I guess my position is unique and I've looked at this subject from all angles.
I've owned a marketing company for the past 25 years that specializes in marketing the most successful and recognizable spirit brands nationally. We work on the world's No. 1 vodka, the world's No. 1 whisk(e)y, the world's No. 1 gin. We handle advertising, brand strategy, promotions and packaging. If you have ever bought a bottle of alcohol in any store in the US you have seen some of our work. I understand the ramifications of this issue first hand. Spirits marketers and brand owners know that developing the brand equity that will represent your products for the long haul is one if the most important things a they will ever do.
I also hire designers and creative teams on a freelance and contract basis, and I work with people that live everywhere - from Bermuda to the Bay area. I know that any designer that you can forge a relationship with is likely to do a better job than one that is pitching free logos all day long just to try to sell one or two of them. That's what these logo mills do. And it bugs me to ask people to do work for free knowing that I am going to profit from their free labor. If there's 30 designers pitching you through the logo mill 29 of them are going to go away empty handed. How many great designers would do this? Would you spend time developing a new spirit idea and then just pitch it to an account for free, shoot-out style? Also, local designers usually take special pride in "home town" projects, especially for something as cool as a distillery. What local designer wouldn't give a break to a local distillery just for the notoriety? It is a RARITY that a designer refuses to find a way to work within the constraints of a tight or small budget, especially if the project is juicy.
Finally, my son and I opened a craft distillery last year, targeting a small 6500 cases a year. So I understand the pressures, finances, processes, permitting and the million other things that a small distillery needs to pay attention to to survive. I haven't run across a situation yet where taking a shortcut to save money didn't have noticeable downsides. Sure, we look for things to be competitive, but cheap bottles still look shoddy, taking more heads and tails to extend your output still makes the booze taste crappy and bargain priced logo mills still turn our work that is USUALLY run of the mill at best, and downright plagiarized at their worst. Sure you can get lucky.
And even though I am a designer myself, I hired a very talented designer to develop our identity.
I'd stick by my original advice. Talk to your designer about what you want and how you think about your brand and company. Don't be afraid to tell them about looks that you like or things you've seen that impress you positively. Don't be afraid to tell them your budget up front, even if it's small. And don't take it personally that designers can be moody, and seem to be wired a little differently that some others. This is one of the things that makes them capable of doing great work that they can be passionate about.
Designers should bring YOUR brand to life. And consumers will respond to this.