ssw Posted January 28, 2011 Share Posted January 28, 2011 Hello, please excuse my absolute ultra newbie post, but this seems like such a vibrant helpful forum. I just know someone will have some good advice for me even though my question is not exactly about distilling, but it is about vodka. I am the smallest of small beans, but I need help... I was doing some experimenting last summer and I started making vodka infusions. I hit upon a method and set of flavors that are unlike anything commercially available. I brought some to a friend's party and it all started from there. People were calling the next day, asking me to make more. I knew I couldn't sell it, but I offered to make it for friends who purchased their own vodka and brought it to me. Friends of friends started to call. I continued tweaking and making it in the name of experimentation, just for fun and for friends. Word continued to spread all over the city. At this point, I have people I don't even know, individuals, businesses wanting corporate gifts, party planners, etc. calling every day wanting my "product", that is not a product, that I can't sell. Everyone says, "you should make this a real business! you should sell it!" but I don't quite know where/if to start. All I know is that people love what I make. There is nothing else like it available. Everyone who tastes it goes crazy over it and immediately wants to buy it. Without my trying, it has grown bigger than what I can manage on my own and even so, I don't know how to make it legit. Should I bail on the whole project and consider it a fun chapter for my memoirs? Should I go with it and try to do something (what?!) with it? I have money I could invest in developing it, but expertise is what I need. Please offer any and all advice. Sam in Philadelphia Link to comment Share on other sites More sharing options...
Gwydion Stone Posted January 28, 2011 Share Posted January 28, 2011 You might try contacting a nearby distillery to see if they'd be interested in contract production for you. Link to comment Share on other sites More sharing options...
Jonathan Forester Posted January 28, 2011 Share Posted January 28, 2011 I agree with Gwydion. Stop by or call Robert and Andrew at Philadelphia Distilling and talk to them. Link to comment Share on other sites More sharing options...
BeerPilgrim Posted January 28, 2011 Share Posted January 28, 2011 You want to "make" vodka and you have money- sounds like you're all set. Do some more web searching, look for companies supplying bulk Grain Neutral Spirit. Some of these guys make it real easy for people to get their own label vodka out there- all it really takes is money (and a license which they can probably tell you more about) and they can do the rest for you. Sounds like you already got the sales covered, but check your state laws as you might have to distribute through a middleman. Link to comment Share on other sites More sharing options...
cowdery Posted January 29, 2011 Share Posted January 29, 2011 You don't need a distillery. In fact, you probably don't want a distillery. Making the vodka from scratch would be a waste of time and money. What you want is a rectifier/bottler. Anybody with a producers license can do this for you. Find somebody close to you and begin discussions. You don't ever even need to get a license because your "partner" can handle all of that. If there are some microdistillers around they might be more interested in working with you than an established rectifier would be, as they tend to be innovative and entrepreneurial. If all you are doing is an infusion, not a redistillation, then all you need is someone with a DSP and a willingness to work with you. Link to comment Share on other sites More sharing options...
Brian Posted January 29, 2011 Share Posted January 29, 2011 Probably the Eagle scout in me, but I would stop your activities until you can get licensed or can come to an agreement with someone who is licensed and operate under their license. If you develop a "record" your future attempts to demonstrate yourself to be a "good operator" could be severely imperiled. Except for rare cases, once you are pregnant it will be hard to make the case that you are a virgin. The difference in effort with holding a ticket for distilling or blending is really quite inconsequential just one more check in the box. Once you take the plunge, you should hold the widest possible license class you can....who knows where your interests can lead??? You should sign an NDA and non-compete with any potential "partner" you come across....blood in the water can attract interesting friends. I would be very heartened by the reaction in the market to your product and know that the lion's share of vodkas in the market come from modification of commodity produced GNS. Best, Brian Link to comment Share on other sites More sharing options...
Scott @ Twenty2Vodka Posted January 29, 2011 Share Posted January 29, 2011 unfortunately, the liquor business is one of those where you can't get started by "selling out of the back of your car or garage" like so many successful start ups go through. The regulations set for our industry have everything to do with "protection of the revenue", where the revenue is the federal excise tax, something the government takes very seriously. The quickest, most legit way to get product out there would be to contract with an existing distiller who will make and bottle your recipe for you. I feel there 2 major hurdles to doing everything legally and from "scratch" with your own DSP license. First is the gauging requirements and paperwork. If you contract out your recipe, the existing distillery will take care of all of this. Second would be the mandatory middlemen. Established distilleries have connections and contacts that will get your infusion out there with minimal cold calling and convincing. Good luck. -Scott Link to comment Share on other sites More sharing options...
ssw Posted January 30, 2011 Author Share Posted January 30, 2011 Wow, awesome... thanks all for your thoughtful responses. I am truly overwhelmed by your generosity... and also, unfortunately, by your advice. I am still trying to get the lingo down. First, to my Eagle scout friend, thank you so much for your concern. I am not selling anything or even buying alcohol - just infusing for friends but keeping my methods and recipes secret, trying new flavors, experimenting with different techniques. So I hope I haven't done anything terrible. It is certainly nothing more than a different twist on things I have read about in Martha Stewart Magazine and the like. But now so many non-friends are wanting me to do the same for them. I'm not comfortable doing it for people I don't know, and it certainly doesn't make sense to spend my time that way if I am not getting paid. But I seriously get calls every day from people begging me to make it for them, offering to pay me whatever (which I can't take), wanting large quantities for corporate gifts, weddings, or events. It is crazy, silly really. My "product" is simple, but people love it. Reading the responses, it sounds like I don't really want to set up my own distillery. I need to find a distillery or micro-distillery or (is there another type of operation?) who will produce my stuff on contract, correct? So then what? How do I sell it since I can't sell it myself. It has to go through distributors, right? What does that process look like for a teeny-tiny operator like me? I have business experience and a good idea of how I would go about producing a small, exclusive, word-of-mouth spreading product like, say, bbq sauce. But the picture seems entirely different in the liquor business. I can't tell you how much I appreciate everyone's help. Even knowing that there is such an active community so willing share is incredibly empowering. If I could, I'd invite you all over for a lovely evening but instead, I'll have to settle for offering my sincere thanks. S Link to comment Share on other sites More sharing options...
Jonathan Forester Posted January 31, 2011 Share Posted January 31, 2011 There is a lot of lingo in this bizz. To make things easy, do like I suggested. Stop by or call Robert and Andrew at Philadelphia Distilling and talk to them. They know about every aspect of what you plan and may be willing to sit down and explain everything. Local and state laws differ, in some states infusing is as illegal as distilling. Some states allow you to be the distributor, others you have to hire a company, and others it is the sate. Some states you can be your own PR and Brand Rep or Ambassador, and others you have to hire them. I don't know PA's laws, just NY and Maine; and each of those two states were very different. Wow, awesome... thanks all for your thoughtful responses. I am truly overwhelmed by your generosity... and also, unfortunately, by your advice. I am still trying to get the lingo down. First, to my Eagle scout friend, thank you so much for your concern. I am not selling anything or even buying alcohol - just infusing for friends but keeping my methods and recipes secret, trying new flavors, experimenting with different techniques. So I hope I haven't done anything terrible. It is certainly nothing more than a different twist on things I have read about in Martha Stewart Magazine and the like. But now so many non-friends are wanting me to do the same for them. I'm not comfortable doing it for people I don't know, and it certainly doesn't make sense to spend my time that way if I am not getting paid. But I seriously get calls every day from people begging me to make it for them, offering to pay me whatever (which I can't take), wanting large quantities for corporate gifts, weddings, or events. It is crazy, silly really. My "product" is simple, but people love it. Reading the responses, it sounds like I don't really want to set up my own distillery. I need to find a distillery or micro-distillery or (is there another type of operation?) who will produce my stuff on contract, correct? So then what? How do I sell it since I can't sell it myself. It has to go through distributors, right? What does that process look like for a teeny-tiny operator like me? I have business experience and a good idea of how I would go about producing a small, exclusive, word-of-mouth spreading product like, say, bbq sauce. But the picture seems entirely different in the liquor business. I can't tell you how much I appreciate everyone's help. Even knowing that there is such an active community so willing share is incredibly empowering. If I could, I'd invite you all over for a lovely evening but instead, I'll have to settle for offering my sincere thanks. S Link to comment Share on other sites More sharing options...
cowdery Posted February 1, 2011 Share Posted February 1, 2011 As long as you are not selling alcohol -- and 'selling' means exchanging anything of value for it -- and not distilling alcohol, then you don't need a license during your 'product development' phase. What you have described is perfectly legal. Infusing is not distilling. Many people make flavored vodka or liqueurs to give as gifts. As long as you are obtain the vodka legally -- i.e., buy it in a store -- and don't sell your 'product,' you're not doing anything contrary to the law. People who have advised you otherwise are mistaken. A rectifier is a type of licensed distilled spirits producer who does not distill. A recitifer buys neutral spirits (vodka) and often other types of distilled spirits, adds other ingredients, then bottles and sells the results. That's not to say that a small distiller wouldn't be able to work with you as well, just that what you're talking about doesn't require distillation. Link to comment Share on other sites More sharing options...
GMB Posted February 15, 2011 Share Posted February 15, 2011 What about creating the infusion and then reverse dry distill it to end up with the "essence" in the pot (use a boiler withot internal heating elements!) and recapture the alcohol as usual (for use in the next infusion). Dilute the essence in the pot with a little distilled water and bottle it. This essence can now be legally sold (because it has no alcohol in it). The buyer takes this essence and add it to a bottle of really affordable vodka and voila! your drink re-created! This method works esecially well when herbs are infused. Off-course the above is a simplification and will require a bit of experiomentation... which is part of the fun.Some essences require mixing (with other essences that is as easy to create) or the addition of sugar to the end product. Link to comment Share on other sites More sharing options...
Chris Martin Posted February 16, 2011 Share Posted February 16, 2011 Can someone inform whether the above ^^ can be done in the USA without a distilling license? Creating an "add-in essence" seems to be a good idea from a product standpoint... Link to comment Share on other sites More sharing options...
Beauport Bob Posted February 16, 2011 Share Posted February 16, 2011 "Add in essence" , I believe a cocktail is a cocktail, as long as the alcohol was attained legally (tax Paid). You would be more advised to register and check with the FDA about that. SSW...to the original discussion of the thread here, I am interested, are your ingredients FDA approved? "GRAS" = generally regarded as safe for this application. I would congratulate you on finding "I hit upon a method and set of flavors that are unlike anything commercially available.". You will have the next big thing to sell. Cheers, Bob Link to comment Share on other sites More sharing options...
ssw Posted February 16, 2011 Author Share Posted February 16, 2011 Whoa, GMB, you just blew my mind! I don't think it would be great in this application, but with herbs and other similar flavors... wow! Thanks! Link to comment Share on other sites More sharing options...
ssw Posted February 16, 2011 Author Share Posted February 16, 2011 Bob, yes, my ingredients are FDA approved... shelf stable, easily purchased in any store. It is so simple it is embarrassing, but people go crazy for it. "You will have the next big thing to sell." I know it, but it is the selling part that is the obstacle. Can I take us off on a real tangent here just to get some reactions?... Is there any universe in which a business model could exist that resembles the very popular in-home, independent consultant models a la tupperware, pampered chef, arbonne cosmetics, I believe there are food ones too? The host invites their personal friends to their private home. All are served free products. Products are then available to order through a larger company or distributor. Consultant makes a percentage of sales and host gets credit toward product. I imagine the obstacles are many and would vary state by state. But when I tell people about my "recipes" they are mildly interested. However, when they taste them, they instantly want more, start planning parties where they can serve it, telling their friends, and so on. I am wondering how to develop a plan that builds on word of mouth and social networks that then demand the product from the source or distributor rather than trying to work it the other way around. Just dreaming instead of getting my real work done today... thanks! Link to comment Share on other sites More sharing options...
cowdery Posted February 16, 2011 Share Posted February 16, 2011 The problem with the in-home, friend-to-friend selling model for this is that you need a growing portfolio of products. You can't do it with a single product. Also, your business model involves serving alcohol, which creates some potential liabilities. As for what you need a license for, it's not that complicated to wrap your head around. If you intend to sell an alcohol product, even if you don't distill it but merely flavor it, you're considered a distilled spirits producer and need licenses (state and federal). If you have a process that involves using distillation of alcohol, even if alcohol won't be part of the product you sell, you need licenses for that too. Your best bet is to team up with someone who is already licensed. Just make sure you protect your interests through appropriate contracts with your partner. Link to comment Share on other sites More sharing options...
bluestar Posted February 16, 2011 Share Posted February 16, 2011 Indeed, there are many legal vendors of flavorings or essences that are meant to be mixed with neutral alcohol. As long as you don't bottle it and resell it, you are mixing a drink for personal consumption. Link to comment Share on other sites More sharing options...
slew Posted September 21, 2012 Share Posted September 21, 2012 Late to the party on this topic, but it really struck a chord with me. I've been toying with the idea of opening a craft distillery but, like many of us, don't sit on a heap of cash to get started. Not to mention the obvious time and effort involved in building out a site prior to getting TTB approval or selling my first case. Which is what brings me to this thread - I'm now thinking about contracting with an existing distillery to produce, bottle, label, etc. If I went that route, and found a suitable distributor, I could continue to raise funds and brand awareness while the next phase (i.e. my own distillery) gets built out and approved. The real question for the gurus -- what kind of licensing is needed for that route? Wholesaler? Or even that? Link to comment Share on other sites More sharing options...
Scott @ Twenty2Vodka Posted September 25, 2012 Share Posted September 25, 2012 Which is what brings me to this thread - I'm now thinking about contracting with an existing distillery to produce, bottle, label, etc. If I went that route, and found a suitable distributor, I could continue to raise funds and brand awareness while the next phase (i.e. my own distillery) gets built out and approved. The real question for the gurus -- what kind of licensing is needed for that route? Wholesaler? Or even that? Contracting out other's equipment and distillery is not uncommon...in fact doing so is how Jim Koch began Samuel Adams. There are many in the game who already contract out their distilling and bottling services, they have the necessary excise tax bond which allows for multi-use of the space. (I'm 99% sure the answer to your licensing question relates only to the tax bond, and this is something you would not need to worry about if contracting the services of an existing DSP) Bendistillery.com is a place to start. Or you can check out www.waytogoidaho.com too. Good Luck, -Scott Link to comment Share on other sites More sharing options...
slew Posted September 26, 2012 Share Posted September 26, 2012 Thanks for the input, Scott. So we think we wouldn't need any federal license at all for this kind of operation (assuming tax bond handled by distiller)? That almost seems too good to be true. I'll be attending a course with TTB in several weeks where I plan to raise the scenario as well, hopefully they can provide good direction. Link to comment Share on other sites More sharing options...
hillbilly Posted January 24, 2013 Share Posted January 24, 2013 Can someone inform whether the above ^^ can be done in the USA without a distilling license? Creating an "add-in essence" seems to be a good idea from a product standpoint... I am also a newbie here but if im not mistaken even if you were to buy and redistill the GNS you would still need a license because you are still distilling alcohol and the TTB makes no distinction between the two i may be all wrong but i dnt think i am Link to comment Share on other sites More sharing options...
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