This week I spoke with Leah Hutchinson at TAPI USA. Tapi manufactures closures for bottles, but her depth of experience within the industry reaches far beyond the lids to your bottles. Fill up your Glencairn and learn about this little detail that can make a big difference.
Let's be honest with each other here. Most of your micro, or "craft" distilleries are probably buying cheap whisky and spirits, repackaging it, and calling it "hand made". There is a right way, which is usually the hard way, and a wrong way. Jack Daniels, in my mind is impressive. They make their own barrels, they cultivate their own yeast, and they draw their water from an artisan spring (for over 150 years). They make a good product because they control every step of their production process, and that sounds pretty "crafty" to me. In this episode we talk with Chris Fletcher, the assistant master distiller for Jack Daniels and get his take on what craft whisky really is.
There is a reason that I wanted to open a distillery in the Missouri Ozarks and it has a lot to do with the State Government. I wanted to be in the Ozarks, for sure, but I did need to narrow it down to either Missouri or Arkansas. Both of these states are near and dear to my heart but Missouri ultimately won out due to the fact that their laws are easier to navigate, understand, and be compliant with. Today I interviewed some very knowledgeable and helpful gents at the MO Alcohol and Tobacco Control branch of the Department of Public Safety. Listen for some real good advice for when you are working on your state application.
A little intro as to where this blog and podcast are going
This blog thus far has merely functioned as a rant for my frustration with trying to get this venture off the ground- not like any of the other military blogs that I previously post on or guest blog on. However, great things are coming; each week I will be interviewing industry experts on the craft distilling movement and uploading to a new podcast on iTunes and putting the transcription on this blog. I've already got some heavy hitters lined up- Tom Hogue with the TTB, one of the leaders in MO Alcohol Tobacco Control, a certain MASTER DISTILLER with Brown Forman, just to name a few. Stay tuned for fun and information.
I feel like opening up a liquor business in the Ozarks has been a real blessing, but not in the way that you would think. I make craft whisky, a product that usually retails between 30 and 90 bucks a bottle in urban venues in the U.S. In the Ozarks, the reality though is that it might as well be a thousand dollars a bottle because this isn't urban and it sure as hell isn't like anywhere else in the U.S. Believe me, I wouldn't have it any other way.
If you can make it in Barry County, you can make it anywhere and I'll tell you why. Any kind of a business around here that doesn't cover basic needs or at least cover them affordably is doomed to failure. The median household income is around 24k. That is 2 thousand a month before you take out taxes. If you have a couple of kids your grocery/household items bill alone will be 500 bucks, and that is IF you cook most of your meals. That means that you probably have around 1300 bucks a month to cover your mortgage/rent, vehicle loans, insurance, gas, electricity, trash, phone, and internet. Then there is the EXTRA school stuff like school stuff, boy/girl scouts, sports, feed for livestock, or repair expenses. Did I mention health insurance? No, I didn't because a lot of people don't have it because they can't afford it. For a lot of the folks around here it's cheaper to pay the annual penalty and go to the urgent care/ER when it's an absolute necessity than it is to pay the monthly premiums for insurance that isn't even close to being comprehensive. What I'm getting at here is that there is always more month at the end of your money. Beer and liquor for a lot of folks a fantastic escape from the harsh reality of living on a razors edge, but you damn well better be able to squeeze it in on a budget that isn't there in the first place.
Really, I understand this. I remember working double shifts mopping floors and being proud as hell that I brought home a paycheck that amounted to 800 dollars. My idea of a party was 25 dollars worth of cheap beer and a pack of smokes, but I still had to go to work on Sunday with a pounding head from drinking the aforementioned cheap beer.
That is why my whisky sits on the shelf for around 25.00 retail. I make around five dollars on every bottle and that is only because I self distribute. I have bought all of my grain by the silo and I currently only have part time employees (which is something I have a LOT of guilt over). So at 5 bucks a bottle I better be selling 400 bottles a month. I pay about 2100 a month just in loan and excise taxes, which makes my take home income every month a little less than 2k. It's pretty spartan, but I'm taking a gamble. I'm betting that if it's hand-made, craft product that the working stiff can afford, that they will actually buy it- that I can make up my margins by selling in quantity. Only time can tell.
Lets get back to why this is a good thing- at least in my mind. My bet is that if my whisky is within reach of the working stiff or college student, that I will be able to sell enough to keep my doors open. With that in mind, sales will eventually increase. With more sales, comes more demand, comes more revenue, and bingo! More jobs are created. I had a pretty good gig as an active duty Army Officer with 8 years of service. Pay was good, benefits were good, and as long as I did a good job I was guaranteed retirement. However, it wasn't satisfying.
I didn't start this business so that I could get rich or even be comfortable; I started it to create jobs, increase agri-tourism, and invest in the rural Ozarks. This isn't about me, this is about the people around me. I want to create Lynchburg Tennessee right here. Jack Daniels is in Lynchburg, TN. There is literally NOTHING in the area besides Jack Daniels. They make a good product, employ most of the locals in the area and give generously to the surrounding community. It's a pretty good business model.
In all, that is why my product is priced the way it is. It isn't rot gut whisky with a price tag of an 8 year Scotch, but something reasonable that any average Joe could pick up in the store. To me, that is worth the dollars and worth the support. Only time can tell if I'm right or not.
Can you “Out-Bourbon” Kentucky?
I’m writing this a day after I attended a local whiskey tasting event here in Missouri. It was a lot of fun and I had an opportunity to really get to know the types ofcustomers that I would want as a craft distiller. There were aficionados, regular working stiffs, localvores, and curious attendees. I had the same opportunities that they did to taste a LOT of different whiskies, and it confirmed my belief that I should not be making bourbon whisky and chances are, most distillers probably shouldn’t either.
Let me first give you a disclaimer; I’m a distiller. Notice that I didn’t put “craft”, “master”, or “artisan” in front of the word distiller. I’m an amateur. Yeah, I’ve been making alcohol since I was about thirteen, and yeah, I can tell the difference between heads, hearts, and tails on a pot still, but compared to the nearly 200 years of generational knowledge that sitting in Kentucky, I’d be an amateur in making bourbon no matter how long I’d been doing it. I don’t have the financial backing, the warehouses, or the football sized scientific team that goes into crafting a consistent tasting product. I’m one guy with a mashtun, a still, and some empty bottles.
So let me give you (the “craft distiller”) a break down of your competition. Beam-Suntory, Brown-Forman, Heaven Hill, and Diageo have combined assets of nearly 53 billion dollars (That is with a B). They have lobbyists that probably make more than you do on any given year, and they have never had to stir a pot of boiling corn mash. Diageo alone had a marketing budget of nearly a billion dollars in 2016. They put up posters, slam your Facebook feed, and take so much shelf space on the aisle that you will be lucky to be sitting on the bottom shelf next to the bottled water. You think your crafty google ad-words campaign is really going to make an impact? Probably not.
So I know what you are thinking now: “But I make bourbon better than anyone in Kentucky.” Maybe you do. Maybe you got your best friend to help you. Maybe you both have truly epic beards and you both visited Scotland and the bourbon trail both while you were in college. It doesn’t matter. You don’t have the time, which is something that Kentucky has lots of. They can afford to make a sub-par product if they want to and just wait for it to get better in the barrel. Do you? Nope. You better be making some damn good moonshine and hope that the American consumer will change their minds and think that it actually tastes good. Actually go hit some bars like I did and try to tell someone your selling moonshine. You will have a hard sell. Harder still? Sell them some of your bourbon. They will automatically think about Kentucky, and with good reason. The first mention of bourbon was in Kentucky, and that was in 1821. What I’m getting at here is that bourbon is synonymous with a state that I don’t live in. Even if I made the best bourbon in America, I’d always be the distillery that is doing something that Kentucky started and I’d always be years behind.
This is why I don’t make bourbon and probably never will. I know that I will never out-bourbon Kentucky. Don’t get me wrong. If you make a great tasting bourbon, your making money at it, and the bottles are flying off the shelf, then by all means you should keep doing what you’re doing. On the other hand, if you’re wondering why there’s dust sitting on the bottles in the local liquor store, then perhaps you should consider placing a little extra effort in crafting a spirit that encompasses your local terroir, is within reach of the average consumer, and offers a taste that will set you apart from the titans of the whisky business. Just keep working on it. After all, all you have to lose is time, which Kentucky has shown can be quite profitable.
Another "post midnight" post. I just can't help but wonder sometimes why in the hell I'm doing this. Nobody in their right mind would put in the hours that I do, face the financial risk that I do, and deal with some of the straight up retards like I do and not make a goddamn penny for it. This may sound like a rant. Truth be told, I couldn't be happier. Yeah, I haven't made a profit but I've been open for 3 months. I have been pushing myself harder than I ever have with little present results. But that is the way it is in everything. In Jan 2007 I weighed 210 lbs. and in Dec 2009 I weighed 165. In The first 10 were easy to lose and the last five were easy to lose. In between there was a slump and I had to change my approach. Towards the end there was a slump and I had to change my approach. I've heard people say that the last 5 are the hardest to lose, but in reality it's only hard because they are doing the same things to lose the last 5 as when they lost the first 10. Things change and you have to change with them.
Really, that is my struggle right now. Our first month was a huge success. We sold out of product 3 times! Now we are in a slump. I have a way to change my approach, but I'm not sure the whisky world is ready for it. Let me break this down for you. Most really, really great tasting whiskies are aged 6+ years. I've got a process that makes a full bodied, ultra smooth whisky in about a days time. It is remarkable. Do you call it rapid aging? Do you call it cheating? What DO you call it? So I have a new approach, but is it consistent with what my distillery is based on? At the outset, I said that I would only make great whisky and that I've never had a good whisky younger than 3 years. Well I've figured out a way that makes great whisky in about a day and I'm wondering what my end customers want to buy; an age statement, or great taste?
It should be an easy answer. I've been working on this process for over two years now. It started out as "wonder what happens if I heat up the alcohol in some wood chips?", but ended in a 14 step process involving chemistry and a lot of miscellaneous pieces of farm equipment. I haven't a lab, a science background, or financial backing like that guy at Lost Spirits, but I have well over 100 test batches; actually I just stopped counting at 100. I'm just glad I never tried to figure out how many hours I've spent on it. So all in all, I should be thinking "Yeah, you figured this out so you should cash in on it." but for some reason the purist in me didn't want me to do it.
Long story short, I'll be at Whiskey Fest in Springfield this weekend and I'm going to hand out samples and see what the overall reaction is to it. If its good, the world gets a new whisky. If its not, I'm just out of a lot of time for figuring it out and a lot of time arguing with the TTB for the label approval.
I came in this weekend to work on the place. I got here at 2am and am getting ready to head back at 2am. This is wearing me out, but to tell you the truth I've never had so much energy. I really believe that I'm gearing up to be able to give something truly great. It's not just about alcohol. There is a lot of great alcohol in this world but not much from the Ozarks. I know that all of this hard work is going to enhance peoples lives. Not just at the club/bar, but this is going to create jobs, promote tourism, and give another way for local farmers to liquidate their crops. This is the "best of the Ozarks"!
I've been working diligently down in Arkansas for the Army but haven't given up on this dream. At first I admit that I was really overwhelmed by leaving the holler when I was just really starting to get the ball rolling, but I never stopped. There is so much that goes into preparations; much more than I could have imagined. Its a sacrifice for sure. I work all week- sometimes well past a 12 hr shift and then head home on the weekends. Over Independence day it got me to thinking about how its that way for a lot of our military- a life of sacrifice. In honor of this sacrifice I will be opening the distillery on September 11, 2016. It may not be a grand event, but it is symbolic. All vets that can show up for it will be getting a drink on me.
I didn't really put this in blazing letters anywhere on this site, but I'm still in the military. I'm not on active duty, but I joined the Arkansas National Guard after leaving my last active duty station. Well, I have been called back into service and I will answer the call. It looks like my projected open date of April 15th will be pushed back. How far I don't know yet. Stay posted.
It has thrown a little wrench in my plans, but it really doesn't bother me that much to be honest. We are building a business around the concept of service to your community. Offering a product or service means absolutely nothing if you aren't using at least part of your time of profits to better the surrounding community. I have been serving since 2008 and I will always serve. Hopefully I can do it a little closer to home next time so that I can bring you "the very best of the Ozarks"
I have to admit that I struggle with actually believing that I will be successful. Growing up in a family with limited financial resources left me with a belief that money, success, health, and wealth only comes to a lucky few. Although I have learned and lived differently, there is a little voice in the back of my mind that says "you ain't gonna make it". Therefore, I tend to try and overpower this nagging feeling with dedicated research to ensure that I do NOT fail. I was looking up some marketing stuff, and I came across this guy named Frank Kern https://www.facebook.com/Frank.Kern.Page/ who seemed pretty straight forward in his marketing approach. He basically postulates that you need to know who your customer is in great detail and tailor your product to him. Seems like a good idea, but when you consider that damn near everybody likes a snort of whisky, the task seems daunting- at first.
As I got up this morning, drank about a half a pot of coffee, popped a couple Motrins, and tried to remember who in the hell I was, I realized that my "ideal" customer is probably a lot like me. A dude in his late twenties to early thirties, got a kid or two, loves wearing a comfortable pair of blue jeans, generally eats healthy but has a secret love of twinkles, works too damn many hours to pay for the toys (motorcycles?) that he doesn't have time to enjoy, and wishes he could spend more time outdoors. He thinks that America is too commercialized and that most of the social interactions he encounters day to day are basically bullshit. He craves something that is authentic, not just marketed as authentic, but doesn't think that paying double the price for it is reasonable. I think this is about right. Only my cash register will tell. Either way, stay tuned. I'm bringing you the very best of the Ozarks!