Another Way Craft Distillers Cope Until Their Product Mature

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King Of Hearts
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Another Way Craft Distillers Cope Until Their Product Mature

Post by King Of Hearts »

from the Whiskey Advocate Blog http://www.whiskyadvocateblog.com/" onclick="window.open(this.href);return false;" rel="nofollow

http://www.whiskyadvocateblog.com/2012/ ... f-whiskey/" onclick="window.open(this.href);return false;" rel="nofollow

MARCH 21ST, 2012
JOHN HANSELL

They buy mature stocks from suppliers until their product matures. This is an alternative to selling “white whiskey” or experimenting with smaller barrels and other techniques to try and speed up the maturation process.

There are numerous examples of this over the past several years, such as High West and Templeton, and even companies who aren’t even making their own stuff yet, like Michter’s, Angel’s Envy, and WhistlePig.

I’m okay with this, as long as the brand owners are transparant about the source of the whiskey, because a lot of the whiskey they are putting out is pretty good stuff!

How do you feel about it?
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by bentstick »

Is that not against what craft distilling is for, putting out a product that is different than anything else you can purchase? I do belive it has to be tough to get up and running but pushing others product that was not distilled by themselves? I may have read it wrong if so ignore and carry on. :thumbup:
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by King Of Hearts »

bentstick wrote:Is that not against what craft distilling is for, putting out a product that is different than anything else you can purchase? I do belive it has to be tough to get up and running but pushing others product that was not distilled by themselves? I may have read it wrong if so ignore and carry on. :thumbup:
Its John's opinion not mine. I couldnt see doing that unless I was just using the base for a liqour or something.
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by astronomical »

Interesting. I tasted Whistle Pig Rye at Binnys the other day. I found it kinda rough and thought the $70 price tag was nuts. I literally gagged when I sipped it expecting it to be smoother. Perhaps it went down the wrong pipe.

Like cigars, I'll give it another try before I dismiss it. Perhaps I just wasnt in the mood or something.

I don't mind the fact that they are buying it from Canada. What will piss me off is if they use the same label when their version is done aging. Thats just wrong. It wouldn't surprise me since it got rave reviews. Thats a bait 'n switch if you ask me and the TTB should deny that label.
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by bentstick »

Yes I diid uderstand that King.
That was what I was looking for bait and switch. Thats wrong!
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by King Of Hearts »

astronomical wrote:Interesting. I tasted Whistle Pig Rye at Binnys the other day. I found it kinda rough and thought the $70 price tag was nuts. I literally gagged when I sipped it expecting it to be smoother. Perhaps it went down the wrong pipe.

Like cigars, I'll give it another try before I dismiss it. Perhaps I just wasnt in the mood or something.

I don't mind the fact that they are buying it from Canada. What will piss me off is if they use the same label when their version is done aging. Thats just wrong. It wouldn't surprise me since it got rave reviews. Thats a bait 'n switch if you ask me and the TTB should deny that label.
You guys should go to John's blog and express your opinions, I'm sure he would love to hear them.
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by King Of Hearts »

astronomical wrote:Interesting. I tasted Whistle Pig Rye at Binnys the other day. I found it kinda rough and thought the $70 price tag was nuts. I literally gagged when I sipped it expecting it to be smoother. Perhaps it went down the wrong pipe.

Like cigars, I'll give it another try before I dismiss it. Perhaps I just wasnt in the mood or something.

I don't mind the fact that they are buying it from Canada. What will piss me off is if they use the same label when their version is done aging. Thats just wrong. It wouldn't surprise me since it got rave reviews. Thats a bait 'n switch if you ask me and the TTB should deny that label.
Wow, thanks for the review Astro. The more I learn & taste the more I'm amazed at what is going on in the spirit world. Like there are so many single malt scotchs it will make your head spin. And the prices are just as crazy out of this world.
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by Fjard »

King Of Hearts wrote: Like there are so many single malt scotchs it will make your head spin. And the prices are just as crazy out of this world.
I have to agree with that statement, there are some fine scotch out there, but 100+ dollars per bottle is killing me....I usually wait till the next scotch party to drink what others bought and my el'cheapo 70-80 dollar bottles
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by Dnderhead »

if you see blended or vatted on label part/all can be made in a different distillery.
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by Samohon »

+2, what Dnder said...

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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by Peter_Muir »

I don't understand why many distilleries don't diversify and produce gin and vodka that they can sell right away until their whiskey has finished maturing.
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by Prairiepiss »

Peter_Muir wrote:I don't understand why many distilleries don't diversify and produce gin and vodka that they can sell right away until their whiskey has finished maturing.
But they are. And its flooding the market. Have see the selections of vodkas on the selves lately? Hard to sell it when there are a ton on the shelf. When you start getting to many people will just start grabbing the old reliable. Instead of trying something new. It's too hard to choose.

Just my thoughts.
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by Mr Viking »

I like what the English Whiskey company http://www.englishwhisky.co.uk/" onclick="window.open(this.href);return false;" rel="nofollow have done, they have released it as it ages, as different "chapters of the story". An innovative way of getting around the problem of waiting for it to age. Though they legally weren't allowed to call the first few batches (I think up until 3 years) whiskey
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by LWTCS »

Stillhouse, Tito's and chase (i assume) are examples of this,,,,,cept still house calls there product sumpin differnt and puts it in a way spendy bottle. Its good but it ain't worth the extra $,,,,,stillhhouse that is.
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by Bushman »

This was posted before but here is another gimmick for selling before the aging processes has finished.
http://www.woodinvillewhiskeyco.com/jou ... n-whiskey/" onclick="window.open(this.href);return false;" rel="nofollow
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Re: Another Way Craft Distillers Cope Until Their Product Ma

Post by MitchyBourbon »

I'm again-it, period. I understand they are looking for ways to survive. I understand that blended scotch means it can be blended with other companies scotch. But this is different, the entire bottle is being passed off as a craft product and would most likely be priced as such.

On the other hand, maybe I should start my own craft/pretend label. I will never produce my own liquor. I'll just resell old crow ($12 per ltr) and call it BadDog Bourbon and charge $99.99.
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Re: Another Way Craft Distillers Cope Until Their Product Mature

Post by SpiritOf76 »

This is a common practice in consumer branded foods. Often the manufacturers are either specifically for hire for contract manufacturing, or, they are factories owned by brands but have excess capacity. But for example 99% of the "house brand" products in supermarkets. And a lot of startup consumer packaged foods. It's called 'co-packing. The brand owners focus on marketing and finding distribution. The factories do what they do best. It's an efficient process and allows everyone to specialize.

The difference here, I believe, is that most craft distillers plan to eventually do away with the outsourced distilling. So there's an undercurrent of legitimacy here that separates the craft distillers from packaged consumer foods.

And, as with co-packing, contract distillers provide a product designed by the brand owner.

Food and spirits have the same startup trajectory (make a product at hobby-level production, find a way to scale with limited resources yet put a product in front of consumers at the right price point). It makes good business sense, and, if consumers buy and enjoy and repurchase, that's the consumers' choice and market validation. If that helps new talent and entrepreneurs enter the distilling industry and become successful, I'm all for it.
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Re: Another Way Craft Distillers Cope Until Their Product Mature

Post by cayars »

Wow this thread was revived from the grave but it's just as relevant today as it was back in 2012. :)

There are some really good whiskey being produced/released from small houses that weren't distilled there. Probably half the bottles on the shelves at your local store were distilled in Indiana (MGP) and not Tenn. or Kentucky. Some of this is straight bottling, some is blended and some of the more interesting product is doing "finishing" like Angel's Envy which sources from other distilleries.

I too wish that these companies were more upfront for consumers instead of intentionally trying to hide the fact of how the product is produced. You can sometimes figure this out by reading the label carefully to see what state the spirit was distilled in. For example if the label indicates the product was distilled in Indiana there's a very good chance it came from MGP (they make very good spirits). But since you can re-distill a product yourself and then label a purchased spirit as your own you could purchase a neutral previously distilled to 190+ proof and then run it through your pot still in batches and "produce" a pot distilled vodka. Sound familiar anyone? Fifth Generation, Inc. apparently does exactly this but you would never know it looking at their bottle or their website. Maybe the name Fifth Generations, Inc doesn't ring a bell but it's a vodka out of Austin Texas if that helps. The product is sold under the name of "Tito's Handmade Vodka".

I think we all know it's not "handmade" and it certainly isn't legally made in a pot still. It was a product already distilled to legal standards that was reprocessed in a pot still. Is that good or bad? Well my personal opinion is that it's bad from the standpoint of deceiving buyers with something of a "fake story" but from a fellow distiller I appreciate the "extra" distillation step done to the spirit which should help to improve it. :) They certainly could have told a more true story that they try to source/purchase the best neutral spirit available then reprocess it again themselves using copper pot stills and good old Texas water then filter it the Tito's way. :)

The other way to help figure out if people produce their own spirits is to bring up the company address and see if they have grain silos which anyone producing large amounts of spirits would likely have (hint look at Tito's/Fifth Generation, Inc. on google maps sat view). This isn't a pass/fail but can be a good indication depending on the amount of product produced.

I think we can all see the issues/problems with a 1 year old company releasing an 8 year old whiskey as the math doesn't add up unless it was sourced.

The TTB should require companies to be more forthcoming on their labels without using "code words" that only "insiders" understand. Companies should learn how to be more truthful in their products to justify prices while explaining why it's worth the price.

If you don't agree, maybe you might be interested in my new vodka that was distilled from the world's purest arctic water separately distilled. It was ran though a pot still 3 times and filtered through gold. The bottle contains gold flakes and gold lettering on the bottle and is very classy. It's $495 a bottle and only 50 bottles are produced each month.

Recipe:
Start with buying 50 bottles of Smirnoff vodka in plastic bottles, purchase 50 bottles of Goldschlager for the gold flakes until such time as it makes sense to purchase the flakes separately (drink contents but filter out gold flakes for re-use). You will also need to purchase 50 bottles of Arctic Blue Waters or other Finland bottled water. Retail prices for ingredients run about about $35 or so.

Take your 5 to 15 gallon copper still and empty 1 part vodka and 1 part bottled water to fill boiler to 3/4 full. Run still until output equals 80 proof. Set this aside and continue to run still until 10% is coming out of still. Set this aside for the next batch and add this to the boiler before the next water and Smirnoff bottles.

Now take all the gold flakes that you have separated from the Goldschlager and put on top of a coffee filter and use this to filter your distilled vodka.
After filtering is complete, split the gold flakes up among 50 bottles. Now proof down your spirit to 80 proof and add to each bottle with gold flakes.

I won't give all our "family secrets" away so you need to source your own bottles with gold lettering. :)

While this may sound "wild" and "far out" it's really the same story a lot of spirits have. The story is way over the top compared to what is actually done to the spirit. With that said get your orders in now for our Arctic Vodka before all bottles are spoken for. Remember it's made from some of the best spirits or Earth distilled using the world's purest natural water and filtered through gold. For forum members it's available for only $295 a bottle but only 5 bottles can be ordered at one time. LOL

Marketing is at least half the worth of the spirit. The "story", the bottling/packaging, the "paid" reviews as well as "special discounts" to distributors and retail outlets to feature the product play a large part in what is "good" spirits.

Now getting back more on topic there are some really unique spirits and especially whiskey that are available doing things completely different from other brands. Take Jefferson for example and their "ocean" series. They fill barrels and then put these barrels on ships that sail across the seas. They criss-cross the equator several times on each voyage. There is a touch/smell/taste of brine in the whiskey and it ages differently then say a KY whiskey. "Jefferson" has a great side story that is worth knowing. The guys behind the distillery wanted to tie the brand to old history USA so they choose a president name that everyone knows without choosing an obvious name like Lincoln or Washington. No direct ties to Jefferson other than they picked his name. :) What is funny about the story is that Jefferson disliked whiskey and thought it was a "peasant" drink. Jefferson looked down on whiskey drinkers. Jefferson was a wine snob and purchases tons from France which put him in debt which he died with. That makes the choice of "Jefferson" much funnier when you know the back story since Jefferson died with wine debt and didn't like whiskey!

Jefferson Ocean series is something that should be experienced like Angel's Envy should be to see what some people are doing with whiskey that is unique but very good.
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Re: Another Way Craft Distillers Cope Until Their Product Mature

Post by seamusm53 »

Label and manufacturing requirements are ways that companies get legislation passed to protect their turf - legalized monopolistic anti-competitive activity. So we end up withe the mish mash of minimum 3 years, unused new white oak barrels..... I think Bernie Lubbers, the Whiskey Professor was the 'historian' who noted that when Rye was becoming the 'new thing' that un-aged rye had only one? source from which everyone bought and then aged/finished before attaching their own name and labels. Certainly not 'Bottled in Bond' products but other than storage/aging costs marketing is by far the biggest expense of bringing liquor to the consumer.
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Re: Another Way Craft Distillers Cope Until Their Product Mature

Post by SpiritOf76 »

seamusm53 wrote: Wed Nov 20, 2019 8:05 pm ... but other than storage/aging costs marketing is by far the biggest expense of bringing liquor to the consumer.
I'd add to that or rather argue (politely, as in the intellectual "argue") that the marketing these days is minimal due to the internet, while packaging and labeling expenses remain high for small scale manufacturers those expenses aren't the major costs. The majority of costs are due to regulations - starting with excise taxes (what is it up to now, $13.50 per proof gallon or more?) the variability in state laws and regulations that create inefficiencies in administration but primarily add costs by dictating distribution channel which also stifles competitive entry. Among the regulations are those forcing manufacturers to use third party distribution providers (their margins as a cost to consumers), prohibition against selling direct to consumer, requirements to sell into a state owned or so called state/private partnership retail channel. In the absence of the excise tax, with the authority to self-distribute, with the authority to sell direct to consumer nationally, and by leveraging the internet the craft distiller would put a lot more $ in their pockets and the price per bottle would be lower - or at least, it could be lower it would depend on overall marketing - price points correlate to brand image so let's say then that they could at least be profitable at price points for top shelf products without having to sell massive quantities.

The system as it stands with its requirements loads the consumer with:
1) excise tax + the cost of goods, marketing and sales multiplied by manufacturer's margin
2) which then gets multiplied by distributor's margin
3) which then gets multiplied by retailers' margin
4) which becomes the price point
5) which then has sales tax applied to it (in my state it's 6% state + 2% local = 8% sales tax)
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Re: Another Way Craft Distillers Cope Until Their Product Mature

Post by seamusm53 »

SpiritOf76 wrote: Thu Nov 21, 2019 6:05 am
I'd add to that or rather argue (politely, as in the intellectual "argue") that the marketing these days is minimal due to the internet

The system as it stands with its requirements loads the consumer with:
1) excise tax + the cost of goods, marketing and sales multiplied by manufacturer's margin
2) which then gets multiplied by distributor's margin
3) which then gets multiplied by retailers' margin
4) which becomes the price point
5) which then has sales tax applied to it (in my state it's 6% state + 2% local = 8% sales tax)
And a very polite argument it is.

Ultimately the manufacturer does not pay the vast majority of taxes on liquor - the consumer does. Though, of course, sales are affected. But I thoroughly agree that regulations raise the price. When I use the word 'marketing' I am not limiting my self to advertising - yes, the internet is cheap. I include expenses such as a sales force, free samples, convincing sellers that they should include your stuff behind the bar or on their shelves. That is where marketing a new booze becomes hideously expensive if your trying to get somebody other than your buds to buy your stuff - and your friends may well balk at buying what heretofore was free.
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Re: Another Way Craft Distillers Cope Until Their Product Mature

Post by SpiritOf76 »

Your quote was that marketing was the majority cost to the consumer. I agree that the excise tax is paid by the consumer. That's my point along with the others. There are far greater cost factors than marketing.

Sales force is the founders at startup and in reality throughout growth until significant (call it established reliable and profitable customer base). At some point supposedly the distributor takes on the field sales role. In my experience in other industries this is not really the case. The distributors' sales force are order takers. They don't flog unknown brands. And although I've also had (in other industries) up to 25 independent sales reps at a time blanketing the nation - some of whom with reputations as being king makers - not a one of them had a lick of sales skills. They couldn't close and frankly, when I walked into their accounts I closed without effort. There's nothing like the passion of founders. In a distilling operation there are few employees required, and every employee would have a dual role as brand ambassador/promotion/sales.

I think you're conflating the cost of sales with the real costs. Cost of sales for founders is primarily time. Free samples to point of sale (bars) promotions using product samples to consumers at bars or at retail if your state allows - these are not large expenses. On the contrary - marketing is meant to 1) drive product trial and 2) drive sales above and beyond individual sales efforts.

Cost of manufacture, excise tax and packaging are already included in item #1 on my list.

The regulations that _require_ those costs plus manufacturers' profit marign to be doubled (at a minimum) then doubled again (at a minimum) and then taxed again at point of sale - that's the consumer shakedown.

Particularly egregious is the excise tax. Because it not only gets factored into everyone's costs and therefore margins and then passed to the consumer in an inflated form, the consumer is then taxed AGAIN on the multiplied excise tax cost. Products which have an excise tax should not be subject to state sales tax. It's an abusive tax on the consumer. Local/municipal sales tax exemption is harder to argue against.

Here's a fun article addressing the excise taxes on spirits. It doesn't include the reality that the tax gets multiplied throughout the distribution channel and then, taxed again at sale. https://thewhiskeywash.com/lifestyle/ha ... iskey-tax/
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