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Thursday, October 23, 2014
Breckenridge Craft Spirits Festival: A supply and demand debate
A couple of craft spirits producers have come under fire lately for the way they are presenting their hooch. Separate class-action suits have been filed against Templeton Rye, in Iowa, andTito’s Handmade Vodka, in Texas, each alleging that the respective distilleries are misleading consumers with claims that its products are small-batch and hand-made.
Consumers are increasingly demanding to know where their food and drink come from, and for many, the factory-sourced whiskey Templeton is bottling and the mass-produced vodka Tito’s is cranking out aren’t making the cut of “craft spirit.”
It boils down to perception versus reality, but the issue has many elements that make it more complex, from honesty in marketing to the realities of supply and demand.
ALL ABOUT HONESTY
Victor Matthews, owner, founder and master distiller at Black Bear Distillery in Green Mountain Falls, said there are two sides to every story. To say it’s right to control the process from grain to bottle and wrong to tweak a mass-produced base spirit oversimplifies the debate.
“On the one hand, you’ve got the fact that you buy stuff from Kentucky or Illinois and process it in some way and, in a way, that’s cheating,” he said. “On the other hand, if a computer is programmed to generate words and writes a poem and it’s read by someone, is that art? The point is, if the stuff in the bottle tastes awesome and everybody likes it, in a way, who cares?”
The main issue Matthews perceives is a company such as Tito’s claiming to make 10 million bottles of vodka on a “little old pot still.” That isn’t physically possible, he said.
“The problem isn’t the product; it’s the producer’s honesty,” he said. “I don’t have a problem with someone buying bourbon based in Kentucky and putting their own label on it and making some awesome product that they age for a couple of years, and they tell everybody, ‘We have our base from Kentucky, but we do it our own way.’”
Matthews will soon be releasing his first product, MountainShine, which he will be creating from scratch in his small cabin distillery outside Colorado Springs, but he said he wasn’t about to judge anyone who was taking a different route.
“If I was going to make MountainShine, I could get that white dog from basically anywhere,” he said, adding that at one point he was approached by a mass liquor producer. She said she could get him a 6,600-gallon stainless steel tanker truck full of anything he wanted. “Any recipe, any age. How different is that from making it, except that 6,600 gallons is going to take me years to make?”
HANDMADE FOR VARIETY
Jamie Gulden, chief monkey boy and jack-of-all-trades at Feisty Spirits in Fort Collins, said his distillery focuses mostly on whiskeys, and at any given time, there are typically 20 different versions of the spirit available in the distillery’s tasting room. Because of the variety of grain bills used to create these products, it wouldn’t make sense to outsource the base spirits.
“We distill all of our own spirits; we don’t buy any distilled spirits,” he said. “The only place we get something from somebody else is when we’re doing collaborations. We do a lot of collaborations with breweries, Fort Collins Brewery, Horse & Dragon Brewery. We’re getting essentially a beer from them, which we distill. But the majority of everything we sell, we do the fermentation, mash, distilling and aging.”
Gulden and co-founder David Monahan started Feisty because they wanted to create a high-quality product that they believed in, and part of that is doing every step from start to finish.
“It also gives us a lot more flexibility,” Gulden said. “We have 20 different types of whiskey usually, and you can’t do that if you’re buying it from somebody else. We use a lot of different grains to get different flavors, and you’re starting from the grain. To get those different flavors, you have to do it all, and that’s the way we want to do it.
“It just seems to us like it’s a lot more fun, for one thing. We also started this company to have fun, and we’re trying new things all the time, and that’s part of what makes the job fun for us. We’re not really looking at it as the business of how to maximize money.”
Copper Muse Distillery, also in Fort Collins, attacks the creation of its rum products and its vodkas from two different angles, said Jason Hevelone, owner and distiller.
“Like everything, honesty is the best way to go,” Hevelone said about divulging his distilling processes. “Be forthright about what you do. Ours is a combinational strategy. For our vodka products, we source a neutral grain spirit for that and combine it with our water here in Fort Collins. Our rum products we ferment and distill here on site.”
Copper Muse is also starting a program for whiskey, which will be 100 percent made and distilled on site, and will be introducing a gin, which will start with an outsourced neutral grain spirit distilled with juniper, anise and coriander at the distillery.
“When I look at vodka, you’re distilling it until it’s like pure ethanol and then you cut it back with water,” Hevelone said. “That’s why vodka doesn’t have a discerning taste to it; you go to pure ethanol and add water to it. From a distiller standpoint, being able to impart any interesting, craft flavor profile, there’s really nothing there to do. You aren’t aging it; you are really doing nothing but adding water to it.”
Hevelone said having limited resources when the distillery got started, it didn’t make sense to focus on distilling vodka, whereas, with his other product, rum, he can bring in black strap molasses or cane sugar and control how much of that comes across in the final product.
“We have a bourbon-barrel-aged rum, where we use used bourbon barrels and impart more of those whiskey notes, those tannins and vanilla notes,” he said. “It’s in the selection of barrels I use, and I can impart more of the heart into the spirit. I felt with my limited amount of time and resources I have at hand, that’s where my time and resources should be focused.”
The same applies to the whiskey products the distillery is crafting. Hevelone said it was important to him to have more control over that process.
“Otherwise, all you’re really kind of doing is rebottling something some other guy is doing there,” he said. “You have some art with mixing different types of whiskeys, but I’m not interesting in that with that product. For the gin, it’s about the type of botanicals you are putting in there. With the exception of juniper, there’s a wide selection of herbs and botanicals — that’s where you get the differentiation.”
Tim Harland, national sales director for Wyoming Whiskey in Kirby, Wyoming, said people care about what they are buying and what they are consuming, and ingredients are an important part of that. He said all of the ingredients that go into Wyoming Whiskey’s small-batch bourbon, from the Bighorn Basin wheat and barley to the water from a mile-deep, limestone aquifer, are sourced from within 100 miles of the distillery.
“We’re supporting the local economy, local farmers, and people want to know what’s in their juice,” he said. “The recent things that are going on nationally, I think it’s good. I think people should know what’s in their bottle and what’s in their box.” As far as truth in marketing, Harland said his distillery is “as transparent as they come.”
“We’re proud of the fact that the process we use is traditional,” he said. “We wanted to make a traditional bourbon. … We have no problem with people blending and it’s kind of a business model that wineries have taken — get your juice and put your label on it — as long as people are open, transparent and own up to the fact that what they’re doing is what they’re doing.”
Harland said there’s a kind of cowboy creed of honesty in a lot of the mountain states, and Wyoming Whiskey was fortunate to have owners who could wait four years before releasing their first bourbon in order to avoid importing any liquid to supplement or kick off the brand.
“It’s about being true to your word, your integrity and your honesty,” he said. “But we had the ability to make a pretty large craft distillery. We’re doing about 12,000 to 13,000 barrels annually, which isn’t small potatoes. So with the large investment that our owners had made, they wanted to make sure it was bourbon made the right way with local ingredients with someone who had a pedigree of making fine quality spirits. We know that’s not the only way to do it, but that’s the way our owners chose to enter the market.”
SUPPLY AND DEMAND
Matthews said sourcing mass-produced base spirits has actually allowed the craft spirit industry to remain solvent and even grow.
“When you get an explosive, massive demand, how are you supposed to keep up with that when you’re running a 50-gallon still in a warehouse somewhere?” he said. “Would we rather have had all of the craft distillers get hit by a wave of desire and all of them come up short and all of America give up on craft spirits because no one can keep up? Or have people fill in the blanks and blend where they have to, to keep the ball rolling.
“No one talks about that. They either want to support the purchasing and blending, or they want to make those guys look bad to make my product look better. If I have a true label and everything is true, then I look better than someone else who isn’t doing that. So am I going to try to disparage them to make myself look better?”
Outsourcing stems from supply and demand and, on a much simpler level, limited resources — two huge problems, Matthews said.
“We don’t want the demand to outrun the supply because then everybody gives up,” he said. “If you go to the store to get your Coors Light and there’s none, then go to the store again and there still isn’t any, by the third time, you’re drinking Bud Light, and you’ll never drink Coors Light again because now you love Bud Light. We don’t want a shortage, but we want to yell at people who blend. That doesn’t work logically, which is why I don’t judge.”
A more specific issue for craft bourbon makers is a lack of barrels, Matthews said. In the last two weeks, he’s talked to every single producer of barrels in America and every single one has a six- to 12-month minimum lead time for production.
“If I wanted to make a bourbon, I have to get that stuff in a barrel right now. It’s got a four-year or six-year wait,” he said. “Lets say we added 20 to 30 craft distillers in Colorado just in the last year, which is way more than 200 nationwide. The question becomes, what are we going to do? If we go with the absolute honesty, start to finish product, we’re not going to make bourbon. We’re going to have to use used barrels and make whiskey, use smaller barrels, make it taste different.”
Eventually, the lack of barrels is going to push many distillers to buy, blend and bottle from the big bourbon manufacturers in Kentucky, Matthews said, or they are going to have to pause and there will be a year where there are many craft distillers who have no bourbon, thus losing market share and customers.
“In my opinion, concerning whatever they do — blend, make it themselves, buy it and reprocess — more power to them,” he said. “I pray for everybody; I pray for their survival, their ability to produce what they want to produce the way they want to produce it, but we have a big problem and nobody’s talking about it.”