cestrin

Making Business Sense of Gin (from grain)

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We're currently making our gin from scratch and are having a hard time of making business sense of it. Based on our calculations we will be making a profit of $3 - $5 per bottle once we move to a distribution model (we're currently self-distributing). Since we have to perform 3 runs of the gin (stripping, spirit, and botanical run) it takes a lot of time and leads to quite a bit of waste (we lose 10 - 20% every run).  How do others who make gin from grain (NOT GNS) make this work financially?

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I'm not certain many others do make it work, unless there are significant tax incentives in your state/country for working from local materials. 

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Consider your price point and the size of your equipment.  I would say it makes sense if you are using a cheap grain source like corn, or one where you have a interesting story and flavor profile and charge more because of this.  But, ideally, you have a huge still that can make GNS in one pass, or even a continuous column that does it.  Then you are at least on par or better than GNS (when purchased in totes).  With a little still, not sure what the point would be.

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Jeffw, the point would be because we like gin and want to make it. We prefer to not use GNS as all of our other products don't use it. I agree with the large still comment and unfortunately our largest still (right now) is 100 gallons (we made our own). Our next still will be larger. Anyway, asking because we want to make all our products from grain.

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We make our own GNS / Vodka, Gin base etc, what I don't quite understand about your question is how or why you are losing 10-20% X 3 runs ?  You should be getting initial Aprox 5.1 PG per bushel and the only thing that should be waste is your heads, a little tails and some minimal stillage left in the bottom.

In you first run (stripping run) you should lose nothing but what's left in the pot (aprox 10% ABV) which is probably like 4% of the total. 

The next run (column run) should be less than 5% heads, keep all your hearts, pull off the tails seperate, hold and dump back in your next column run. Take that down to 10% again, and you have 4%+/- waste. 

Cut your NGS down with RO water, and run it all through your vapor path. It shouldn't have any heads or tails, if your water is clean. Dispose of the 10% wash in your pot (4%)+/- of total. 

Rinse and repeat, trash your tails after 4-5 runs (or barrel it for something really special).  Your yield should be close to 80%  final alcohol.

Now, if you can make money on that at wholesale, is a totally different question.

prost 

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9 hours ago, Roger said:

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In you first run (stripping run) you should lose nothing but what's left in the pot (aprox 10% ABV) .................

You appear to be saying that the stillage left in the pot has an ABV of 10% !!   I doubt that is what you mean.

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@Roger - 5.1pg per bushel and an 80% product yield (on a PG basis) on top of that?  You make me want to cry.

That's the equivalent of, what, 450 bottles of vodka from 1000 pounds of grain?  Cost of the alcohol alone would be about 50 cents a bottle using corn, that's 2-4x cheaper than GNS.

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1 hour ago, Silk City Distillers said:

@Roger - 5.1pg per bushel and an 80% product yield (on a PG basis) on top of that?  You make me want to cry.

That's the equivalent of, what, 450 bottles of vodka from 1000 pounds of grain?  Cost of the alcohol alone would be about 50 cents a bottle using corn, that's 2-4x cheaper than GNS.

SCD: How much are you paying for corn where you are at? Commodity price of corn is $3.75 a bushel around here, I'm getting a number close to 15 cents a bottle with pure corn. (1000 pounds = 17.9 bushels, $67.13 for 450 = $.149). 

Cestrin: There are simply too many variables to just say "do this and you can be profitable". My first comment is to illustrate just that. I once had an operations manager for a large distillery tell me that by far our greatest cost would be grain. Which for us, it isn't even near the top. It is all about scale, labor, cost of grains, cost of botanicals, utility rates, capacity utilization, and that is just about COGS. Your finished goods price is going to have to be influenced by the market, and obviously the less you charge the more you sell to some extent. 

Major variables include, but are not limited to, raw material costs (varying based of equipment available, production efficiency and location), utilities (gas vs. propane vs. electric and location), labor (still size, skill level and location), packaging costs, market pricing (branding and you guessed it... location).

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Fully loaded, not just grain price - yeast, enzyme, energy, etc.  At least enough loading to compare to buying neutral.

Closer to $6-7 out here in Jersey, but that's milled and bagged.

 

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2 hours ago, PeteB said:

You appear to be saying that the stillage left in the pot has an ABV of 10% !!   I doubt that is what you mean.

What I meant by that is if you run your strip down to 10% ABV coming over, you are left with aprox 4% of your total original alcohol in the stillage, which you can dispose of, or use some segment of, as backseat. 

Example. You have 10 gallons of raw alcohol in your 100 gallons of beer. You strip down to 10% ABV at the parrot, and you are left with aprox 4/10th of one gallon in the stillage. Your results may vary depending on reflux efficiencies.

2 hours ago, Silk City Distillers said:

@Roger - 5.1pg per bushel and an 80% product yield (on a PG basis) on top of that?  You make me want to cry.

That's the equivalent of, what, 450 bottles of vodka from 1000 pounds of grain?  Cost of the alcohol alone would be about 50 cents a bottle using corn, that's 2-4x cheaper than GNS.

The last quote I got on NGS was 44cents per bottle. That's why fake craft vodka for $30- a bottle is such a profitable scam. 

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My point was more around the fact that 5.1pg a bushel with an 80% product yield seems implausibly high.

I'm not ashamed to say I couldn't even remotely hit these numbers.

 

 

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Thanks for the replays! So our losses are closer to 10% per run. We use heating elements in the wash so we have more losses than someone using a steam jacket or other less-invasive method. This is also based on the draft of our Stills as we can't get the stillage under the elements out as alcohol so we have a higher loss. This probably accounts for more loss than 'average'.

We have a 100 gallon and a 50 gallon still that we made so we are a small operation (we have very high spirit quality). We'd like to make all our products from grain so we're trying to avoid GNS like the plague. Maybe we need to make a more efficient still or use a steam-heated still. This is just more expensive to make.

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With a 50-100 gal still, labor cost is likely a much more significant factor than mashing efficiency or distillation yields. If you are doing it yourself (and probably not taking a paycheck or salary), make sure to factor the theoretical labor cost into the product or you will paint yourself into a corner of never getting to pay your self (or someone else). 

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