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09.2010

Massachusetts Beverage Business

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Article By: Liza Weisstuch

In the beginning, there was rye. The early colonists made it – particularly around Pennsylvania and Virginia – because rye was a bountiful crop. Even George Washington distilled it when he wrapped up his presidency and settled at Mount Vernon. His still house was completed on the vast property in 1799. Now, over two centuries later, thanks to the preservation efforts of Mount Vernon and the Distilled Spirits Council, Washington’s distillery has been reconstructed at the original location (the facility burned down in 1814). With the professional input of David Pickerell, former Master Distiller of Maker’s Mark, a batch was recently produced in accordance with the founding father’s original specifications (including that it be bottled and consumed unaged). Several barrels yielded 471 bottles, which sold out within hours of its launch at Mount Vernon on July 1, the day of a formal ceremony that kicked off Independence Day weekend. At $85 for a 375-milliliter bottle, it just goes to show that Americans’ thirst for rye is fervent – especially styles that differ from what’s typically found on the shelf.

As the story goes, with westward expansion came the discovery of corn’s abundance, and being resourceful, the settlers used the bounty at their disposal. Before long, the whiskey came to be called bourbon (through a long, complicated tale that involves a royal French clan, the Ohio river, and the beauty of accidental marketing.) Flash forward to 1964, when Congress passed a bill setting federal standards that define how bourbon is produced. In 2OO6, Congress hit the bottle again and established September as “National Bourbon Heritage Month”.

The American whiskey world has evolved by leaps and bounds since then, and while the iconic brands will remain standards, the demand for new, eccentric whiskies made in the USA has been on the rise. To wit: In a single decade, the number of licensed distilleries nationwide has increased from a few dozen to more than two hundred. While most of those distilleries make white spirits and liqueurs, many also make whiskey.

This growth has been so fast and furious that in February, DISCUS announced the establishment of the Craft Distiller Affiliate Membership program. It’s chaired by Anchor Steam’s Fritz Maytag, who’s credited, by and large, as the individual who kick-started the movement in 1996. That’s when he unveiled whiskeys he produced made exclusively with rye again. With that mash bill plus minimal aging, he was aiming to replicate old-world American rye like Washington’s. That product remains one of his three Old Potrero whiskeys Anchor Steam distills today. The DISCUS program is devised to coordinate and align the growing number of small distilled spirits producers (anyone producing less than 4O,OOO cases annually) across the US and keep them all up to speed on the ever-changing, increasingly complicated legal and policy issues that affect the industry at every level of government.

Collectively, these micro-distillers are pulling the proverbial rug out from underneath the long-held perception of American whiskey. In fact, they’re creating what could arguably be referred to as a new sub-category, where the rules that define bourbon and rye need not apply. If one thing binds them together, it’s their hand-crafted, small batch production and their willingness to honor age-old techniques, but also riff on them. Additionally, many prize local crops and resources, including local wood for barrels. Some, like Stranahan’s Colorado Whiskey, have worked in conjunction with nearby craft brewers to have them produce the wash. (Since moving into a bigger facility last year, Jess Graber, founder of Stranahan’s, now produces his own wash.)

Another trailblazer has been Steve McCarthy, who started Clear Creek Distillery in Portland, Oregon in 1985 and had gained renown for the luscious European-style fruit eaux-de-vie he produced with seasonal crops from nearby orchards. In the mid-199Os, he paid a visit to Ireland’s western coast – and when rainy weather prevented him from his planned hiking excursions, he spent the time exploring the single malt collection at the guest house. He got inspired. Figuring he could make his own peated whiskey with Scottish peat, he had some shipped from the UK and McCarthy’s Oregon Single Malt Whiskey was born. In the early 2OOOs, noted spirits scribe Jim Murray paid a visit and declared the malt “the best small distillery whiskey in the world”.

Just as there are now wineries in almost every American state, an increasing number of states are registering craft distilleries. From New York’s Hudson Valley (Tuthilltown Spirits) to Triple Eight Distillery in Nantucket to Berkshire Mountain Distillers in Western Massachusetts to Copper Fox Distillery in Virginia to the vast expanse of California, which Charbay Winery & Distillery and St. George Spirits call home, distillers are turning out a range of products, each of which represents their respective landscapes. Some are limited edition and pricey, others are more accessible.
Scott Bush, an Iowa native and graduate of MIT Sloan School of Management, built his distillery in his hometown of Templeton, Iowa, where his grandfather and an underground ring of his townsfolk distilled rye whiskey during Prohibition. The hooch was widely recognized as “the good stuff” by those who could get it – and those who tried to. It can be said that Bush’s creativity as a contemporary micro-distiller is his commitment to stay faithful to the original recipe, made at a time when distilling was far less sophisticated. He managed to ascertain the original recipe from some of the few of those Prohibition-era moonshiners and, having founded Templeton Rye Spirits LLC, he opened his distillery in 2OO5. He has 27O barrels aging in Templeton. He hopes to do another 1OO this year. At present, it’s only available in Iowa and Illinois, but he’s working on a distribution strategy for the coming months. Bush serves on the Craft Distiller Affiliate Membership program’s advisory council, which is chaired by Maytag.

“Nationwide, states are benefitting from a rapidly growing number of craft distillers that help create business and jobs at a time when it’s all very much needed,” said Ben Jenkins, spokesperson for DISCUS. “Craft distillers are a critical part of the hospitality industry and key to communicating messages about the importance of modernization, our commitment to responsible drinking and the positive role distillers play across our communities.”

That positive role plays out on an everyday level on- and off-premise. “People are definitely interested in more small craft stuff,” said Kevin Scott, a manager at Lord Hobo in Cambridge. “Bourbon is great – I love it – but it’s interesting to see things coming in from all around the country. With craft beer getting mainstream, the market is there for cooler whiskeys. People are curious and want to try stuff like Stranahan’s.”

Joe Howell, manager of Federal Wine and Spirits, is tuned into a whiskey-enthusiastic clientele. He sees the small distilleries’ whiskies, like Stranahan’s and Tuttletown, as a “really niche category”. But it does have the potential to attract a lot of attention because it’s easier for people to visit some distilleries that are closer than bourbon country – particularly Tuttletown, which is in the none-too-distant Hudson Valley region. This regularly leads people to feel an affinity toward the brand. “They really get involved with it – it becomes a family-affair kind of thing. People come out of there with a strong feeling,” he said.

Howell also noted that the number of unaged white whiskies, often referred to colloquially as white dog or even moonshine, (despite the fact that moonshine technically only applies to spirit that’s distilled illegally) is on the rise. A spring new york times article (“Moonshine Finds New Craftsmen and Enthusiasts”) “got a lot of people inquisitive about that,” he said. “It’s nice to see them looking at those whiskeys. I was getting a lot of calls right away about them, including the Buffalo Trace White Dog.” He also pointed out Georgia Moon, which is produced by Heaven Hill and classified as a corn whiskey. It’s aged for less than 3O days in a barrel and packaged in a distinctive mason jar-style bottle. Howell said it’s often overlooked, but he hand sells it regularly because it’s one of the more readily available marques.

High profile press counts for a great deal. McCarthy’s sold out overnight when it won an award, Howell said. “A big award is one of those things that brings people to the retailer immediately,” he asserted. But given the niche nature of the category, despite its growth, price is – and will likely remain for a while – a determining factor. While logic would dictate a younger distillery would need to charge a hefty price to keep a good size of stock aging, consumers are far less likely to experiment with a new product if it’s going to fetch a triple-digit price tag. Howell attests that the more expensive brands can be a tough sell, another reason he tends to veer away from the pricier ones.

It can also be tricky for a whiskey connoisseur like Howell, seeing as he has a honed palate and a sense for what makes a whiskey good, but also wants to support a small company that may be just learning the ropes in its nascent stages of whiskey-making. He’s interested, for instance, in the American Single Malt produced at Nashoba Valley Winery of Bolton, but wonders if the distillate is living up to its full potential. “I’d love to see them put it down in French Limousin oak. It’s put in wine casks and niche packaging. I think if they use French wood, they’ll see some great things come out of it.”

Andrew Deitz, an on-premise sales rep for MS Walker, has seen interest in a few brands, but is sure that its growth will be fueled more by off-premise than on-premise accounts. “For the most part, mixologists are not working them all that much. They stay categorically focused. To some extent, a lot of them are price prohibitive. You’re not going to mix with Stranahan’s or McCarthy’s. Bernheim Wheat has more potential,” he said, referring to a Heaven Hill whiskey that came out in 2OO5. It’s distilled from a mashbill that’s largely wheat, lending it a gentle floral character.

“Bars are selling more bourbon and rye cocktails than Scotch,” said Deitz. “I’ve see people doing cobblers with Bernheim and using it in place of rye. It’s more tangy and spicier than bourbon, and sweeter and rounder than rye. If Kentucky rye is bourbon’s fiery cousin, Bernheim is its more elegant cousin. People are playing with that and the pricing is something they can work with. But I’ve noticed – even with that wheat whiskey – it’s something that goes over well for whiskey enthusiasts in a retail setting. People are buying it because they’re fanatics and want something different. Everyone wants the next cool thing.”

The curiosity factor does indeed come into play at a bar like Lord Hobo. “Any time there’s something that’s good, I’m down to carry it. It’s the nature of what we do here,” said Scott, who recently took on a few expressions from Park City, Utah’s young High West Distillery. “People expect to not know everything we have here. We have things that not every bar has, so we hand-sell a lot. In time, I think people will view this as a destination for having a lot of whiskies other bars don’t.”

Of course, there’s always the matter of distribution. Dozens of experimental whiskeys produced around the country have yet to arrive in the Massachusetts market. Even once a product has a distributor, it’s hard to get its footing in a marketplace dominated by brands owned by colossal global corporations. Howell said that according to Clear Creek’s McCarthy, he’s been cranking out small batch products for 25 years, and he’s only starting to feel good about distribution.

“All companies are looking at quality products. It’s not about trying to distill and mass market,” said Howell. “It can be such a tough thing because of the cost and time involved in an upstart, but a lot of people are starting to get into it. I think it has legs. The distillers will have their following and be able to stand tall and go forward.”

And between the broad, powerful support and the individual interest, forward seems like the only likely direction.


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