Craft/Small Barrel vs. KY Straight Bourbon

[HighInTheMtns]

Some local boys opened a distillery in my hometown and make 'craft' vodka. I bought a bottle (we all did) for about $15.00 or so, it was ok, it's vodka so wasn't expecting much and wasn't disappointed. Didn't buy anymore when I found out they were buying GNS then running it through their still so they could say they 'made' it.

Good thread.

[Harry in WashDC]

Well, sort of in defense of some (the key word here is SOME) small distillers -

There are a few who post here whose products I have tried based at least in part by how honest they were about their business plans generally and their products specifically. It's likely that I'll continue to try their new ideas in bottles - at least some of them. I've also tried some from small distillers near me who, I don't think, post here. Mostly, I tried them because I was curious; I've found a few products I liked enough keep on hand even though some whiskey drinkers make faces when I share them. Products have ranged from Virginia scotch guaranteed less than 90 days old to "finished" corn whiskey to some ryes and bourbons (Man, you like that rye? It tastes like grass clippings with mint."). There's a gin producer in WashDC that makes some pretty fine seasonal gins. I think they love serving the local area, but I see no sign that they're planning on growing ten-fold in the near forever.

From the comments made by these makers and from the information available elsewhere, I think, based on anecdotes alone, not on mind reading, that most of these are like fine furniture makers - they know they'll never be able to produce products in volume and consistency (over years) like the major manufacturers (which, BTW, use many of the same raw materials, tools, and designs). They may not get rich, but they truly love creating a niche product for a relatively small audience of consumers. Some of them seem to truly love the experimenting and sharing their successes and failures with others.

These are the makers I'd put in my own personal definition of "craft" distillers.

[nd2005]

Craft distilling is a tough business. I think to some degree its rise is happening in reaction to the success of crafter brewers in the beer world, where nearly every beer geek prefers the craft stuff to the macros.

Problem is brewing and distilling are very different businesses and distilling in particular is all about delayed returns - which is a challenge for a start-up business that needs to, you know, make money.

In the bourbon world the macros have all the advantages - time, money, space, stocks, etc.

Why should I waste $60-70 on a craft experiment when for that price I can get a 10+ year old barrel proof offering from Heaven Hill, Four Roses, Willett, or BT (well, Stagg Jr may not be 10+ years old, but it's still dang good for 40-50 bucks)?

There are a couple of distillers you can argue are doing it "right" - but even they have their detractors.

[aphoticV]

The downside was the same I find in about every small barrel aged product that I have tried; they are over oaked with a bitter astringent finish.

That's exactly what I thought of Garrison Brothers, another TX bourbon. The biggest "flaw", imo, was that the whiskey tasted overoaked, which added distracting astringency. And their bourbon is between 2 and 3 years, if I'm not mistaken, and aged in smaller size barrels - 15 g, I think.

There is also a very small producer here in MA who uses 5 g barrels. Their whiskey taste too oakey, over imo, already at 6 months.

[suntour]

Nd2005 nailed it. They took the craft brewery formula and tried to apply it to spirits, which can sorta work for gin I guess. Whiskey is another thing altogether. Can't wait for this to pass, inversely, I'm looking forward to the fall of the old guard in brewing.

[B.B. Babington]

crafts are worth exploring. there's some really unique stuff out there like yam vodka from north carolina from covington distilleries. I understand crafters want to recoup investment, but thinking they're going to recoup the first month is ridiculous. Price at least somewhat not too far out o' line from what it's worth unless there's reason other than trying to gouge suckers.

[nd2005]

I think the craft market is better suited to gin and vodka, not aged spirits.

I also think the attempts to shortcut the aging process (small barrels) is a mistake...especially for the example in the original post of aging in a hotter climate like Texas. The combination of hotter temps and smaller barrels just by common sense is going to lead to an over-oaked whiskey.

There are some really good american gins these days (Aviation, St. George's) but I don't know that it's accurate to even call those "craft" anymore since they seem to have pretty high production and wide distribution.

[michaelturtle1]

Most craft whiskeys I have tasted are terrible, shortcuts to have a finished product ready to sell to recoup capital generally kills the product. There are some who do it right, wait the 4 years, use "real barrels", also don't spin a yarn about how grand pappy gunner used to make it down the holler by the crik and then aged it in small barrels under his bed.. Just sell me well made whiskey!!!!

[squire]

I think there are great opportunities out there for craft distillers in the area of white goods, gin, vodka, fruit brandies. Absente, etc. The problem with making aged whisky is your product will invariably be compared to existing standards.

I mean you can't just up and make a Macallan 18 or even a Barton BIB. Over the past 200 years innumerable small distilleries have come and gone because they couldn't compete with the standards.

[dSculptor]

So, when these new craft whiskies hit the market, is the distributor the first to convince it's worth selling? I mean do these crafters get paid first from them, and then the distributors try and sell it to the stores? Do the crafters go directly to the stores with samples or is it the distributors who actually bring in the samples. Or do they simply give it to the distributors and then get paid as it sells? Often wondered how that whole process works.

[TunnelTiger]

Great questions. Hopefully somone can answer becuase I am very curious as well.

[portugieser]

Isn't the Willett 2-year rye a "craft" whiskey? Plenty of "craft" distillers have been distilling far longer than Willett yet some folks would give Willett instant credibility as a more traditional distiller because (1) they're in Kentucky and (2) they've been selling other distiller's whiskey for some time.

[HOF44]

Isn't the Willett 2-year rye a "craft" whiskey? Plenty of "craft" distillers have been distilling far longer than Willett yet some folks would give Willett instant credibility as a more traditional distiller because (1) they're in Kentucky and (2) they've been selling other distiller's whiskey for some time.

i have always thought of craft distillers as having a gimmick. Using small barrels, pressing through oak, etc.

If you are making your own traditionally or picking and sourcing through traditional sources I wouldn't call you craft.

Never really thought about it that closely. How do you guys define craft distillers?

[nd2005]

i have always thought of craft distillers as having a gimmick. Using small barrels, pressing through oak, etc.

If you are making your own traditionally or picking and sourcing through traditional sources I wouldn't call you craft.

Never really thought about it that closely. How do you guys define craft distillers?

Part of the trouble with "craft" is that it doesn't have a strict definition. Sam Adams calls themselves craft, and they are the fourth largest brewer in the US.

I still think of Willett and Smooth Ambler as craft, although Willett in particular has the production and storage capacity to crossover into a more "macro" role.

I also don't think Willett or SA deserve "instant credibility" - got to see what they can do with their own production and maturation over time rather than just as a NDP.

[squire]

I shouldn't think so, smaller producer perhaps, it certainly has the capacity to produce way above what I consider craft level. Even though the stills were silent for decades the distillery continued as a functioning entity and the fact that the family was able to hold onto it and bring it back into production is a remarkable achievement. I

[dSculptor]

So, when these new craft whiskies hit the market, is the distributor the first to convince it's worth selling? I mean do these crafters get paid first from them, and then the distributors try and sell it to the stores? Do the crafters go directly to the stores with samples or is it the distributors who actually bring in the samples. Or do they simply give it to the distributors and then get paid as it sells? Often wondered how that whole process works.

Thought for sure I would get a answer from you, Squire, no comment? Stupid question?

[squire]

Don't think there is a clear answer. Liquor laws around the Country are a mishmash of piecemeal legislation that sometimes border on the ridiculous. In our State everything, and I mean everything, has to go through the State ABC warehouse who adds a 27.5% markup.

Oddly enough you can order a case of anything available, even if it's not on the State's official approved list, but your order has to be delivered to the State warehouse and can only be picked up by a licensed retailer.

[Leopold]

So, when these new craft whiskies hit the market, is the distributor the first to convince it's worth selling? I mean do these crafters get paid first from them, and then the distributors try and sell it to the stores? Do the crafters go directly to the stores with samples or is it the distributors who actually bring in the samples. Or do they simply give it to the distributors and then get paid as it sells? Often wondered how that whole process works.

It is different in each State, particularly control States, but in general....

You present your whiskey and/or line of spirits to a distributor/wholesaler. They decide whether or not to carry your wares. That's really about it. The wholesaler buys whatever quantity the deem fit to get the "shelves set", and cut you a check 30 days after they take possession. Or if you've been around for quite a while (we've been in business for 15 years), the distributors call you, normally because they have heard of you via the press, or because a particularly good account or multiple accounts really want your spirits.

For the control States, the distillers or their reps usually have to make an in-person presentation to some type of board. These boards accept new products a couple times per year. Usually, but not always, larger distributors (Southern Wine and Spirits, Charmer, etc.) will simply have salespeople operating in the State since the State handles the warehousing and delivery aspect that a wholesaler would normally undertake. Even though it is illegal, control States tend to play favorites with in-State distillers.

And most control States have a default position for smaller brands: the special order list. To get on that list, a distiller/importer fills out a few forms, and voila, their sprits are listed for special order in that State. The distiller/wholesaler then ships as little as a case of said registered product to the State's warehouse for pending shipment to a restaurant or liquor store.

Now that spirits are getting hot again, many wholesalers that used to sell only wine or beer are jumping into the spirits game and adding small distillers to their portfolio. That's where many of the small distillers look for representation, as many of the larger distributors are uninterested in untested and usually underfunded small distillers.

Hope this helps.

[dSculptor]

Thanks guys, So not only is starting up a new distillery very difficult, so is trying to get the public to buy it, not necessarily the public but the wholesalers. Do you guys still go to individual liquor stores to try and push your product as well? If they like it can they in turn put in an order in thru a wholesaler? Or must you follow the chain? Just curious, when I see these guys at LS pushing samples, that's the wholesaler's?

[TunnelTiger]

In Ga a distiller/bottler can't present products to storew without a distributor being in attendance.

[mosugoji64]

That small-barrel flavor is very distinct to me and is very off-putting. It's like sucking on a matchstick, which may not be a bad thing on its own but its not something I want to experience when I'm drinking whiskey. The craft distillers don't seem to get that just because their whiskey tastes like wood, that doesn't mean it's aged. It just means it tastes like wood.

[squire]

And if they add that 2.5 % of something special it tastes like sugar water that's been stirred with a burned stick.

[PaulO]

Some people here seem to like some of the Balcones products, but those aren't supposed to be KY bourbon. After reading a lot of posts, "bourbon" from small barrels never get any reviews that make me want to go look for it. I should say, no reviews from people whose opinion I have come to trust. I honestly believe that if there was a legitimate way to speed up aging, the large companies would already know about it and do it. I have tasted several young whiskies from large producers that I thought were good: 2-3 year old LDI/MGP Rye bottled by Pepper or Willet, and Early Times 354 Bourbon (simple, but good). I'm sure these all came from standard full size barrels.

[dSculptor]

The only craft whisky I have ever really enjoyed was Breckenridge, I think it was a 2 year old, what ever they did, they did a pretty good job at it, but that was a long time ago that I had it, would like to go back and try it again, but again it's not inexpensive..

On another note, I wonder what the life expectancy of these crafters is? Seems like a pretty tough business to get into.

[CorvallisCracker]

Over the past 200 years innumerable small distilleries have come and gone because they couldn't compete with the standards.

Hard to find data that addresses the actual operational duration of a particular distillery, but in terms of the number it would seem that there were always a lot of small ones operating.

Beginning in the early 1880s the IRS provided a tabular breakdown of whiskey distilleries by capacity, by state (actually by district, but that's a digression I don't want to get into).

From 1883 to 1900, total for the USA.

Daily capacity in bushels...1883...1900...change

less than 5..................439....778....+77%

5 - 10.......................178....188.....+6%

10 - 20......................123.....46....-62%

20 - 60......................135.....87....-35%

60 - 100......................29.....36....+24%

100 - 500....................101.....97.....-4%

500+..........................91.....88.....-3%

During this period we see an almost doubling in the number of very small distilleries.

Note: after 1900 the data becomes increasingly skewed as a result of various states implementing prohibition. The state with the largest number of IRS-registered distilleries in the late 19th century was North Carolina (600 in 1900 vs only 218 in Kentucky). However NC went dry in 1908.

Edited January 17, 2015 by CorvallisCracker