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Spirits: Craft whiskey distillers are over a barrel

By Jason Wilson
Wednesday, May 19, 2010; E05

"The future of whiskey is about rosy as it gets." So trumpets the first page of the American Distilling Institute's 2010 Directory.

That bright outlook is quickly followed by this sobering thought: "The future of specific brands, especially craft-distilled whiskeys, is less so."

Such were the contrasting assessments presented by the ADI, an organization of craft distillers, at its seventh annual Whiskey and Moonshine Distilling Conference, held this month in Louisville. With seminars and panels including "So, You Want to Open a Distillery," "Mixology and Marketing" and "High-Proof Blending: Pros and Cons," and a small trade show with companies hawking oak barrels, organic malted barley, frosted bottles and more, there was plenty of encouragement for those looking to begin making distilled spirits.

Meanwhile, there were plenty of reminders about what a brutal business spirits can be for the would-be entrepreneur.

On one hand, American microdistilling is more vibrant than it has been since before Prohibition. The number of licensed distilleries in the United States more than doubled in the past decade, from 300 to 725. On the other hand, the spirits industry is still dominated by giant multinational conglomerates and hampered by most states' draconian three-tiered setup, in which a privileged wholesaler is placed by law between the producer and the retailer, making it a small miracle if craft-distilled products actually land on a liquor store shelf. The old joke in the wine business about how to make a million bucks -- start with $10 million! -- seems apt here.

Yours truly sat on a panel and was asked rather blunt questions about How to Get Good Press. (I'm not sure that what I said will have business schools clamoring for my insights: Make good booze; tell a true story; don't bother me with too many news releases.)

Making whiskey is an especially tricky proposition. Try approaching a bank loan officer with this business plan: "Okay, so we've made this amazing product. But we're not going to sell it just yet. See, what we're going to do is stick it in a wooden barrel. Then we're going to wait two or four or six years. Or longer. Then we're going sell it."

"A lot of people would really like to make whiskey, but the big problem is the barrel," said David Pickerell, a former master distiller at Maker's Mark and now a consultant, who spoke at the conference. "The thing everyone wants to know is, 'How can we get this stuff out of the barrel faster?' "

The reality of the barrel is why so many start-up distilleries first sell vodka and other white spirits in hopes of financing the aging whiskey to come.

Yet despite all of the obstacles, it truly is an exciting time for American whiskey. The new generation of distillers will change the way we think about the spirit, and the microdistilling trend should continue to snowball over the next decade as small-batch whiskeys win greater awareness and distribution.

For now, the revolution moves slowly. It breaks my heart that so few of the interesting, high-quality whiskeys I tasted at the conference are available at stores in Washington, Maryland and Virginia.

Among those that are sold here are some I've raved about before, such as the excellent rye whiskeys from Tuthilltown Spirits in New York's Hudson Valley, the unaged whiskey from Death's Door in Wisconsin, and Rendezvous Rye, made by High West Distillery in Park City, Utah.

Closer to home, in Virginia, you can find great single-malts and ryes from Copper Fox Distillery in Sperryville and a beautiful unaged whiskey (as well as a slightly aged rye) from the recently opened Catoctin Creek Distilling Co. in Purcellville.

But there are so many more whiskeys whose arrival here we're awaiting. There is, for instance, an interesting microtrend of whiskey distilling in the mountain states, Colorado in particular. Stranahan's, in Denver, makes one of my current favorites, and Peach Street Distillers, in Palisade, Colo., makes an exquisite, spicy and complex bourbon. If you can find them, buy them.

As part of the ADI festivities in Louisville, the craft distillers were invited to a reception at the headquarters of liquor behemoth Brown-Forman. It was a discordant scene: a group of small distillers with lots of interesting facial hair, tattoos and rough-and-tumble work clothes, sipping Woodford Reserve in the posh tasting room with the suits from Brown-Forman. The party was hosted by the Distilled Spirits Council of the United States, a trade group, which recently offered affililate memberships to distillers who produce fewer than 40,000 cases per year.

Brown-Forman -- maker of Jack Daniel's, Southern Comfort and Finlandia, among other brands -- probably could have bought out every single craft distiller in attendance. But that didn't stop a corporate executive from joking to the crowd, "You know, we're just a small craft distiller ourselves."

There were laughs. And later, privately, there was a little grumbling among the microdistillers. But who knows? If the future is indeed rosy for American whiskey, the next Jack Daniel's just might emerge from this group.

Wilson can be reached at food@washpost.com.

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