Diageo goes "Artisanal" with Moon Mountain Vodka

[High Sierra]

Has anyone seen Moon Mountain Vodka on their local shelves yet?

Looks like Diageo sees an opportunity and is taking direct aim at small producers. From stamping "copper pot - small batch" on the bottle to trademarking the phrase "Crafted. Not Made."

[Ralph at Tuthilltown]

Another inducement for the REAL craft producers to get our act together and get a fully functioning Industry Association together before "craft" goes the way of "extreme", being so overused and abused it loses all meaning; meaning we have been working very hard to establish. Diageo can not by its very nature do what we do. And they've demonstrated their willingness to co-opt the definition of "whiskey" by claiming the appellation "blended whiskey" and using non grain neutral spirits to blend. And by the way, it is not possible to make vodka in a pot still using heat, against the laws of physics; it's still neutral spirits made in a column then redistilled in a pot; like running through a filter, then running through a larger filter and calling it better.

[cowdery]

They may not be craft but they sure are crafty. They claim Moon Mountain is made "at a Midwest distillery using a small batch copper pot still," but they don't say where that still is located. Presumably, like many ADI members, they mean a hybrid, not an alembic, but they don't really say, and they show a picture of an array of alembics that looks remarkably like something in one of their single malt distilleries in Scotland. They do say it is bottled in Lawrenceburg, Indiana, possibly at the old Schenley plant there, which I assume they still own, though perhaps they had Angostura's LDI do it under contract. They seem to be trying to point attention away from Plainfield, Illinois, the 450,000 square foot distillery, brewery and bottling plant where they make Smirnoff Vodka.

Diageo also owns Ketel One and Ciroc, and they are introducing three new vodkas in addtion to Moon Mountain. They have told investors they intend to dominate the vodka category.

.

[Collin]

This is a little scary. I agree that we really need to get our act together -- they apparently see craft distillers as a threat, otherwise they wouldn't be trying to co-opt the category. Sort of like how the big beer guys bought out a lot of the craft brewers to expand their product lines and keep relevant.

Vodka is already a crowded category... This will be interesting. Can't wait to see a craft "small batch" vodka available throughout the world... >.<

[Guppy]

This is a little scary. I agree that we really need to get our act together -- they apparently see craft distillers as a threat, otherwise they wouldn't be trying to co-opt the category. Sort of like how the big beer guys bought out a lot of the craft brewers to expand their product lines and keep relevant.

Vodka is already a crowded category... This will be interesting. Can't wait to see a craft "small batch" vodka available throughout the world... >.<

It will be interesting to see how this effects the marketplace. I one aspect their mass distribution of "craft" brands will add credibility category especially when the product starts selling as a result of little Moon Mountain Distillery's incredibly large advertising budget. The may help convince retailers to give space to the true craft brands as well. This will get more distributors to take a serious look at the opportunity; they are probably locked into the same tiny margin for Moon Mountain as they are for the rest of Diageo's products. If their customers take an interest the distributors will have an opportunity to make better margins with ADI member products. On the other hand, if Diageo puts out 3 or 4 "craft" brands in various categories they may just steal up all the shelf space (which is probably their plan). I think it would be prudent to petition the TTB for definition on craft distilling, much like they have for craft brewing which is measured in barrels produced per year.

[Denver Distiller]

Fellas, how is this a new thing?

Grey Goose, Pappy Van Winkle, Patron, Johnnie Walker, and on and on. This has been going on long before even Clear Creek 1st opened its doors. Heck, you can look to labels like Templeton, Death's Door, or High West (most of their labels, but not all) if you'd like. I'm happy for the successes that they've had. Good for them. How is it any of my business as to how they market their wares?

Or how about St. Germain's owner, who just won "Distiller of the Year" from a prominent Wine Mag, when he doesn't have a distillery? Is he a cad?

Or how about the two US craft distillers that were purchased by one of the largest spirits conglomerates in the America's? Are they no longer "craft", and no longer worthy of our support? I sure don't think so.

Unless you guys think that Sam Adams, Blue Moon, or Pete's Wicked Ale ruined the growth of craft brewing, this is much ado about nothing. My unasked for advice is to worry about what happens in your own walls, and let others run their businesses in whatever way they see fit.

I'm certainly not saying that we shouldn't get together and organize nationally as Ralph is suggesting, but this "new situation" about dead last on my list of business concerns. There isn't a thing that we can do about it, other than highlighting and marketing what we do...which brings us back to focusing on what happens in our own four walls.

Just my opinion.

[Ralph at Tuthilltown]

Absolutely so. Hyperbole and outright hijacking of "high concept" happens every day in every craft and art and business. Something gets press and there's a new bandwagon to jump onto. And the big guys didn't get where they are by quibbling about the details of the truth in things. Most consumers don't read the labels to see if their vodka is from a factory in Illinois or in central France; and the overwhelming majority of the world has no idea what "craft distillers" are or what we do or how. It's up to the "craft" or "micro" movement participants to educate the public. It would be a waste of time to try to out-shout the big eight as they scramble to capitalize on our successes as small producers.

Your defenses are organization and education; not just among ourselves, but at the Legislative level. We have an accepted definition of Micro Spirits Producer which defines the "craft" by it's method and size of production (neither of which is the exact definition of "craft distillery" but overall as close as we could come and not eliminate the ability of the craft distiller to exercise his "craft" through experimentation and variety). It would be the goal of an organized small distillery industry association to draw that distinction apart from any stamp the big guys might attempt to put on it so to call it theirs. They can not do what we do, and by their very nature are not "micro" or "craft" distillers.

One can rightfully say, "the hell with this" and simply go back to the distillery and to work, and make money (if they're good at it) and live happily ever after......that is till something happens to threaten their business, something for instance like a doubling of Excise Tax on distilled spirits WITHOUT a discount to the micro producers akin to that which is enjoyed by micro brewers and wineries. It's conceivable. And without DISCUS support for a discounted rate to micro producers your FET may actually double in short order. Without organization NOW and action NOW, which action is being taken by a small ad hoc group to reorganize ADI into a viable industry association, only the voices of DISCUS members will be heard. The value of your craft products will decrease in the perception of the consumer if similarly labeled products flood the shelves.

I am continuing to work on getting a bill in front of the Congress that will actually define our category. That is the only protection we can hope to get, for what it's worth (reference the acquisition question, if DIAGEO buys out a craft producer is that producer still a craft producer)?

R

[cowdery]

To the extent that co-opting by the majors is a threat, the solution is to do the one thing they can't do, establish an intimate relationship with your customers based on truth and respect. Don't try to beat the majors at their game of empty claims and hyperbole.

[Ralph at Tuthilltown]

Agreed. Our own selves and our relationships with customers and consumers is really our best defense. That said, it is important to address the inconsistencies rather than simply treat them as "accepted truth".

Bill Owens raised an interesting point about "truth in advertising". Is the TTB being true to its mandate and that of the ALFD, permitting phrasing on labels which misleads?

[Joe Pawelski]

Fellas, how is this a new thing?

Grey Goose, Pappy Van Winkle, Patron, Johnnie Walker, and on and on. This has been going on long before even Clear Creek 1st opened its doors. Heck, you can look to labels like Templeton, Death's Door, or High West (most of their labels, but not all) if you'd like. I'm happy for the successes that they've had. Good for them. How is it any of my business as to how they market their wares?

One reason Miller is now MillerCoors and Budweiser is owned by Inbev is loss of market share to "Craft Brewers". Diageo would be stupid not to see themselves in a similar position with the rise of Craft Distilling. For Diageo the only reason to be in business is to maximize and continually increase profits - backsliding because you lost some market share to some small guy is not okay. The largest carft breweries, Sam Adams, Sierra Nevada, and New Belgium are still tiny compared to the "big guys" and it probably seemed inconceivable that craft brews would ever be any competition 10-15 years ago - but when you combine all the craft breweries its clear there is competition. Big beer responded too late and even with Blue moon and bud wheat consumers have developed a taste for what they consider "Craft Brew" that typically does not include beer owned by any of the big guys.

One major difference between the Craft Spirits and Craft Beer is choice. Back when Sam Adams was introducing its beers you could pretty much only get clear watered down Lagers - made the difference clear to consumer and branded "Craft Brewing" as a stepping point for all the other craft brews that came after. Point being, you really couldn't slap a fancy label on Coors lite and convince someone that its craft brewed. With spirits on the other hand you could slap a craft distilled sticker on a bottle of Evan Williams and far more people are liable to believe it. This is the intent of Diageo I guarantee it.

Individually I agree most of you that the best thing each of us can do is focus on making quality spirits and operating our own business - as a whole though its imperative that we all work together to make sure "craft Spirit" is defined in a manor that prevents deceptive labeling.

[Made in Maine]

Folks,

First of all, I love that Ketel One Vodka! That is great stuff...I clean many small orafices and delicate equipment with it. and thats it. The contents of a bottle will make a lasting customer or not. The label and marketing will get them to buy it in the first place. For many years now, I have gone to a liquor store and not bought "big guys crap". My tastes in beer, however limited, are definetely over to craft brews. I have tried many local distilleries spirits and found so many great flavors. Its my humble opinion that its our job to educate the consumers. Even if its one at a time. Many people I know like a product that is heavily advertised. They forget to taste what they are buying. They dont think for themselves. tasting is an acquired skill. anyone can dump a shot of liquor in their belly and chase it with something and agree blindly that it was good. so many do. I spent years doing it myself. mixed drinks tell little about the base spirit. I would love to see a national commercial that shows the differences between Biggie and the crafts. That shows the still and process, the people with their hands on the process. The big guys are trying to hitch their wagons to the craft trade! see that as a huge compliment, now we need to show the consumers why they are doing that. The same as the beer industry did. I do however agree that the playing field is not level. Definitions need to be clear. Too many gray areas for the lawyers to find holes in and allow the misrepresntation of a spirit. Honesty in labeling is what the TTB and COLA is supposed to be doing. Seems they are missing their mark.

and IMHO, the TTb definition of what makes a Vodka should be changed. Maybe I'm wrong on this. Thats why we dont intend to make it. Whisky, its the new plastic! "The Graduate"

[Melkon Khosrovian]

This is very crafty stuff, but I'm a little surprised by everyone's strong reaction. We've seen this move before from the industrial producers -- masquerading their wares as "small batch," "boutique," "organic," etc. -- without much to show for...yet.

Just look at where Moon Mountain is "crafted"...at a tiny little operation that makes a 28 million proof gallons a year! (If we want to burst Moon Mountain's "Crafted. Not Made." balloon, we should carry a printout of this picture. What are the chances that anything is "crafted" in this place.)

What can we do to create more awareness and appreciation for real hand-crafted spirits?

- First and most importantly, make killer spirits that can stand on their own or, better yet, win the "Pepsi challenge" against the stuff that comes out of these mega plants. Without this ability to deliver better quality to the glass, it's going to be a long haul for the movement. Some talented artisan producers will naturally rise to the occasion -- as many have -- but the movement will not get the same recognition as the craft brewers (to Joe's point) if customers can't appreciate how much better our handiwork tastes, not just sounds.

- Second, have ADI officially endorse the definition of Micro Spirits Producer that Ralph and others on this forum have drafted and issue a logo to all producers who meet the criteria to use on their packaging. This would act as an objective indicator of brands that actually are craft/artisan/micro.

- Third, have ADI petition DISCUS and the TTB to help keep the category pure, so that anyone who claims to make artisan products must meet ADI's definition and apply for the logo for their package and marketing material.

Melkon

[Ralph at Tuthilltown]

Thank you Melkon for that image. Speaks volumes. In discussion with Frank Coleman at DISCUS, after sending him the definition which was published in the ADI mag at the last conference, it seems that DISCUS Craft Advisory Council's definition does not match the definition published by ADI. DISCUS CDAC sets a different upper limit:

"...we are going to stick with our definition of 96,000 gallons, since it will permit a little growth for the members of our group without bumping into the cap, which is why we ended up at the 40,000 case level after some discussion. So our definition will be a little more generous than ADI’s for the moment. Also, for now, we have limited our craft distiller membership to folks who actually own a distillery; a number of small importers, rectifiers and brand marketers have inquired about joining but we have not gone down that road yet."

I responded, all the ADI members I've spoken with agree that for a reorganized, member driven, Board managed ADI (or whatever it ends up being called) must hold a current DSP permit.

The higher upper limit is the choice of the group that wrote the DISCUS CDAC definition and has no immediate impact upon any of our situations; that is, until we have to go to the FED to talk about the reduced FET for "craft distillers". It also reopens the discussion of use of the term we are defining: "MICRO SPIRITS PRODUCER". Many, me included, felt that Micro Spirits Producer was the more inclusive phrase. But the possibility that DISCUS could, with its resources, carry the day when we sit down with the Fed to actually get this into law may require we, as the actual micro distillers, have to revisit the use of the word "Craft".

Some may recall this discussion in the "Definition" thread, early on. The term "Craft" was thought to be too vague, "what is 'craft'?" was the question under debate. But looking at it now, I am inclined to replace "Micro Spirits Producer" with the term "Craft Distiller", without changing any of the rest of the definition. Of course we may sit with the DISCUS group and come to an agreement about that upper limit, and revisit the wording overall.

But the point is that the small producers, the Craft Distillers should decide the definition as a group at large, not as an "Advisory Council" to DISCUS. This is a discussion which should be on the agenda in Portland for discussion by the General Membership when we ratify the Articles and form the new ADI. And for the sake of future lobbying work and to ensure conformity in the minds of the consumer DISCUS CDAC and ADI definitions should match, barring any unforeseen disagreement among the distillers themselves; though it seems in the best interest of all to find consensus.

R

[Denver Distiller]

Some may recall this discussion in the "Definition" thread, early on. The term "Craft" was thought to be too vague, "what is 'craft'?" was the question under debate. But looking at it now, I am inclined to replace "Micro Spirits Producer" with the term "Craft Distiller", without changing any of the rest of the definition.

I agree wholeheartedly, and am very pleased the tack has changed. If you haven't figured this out already, I do not like the us vs. them mentality that has been growing here at ADI. The distilling plant pictured above is procedurally not much different from mine. They mash, ferment, and bottle. Just like me.

We're all part of the same fraternity. Some seem to forget this, or never learned this in the first place. And it's too bad, because there's some world class distillers at the helms of some of those plants, who have likely forgotten more about the art of distillation than many of us have learned. It's a mistake to confuse the cats in their marketing department for those who do the actual work in these distilleries.

Just one man's opinion.

[Melkon Khosrovian]

Let's try to nail this down as an agenda item in Portland, with a plan to launch a marketing campaign at point-of-sale and through the media, if we can achieve consensus.

I'll reach out to Bill Owens to see if we can get this into the mix for the conference.

Melkon

[cowdery]

Melkon -- what makes you think LDI is producing Moon Mountain? Diageo mentions bottling in Lawrenceburg, IN, but they could be referring to the old Schenley plant there, which I presume Diageo still owns. LDI doesn't have anything Diageo doesn't have so why would they contract anything to them?

Remember, my thesis is that most marketers will stretch the truth and phrase things artfully to create an impression. In so doing they will willingly mislead consumers but rarely do they lie outright. That's why any notion that they might be violating some 'truth in advertising' standard is pretty far-fetched.

The headscratcher, though, is their claim that Moon Mountain Vodka is made in copper pot stills.

If it's really just the same stuff as Smirnoff then they're making it at Plainfield, Illinois, but they're not making it in copper pot stills. I assume they would not explicitly say that if it were not true, assuming also that we will stretch the definition of "pot still" to mean any non-continuous still, i.e., any charge still. I think we also can safely assume that "copper pot still" does not mean "solid copper alembic," but then what does it mean?

As for the word "craft," you'll never be able to define that in a way that can be legally protected. I've argued many time that some ADI members are small but not particularly "craft." I notice Blue Moon, a MillerCoors product, is using "Artfully Crafted" as its new advertising slogan. We'd probably be hard pressed to even get a majority of the participants in this forum to agree on a definition of "craft distilling."

[delaware_phoenix]

Well if the still is copper, and the bottom part where you put the mash/fermented wash is a pot (it holds liquid doesn't it?) that makes it "copper pot still". Doesn't matter that there's a 32 or 50 plate column on top of it or that it's run continuously.

Stretching the truth to the point of nonsensical gibberish is what it's all about. Oh, and taking the customers' money. It's all a big shell game to obscure who really made and is marketing the product. If all of Diageo's products had to have the words Diageo in big letters on the front of the bottle, citizens might really see how many products are made by the same company, and may very likely be the same products sold under different brand names. All to take up shelf space and control the market.

[Melkon Khosrovian]

Melkon -- what makes you think LDI is producing Moon Mountain? Diageo mentions bottling in Lawrenceburg, IN, but they could be referring to the old Schenley plant there, which I presume Diageo still owns. LDI doesn't have anything Diageo doesn't have so why would they contract anything to them?

Remember, my thesis is that most marketers will stretch the truth and phrase things artfully to create an impression. In so doing they will willingly mislead consumers but rarely do they lie outright. That's why any notion that they might be violating some 'truth in advertising' standard is pretty far-fetched.

The headscratcher, though, is their claim that Moon Mountain Vodka is made in copper pot stills.

If it's really just the same stuff as Smirnoff then they're making it at Plainfield, Illinois, but they're not making it in copper pot stills. I assume they would not explicitly say that if it were not true, assuming also that we will stretch the definition of "pot still" to mean any non-continuous still, i.e., any charge still. I think we also can safely assume that "copper pot still" does not mean "solid copper alembic," but then what does it mean?

As for the word "craft," you'll never be able to define that in a way that can be legally protected. I've argued many time that some ADI members are small but not particularly "craft." I notice Blue Moon, a MillerCoors product, is using "Artfully Crafted" as its new advertising slogan. We'd probably be hard pressed to even get a majority of the participants in this forum to agree on a definition of "craft distilling."

Chuck,

You can easily see where any bottle of any spirit is produced by checking label approvals on TTB's public COLA registry:

https://www.ttbonline.gov/colasonline/publicSearchColasBasic.do

Follow the above link, type in "moon mountain" in the name section and you'll see that it's produced at:

LAWRENCEBURG DISTILLERS INDIANA, LLC

7 RIDGE AVE

LAWRENCEBURG IN 47025

MOON MOUNTAIN DISTILLING CO (Used on label)

Don't know why they'd make it there, other than that the plant might have organic certification and theirs doesn't.

As for use of the term "craft," I'm far from encouraging ADI to try to claim the word for its members, many of whom aren't craft producers. But we could own a very important aspect of what anchors terms like craft, artisan, etc -- and that is size. We can all attempt to create market awareness of "micro" as a category of spirits. There's no vagueness here -- it's proof gallons. Some of these proof gallons may be great, some not so great -- but it'll all be coming from a "little guy," which carries some weight among the target audience that Diageo is going after with Moon Mountain.

Melkon

[delaware_phoenix]

Seems that maybe some of the vodka is produced in Lawrenceburg, but maybe not all.

For the Moon Mountain Wild Raspberry flavored vodka (COLA here), two plants are listed: one in Plainfield, IL, the other in Norwalk, CT. And the label states it is produced and bottled in Norwalk, CT and made with organic vodka and contains elderberry extract. Also, only 35% ABV.

There's another COLA where the Moon Mountain Wild Raspberry flavored vodka is made in Lawrenceburg, IN.

What's being done I suspect is that the vodka is being made at Diageo's Midwestern production plants. The labels say 100% Grain Neutral Spirits. Then some is transported to Norwalk where it's redistilled in a copper pot still with flavorings/juice to add fruit flavor. Additional flavorings could maybe be added post distillation. Pot stills may be present at the Lawrenceburg plant as well since some product is totally made there. The citrus products are similar in that they can be produced at either set of plants.

It's certainly a better way to make a flavored vodka than simply buying GNS and adding flavorings from the chemical industry (though they may do a little bit of that too).

But the consumer is paying for 65% water, regardless.

[cowdery]

"Produced at" doesn't necessarily mean "distilled at." More often than not it means "bottled at" and nothing more. The Moon Mountain web site says the product is bottled at LDI but all it says about where it's distilled is "in the Midwest," which could be Plainfield, IL; or Lawrenceburg, IN; but not Norwalk, CT.

I have no reason to believe LDI is certified organic. They don't claim that on their web site. That's a good clue, though, and suggests DR Inc. in Idaho as the source, except they don't use "copper pot stills" in any sense. Nor, for that matter, does LDI. Who in the Midwest is certified organic and producing vodka in something that can be construed as a "copper pot still"?

Why Diageo is using a contractor (LDI) in any capacity is a head scratcher, but LDI may be better equipped for smaller bottling runs than Plainfield or Norwalk, both of which may be running at or near capacity. I believe Seagram's Seven Crown is still produced at LDI under contract from Diageo, so LDI is already a Diageo contractor.

Another certified organic vodka producer in the Midwest is Buffalo Trace. Although they don't produce their organic Rain Vodka in a copper pot still they do have a copper pot still.

On one level this is fun but on another it is infuriating because these things really should be transparent.

[delaware_phoenix]

Chuck, there is a specific phraseology that must appear on the label that qualifies the producer. These statements are "Distilled by" and "Bottled by", or the combination "Distilled and bottled by". These terms are followed by the name of the DSP as stated on it's Basic Permit, and the city and state where the DSP is located. I'd have to look again at the CFRs, but I don't think there is a "Produced by".

There's nothing in the labeling CFRs that say you can't add other information, nor do they restrict the proximity of that auxiliary information to the required phrase(s).

So it may well be that Diageo is simply bottling something made by someone else. And it could be that someone in marketing simply put the "copper pot still" stuff on the label regardless of whether the product was actually made that way. Though it seems to me that they'd run the risk of someone complaining (perhaps to TTB about it).

[Ralph at Tuthilltown]

This goes to "truth in advertising" and "protecting the consumer", both of which are the mandate of the TTB/ALFD. I can speak to the difficulty in getting label copy approved, having dealt with this issue with the TTB and the constantly shifting interpretations provided by reviewers who are at liberty to use "discretion" in their determinations.

By way of example, one reviewer denied use of the phrase "Single Malt Whiskey" for one of our whiskeys, claiming it can only be made in Scotland. And twice in the last two years the TTB has denied label approval for labels which had been previously approved and in use for a number of years, causing us to dispose of labels and reprint.

It appears in this case that Diageo perhaps is not getting the same level of scrutiny for their label claims. As Chuck points out, it is unlikely they are actually using a pot still and the product is definitely NOT an artisan product, or "craft" produced. And as Chuck has pointed out many times, the laws don't prohibit the making of any particular type of spirits, only what you can call them. Unfortunately the TTB seems to missed the boat here and is allowing Diageo to ride the coattails of the Craft Distillery movement by permitting statements to be used which it has not qualified or even questioned.

Of course, one could say that imitation is the sincerest form of flattery, but we can be certain Diageo is not trying to flatter anyone. They are co-opting the phrase "craft distilled", which is undefined in Federal law.

[daveflintstone]

Chuck, there is a specific phraseology that must appear on the label that qualifies the producer. These statements are "Distilled by" and "Bottled by", or the combination "Distilled and bottled by". These terms are followed by the name of the DSP as stated on it's Basic Permit, and the city and state where the DSP is located. I'd have to look again at the CFRs, but I don't think there is a "Produced by".

You can have "distilled by", "bottled by", "produced by", or a combination. This is in the regs.

[Ralph at Tuthilltown]

This issue should be of great concern to members of the DISCUS CRAFT DISTILLERS ADVISORY COUNCIL (Tuthilltown is among that group). DISCUS CDAC defines "craft distiller" as producing no more than 40,000 nine liter cases of goods a year in a single distillery, according to the DISCUS website. DISCUS largest member is putting out misleading information and advertising about MOON MOUNTAIN, claiming it is "craft distilled", though it is mass produced in an industrial plant. The ads and website show photos of whiskey stills and claim the vodka is pot distilled, implying it is made in the stills shown.

I'm curious to know what the rest of the members of the Craft Distillers Advisory Council, a DISCUS committee, think about this and if they intend to raise the issue with DISCUS. Both the DISCUS and the ADI definitions of a "craft" or "micro" distiller are in direct contradiction of DIAGEO's claims about their MOON MOUNTAIN product being a "craft" product.

I'm not alone wondering how DISCUS can claim to be working with and for all the Craft members while the largest DISCUS member, indeed the largest producer of alcohol in the world is making false claims that diminish the very special character of what we do, misleading consumers in their perception of the nature of "craft" spirits.

[absaroka]

Until "craft" is defined in the CFR, SoI, etc., there's no foul. Diageo could give two shakes about what DISCUS, ADI, or someone's grandmother defines as "craft". Until it's a legal definition, it's a moot point.