How We Launched a Successful Distillery This startup story shows how to get a craft distillery off the ground.
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In Start Your Own Microbrewery, Distillery, or Cidery, the staff of Entrepreneur Media Inc. and writer Corie Brown with Zester Daily Contributors explain how you can get started in the craft alcoholic beverage industry, whether you want to start your own microbrewery, distillery or cidery. In this edited excerpt, the authors profile a California-based craft distillery to give wannabe entrepreneurs an inside look at a successful business.
Ventura Spirits Company, Ventura, California
Andrew Caspary, Anthony Caspary, Henry Tarmy, and James Greenspun, Owners - Opened April 2014
Andrew Caspary, 33, and his brother Anthony, 31, made a little hooch in a hobby still and considered starting a craft distillery. But they needed help. Once Andrew's Dartmouth College roommate, Henry Tarmy, 33, moved to Los Angeles with brother-in-law James Greenspun, 33, in tow, they had an MBA, an engineer, an industrial designer, and an environmentalist. Ventura Spirits was launched in 2010.
Their first sale was in mid-2014 to a cousin working in a tiny wine and cheese shop in Beverly Hills. By September, Whole Foods Market had Ventura Spirits in stores across southern California. They were selling local, unique spirits to an eager market.
The base ingredient for their signature vodka—Ventura County strawberries—is an original move. Also unique is their copper still—a four-plate column/pot hybrid they handcrafted themselves to get the efficiency of a column still without losing the flavor preservation quality of a pot still.
Opinions differ on whether their vodka retains a hint of its strawberry origins, but it definitely has a distinct smooth, round, umami-ish mouth-feel. They could have bought neutral spirits at $6 a gallon from an industrial producer, run it once through a still, filtered out the harshness, and sold it for the same price, which is the story behind many "craft" vodkas.
But, as Andrew Caspary says, "There are enough people doing that already. We have a heartfelt belief that distilling is an agrarian tradition firmly rooted in place and, when every community has its own distilling tradition, the imbalances of the globalized economy will begin to correct. We want to be a part of that change."
Still, he says, there's a place for commercial base alcohol in craft spirits. Until Andrew and his team can afford a large enough distillery to produce grain spirits themselves, they're using an industrial-produced organic wheat spirit as the base for their Wilder Gin. The local/sustainable part is the purple sage, sagebrush, bay leaf, yerba santa, chuchupate, and pixie tangerine peel, some of which is foraged in the Santa Monica Mountains behind their distillery. The juniper berries and coriander seeds complete the botanicals for a 12- hour infusion, after which they let it rest for three weeks before bottling to firmly establish aromas. Then it's four weeks to market at a price of $32. The gin has smells and tastes reminiscent of a hike in the coastal hills near the ocean.
A prickly pear brandy—their version of American tequila—rounds out their portfolio for a total production of 2,700 six-bottle cases. "We're still in the beta phase," Andrew says, noting that they haven't come close to reaching their production capacity.
An aged whiskey distilled from Kernza grain, a proto-wheat developed by the ecologists at The Land Institute in Kansas as part of a project to re-establish wild prairies, is aging in oak barrels. In development is a seaweed and rice distilled spirit made with the koji yeast used in sake. They hope it will taste like the ocean that's just out their front door.
Model for a new craft distillery
Distilling is less expensive—and more profitable—than brewing, if you don't count the cost of holding your inventory in oak barrels for years as you wait for it to age into sippable whiskey. It's why distillers always start by selling vodka, gin, or white (unaged) whiskey. The best marketing tool is the origin of the ingredients: local, local, local.
"Consumers are willing to pay more for spirits [than craft beer], and the upfront investment in equipment is laughably cheap, and the ingredients cost less," says Jake Keeler, director of marketing at BSG, a leading supplier of ingredients and services to craft brewers and distillers.
Andrew Caspary and his team are following the craft-distilling playbook by starting with white spirits that move quickly from still to store shelves so they can pay the bills while their brown spirits age. They're taking advantage of readily available, high-quality industrial spirits to make one of the products in their portfolio, conserving time, effort, and money while still creating a unique, high-quality craft product. At the same time, they're following the "craft" standard of transparency in all of their ingredients and processes.
They're riding the local, environmentally sustainable wave that's working so well in craft spirits today and doing it with products that stand out on the shelf. Retailers are lining up for their spirits, and they haven't spent a nickel on marketing. Their website is a rudimentary placeholder. They started with a home still and didn't work with a commercial distiller before launching their company.