog,
cold brew coffee, demerara sugar, Miraculous Foamer bitters, house coffee,
cacao bitters and nutmeg.
Whether skiing the slopes in winter or biking the beauty of the Elk River Valley trails in the summer months, Fernie Distillers offers guests excellent service and products. Their success is fueled by the dedication of those who live and work in a vibrant and historic town dripping with myth and legend.
With less than 200 bottles per batch and one of the industry’s few female distillers at the helm, Fernie Distillers proudly recognizes and celebrates all that Fernie has to offer, one exceptional spirit at a time.
Fernie Distillers is open
every day of the week except Tuesday. Fall cocktail hours are 4-10 p.m. on
weekdays and 2-10 p.m. on weekends throughout ski season.
Another distillery conference season has come and gone.
Distillers, weary from their travel across the country, are unpacking their
conference tote bags filled with business cards and supplier goodies. The
follow up vendor emails are slowing trickling in while the distillery owners
dread their upcoming credit card bills. But for now, conference attendees
reflect on everything they learned and have taken away from their adventures.
The first quarter of the year contains some of the biggest craft distillery relevant
conferences and expos including the American Craft Spirits Association (ACSA)
Annual Distillers’ Convention & Vendor Trade Show, the American Distilling
Institute’s (ADI) Annual Craft Spirits Conference and Vendor Expo, and the Wine
and Spirits Wholesalers of America (WSWA) Convention and Exposition.
The ACSA Convention and
Vendor Trade show is usually the first major distiller conference of the year
in either February or March. This year’s conference was in the wintery city of
Minneapolis, Minnesota and appropriately themed “Distillers on Ice”. Next
year’s conference will be in Portland, Oregon March 29-31, 2020. The conference
is three-day opportunity for distilleries to connect with suppliers, attend
educational breakout sessions, collect their awards from the spirits judging
competition, and discuss the issues “du jour” such as lobbying efforts to
continue the Federal Excise Tax reduction. The conference leadership is made up
of elected volunteer board members and committee chairs from across the
country.
Mike Blaum, Co-owner and
Chief Distiller at Blaum Bros. Distilling Co. in Galena, IL brought his entire
distillery team to the ACSA conference this year and was very pleased with the
show. Mike had several takeaways from the conference. “Besides the educational
content and being exposed to new ideas, the networking with industry colleagues
and opportunities to discover new vendors is always a highlight.” The travel
and entrance fees for the conferences can add up but Mike believes there is significant
return on investment for him and his team. “If we can all come home and apply
the concepts we were exposed to, cut our costs or improve the value from
suppliers, change our way of thinking or doing business, and improve safety,
it’s easy to feel good about the ROI.”
The ACSA conference entry
fees for 2020 have not been announced but they are anticipated to be close to
the 2019 fees. For the Minneapolis conference, the prices for ACSA Members were
$625 per person (with additional attendees at $425 each) and non-members $825
per person (with additional attendees $625 each).
The ADI Craft Spirits
Conference and Vendor Expo is usually in March or April following the ACSA
show. This year’s conference was in Denver, Colorado and had over 1,800 industry
members in attendance. Next year’s show will be in New Orleans, Louisiana in
April of 2020. The American Distilling Institute (ADI) is privately owned with
conference leadership positions filled by full time employees. The ADI show is
a week long event with several hands-on workshops, such as whiskey and rum
distilling classes, before and after the three-day conference. Like the ACSA
show, distillers can meet with suppliers on the vendor expo floor, attend
educational sessions and paid workshops, and attend the Gala dinner to receive
their awards from the spirits judging and tasting panel.
Matt Beamer, Distiller at
Sagaponack Farm Distillery in Sagaponack, NY attended the ADI Conference this
year. Matt enjoyed the one-on-one interactions with industry members. “I would
say the biggest takeaway from attending would be listening to the panel
discussions on several topics. Being in these discussions with distillers
discussing their personal experiences makes a huge difference. The face to face
interactions go beyond a phone call or email. It takes theoretical knowledge
and adds a personal experience to it and makes understanding the issue much
more effective.”
Matt spent time on the
vendor expo floor as well. “Being at ADI and having face to face discussions
with vendors is very helpful. Phone and
email conversations pale in comparison to direct conversation.” When asked
about making the long trip to Denver, he reflected on being part of a bigger
community. “There is nothing like being in the community of distillers. When
we’re at ADI, we get a sense that we’re not on an Island, but instead in the
very thick of the journey of being a craft distiller.”
Matt and his team’s time
away from the distillery, travel expenses and conference fees were high but he
felt it was a sound investment. “As for return on investment, we come back
excited, invigorated, and ready to incorporate what we learned to take us to
the next level. Totally worth it.”
The ADI Full Conference
Pass fees for 2019 were $550 per person for ADI members (with $350 per
additional attendee) and $750 per person for non-members (with $550 per
additional attendee). The ADI Awards Gala dinner is an additional $50 per
person. Additional paid workshops are also available. It is anticipated that
the 2020 conference will have similar fees.
The ACSA conference and
ADI conferences provide many similar benefits such as a vendor and supplier
expo and diverse educational workshops but there are many reasons to attend
both. Some distillers choose to attend one versus the other while many
distillers try to attend both conferences each year. Jared Himstedt, Master
Distiller of Balcones Distilling in Waco, TX is one of the many distilleries
who send teams to both conferences. “For me, the value falls into a couple of
categories. The most enjoyable by far is the time with industry friends and
colleagues. Every year there is always a new connection made or chance to
deepen old ones, whether it’s serious discussion on the trade or just good
laughs over drinks. Opportunities to discuss and brainstorm around legislative
issues are super valuable to me.”
Jared and the Balcones
team are experienced distillers who have had some disappointments with the
technical educational sessions at the conferences. “I always look forward to
technical and research sessions with high hopes, but I feel like only a few
deliver. There are only a rare few that live up to the expectations of
delivering actual research. A lot have anecdotal and uncontrolled ‘experiments’
that leave me a bit disappointed. I look forward to those getting more dialed
in over the years.”
The Balcones team believes
that the price to send the team to these conferences is an investment more then
an expense. “We have no problem investing in the professional growth of our
crew as long as they see the value in the experience. The team does a good job of attending sessions
relevant to their role at our distillery and bring a lot of good info back to
the table.”
The last major show that
craft distillers attend in the first quarter of the year is the Wine and
Spirits Wholesalers of America (WSWA) Show. The WSWA show is an opportunity for
wineries and distilleries, big and small, to reserve a booth to showcase their
products to distributors from across the country. Distributors walk around the
show tasting products and meeting up-and-coming brand owners. If distributors
like a product, they can decide to add it to their portfolio for distribution.
The WSWA show is one of the biggest wine and spirits show in the country.
Impressing a large distributor could mean a huge increase to sales for a
growing craft distillery. This year the show was in Orlando, Florida and next
year the show will be in Las Vegas, Nevada. The show alternates between these
two cities every year.
Nick Ladig, VP of Sales of
Hotel Tango Whiskey, Inc. in Indianapolis, IN. attended the WSWA show in
Orlando, but did not attend the ADI or ACSA conferences this year. Nick’s
biggest take away from the WSWA show as both the opportunity for new sales and keeping up with industry trends.
“It was interesting to see the proliferation of new products chasing the trends
(ex. canned cocktails, low abv) and the emergence of the new web-based tier in
alcohol distribution and wholesalers becoming more disciplined when adding to
their portfolios.”
When asked why Hotel Tango
Distillery did not attend the ADI or ACSA conferences, he felt increasing sales
was priority for them right now. “We opted not to attend ADI/ACSA because they
are more educational and internally focused versus WSWA which is more likely to
lead to new business partners.”
The WSWA pricing for
distilleries, wineries, and brand owners to get a booth varies. For WSWA
Members booths start at $2,800 for a 10’x10’ booth but go up to $11,900 for a
20’x20’ island booth. Larger suppliers may opt for a private suite or reserve
entire conference rooms to showcase their brands. Distillers can pay for
additional attendee tickets such as $275 per model and $675 for each additional
non-member or spouse to attend.
Tyrone President and
Co-Founder of Islamorada Distillery in the Florida Keys attended both the WSWA
and the ADI conferences this year. At the ADI conference Tyrone and his
distillery team was able to take away education on good distilling practices.
At the WSWA show, Tyrone was able to expose his brands to distributors of all
sizes. “The WSWA show opened us up to industry contacts and smaller
distributors that we wouldn’t have been able to connect with before. We got to
talk to people in the industry that gave us excellent advice like not to be in
a rush to get out of your home state and don’t grow too fast. We are a small
startup distillery and competing against the large brands can be incredibly
difficult.”
Whether distillers are
looking for hands-on workshops, educational breakout sessions, panel
discussions with industry experts, connections to vendors, or exposure to
distributors, the first quarter of the calendar year has multiple resources.
Distillers who can raise the funds to travel to the ACSA, ADI, or WSWA shows,
will usually find a considerable return on their investment.
What do apple pie moonshine,
birthday cake vodka, blueberry liqueur, absinthe, spiced rum, and cinnamon
whiskey have in common? All are distilled spirit flavors, and they make up one
the fastest growing segments in the industry.
The growth of these flavored varieties isn’t necessarily indicative of
market expansion. Vodka, with entries
that include pumpkin pie, marshmallow and cookie dough, has seen stagnant sales
in the U.S. since 2003. Sales of vodka’s
flavored varieties experienced steady growth for the same period, according to
market research firm Euromonitor International, but not enough to grow volume
overall, and new flavor releases started to decline in 2013. Around the same time, flavored moonshine hit
it big and a surge of new brands began vying for a piece of the Mason jar
craze. Now moonshine growth has slowed
and flavored whiskey is on the rise, led by cinnamon whiskey and the new fruit
and honey-flavored bourbons.
The bottom line is the flavored spirit market offers opportunity, as consumers
are always looking for something new.
But, this also makes it volatile and risky, rewarding the producer who
can innovate and move to market quickly to benefit from the success of a new
trend or flavor. The good news is that
small craft distilleries have a significant advantage over the larger producers
in their ability to just that.
But, before considering an entry
into the flavored market, let’s review some basic concepts that will improve
your chances of success: flavor development, avoiding shelf-life problems,
complying with the TTB, and leveraging a lower effective tax rate.
Flavor Development
Many distilleries begin by mixing their spirits with flavors, juices,
fruits, or any other unique and natural mixers they have on hand, and then
market test with their friends, neighbors, and local bartenders. It’s not an
easy or quick process, but many distilleries find success using this method.
Several regional craft coffee-flavored liqueurs and vodkas were developed
in-house by mixing two beverages their distillers were passionate about: coffee
and alcohol.
Another option is to utilize the services an experienced flavor house
like Flavorman, Wild Flavors, or Mother Murphy. These flavor blenders and
producers have decades of experience in testing and developing new flavored
spirits, and they have it down to a science. Ask for a specific flavor and
their teams of scientists and researchers will give you exactly what you are
looking for.
For example, the creators of cookie dough-flavored vodka didn’t soak
vodka in freshly mixed cookie batter. The flavor essences were developed by an
experienced flavoring company, and then shipped to the distillery to be blended
and bottled. They can assist you in creating
a blending procedure, or provide you with distillery finished flavorings ready
to blend. And, they can conduct shelf stability testing as a way to help ensure
your product looks good on the shelf, or after being exposed to extreme
temperatures.
A third flavor development option involves partnering with an
established craft distillery with experience launching a few of their own
flavored offerings. They can bring
expertise in blending sugar, flavorings and colors with distilled spirits, and
can help you develop your recipe. They
may also be able to source the blending ingredients, manage the government
compliance and application process, and even bottle for you to help get your
product out to market as fast as possible. Once you have the capacity and
expertise to do it yourself, you can bring the process in-house.
Avoiding Shelf-Life Problems
Introducing foreign objects like whole cherries, strawberries, cinnamon
sticks, or other non-liquids has the potential for serious shelf-life issues.
Before shipping anything with a foreign object, make sure the bottle sits in
sunlight and in extreme temperatures for at least a month before you
manufacture a large batch. You need to see what the product looks like over
time, as fruit may oxidize and other ingredients can change in color.
The same foreign objects that give your flavored spirit its unique
qualities may also be visible in the bottle.
Many consumers are not used to sediment or objects floating in their
bottles, as many large distilleries use chill-filtration to remove every last
bit of sediment, barrel char, and haze from their spirits. Educating consumers
on the role of residual sediment in full-flavored spirits may be challenging,
but your continued success could depend on it.
Consider addressing the subject on your packaging or display, as well as
in your other consumer communications.
And, finally, do your blended fruits or juices have an expiration date,
requiring bottling within a short period of time? This is a shelf-life issue as well, albeit an
internal one, and it is an important issue to address with purchasing, storage
and quality control procedures before going into full production.
Tax and Trade Bureau
(TTB) Compliance
Next on the agenda is ensuring compliance with the TTB. Your formula
must be submitted for approval, along with the detailed list of ingredients,
blending steps, and batch details. TTB approval may take 20-40 days and the
agent may ask for a sample to evaluate, although this is not common. After the
formula is approved, you can then apply for approval of the bottle label which
may take another 30-50 days. The bottom line is that earning TTB approval is
not a quick process, so be sure to allow for it in any product launch timeline.
Compliance requirements continue beyond the approval of your formula and
label, as each batch must be made within tolerance of the approved
formula. Meticulous batching records
must be kept and should include the DSP/Plant Number, the TTB Formula Approval
Number, the ingredients used, blending tank name, proofing notes, and other
batch details.
Each batch must also be proofed to ensure it is within tolerance before
being bottled. The TTB requires that, if a flavored spirit contains solids in
excess of 600 mg per 100 ml, the true bottle proof can be no higher than the
stated label proof, and no lower than 0.5 Proof (or 0.25% ABV) below the label
proof. For flavored spirits, this may
not be as easy as just measuring with a traditional hydrometer, as the spirits
can be “obscured”.
Spirits are considered obscured due to the change in density from the
sugar and other solids, requiring an obscuration test utilizing a small desktop
still to distill off the liquid from the sample, leaving only the syrups and
solids behind. After the recovered distilled spirits are collected, water is
added to make up for the original solids left behind, and it can then be
proofed accurately with a hydrometer or density meter. The entire process can
take anywhere from 2-4 hours per batch.
An alternative is to send a finished sample to a TTB-approved lab to do
the proofing, but it can take a few days to get the results. And there are some
desktop density meters that can do obscuration testing, but these can be very
expensive.
It is crucial that a craft distillery proofs their flavored spirits
correctly and in full compliance with regulations. TTB agents randomly pull
spirits off liquor shelves across the country, and then test for proof and fill
tolerance, and to ensure the approved formula was followed. If a bottle is
found to be out of tolerance, the TTB will ask for the distiller’s batching and
proofing records, and may issue fines, penalties, or additional taxes.
Leveraging a Lower Effective Tax Rate
The final and most important
consideration for flavored spirits is the opportunity to pay a lower effective
tax rate. Distilled spirits are taxed at a standard federal excise tax rate of
$13.50/proof gallon. However, with flavored or blended spirits, there are
methods a distillery can use to lower that tax rate.
The most common example is OTS (Other Than Standard) wine. This high
proof wine can be transferred into a distillery and blended with spirits. The
portion of the alcohol contributed from the OTS wine is taxed at the much lower
rate of $1.57 per gallon. Another option is to use tax-paid flavorings that
contain some alcohol, where up to 2.5% of the total proof gallons in the batch
contributed by the tax-paid alcohol are taxed at 0%.
An important warning: these calculations are not simple and managing a
lower effective tax rate can be challenging. A craft distillery interested in
developing a flavored spirit with a lower effective tax rate would be wise to
consult with an experienced flavor house or supplier for guidance.
In summary, the flavored spirits market continues to expand and
innovate, but the same demand for innovation also introduces volatility and
risk. A distiller looking to compete in
the category should spend time in research and preparation, so that its sour
pitfalls can be avoided, and the sweet rewards can be enjoyed.
What do a former chef, police officer, wine taster,
lawyer, home brewer, fireman, general contractor, and farmer all have in
common? They all have become award winning distillers. With new craft
distilleries opening every month, how does a startup find the
right individual to run their stills? Given the shortage of
experienced distillers, looking for the right candidate outside the
industry may be the only option. What core skill sets would make
a good distiller? What skills are crucial to running the day-to-day
operations of a craft distillery? After the right candidate is
found, how does this person begin a lifetime of learning?
A quick scan of the
American Distilling Institute (ADI) Online Forums shows “Help Wanted”
posts looking for distillers outpace the “Job Wanted” posts by almost
3 to 1 (http://adiforums.com/). Individuals with distillation experience, or
even fermentation and brewery experience, are in high demand right now. Given
the shortage of available experienced distiller candidates, some
craft distilleries are connecting with professional recruitment services
normally only used by larger distilleries. Even then, finding someone with
real-world (and legal) distillation experience can be a challenge.
In the end, most startup
craft distilleries will not be able to recruit an experienced head distiller.
However, there are some key skill sets to look for when selecting this
crucial member of the team. The most important and fundamental skill an
aspiring distiller must have is a good palette. The ability to
taste distilled spirits and identify subtle differences is critical. All
the most advanced automated control systems in the world cannot
replace the importance of being able to taste and smell spirits to
make the correct cuts. The head distiller must also be able to
evaluate the quality and flavors of spirits during barrel aging, determine what
batches to blend, and even ensure the correct profile before the spirits are
bottled. These skills sharpen with experience and training but must build on a
core ability to taste and smell. Sherman Owen, Distillery Consultant
and Owner of Artisan Resources LLC, says, “If you can taste the difference
between Hunt’s and Heinz ketchup, you can learn to be a distiller.”
Besides having a strong
palette, an aspiring distiller must be driven and have a strong work
ethic. Eight-hour work days are a rarity in most craft distilleries. If
there is an equipment breakdown, it may take twelve or more hours to distill a
batch of spirits. Distilling vodka or gin may take a full day or
beyond to completely finish. A distiller must be willing to stay with a project
no matter what.
Another key skill
set is to have a reasonable mechanical aptitude. If something is
not running correctly, can they start to investigate what went wrong? Does
the aspiring distiller have any experience fixing basic mechanical issues? Most
craft distilleries do not have a full time maintenance staff. Instead of making
the expensive call to bring in a mechanic or equipment vendor, can
the distiller safely grab the right tools to troubleshoot the
issue? A distiller doesn’t have to be able to completely rebuild a pump
motor, but they should be able to identify if the pump stopped working
because of a clog in the hose.
A distiller must not be
afraid to get dirty. Distilling can be strenuous work, even
with automated handling equipment and forklifts. Over half a distiller’s
time will be devoted to cleaning and sanitizing. Commercial brewers can
make good distillers not only because of their understanding of
fermentation and alcohol regulations, but because of a
brewery’s rigorous cleaning requirements. Grain left in an unrinsed fermenter
is a magnet for bacterial infection. Once a distillery gets a bacterial
infection, it can be very difficult to eliminate. If a
bad bacterial infection gets in your fermenter due to a lack of cleaning
discipline, it can stall your fermentation and kill your yeast. A distiller
must be diligent to balance their time between running the distillery
operations and cleaning up after each day.
Distillers must
be open to learning new things. A distiller is going
to learn something new every day. If
a distilling candidate does not have distillation experience,
they will be inundated with new experiences for the first several months.
However, the learning never really stops. New distillers need to be like a
sponge, learning as much as possible about all aspects of the industry. They should
be open-minded about experimenting with new materials and tools. If there are
issues with fermentation, they should learn what variables can be
tweaked. Even the most experienced distillers will make mistakes, but the
most successful distillers will learn from them
and prevent them from happening again.
One of the many
things that makes the distilling industry unique from most other small
businesses is that it is highly regulated and taxed by the federal
government, specifically the Tax and Trade Bureau (TTB). Distillers must be
organized and be able to keep copious notes. They must be able to learn and
understand federal and state regulations to ensure compliance. If a distillery
is audited and the distiller did not keep sufficient notes, the business could
be heavily fined or shut down. The distiller’s role is crucial
to ensure everything is organized and audit-ready. There are
online systems to help track distillery production and federal excise
tax liabilities, but the distiller needs to be disciplined and organized
enough to enter the day’s transactions. It is also critical that an
aspiring distiller who is thinking about getting into the industry knows that
stealing or “bootlegging” cases from a distillery is a felony. This is
a very important conversation to have with anyone thinking about getting into
the business.
An
aspiring distiller must be a leader. Owners and managers will lean on
the head distiller to keep the pace of the team and distillery
operations. Upstream, the distiller must ensure they have enough raw materials
to cook, mash, ferment and distill. Downstream, the distiller must ensure they
have enough empty tanks to hold the spirits. The distiller will drive the
supply of spirits for filling barrels, batching recipes, proofing and blending,
and even preparing for bottling. Each operation requires coordination,
planning, materials, and labor. For many craft distilleries, it is the head
distiller that provides the leadership that keeps all the working parts in
sync.
A distiller must have
charisma. Tourists, fans, locals, and other customers will patron a distillery
for a chance to meet the distiller. When there are tastings at bars, liquor
stores, distributors, or other events, the distiller should be there. To
have a drink and chat with a head distiller is a highly coveted event along the
bourbon trail in Kentucky. Consumers seek this unique
experience from their local craft distilleries as well. Having a head
distiller who is approachable and accessible will go a long way to create
raving fans. They also must be passionate about what they are making.
That passion and excitement will carry through when consumers
come in for a tour.
Finally, a new distiller
must completely understand the competitive landscape. Visit as many
distilleries as possible, large and small. Build a good relationship with the
surrounding craft distilleries. Go to a large liquor store and buy as many
distilled spirits as possible and taste them all. Identify what is good and
what can be improved. Find where your products fit into the mix regionally and
potentially nationally. How do you want your product to taste? Can you tell the
differences between similar product types? Subscribe to magazines with tasting
notes of spirits. Research the award winning distilleries. Make the rounds and
learn about the industry.
After finding the right
candidate, where to begin a new distiller’s training? The
best place to start is at a class focused on craft distillery operations. There
are several classes available throughout the year including Six & Twenty’s
Distillery Management Course in Piedmont, SC (http://www.letsdistill.com/),
Camp Distillery at MB Roland in Pembroke, KY
(http://mbroland.com/camp-distillery/), various American Distilling Institute’s
(ADI) Workshops across the country (http://distilling.com/events/distilling-workshops/),
and many others. New distillers should attend the two major
annual distillery conferences; American Craft Spirits Association (ACSA) and
ADI. The ACSA conference is a great opportunity to network with established
distillers and learn about issues impacting the industry. The ADI conference is
a great source of education about the distilling industry for all levels of
experience. Talk with vendors to see what the latest technology can offer
the distilling world. Can the new distiller mentor or shadow at another distillery
for a week? This could be some of the best education available.
With hundreds of new craft
distilleries opening every year, it will be a long time before there
are enough experienced distilling professionals to fill every need.
However, if a passionate, hardworking, organized, and eager individual
with a strong palette has the drive, they can make a fantastic
distiller. The head distiller is the true face of the distillery so
they must be a team leader. Once the right individual is found,
the lifetime of education begins. Taking classes, networking at conferences,
and meeting fellow distillers can give a new distiller the foundations to grow
on. After a lifetime of education, fine tuning your skills and experimentation with
new techniques, you too can become a master of your craft.
