In the Business Planning Stage of a New Chicago Distillery

[PKSullivan]

I've been a long time fan of spirits and cocktails and am in the beginning stages of looking to start a distillery here in Chicago. It started with the idea to make nut-free falernum, orgeat, and amaretto because nut allergies have mostly kept me away from the entire tiki genre. Looking into it I realized the business would have to be a distillery, which was surprisingly really exciting to me. Owning a distillery hadn't ever occurred to me but it sounds like a really rewarding career once I hit upon the idea. The business concept has grown from there to be a distilling pub, though with a lighter menu than typical pub fare. I'd like the tasting room to be a top-tier cocktail bar. The laws in Illinois recently changed to make that more feasible and there's a good example of it in the north suburbs with North Shore Distillery. 

There are plenty of local resources in Chicago to help me with the business plan, licensing, permits, zoning, etc. and I've been in touch with my local non-profit business advocacy group to get started. I joined ADI to get a sense of what the spirits business is like, learn about the business and technique, and hopefully make connections in the industry.

The ADI videos have been a great educational resource for me already and I'll be in Vegas next month for the annual conference. Looking forward to meeting folks and seeing if this dream could be a reality.

Cheers!

-Phil 

[Glenlyon]

Just remember, he says after 16 hours of working straight since o'dark o'clock this morning, running a distillery is a shit ton of work and right now, there are not so many customers and making a profit is not easy - the start up costs are very high and the monthly overhead, even for our small distillery can easily exceed $20 = 30k per month.

[jocko]

... and starting small and trying to bootstrap through sales can be a rough slog.  When we started our brewery, we researched for years and decided to start with a fairly large system.  Best move.  Many have started small and struggled to keep up, and upgrading while trying to produce and sell is tortuous, and they are constantly battlng space constraints.  We took the same approach to the distillery.  I'll say that the distillery side is much more complicated (steam vs. direct fire at the brewery), more involved from an architecture & engineering, fire department, etc. perspective.  The ROI is also much more difficult.  As with brewing, operating the distillery doesn't involve much distilling.  Most time is spent on the other aspects.

Think long & hard because you will be spending 7 days a week 12+ hours (many more on some days) for years getting it into a place where it can begin to return some of the investment. 

There are numerous consultants here like @Kindred Spirits who can help you get started.

[Kindred Spirits]

It's a tough business for sure, but a lot will depend on your definition of success, to define what your overall goals should be. By making some smart choices early on in regards to your location and equipment you can easily avoid making mistakes that can cost you time and money.

The forums are a great resource, however each individual distillery has its own unique set of circumstances. If you need any help be sure to reach out.

[adamOVD]

Making money purely through distribution as a small producer Is definitely a hard nut to crack. Have to have a fantastic product, marketing, label, location, distribution, sales staff, ect, ect to have any hope of success. As a little guy, distill pub is a great way to go, in my opinion (depending on your state regulations on cocktail sales). Most people get in this business because they want to make cool stuff though, and don't want all the headaches that go along with running a bar/ restaurant, of which there are so many.

The bar pays our bills though, and many nights the bar is slow, are still high earners due to bottle sales, and when both are strong it's off the charts. The symbiosis is great. It is also easier and cheaper to hire and train bar staff than a Distiller, so you can pay someone and not have to work 80 hour weeks... eventually. Your time will be split though, especially if you don't have a partner you can depend on.

If you can create the right environment, building a community of happy regulars and staff is actually as rewarding as creating a great product. Hope it works out for you.

[Cru Bottling Systems]

Welcome PK! There are many smart, generous folks here on the Forums that are willing to share both their experience and expertise. We will also be in Las Vegas this year for the annual conference. Stop by the Cru Bottling Systems booth and introduce yourself - look forward to meeting you.

-Steve