Steps in opening a distillery

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LWTCS
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Re: Steps in opening a distillery

Post by LWTCS »

You will have to meet with them. Help them understand that you will be creating jobs and more revenue paid in the form of taxes.
Explain that you will be sourcing local ingredients, etc,etc.

You have to sell it.
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Re: Steps in opening a distillery

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fqu8847 wrote:The town where I live is a tourist attraction of sorts already. It is on the state line and there are many options for promotion. And with the travelers, it could prove more lucrative than I know. Changing the mindset of the local government will be the problem... any suggestions on that?
What about getting involved? Are there vacancies on the county planning commission or board?

While not as extreme as changing local liquor laws, I did have to get my property rezoned and at the final approval hearing, I mentioned to the city planner that I'd read every word of the city land use and development municipal code while building my PUD. She caught me off guard by saying "Great! We've got 5 vacancies on the planning commission - we could use you!"

Getting involved in local politics is surprisingly easy and I can't imagine an easier way to change law than from inside.
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Re: Steps in opening a distillery

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3d0g wrote:
fqu8847 wrote:The town where I live is a tourist attraction of sorts already. It is on the state line and there are many options for promotion. And with the travelers, it could prove more lucrative than I know. Changing the mindset of the local government will be the problem... any suggestions on that?
What about getting involved? Are there vacancies on the county planning commission or board?

While not as extreme as changing local liquor laws, I did have to get my property rezoned and at the final approval hearing, I mentioned to the city planner that I'd read every word of the city land use and development municipal code while building my PUD. She caught me off guard by saying "Great! We've got 5 vacancies on the planning commission - we could use you!"

Getting involved in local politics is surprisingly easy and I can't imagine an easier way to change law than from inside.
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Re: Steps in opening a distillery

Post by Bushman »

A tourist destination is definitely a plus, I toured and I know 3d0g also toured a distillery in Maui. You had to pay for a tour to sample at the end of the tour. People lined up for each tour and they also had a good secondary market as the tasting room was also a gift shop.
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Re: Steps in opening a distillery

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That's great! I would love to sit down with them, but I have to probe and see who to talk to. And as far as vacancies, both my wife and I are thinking about running for commissioner next time around. She is the local sweetheart and I was lucky enough to marry her! There are two distilleries in the next counties but they reside in different states, so I could tour those!!!
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Re: Steps in opening a distillery

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fqu8847 wrote:That's great! I would love to sit down with them, but I have to probe and see who to talk to. And as far as vacancies, both my wife and I are thinking about running for commissioner next time around. She is the local sweetheart and I was lucky enough to marry her! There are two distilleries in the next counties but they reside in different states, so I could tour those!!!
Also, if you could dig up any data from the other distilleries that could help illustrate the benefits of having this business would bring to your area.
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Re: Steps in opening a distillery

Post by Likker_Head »

My best advise would be First, go get a job in a distillery. Work there for at least a year, learn what it takes to run one and then see if its up your ally! I don't mean to hamper ones dreams just don't want to see anyone fail or get stuck not being able to playbills and have a life.

I am an avid home brewer. Like you I had big expectations of wanting my own brewery. I started to do all the research, make a business plans and getting funding in line. Then I was lucky enough to get a job at a small/medium size brewery. I learned a LOT. After about a year, I could see it would be a full 24/7 job, no vacation time for years and the headaches of getting the product to market was incredibly hard due to all the underlying unwritten rules out there with the distribution company's. In short I will not be going that route anytime soon!

Hope that helps!!
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Re: Steps in opening a distillery

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Jimbo wrote:Finding distributors is key, and its important to select carefully. In a class Windy and I took, they warned us about the pitfalls of small, medium and large distributors. From being too small to have any real influence and/or not energetic about beating the street to find a market for you, to large guys signing up then burying you by doing nothing, to 'play' positioning of product they make better cuts on or are engaged in for whatever reason. They also told us some distributors will try to game you with bullshit like 'give me a case for every 5 I sell' and I'll work hard for you. Koval told them types to pound sand. The whole finding good distributors concern is reportedly one of the biggest headaches of getting a new likker business going strong. Doesnt surprise me. Making the product is definitely the easy part.
I took the same class in December and highly recommend anyone looking to open a craft distillery take it or a similar class. The Koval class is $900 which seems like a lot until you start really crunching the numbers in your business plan, the. It's pretty cheap. I've put my plans on pause after taking the class until I have a lot more money saved up and a partner to handle the sales end.
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Re: Steps in opening a distillery

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bluefish_dist wrote:First step is getting the building in place, then all the licensing. We are 11 months in and about a $100k not counting time. So far I have 5 licenses/permits and need a couple more. Little things, like you serve ice, so now you need to have a food service license, you have large quantities of flammable so you have to have a hazmat permit. The dsp and state licenses were actually the easy part.

Pm if you want to talk more detail.
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Re: Steps in opening a distillery

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Update on this... the liquor laws are to be voted on in a few weeks. Seems after that I need to send a certified formal letter of intent the mayor of my county. Only then can I start looking at locations and begin attempting this formidable task. In other news, however, it seems I have secured 100% financing for it! Pretty excited, and to be honest, scared shitless...
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Re: Steps in opening a distillery

Post by Swedish Pride »

good on you lad :thumbup:
yep that would sum up my feelings to if I ventured out on my own, exited and scared, mainly because I know the boss would have been a wanker
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Re: Steps in opening a distillery

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3 more days, y'all!!! Got 3 more days before the voting ends and the results tallied! I'm literally crossing every thing I have. Almost sick to my stomach with anticipation!
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Re: Steps in opening a distillery

Post by Boda Getta »

Also, I'm picking up from some of the Bourbon blogs I subscribe to that the craft/micro distillery movement are showing signs of peaking. Some have go completely out of business, a very few were bought out by the big boys(not necessarily a bad thing from a business point of view). The mega distilleries are also jumping in with their "Small Batch", "Single Barrel" etc attempting to move into the craft distilleries turf. As an aside, several of the big boys have class action suits filed over their "Small Batch" claims. Bottom line: It's very hard to successfully compete with the big boys in any industry.
But good luck.

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Re: Steps in opening a distillery

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Thank you, BG. I'm extremely wary of this as well. The only thing keeping me interested is the fact that I do so love this hobby. The area where I would plan to operate has nothing of the sort for several miles, and selling locally to tourists would prove lucrative I believe. I do however worry that, with all the other out there, what if couldn't do so well on shelves. Essentially you have to get out there on the shelves and sell or there will be no growth, ever. I guess you'll never know till you try, but I wish it was a surefire thing anyway. I appreciate the input, however, still!
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Re: Steps in opening a distillery

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Words cannot describe my excitement tonight as I post that the laws have passed that will allow me to operate in my home state within the county which I now reside! It is now legal by all definitions! Sending out letters of intent tomorrow!!!
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Re: Steps in opening a distillery

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fqu8847 wrote:Words cannot describe my excitement tonight as I post that the laws have passed that will allow me to operate in my home state within the county which I now reside! It is now legal by all definitions! Sending out letters of intent tomorrow!!!
Congrats on it passing and good luck with the rest of your journey!
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Re: Steps in opening a distillery

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What happened? ...How bout a progress report.
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Re: Steps in opening a distillery

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We have filed the paperwork with the state for the business. As of now we are discussing location of operations with city officials. Should he that locked down by the middle of February.
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Re: Steps in opening a distillery

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And problems... We have been informed that a brewery in a neighboring county has an extremely similar name. We have proposed "Big Frog Distillery" the name of the brewpub, however, is trademarked as "Big Frog Brewing Company". My lawyer advises that while they are not essentially the same... the pub has a frog on the logo, where we only have mountians... there could be an issue for infringement should the distillery do well. He proposes a name change to avoid any confrontation later on.

Damn.
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Re: Steps in opening a distillery

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So we now have a new name, and will be looking at properties February 12th! Starting a new thread to document the journey!
Name: "Old Copper Road Distillery"
Check out the thread to keep up to date on the latest happnings!
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Re: Steps in opening a distillery

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Really interested in tracking your progress.
You mentioned marketing. Obviously in Ducktown you should be getting a ton of interstate traffic, especially during football season.
Roll Tide dammit.
For What It's Worth, travelling through the midwest recently, I got off the interstate because of small, historical type signs for distilleries.
(Thank God they weren't like the "Jack Daniels, Exit Here" signs on I-65. Fell for that long ago)

Anyway, the two stops couldn't have been more different.
First was in Weston MO, at McCormick Distilling:
https://youtu.be/AvD7sFPAoHw" onclick="window.open(this.href);return false;" rel="nofollow
Beautiful place. But despite the hype, they're only distilling whiskey on site and only been doing that and putting up barrels for a year or two.

The other place was I guess more like a craft brewer. Rolled up to a small Butler building that may have been an auto repair shop. Looking through windows in the rollup doors, I saw racks of maybe 30-40 barrels tops.
Went in the tasting room and like McCormick, saw several brands of flavored "whiskies" and vodkas.
Neither had been distilling long enough to offer true "Bourbon".
But both operations did offer the same thing. A package special of 3 bottles of white dog along with a 1 or 2 liter charred barrel with their name burnt on it.
The shtick of course was buy the set up and have your own personalized bourbon in a couple of months.
I haven't been around enough to know, but I ASSuME every "craft distiller" does the same thing.
Look forward to hearing your progress.
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Re: Steps in opening a distillery

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I am a NOOB that knows just enough to be dangerous!
With that disclaimer, I was on another site reading something else and I had a brain fart. :shock:
They were wondering how to get their recipe run for public sale.
Here's my fart
I visited several distilleries this summer from family business to large full blown bonded warehouses.
All now with tasting rooms as part of the site, always with product that was only available there.

I wonder about as part of a business plan, say one day a week, let a small group "hobbyists" come in for classes, make up their mash and run or wherever they are in their process.
Similar to garages where you rent a lift etc. or art studios where you go, drink wine and paint.
If anything is worth a damn, have samples and bottles for sale in your "tasting room", taking your cut and paying the "hobbyist".
I am SURE it is NOT that simple!

But the point is, it brings attention to a target market, also be a good way to drive traffic to your business.
If you had bottles of your stuff LEGALLY on sale, wouldn't you show your buddies?

And I would sure be inviting target bar owners to come by one on one and see what's happening.
They could legally distill a small ? batch their own bar brand liquor.
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Re: Steps in opening a distillery

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Yes, that could be done in the us, but unlike beer which can be sold in growlers, liquor has to be in bottles with an approved label. In Colorado the label also has to be registered with the state for 1 month prior to sale. So theoretically a customer could make spirits at your distillery and then bottle it in your bottle to take home.
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Re: Steps in opening a distillery

Post by Cu29er »

.

Lark Distillery in Tasmania gave weekly distilling classes when they opened. No idea if they still do it or not.

Story I heard from the founder was shortly after they opened, he got a call from the head of one of the big famous Scottish distillers that wanted to help Lark; their reasoning was "you're going to have a lot of new whiskey drinkers stop by your place and we want to help you make great product that will keep them as whiskey drinkers not send them back to beer and wine". So the founder of Lark set about to share his insights with other Tasmanian craft distillers and customers through his classes.

.
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Re: Steps in opening a distillery

Post by Single Malt Yinzer »

To give a little more color to what Bluefish said - To get a label (COLA) approved you may need to submit a formula (grain bill or other ingredients/processes) for approval for a specific type of spirit being made. It's not always required but can be required randomly even on non-required requests (yes, it happens). Traditional whiskeys/neutrals wouldn't be super hard. Anything non-traditional would need to go the Distilled Spirits Specially route and would require an approved formula. It's not hard to do but is very time consuming as you can't be certain that any formula will be approved or when. Either way it would present a substantial amount of effort on a distilleries' time and they would have to charge to cover it.

Can it be done? Yes. Would it be expensive? Yes. Would it be awesome? YES!

I do know one distillery in my area that was looking into it. I don't think they pulled the trigger on it due to the expense and complexity of it.

Rules: https://www.ttb.gov/formulation/pre_cola.shtml" onclick="window.open(this.href);return false;" rel="nofollow
List of COLA class requirements: https://www.ttb.gov/industry_circulars/ ... pirits.pdf" onclick="window.open(this.href);return false;" rel="nofollow
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Re: Steps in opening a distillery

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bluefish_dist wrote:Yes, that could be done in the us, but unlike beer which can be sold in growlers, liquor has to be in bottles with an approved label. In Colorado the label also has to be registered with the state for 1 month prior to sale. So theoretically a customer could make spirits at your distillery and then bottle it in your bottle to take home.
How about
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Re: Steps in opening a distillery

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As a thumbnail sketch of a biz plan I like it. In fact, having been round the track on this as a leagle distller, I'd even be willing to help do this.

But this plan would require a significant investment of capital, time, and expertise from someone, all of which I'm willing to provide, EXCEPT the capital.

I ran the numbers, and here in VA, it could be made to work, provided the mash contributors understood and covered the frontend costs of producing thier small batch product.

PM me if you want to discuss this.

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Re: Steps in opening a distillery

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Odin wrote:I have some sheets for business planning. That's really the first step. Knowing you can sell it, rather than knowing you can make it. And knowing you can finance this step to start with. If I can help you out, let me know!

Regards, Odin.
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Re: Steps in opening a distillery

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Hi folks,

Got a message from someone, and had them call me. The request was pretty straigtforward, he wanted us to provide our spreadsheet tools to him for use in his business planning relating to a vision to open a distillery.

This was my reply:


Thanks for your call this morning. Just to recount our conversation:

We’ve paid over $12,000 to outside consultants as part of our investment in our spreadsheets. Even then, the raw tools they gave us took 6 more months of in-house revising to make them reflect accurately what we needed our tool to do. We used the tool for three years after its development and can assure that it works well. This tool is basically a Production Prediction Tool: it uses everyday data to predict cash flow for the various stages of production inside the distillery. It allows you to collect cost data, labor data, infrastructure costs, tax monies due at state and federal levels (and dozens of other data points), and hinges to your federally required reporting for daily production. It has built in variables that allow you to run “If - Then” assessment relating to the size and frequency of Mashes and run size and frequency of different sized Stills. The tool predicts the value of inventory when presented as un-aged (white whiskey ) and whiskey aged 1, through 6 years, with a built in factor to acknowledge the Angels Share.

Powerful features include several dozen other variables that relate your production to the resulting inventory aimed at predicting profit or loss relating to a specific (but variable) pricing models.

We are willing to make these tools available, and to work with your group as consultants assisting you in developing your business planning. I can pretty much assure that you’ll recover your investment with us many times over by avoiding hidden pitfalls these tools will reveal, and predict when they will emerge along the way to creating and operating a licensed distillery. You’ll find us immediately useful when you begin negotiating with potential investors because our model will provide tested hypotheses using your own data that will help you work with them to understand your vision and interpret that vision into a viable business plan.

We are available to help, when you are ready to move forward.

Dick Griffin
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Re: Steps in opening a distillery

Post by HDNB »

wanna get some ideas going? copy and paste these headings into an excel spreadsheet column, and then extend the columns with month 1, month 2 etc and start punching in your information.
"1. CASH ON HAND
[Beginning of month]"
2. CASH RECEIPTS
units
(a) Cash Sales
(b) Collections from Credit Accounts
(c) Loan or Other Cash Injection
"3. TOTAL CASH RECEIPTS
[2a + 2b + 2c=3]"
"4. TOTAL CASH AVAILABLE
[Before cash out] (1 + 3)"
5. CASH PAID OUT
(a) Purchases (Merchandise)
(b) Gross Wages (excludes withdrawals)
(c) Payroll Expenses (Taxes, etc.)
(d) Outside Services
(e) Supplies (Office and operating)
(f) Repairs and Maintenance
(g) Advertising
(h) Auto, Delivery, and Travel
(i) Accounting and Legal
(j) Rent
(k) bond
(l) Utilities
(m) Insurance
(n) Taxes (excize and state)
(o) Interest
(p) barrels


(q) Miscellaneous [Unspecified]
(r) Subtotal
"ESSENTIAL OPERATING DATA
[Non-cash flow information]"
A. Sales Volume [Dollars]
B. Accounts Receivable [End of Month]
C. Bad Debt [End of Month]
D. Inventory on Hand [End of Month] (units)
E. Accounts Payable [End of Month]
F. Depreciation
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