Startup product release

[tarsyn]

Hey guys,

The major question I have about starting up a distillery (and apologies if this has already been answered.. I did do a search) is:

If you are opening a distillery (pot-still) focused on producing high-quality whiskey/scotch/bourbon, how is it even possible to release a product in your first year of operation? Doesn't the legal term for whiskey need barrel aging of at least a couple years? It seems to me that you would have zero revenues while still shouldering your full overhead. Do startup craft distillery just produce low-quality hooch in their first few years until the good stuff is matured? Does anyone buy this white dog?

Thanks for your help. I'd love to hear personal tales of conquering this problem. This forum is such a GREAT resource for anyone considering commercial distilling.

Cheers,

JQ

[rmacvarish]

JQ,

I'm just starting the planning stage but I think the general model is to make some percentage of aged whiskey and some percentage of unaged spirits (usually gin or vodka) for the first few years. Those percentages depend on your business plan as a whole. Personally I plan to start small enough that I can wait it out if I need to.

That said, I don't think crafting an unaged spirit is the same as producing "low-quality hooch". Vodka can be a great product if you have the plates to get to 190 proof (otherwise it ain't vodka per the TTB) and I've had some really nice white whiskeys over the years.

Just my opinion, YMMV =)

Regards, Rich

[tarsyn]

Is it feasible to create gin and vodka in a pot still? I thought those were traditionally column still spirits?

For those seeking only to produce whiskeys, is there an alternate solution? I'm worried about the potential branding issues that come from a confusion in spirits output. Additionally, the different grains and yeasts required (to say nothing of techniques) between clear spirits and whiskey could lead to supply waste/logistical concerns, right?

JQ

[rmacvarish]

JQ,

I overlooked that your question was specific to pot stills. Sorry about that. You are correct vodka comes from column stills with enough plates to hit 190 proof.

I would also be interested in hearing how others have overcome the start up hurdle.

//Rich

[Lenny]

Some distilleries that want their brand to be focused around a whiskey, and not dillute their offerings with a range of other spirits, will initially seek out product from another larger distillery and bottle it as their own. This will allow for a well aged product right out of the gates. The level of craft in this sort of thing is debatable for sure. There is certainly a level of blending involved — I've heard of a few places aquiring bourbon and blending it with their new make to allow for an offering this a bit more their own. Some disitlleries that do this sort of thing and make their practices known and some do not. Many craft disitlleries are laying down their whiskey in 10-30 gallon casks and finding them to yield a sellable product in 6-18 months. You have to do what seems right to you.

Regarding the question of startup hurdle... I've scene it pulled off in a variety of ways. I'm just coming out of the gates now with a white whiskey and an eau de vie. Overhead costs have been kept very low to allow us to wait out our barrel aged single malt releases. While waiting on the barrels, we're going to start with small scale self distrobution of the white whiskey and we're expecting to do well with our tasting room sales (bottles and cocktails). To make sure that our tasting room recieves the traffic we need we located on the main street of a mountain town that sees heavy summer tourism. We'll see if the plan works out — check back in a year or so and I'll let you know.

[okolehao]

One alternative is to sell barrel share/futures where customers can buy bottles of future releases. This might be a harder sell for an untested company and product.

There is also one distillery that I know of that sells age your own whiskey kits. You get several bottles of white dog with a small barrel and the customer does the rest. They sell sizes all the way up to 53 gallon barrels.

[WI Distiller]

This is the operative question and the biggest hurdle for new whiskey distillers. There is no easy answer.

As has been said, the most common approaches are:

1: Bottle wholesale whiskey while your own stuff ages out.

2: Make Gin/Vodka/White Whiskey/Moonshine while your stuff ages out. Many have done this. Vodka and Gin can be made from GNS (Grain Neutral Spirits) without a column still. Some argue that this is not a "craft" approach, others disagree. A quick search around the forums will get lots of input on this.

3: Use smaller barrels to get products on the market more quickly.

I'm in the planning stages as well so I can't say what works, but all of these approaches have been done.

[coop]

I think that depending on what you are aging in the barrels, no matter if it matures faster, the TTB requirements are, if it says 2 years that means two years, not one year in a smaller barrel. Taking short cuts in agings will not meet there requirements. So if you are going to make a product that requires some kind of aging in oak for a certain period of time why take short cuts? Using smaller barrels will not get your product to market any quicker. Coop

[WI Distiller]

Coop,

Respectfully, 2 years is only a requirement for the designation "Straight Whiskey." The word "Whiskey" has no age requirement other than it must be "stored in oak containers." Many distilleries, such as Hudson, have released whiskeys that have spent less than a year in a smaller barrel.

[coop]

That is why I said if aging is required not "stored". Tarsyn brought up the two year question, he was asking about a high quality whiskey and a scotch whiskey also a bourbon. So for those products I think that aging would be required. Coop

[johnny_teapot]

What we're doing is making a bourbon mash whiskey, bottling half of it as new make and barreling the other half. Depending on how things go from there, we'd like to start a vodka by the summer, and a rum shortly thereafter; hopefully some of the smaller barrels of our first batches will be marketable by the holiday season.

[Beauport Bob]

From the manufacturing side, take a look at your business plan. The secret to short aging in your new, unused (for Whiskey), smaller barrels is you must be able to bear the cost of the barrel over the sales price of your per bottle. You must train your customers what to expect. Will you be able to charge enough in your market for a "new make", then up the price for a short age, followed by the longer aged? Will you abandon the "new make" or have to continue creating it after aged product release? , etc. etc.

[johnny_teapot]

We've budgeted/planned for the lag in aging time for the bourbon, and it will be enough to carry us through the end of the year; it's the new make stuff that's a bit more of a wild card. We anticipate it being in reasonably high demand for the first month or two due to pretty decent media coverage and very positive local response. After that, if it continues to sell once the novelty factor wears off, we'll continue making it (well, we'll be making it either way - the question is whether we continue to sell it without aging); however, we're not necessarily counting on it, which is why we plan on developing more recognizable/marketable unaged products (vodka and rum) to put on shelves once we've got some whiskey in barrels.

That being said, we're planning on using a variety of barrel sizes and char levels for some experimentation with the aged products. I've read pretty much everything the forums have to say about that; if anyone has anything more to share, I'd be more than happy to hear it.

[Curtis McMillan]

ya give me a call