The microbrewing trend of the last two decades has spawned a generation of craft distillers. Across the country, craft distilleries have cropped up, taking advantage of brewing skills gained from experimenting with beer and negotiating the arcane laws leftover from Prohibition. The growth of New Holland Brewing Company and Artisan Spirits in Michigan shows one of the more logical progressions.
"With beer, you can turn grain into profit in a matter of weeks. With spirits, it's different," says Rich Blair, the company's spirits ambassador. "We went through the process with craft beer. But turning a profit with aged spirits is a slow go. We're lucky we could rely on the brewery."
New Holland (www.newhollandbrew.com) started as a brewpub offering an array of craft beers. Eventually it built a second facility just to brew beer, which it now distributes throughout the Midwest and some other states (13 total). Company president Brett VanderKamp is a self-described "rum nerd" and he wanted to move the company into distilling. At first, in compliance with Michigan laws, it was able to distill fruit brandies, which it flavored for use in the pub, but there was a great leap into distilling. The brewpub essentially had to choose between buying all its spirits from a distributor or making all its own. It jumped into distilling in 2008 with a large portfolio of liquors, including whiskey, rum, gin, vodka and a spirit called Hopquila (technically an unaged whiskey made from hops, but with a flavor profile very similar to tequila). Like other craft distillers, New Holland is shooting for distinct and original flavor profiles in its spirits and reaching out to the cocktail movement as a natural market.
"The most common response I get to Hopquila is, 'This is great, but what do I do with it?'" he says. Margaritas are an obvious choice, and Blair develops cocktail recipes to share with bartenders.
The course New Holland followed leveraged its own experience and position as a microbrewer and navigated Michigan's laws. All states have different laws governing production and distribution, and that is one of the reasons craft distillers have taken different approaches. A host of young craft distilleries, all launched in the last decade, are sending representatives and samples to Tales of the Cocktail, looking to introduce and promote their products to spirits writers, bartenders and fellow industry people.
The liquor industry is dominated by major brands that do business in the hundreds of thousands of cases. The growth of premium spirits has helped open the door to boutique products, but the craft distillers are only taking a small bite out of the market. When it started distilling its array of spirits, New Holland produced them all with the same 60-gallon pot still. It has been able to experiment and produce everything from vermouth to flavored liqueurs for its brewpub's bar. This week, the distillery is installing a refurbished 800-gallon still, which will enable faster growth. Existing state and federal liquor laws require distillers to pursue distribution in each state individually. A distillery only does that as it adds the capacity to supply the new market.
San Francisco's No. 209 Distillery (www.209gin.com) is taking a different approach. The distillery was launched by Leslie Rudd, who has been a winemaker at Rudd Oakville Estate since 1996. But he is a transplant to California. Rudd grew up in Kansas, where his family built the large liquor distribution company Standard Beverage Corp., so he has plenty of industry knowledge. He thought the vodka craze would cool off and chose to launch a gin, says CEO Nicole Nicolette.
The name 209 comes from a discovery on property the winemaker bought in Napa Valley. The federal government's 209th distilling license had been issued to a distiller who used a barn on the property to make liquor in the 1880s — likely a brandy, Nicolette says.
Rudd adopted the name but built his distillery in San Francisco. In 2005, it released No. 209 Gin, an artisanal spirit that's lighter on juniper and more citrusy than the traditional London dry gin style. It's hand-stilled five times in a 1,000-gallon custom-built still, and the brand is growing rapidly. It's available in about 35 states, and Louisiana is expected to be added by the end of the year.
"We're trying to trailblaze with our flagship gin," Nicolette says.
The distillery did, however, release a Kosher gin in 2010, one of only two Kosher-approved spirits available in the United States.
Philadelphia Distilling has taken a middle path, also releasing a boutique gin, Bluecoat Gin, which is available in New Orleans, and later adding a few more products.
Founding partner Andrew Auwerda came out of semi-retirement to get into the craft distilling business. He had built up and sold a cosmetics company and was not working when an in-law, Robert Cassell, approached him about starting a distillery. Cassell had accumulated experience at a microbrewery and saw the development of craft distilling as an opportunity.
Along with another partner, they founded Philadelphia Distilling (www.philadelphiadistilling.com) and filed the first application for a new distilling license in Pennsylvania since before Prohibition, Auwerda says. The state had to revisit its application process in order to issue the license.
Starting with a non-aged spirit is the quickest route to getting a product on shelves, and Cassell also believed the vodka market was crowded — with new vodkas being released almost weekly. They thought gin was a ripe category because it hadn't seen a lot of change in 20 years and there wasn't a premium American made gin on the market, Auwerda says. After experimenting with 27 different recipes, they released Bluecoat Gin in 2006.
"We said, 'Let's win the gin war,'" Auwerda says, referencing the way they have branded the product with a little Revolutionary War history and spirit.
The brand did well regionally, and fans started to ask for a premium vodka, Auwerda says. They responded with Penn Vodka 1681 (referencing the year William Penn was granted the land that become Pennsylvania). It's made from organic rye, and it's only available in Pennsylvania.
Philadelphia jumped into the absinthe category with Vieux Carre, and its most recent release is XXX Shine White Whiskey, a triple-distilled spirit made from three types of corn. It's like some moonshine in that it's an un-aged corn liquor, but it's a triple-distilled craft whiskey that sells for $25 a bottle.
"We're threading the needle on that," Auwerda says.
Philadelphia Distilling expects to produce almost 13,000 cases of all its spirits combined this year. It has the breathing room to develop an aged rye whiskey. Auwerda envisions releasing new spirits every other year at the most.
"We got into white whiskey because we thought it would be a good category for the long term," he says. "We're not trying to do the spirit du jour."