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DEFINING "CRAFT" DISTILLERY


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How about calling the umbrella group the American Artisan Spirits Guild (AASG) or the American Craft Spirits Guild (ACSG), which can have many subgroups even at its inception? But we lobby as a group for things that matter to all of us.

Qualifications:

- DSP license

- Making less than 60K PGs

Ultimately, those who make BS products will come out in the wash or need to up their game, which will strengthen our category.

What do you all think?

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Reconsidering the name may be necessary, but it is secondary to determining, as Ralph and Jonathan have said, the fundamental nature of the organization. Note that the current name doesn't say anything about "small" or "craft" either, and that's what's most important. Size is what makes it possible for policy makers to draw a meaningful distinction regarding taxation and regulation, and craft is what makes it important to consumers.

Speaking as someone who doesn't produce anything except information, establishing an effective "collective voice" now will be very important to the development of your industry.

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OK - I think I have it figured out. This is easy - it's all about the focus on the DSP permit.

I propose the following tiers in the new SDSPA (Small DSP Association):

SDSPMDP - Level code Alpha - This Small DSP holder Mashes, Distills, and Packages product. Their group color shall be copper. They will only sit in chairs draped in red at all group functions. Their dues shall be paid in Euros.

SDSPDP - Level code Omega - This Small DSP holder Distills and Packages product. Their group color small be bronze. They must only shake hands with their left hands. Their dues shall be paid is US Dollars.

SDSPP - Level code Delta - This Small DSP holder only packages product. They have no distilling equipment other than a 3 liter coffee pot still they bought on ebay. Their group color shall be orange - as in the threat level orange. They must sport a tattoo of their logo somewhere above the belt line. Their dues shall be paid in copper scrubbing pads.

SDSP - Level code Zeta - This Small DSP holder does whatever in the hell he or she wants. They don't make or package anything. They are "worried about small distilling and world peace." Their group color shall be red. They will be granted permanent access to every other members facilities so they can "borrow" some stuff with promises of an speedy return. This group shall have no dues as they live off the work of others.

See, That wasn't so hard.

Don

Proponent of SDSPA

People,

I WAS JUST KIDDING!

My gosh, this is all becoming way too serious. Time for a round of chill pills.

Obviously one must be totally serious here. NO MORE FUN!

Don

At least Paul got it . . . . .

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Don being 100% serious and on topic here:

The only thing I think this group of diverse folks will probably agree on is a volume tier to define a "small producer." The rest of this discussion is an exercise in futility.

Don

Nice post. Precise. Very serious.

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The only thing I think this group of diverse folks will probably agree on is a volume tier to define a "small producer."

I think it's important not to limit our growth as small distillers to too small of annual production amount. Besides, odds are good that whatever we shoot for will get cut back in the legislative process. Best to try for something a bit bigger in terms of volume as we can always cut it back later if needed to get various goals accomplished. The big guys are going to be way over any amount we choose anyway.

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My suggestion is that we look at the State with the highest production limit, I believe the highest I've seen is 60,000 pg a year. That is also the point, it seems, that gets the attention of the big alcohol money. Since the production limits are placed at the State level, I think we do not have to too greatly concern ourselves with possible Federal limits. Any Federal considerations should defer in this matter to the license catagory of the home State of the distillery. It is unlikely that the Fed would establish or enforce a Federal standard for production limits. I suppose it is something that we could push for, but not sure if it is advisable to let the Fed determine such things. (Really, just don't know.)

And yes, this is serious. This is all our futures, and that of our families and employees so yes indeed it is serious.

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My suggestion is that we look at the State with the highest production limit, I believe the highest I've seen is 60,000 pg a year. That is also the point, it seems, that gets the attention of the big alcohol money. Since the production limits are placed at the State level, I think we do not have to too greatly concern ourselves with possible Federal limits. Any Federal considerations should defer in this matter to the license catagory of the home State of the distillery. It is unlikely that the Fed would establish or enforce a Federal standard for production limits. I suppose it is something that we could push for, but not sure if it is advisable to let the Fed determine such things. (Really, just don't know.)

And yes, this is serious. This is all our futures, and that of our families and employees so yes indeed it is serious.

Ralph,

It is serious, but not so serious that we labor over such much data and opinion that we lose our ability to enjoy what we are doing.

Volume seems to be the ONLY common ground. And if indeed that is the only criteria, then we need to change the name, scope, and mission of this organization. It's just not right, in my humble and unpopular opinion, to call us distillers, when in fact many under this new criteria will not be so.

I think we are treading on losing our identity here. On one hand, we want to develop small distilling, on the other, we want to attack legislative issues that effect not only small distillers, but small spirit producers as well. The two, although complimentary, may not be perfectly aligned.

Don

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Here's a thought: welcome all holders of beverage DSPs. Producers, warehousemen, processors and all the combinations. All sizes. Change the name of you like - but I don't think it's necessary. If you feel the need, rig the bylaws so that large corporate interests can't hijack the Board - though it doesn't seem necessary to me - the little guys now heavily outnumber the big ones. Vote by company/proprietor rather than gallons taxpaid.

Save the battle over production methods and standards for marketing programs that promote specific styles (and/or methods).

Having some of the friendly big boys on board early might help legislative efforts from getting dismissed. I think it's way to easy for a specialty group to end up ignored. We say 'small' and mean 'unique', 'diverse' and 'entreprenurial' while the lawmaker hears 'inconsequential'.

This discuss reminds me of a story of the creation of the MI Brewers Guild. One of the dedicated advocates of the industry in Michigan manages to gather all the brewers in one place and one time. The one thing they can agree on is that they all want to sell more of their own products.

It's a start.

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The Distilled Spirits Council (DISCUS), with which I'm very familiar, is primarily a lobbyist. It does other things, but they are always consistent with and supportive of their lobbying efforts. That's the first question. Do you want your trade association to be primarily a lobbyist? If yes, then what are your common legislative and regulatory interests? If no, then what do you want it to be?

Like my comment in another thread about people always jumping too fast to tactics, people in discussions such as this jump too quickly to worrying about names. Don't worry about that now. Once you know what you are you'll know what to call yourselves.

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Personally, I'm less interested in lobbying efforts than I am in having the TTB be aware of the specific needs of the small distiller/craftsperson. I don't think we can address the mess that are the state regulations.

One impact of increasing the tax rate for distilled spirits from $13.50 to $20 per PG will be a nearly 50% increase in everyone's bonds.

I think the State and Federal regulators need to see us as serious professionals, in spite of the fun of distilling. That way they might get over the idea that everyone in this business is a crook, or associated with crooks.

Sorry if I seem serious, but if I don't succeed in this endeavor I'll probably end up a homeless person. That's life.

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This discussion seems to be at the point of needing one simple statement, trimmed down, generic, that includes everyone making under a specified amount of finished product regardless if it is distilled by the producer or not. It is increasingly clear to me that the interests of the small craft producers are for the most part common. As a whole, we can not afford the luxury of fracture into all the niche definitions and distinctions or risk losing what little lobbying and marketing power we have.

The fact is that the end products will rule the day, no matter if they are distilled or blended or infused or simply rebottled by the producer. If it is crap, it won't matter if you call it "artisan" or "craft". I do not believe we are a known enough quantity in the minds and hearts of the consumers that the industry will suffer as a whole just because someone puts out (arguably) substandard spirits and labels them "craft" or "artisan". We do not believe that because some numbskull in East Bumstead is putting garbage in his bottle and touting it as artisan alcoholic beverage will hurt our sales in any significant way.

Deciding on a simple starting point is important, with latitude to make adjustments and changes as necessary, and it will be necessary. Is there anyone out there who is distilling and seriously disagrees that a craft producers organization should not include the non-distiller producers of craft spirits? I agree with the comment that the name may have to be changed, but down the road. Right now we should be open to nearly everyone who is producing and sending craft spirits to market, paying taxes and struggling against the enormous odds we all face.

Drawing from many years of mountaineering, I would say there comes the time when you have to decide and go. Let's stop this and get something down and vote on it. "How?" is the question.

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Drawing from many years of mountaineering, I would say there comes the time when you have to decide and go. Let's stop this and get something down and vote on it. "How?" is the question.

Ralph, I agree that we need to take this conversation to another level and act, particularly as the window before elections -- when we could make some impact -- will be closing soon. I'm working on a short position paper on lowering the federal excise tax rate for small producers -- something all of us can agree on.

If anyone has data that could help make our case, please email them to me at melkon@modernspiritsgroup.com. I'll post it over the weekend on a new threat so we can hash out some specifics: target excise rate, maximum production volumes, etc.

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All this seems to be headed somewhere. We need any group designation to be generic, brief and to encourage innovation and creativity.

Of course, we do have still to address some basic questions like volume. But for the most part, if we are considering all micro-producers in the same "class" of ,producer perhaps something like this is acceptable:

Craft spirit makers produce beverage spirits primarily from agricultural raw materials, including but not limited to grains or fruit. A Craft Spirit Producer utilizes a variety of techniques in the preparation which substantially change the character of the original material, including but not limited to: infusion, batch distillation and/or redistillation. Craft distilleries produce and bottle up to 65,000 proof gallons of product per year in a single licensed premises.

I think that the futher distinctions can be left to sort out later by the affected groups. But for the purpose of beginning to actually participate at the State and Federal levels, this definition may be something we can all work with for now.

Ralph

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Perhaps there is no distinction in the big alcohol world. But for our part (meaning here at our distillery), we think it is not crafted if it's mass produced continuously. There is after all a difference between the baker hand making his pastries and a factory spitting out machine made canolis.

That said, infusers often use continuously distilled raw material when using GNS as the base raw material to make crafted infused spirits, so it is a question that bears discussion.

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Can someone please explain to me the hang-up about batch distillation? What is so wrong with continuous distillation?

Chuck, there is a difference. When distilling in small batches all cuts are made according to the distillers senses (in our case we do it primarily by senses, and only use hydrometers and thermometers secondarily to back up and to try and develop a correlation between instruments and our senses and of course to ensure our distillate meets federal requirements for the class). We have the ability to control the outcome and make adjustments while processing the product to get the desired result- the process is slow.

When distilling continuous, it's all done by engineering. You cannot produce 1000 gal in an hour and affect the outcome by taste alone, it all happens fast -you primarily rely on instrumentation and the location of cracking valves in the design of the still- very rigid, not much room to improvise.

Essentially there is nothing wrong with continuous distillation, but it was created for one purpose- to produce large volumes of the same product over and over. I think the differences are philosophical- what business do you want to be in? Big volume of the same product or smaller volumes of various products and the freedom to experiment and create new things? Choose either, they are both excellent ways to spend your productive years, but I think most "artisan distillers" will choose the freedom small batch distillation affords.

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I'd like to make a slight amendment to the last sentence of this proposed definition:

"Craft Spirit Producer"

Craft spirit makers produce beverage spirits primarily from agricultural raw materials. A Craft Spirit Producer utilizes a variety of technical skills in the preparation which substantially change the character of the original material, including but not limited to: infusion, batch distillation and/or redistillation. A "Craft Producer" operates facility with an annual capacity of up to 65,000 proof gallons of finished product in a single licensed premises.

This revision (from "craft distiller" to "craft producer") is more inclusive. I'm inclined to agree with those who feel that we should define the broad category and then address the different variations of the craft (distiller, blender, infuser, whatever). And if this is acceptable to most, I suggest we begin to weigh in on the proposal either as it is written above or with revision that may be proposed. Comments anyone? Disageements in principle? Wholehearted support?

R

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I agree that for lobbying we need the more inclusive term. Later for the fine details where we define the sub-categories. Let's agree on the main definition of Craft Spirits Producers now.

Maybe we should start a different thread that focuses solely on the definitions of the sub-categories. We can argue all we want there, but get the basics agreed to now.

Jonathan

I'd like to make a slight amendment to the last sentence of this proposed definition:

"Craft Spirit Producer"

Craft spirit makers produce beverage spirits primarily from agricultural raw materials. A Craft Spirit Producer utilizes a variety of technical skills in the preparation which substantially change the character of the original material, including but not limited to: infusion, batch distillation and/or redistillation. A "Craft Producer" operates facility with an annual capacity of up to 65,000 proof gallons of finished product in a single licensed premises.

This revision (from "craft distiller" to "craft producer") is more inclusive. I'm inclined to agree with those who feel that we should define the broad category and then address the different variations of the craft (distiller, blender, infuser, whatever). And if this is acceptable to most, I suggest we begin to weigh in on the proposal either as it is written above or with revision that may be proposed. Comments anyone? Disageements in principle? Wholehearted support?

R

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Craft spirit makers produce beverage spirits primarily from agricultural raw materials.

Does this aspect of the definition leave out those that choose to purchase neutral spirits and redistill them into products such as gin, etc? Because if so, then I do not support such a definition. By the reading of that definition it appears to leave out us distillers that choose not to make our own wash. When I make my gin and absinthe using neutral purchased spirits, I'm just as much of a "craft distiller" as someone who manufactures their own wash. FWIW, I do not support including into the definition of "craft distiller" those who purchase neutral spirits and water them down to make "vodka."

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Marc, the definition I'm proposing includes the stipulation for a change in the nature and character of the product by use of the craft involved. In my opinion putting juniper and whatever other ingredients into GNS would produce a substantial change in the character of the base material (GNS is grain based after all). The point of gin is the herbal character added by the infusion and perhaps redistillation. Taking GNS and redistilling it in a pot or any other still and bottling it thereafter without any substantial change in the character takes minimal technical skill and (again opinion) is not a craft undertaking. To be clear, that is not to say the making of vodka is not a craft; as I mentioned in another post, starting from the raw agricultural source materials and making vodka is another matter.

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And the botanicals would be the "agricultural raw materials."

But just running some GNS through a still, so you can say you distilled it, without actually producing "a substantial change in the character of the base material" would simply be scamming and not acceptable.

Somebody also might get the idea to set up a mere bottling operation to get craft producer status for the reduced tax rate, a scam both ADI and TTB would be motivated to regulate out of the system.

There are already today dozens of small blending operations, who basically just add flavoring, and in some cases sweetener, to GNS, to make things like flavored vodka and liqueurs, and gin. I'm thinking of Philips Distilling in Minneapolis and Luxco in St. Louis. They would have to exclude the products they merely bottle, like their bulk whiskey and bulk rum, but that would actually help them get below the production limit. They probably would qualify under the proposed definition, even if all they are doing is blend a gin concentrate they bought with GNS. What about blending bulk bourbon with GNS to make American Blended Whiskey?

One thing you may just have to accept is that you can't regulate quality. The marketplace will have to do that.

This is important because you're going to get big time resistance if it looks like some producers, such as Philips and Luxco, who are now paying full freight, would be entitled to re-classify themselves as craft producers to get a lower rate.

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That's a good point. How do you differentiate between a producer who uses flavorings, extracts, concentrates, and sweeteners to make flavored vodkas and gin. Or mixing whiskey and GNS to make bulk blended whiskey. Vs. someone who infuses / cold compunding GNS or vodka with botanicals or fruit/vegetables/spices/herbs to make infused /flavored vodka or gin. Or fine whiskey blenders who use high quality whiskey and artisanallly blends them to create a premium product.

And the botanicals would be the "agricultural raw materials."

But just running some GNS through a still, so you can say you distilled it, without actually producing "a substantial change in the character of the base material" would simply be scamming and not acceptable.

Somebody also might get the idea to set up a mere bottling operation to get craft producer status for the reduced tax rate, a scam both ADI and TTB would be motivated to regulate out of the system.

There are already today dozens of small blending operations, who basically just add flavoring, and in some cases sweetener, to GNS, to make things like flavored vodka and liqueurs, and gin. I'm thinking of Philips Distilling in Minneapolis and Luxco in St. Louis. They would have to exclude the products they merely bottle, like their bulk whiskey and bulk rum, but that would actually help them get below the production limit. They probably would qualify under the proposed definition, even if all they are doing is blend a gin concentrate they bought with GNS. What about blending bulk bourbon with GNS to make American Blended Whiskey?

One thing you may just have to accept is that you can't regulate quality. The marketplace will have to do that.

This is important because you're going to get big time resistance if it looks like some producers, such as Philips and Luxco, who are now paying full freight, would be entitled to re-classify themselves as craft producers to get a lower rate.

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This is important because you're going to get big time resistance if it looks like some producers, such as Philips and Luxco, who are now paying full freight, would be entitled to re-classify themselves as craft producers to get a lower rate.

Precisely. I think this is why small is important. Just as important as craft. And if someone becomes big enough to bump up against the tax rate, they have to decide whether to stay small or grow and pay the higher rate.

Personally, I think flavorings need to be excluded as raw agricultural products. Unless they were made from petrochemicals, somewhere along the line raw ag products were used. I also think craft producers don't add GNS to dilute their products.

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Cheryl- Exactly in which sense do you mean " I also think craft producers don't add GNS to dilute their products"?? What if you distill a gin and it is the correct flavor balance, but too much of it, too big a flavor? So you add GNS and water until it is the correct strength and abv.?

Or are you talking specifically about gns/whiskey blending?

Precisely. I think this is why small is important. Just as important as craft. And if someone becomes big enough to bump up against the tax rate, they have to decide whether to stay small or grow and pay the higher rate.

Personally, I think flavorings need to be excluded as raw agricultural products. Unless they were made from petrochemicals, somewhere along the line raw ag products were used. I also think craft producers don't add GNS to dilute their products.

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