Two Bit

Actual distillers? It sounds like you aren't too fond of ADI and are a little offended that someone who might not 'actually distill' might have a voice, so why do you keep coming back to the forum? ADI is an independent organization (which you paid into for some reason) and can put whichever designation on a sticker they want, and it will only bug the 'actual distillers' (which we are) and not the public. The Public wants a craft distilled product, and this is a good step in the right direction. I applaud ADI for not designing something by committee and just making a dang decision already. I'll also bet several 'legitimate actual distillers' that are well respected in the industry were consulted on the matter and helped to frame the definition - no matter how loose it may be. Sounds like you're mad you weren't invited to the party. Forego the stickers. It's totally within your right to not identify your product as craft.

It's like when everyone "hip and indy" deserted Modest Mouse for signing with anything other than a tiny indy label. Still great music, but they're just making more money at it. Few things bug me more than those who have vitriol against those who are successful.

Except he did do it. For a long, long time. And paved much of the road that you are walking on right now. Simply because he is better at it and more popular than you doesn't make him any less relevant. Like I said, if my biggest problem is defending how big I've become, I'm ok with it. Best of luck to you and your super duper small, extremely small batch, small hands that touch everything small brand. May you always stay as small as you want to be. I assume you also grow your own grain, blow your own glass, and farm your own corks? And use your own letterpress to make your labels?

Man. If my biggest problem was an issue trying to convince people I'm smaller than I really am, I'd have it good. Good for Tito. As far as I'm concerned, he can continue to put 'handmade' on every stinking bottle. Because he's earned it.

Read part 19 more carefully. Get the hard copy version and read it from front to end. Highlight and copy the proofing requirements, and keep them on hand as reference. Yes, they are required. This will tell you where specifically to look. http://www.ttb.gov/spirits/regs/27cfrpart019.htm#19.91 If you don't find it there, keep reading. And then read some more.

I do what Pacioli recommends. It is a cost of goods, and whatever you decide do with the byproduct is simply absorbed by that cost. Sounds like your accountant is being overly picky for no reason. Might think he/she is doing you a favor, but simple is always better. A handshake deal for a couple of hogs in exchange for the grains works for us. We're happy because the grain is gone, and the farmer is happy because his hogs fetch a higher price at market. win win. Don't write it down - it makes it a legally binding document, and we have enough of that pain in the ass to deal with as it is. Keep is simple. Accountants and lawyers are a necessary evil, but a pain in the ass none the less (sorry pacioli).

Michigan State has classes every now and then. They are taught at the basic to intermediate level for the most part, but they have chemistry professors on hand to answer advanced questions. Really, a basic understanding of the chemistry will put you ahead of likely 85% of the distillers out there. More important than the basic understanding of chemistry are the small nuances of distillation that you won't learn anywhere but by doing it. Chemistry and math are easy. Making good vodka/whiskey/spirits is harder, and you don't need to understand one bit of "why" it works to know what does work.

Ours has an automatic valve with a manual override. It's hooked into a thermostat and an alarm sounds if the vapors or condensate are at too high of a temperature. It's all part of the safety measures built in, which in my opinion should be mandatory for insuring a new distillery. Even with these measures we never have anybody leave the still. Someone is within smelling, listening, and watching distance at all times it is running. Running it via smartphone sounds tempting, but phones can't smell alcohol vapor before an alarm goes off. Or physically turn a valve if the automatic system fails. Or see if the column is about to flood. Be safe. Never leave the still. Have automatic and manual controls.

$1 million per year is easy to spend, and it will get you close to your 50,000 case goal. Good job on setting your sights high. I'd spend $5 million tomorrow if I had it. My advice is to keep as much equity as your new partners will let you keep. If you have lofty goals you'll need money and lots of it. What you need to ask yourself is whether you'd like to own 35% of Bacardi (for example) or 100% of your smaller brand. Are you in the business to create a small craft product or make gobs of money straight out of the gate? It's entirely up to you, and nobody on this forum board can really advise you on it. That said, if you have 400-500k of your own money, keep every penny for capital and get some long term loans for the rest. You should be able to show it as 15% of your overall spending package, and put the startup price at $3.3 million. Easy to spend, especially when you don't have an income for 4 years. Can you afford that loan payment? Maybe. Will it be less expensive than an equity partner? Probably. It sounds like your industry/advisory board is made up big corporate type people, so I'll just go ahead and assume that you're leaning in that direction. Nothing wrong with it, but if you aren't leaning toward big corporate, you should maybe get folks more familiar with shoestring budget businesses. We have both on our advisory board, and both give invaluable advice. Don't let anyone make you feel guilty or misguided about you wanting to start larger than they did. Your 500 gallon still isn't going to get you there though. If you have a goal of 50,000 cases in one year you should probably get a new calculator because your goal is either too high for that size still, or your still is too small for your size goal. It's all in how you look at it. I think you should go for the 50,000 cases. It's still pretty small compared with the 'big guys.' I would love nothing more than to see you back here in 4 years declaring you met your 50,000 cases first year goal straight out of the gate. Good luck to you, and keep tight hold of control of your business - because it's YOUR business.

Make sure you check your state regs. Ours is very strict regarding the separation between a brewery and distillery. Feds don't really care as long as everything is marked and legit in their very black and white, laid out in Part 19 ways. The state is who you need to worry about. And possibly your municipal code. The littler the government, the stricter - and fuzzier - the rules.

And to answer your question, I took every class I could, got a fuel alcohol license and made as much fuel alcohol as I could, made as much beer and wine as my friends could drink, and still hired a distiller with more experience than I had. Because I have to know what is going on in the next room.

Your insurance company will ask the same thing. So will the bank. And all of your friends, and everyone who walks through the door. I agree with jwymore that marketing is just as if not more important than the distilling side of things, but unless you are only bottling and selling, you need to know how to actually distill, not just pour drinks.

That's a loaded question with too many variables needed for a good answer. What is your marketing plan? What is your definition of a few thousand cases? Do you live in a heavily or lightly populated area? What are your state laws regarding a tasting room? How many products are you making? What is your capacity? How much money do you have (it will never be enough, by the way)? What is your growth strategy? When do you need to break even? Do you have investors to keep happy? Will it really take a few years down the road to get to a few thousand cases, or is that your first year? Are you making everything yourself or supplementing your income with bulk product? Can you realistically work 18 hours per day 7 days per week (I do, but also have five employees)? Do you know how to do accounting (I don't, so that gets hired out)? Every little detail matters. Some distilleries have 20+ employees after six or eight months. Some stay at one or two for years. It all depends on your business plan.

3500 sf bonded. Need more room after 1 year.

I guess to more accurately answer your question, even a 'simple malt recipe' is all about the ratios. Even if the books you're reading are for larger batches (the books I've recommended are all very small - 5 gal or so batches), you can figure out the relative ratio of the recipe. For instance: All the home brew books will teach you about small batch ratios which can relatively easily (with modification and probably some enzymes) be scaled back up to large batches. You don't have to get super technical, but you do have to understand the basics of the chemistry you're dealing with - specific gravity start and end and what they mean, enzyme kill off temp, optimum enzyme temp, different malts and their activity and WHY you might need different enzymes and malts and different temperatures for optimum conversion of your batches. The yeast is also important. There are hundreds of different yeasts out there to choose from, and the only way you can know which one is right for you is to - you guessed it - experiment. That's why you'll be hard pressed to find someone who will just flip you a recipe. It isn't intellectual property necessarily, it's just because there are SO MANY different ways to do it. Good luck and have fun with it. Your buddies will drink your beer mistakes regardless of the outcome.