Attendees at Huber Starlight Distillery
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April 29,2007
The Rum Conference, Bordon, IN
Article by
John Lipman, West Chester, OH

"Okay," Bill Owens calls out to the people milling around the Holiday Inn Clarksville lobby, "Let's get these buses loaded and get started." It isn't even half past seven in the morning yet, and three days of intense learning, teaching, and sharing are about to commence, as Owens' American Distilling Institute begins the fourth in its series of annual trade conferences for artisan and craft distillers, and the first to focus specifically on the production and marketing of rum.
For many of the 122 people attending, the festivities began yesterday, as they trickled in from every corner of the United States and from as far away as El Salvador, Brazil, Holland, and the U.K. Registration went on during the afternoon, and several distillers brought samples of their products for tasting. Some were already acquainted from previous events, others were familiar through email. Most were meeting for the first time. Among Owens' multitude of valuable talents is his skill at "people-matching". Bill (thankfully) does not make use of the "icebreaker" games commonly employed for coercing people to relate to one another. Throughout the introductory session, and continually as the conference goes on, he floats ("zooms" may be a better description) among the members, adroitly picking those who he feels would find one another interesting, putting them together with a small introduction, and just letting them go at it. On the surface, he makes it look easy; but to do it means he's already internalized enough about each individual there to make matchup choices that work. And they always do.
Friday and Saturday's events will be lectures and demonstrations held at the Huber Starlight Distillery in Indiana, but today we are touring some important industry suppliers and mainline commercial distilleries. The buses roll out of the Holiday Inn and cross the beautiful Ohio river into Louisville as we head for our first tour, that of the Vendome Copper & Brass Works. Perhaps best-known for building most of the multi-thousand gallon column stills and peripheral equipment (both copper and stainless) used by the big bourbon distillers, Vendome also produces beautiful pot and combination stills with capacities as low as fifty gallons. The entire production operation (or at least the part we are visiting) is contained in a single, noisy, shop area, so there is no place for guides to take us around, but Vendome has provided several representatives to answer questions and discuss issues with the distillers. It is a very lively session, as craft distillers are almost always also tinkerers and seat-of-the-pants engineers who love to talk equipment... and so are the big boys at Vendome. There is a lot of ladder-climbing and flashlight poking as the distillers examined samples and real-time projects being produced for a medium-large all-copper facility currently under construction.
Whether batch or continuous, the still marks the end of the first part of spirit production. Part two begins and ends with the barrel. And our next stop, also in Louisville, is the Kelvin Cooperage facility. Kelvin originated in Scotland in the early '60s and moved to its present location in the early '90s. It is operated by the McLaughlin family. But this was a cooperage prior to that, being the site of the Universal Cooperage. This time it's necessary to break into smaller groups (which is the way we'll be doing all the rest of the tours) of about a half-busload each. Our group is guided by Paul McLaughlin, who is actually a Harvard and Notre Dame University trained attorney with an international law firm, but also works with his father and brother, specializing in fulfilling wine barrel needs... and for the fun of showing off the family business to entrepreneurs who want to know more about aging and maturing options available to them.
Having seen where the spirit goes in and where it comes out, our next couple of stops will be at the homes of two of the world's premier makers of the spirit known as Kentucky Bourbon. It would, of course, have been more appropriate for us to visit American rum distilleries, but the fact is that there aren't any American rum distillers that would be in a class above that of the existing members visiting here! Perhaps the only American rum distillery with a national distribution would be Pritchard's, and Phil Pritchard is a member of the ADI himself. So, for inspiration, we must turn to Kentucky Bourbon -- admittedly not a bad choice itself. And Bill Owens, without even a pinch of self-aggrandizement (heck, he'd deny it even if you asked him), has carefully chosen the perfect combination of two bourbon distilleries to show this group -- every one of whom holds the potential to be as successful -- how a world-class distillery looks from two very different angles.
Our first stop is at Woodford Reserve in Versailles. That's "Verrr-Sails" for those of you who would otherwise have used the French pronunciation. It wasn't always called Woodford Reserve; it used to be Labrot & Graham (as can be seen stamped on the barrelheads in the warehouse), but the owners (Brown-Forman, who also make Jack Daniel's whiskey) changed it to match the brand name. Our tour guide didn't mention this, but it was also once known as Oscar Pepper, and was the distillery where Dr. James Crow (generally thought of as the father of bourbon whiskey) was the distiller. Since Brown-Forman doesn't own the Old Crow brand, they prefer not to mention that rather important detail of the distillery's history.
The distillery, which was a crumbling ruins as late as the early '90s, was rebuilt, at enormous expense, by Brown-Forman and began production in 1996. What makes the distillery unique, to anyone, but especially to craft distillers, is that it has no continuous (column) still. Instead, a set of three huge and beautiful onion-shaped all-copper pot stills were designed in Scotland especially for the distillery, which certainly makes it relevant to rum craft-distillers who are almost exclusively pot-still oriented. Unfortunately, the pot stills, as used by Woodford Reserve, have been extensively adapted for their unique needs and aren't really very typical of either normal pot stills nor of conditions likely to be encountered by rum-producers. Plus (at least in the case of our group) our tour guide, while very pleasant and probably a wonderful choice for average tourists, was hardly up to the sort of knowledgeable question he received from avid distilling enthusiasts with experience and tough questions. The impression that many received was one of a lovely, tourist-oriented distillery whose product's success may be more greatly influenced by publicity than by actual innovation. Realistically, that may not be a bad thing to learn, even if only as a temptation to avoid in producing a truly artisan product.
Or perhaps not. Woodford Reserve is certainly not embarrassed about being a tourist-oriented facility. They didn't spend millions of restoration dollars just to make good whiskey (and make no mistake, whether it lives up to its pot-still authenticity image or not, Woodford Reserve is world-class excellent whiskey). The grounds are the most beautiful you'll see anywhere, the visitor's center is both authentically educational and picturesque, and the company sponsors many events that bring the public to this location for more than just "touring a distillery". One example, which we have an opportunity to enjoy, is David Larson, their "chef-in-residence". Throughout the year, Woodford Reserve offers dinners, luncheons, brunches, and other events-with-food featuring Larson's creations, made always from fresh locally produced ingredients and featuring Woodford Reserve. In that respect, the distillery really does qualify as a distillery pub, or at least a distillery-restaurant. For those members who may have picked up on that, Larson is available to answer any questions that they might have relating to their own ideas about combining rum with food as an enterprise unto itself.
Our luncheon today is a delicious offering of fresh green beans and artichoke salad, with the entree being classic Kentucky hot brown, a turkey, bacon, and tomato dish, simmered in Mornay sauce.
The second distillery we visit is Buffalo Trace, near Frankfort. One could hardly ask for a better example to use as an opposite to Woodford Reserve. Instead of a carefully-restored and immaculate museum-quality environment, we exit the buses to find ourselves in what can only be described as a "whiskey factory". Everything here is huge. And old. And run-down. And they crank out hundreds of cases a minute of spirit (okay, I exaggerate; but not that much). But this distillery is real. It is operated by people who not only know what they're doing, but also know what they're not doing. Yet. But they will. The people who make Buffalo Trace bourbon (and their many other products) love distilling whiskey -- you can see that in everything they say. Our tour guide easily handles technical questions from the distillers, and even-more-technical follow-up questions, too. He says if he doesn't know the answer, he'll find someone who does. But no one's able to give him a question he can't answer, and in terms that distillers can understand. It's easy to see these aren't stock tourist answers, and the distillers know it, too. My own personal experience with bourbon whiskey and it's producers makes it clear that Owens couldn't have picked a better combination of two distilleries to present an example of that class of operation to his members.
Although we could have taken a straight route from Frankfort back to Clarksville, our itinerary takes us, instead, to Bardstown. This is the home of Heaven Hill, the largest and most successful family-owned distillery in America. Here we do not tour any facilities, but instead split up into our by-now-familiar four groups and take turns sampling Heaven Hill bourbons, wandering through some really excellent displays of bourbon (and especially, but not exclusively Heaven Hill) history, and another buffet offering, this one being mostly delicious hors d’ouvres rollups and Italian meatballs. Normal tourists (who do not get the buffet) are offered two Heaven Hill whiskeys at the tasting. One is the current year's Single Barrel expression (which we also tried) and the other being an 18-year-old Elijah Craig, certainly a wonderful choice for bourbon aficionados. But our group is being hosted by Larry Kass, who, as its Director of Corporate Communications is the very personification of Heaven Hill. And Larry has substituted their Original Bernheim whiskey for the Elijah Craig, because this whiskey, made from predominantly wheat grain, rather than corn or rye, is unique to Heaven Hill. As such, it represents both a unique product (this is the only example of this type of whiskey in existence since at least the beginning of prohibition in 1920) and the innovation that is integral in even such a giant company as Heaven Hill. Larry's monologue is anything but standardized, and he speaks directly to the distillers in terms all can readily understand and relate to. And laugh at, too, since Larry's presentation is as funny as most professional standup comedians.
It was almost light when we left this morning. It is almost dark when we return.
More tastings, more conversation. Sleep comes only when you want to, and you don't want to. Will we be sorry tomorrow?

FRIDAY-

As we board the bus at 7:15 this morning, we can see who turned in early and got some sleep last night. But we can't see them for long, because our eyes keep closing. We have only one destination today, the Huber Starlight Winery and Distillery, operated by Ted Huber and his family. Starlight produces brandy, made from their own wines, for sale and are consistent winners of awards. But, like most distillers, they are experimenters and innovators, and they have attempted other spirits on occasion, including rum. The facility itself is designed for conferences and large events, and makes a perfect location for the remainder of our conference. We will be here all day today, and return to be here all day tomorrow. Coffees, juices, and breads are waiting for us when we arrive.
Yesterday we all left Heaven Hill in a state of laughter. It would, of course, be too much to ask of our first speaker that we begin a sleepy-eyed day the same way. But that's exactly what Appleton Estate's Michael Delevante brings us. His topic is Rum Distilling in the Caribbean, and he covers that thoroughly, but with such humor and wit that we are more awake by the time he finishes than we were at the beginning (how often does THAT happen? At eight in the morning?). Delevante, also known as the "Rum Doctor", is senior master distiller for Appleton Estate in Jamaica, author of at least one book on the subject, designer of Appleton's stills (both column and batch), and a genuinely funny and interesting guy who loves distilling and all aspects of it. And although his presentation is completed first thing this morning, we will continue to find Michael all the way to the end of the conference, poking around here, climbing up into Starlight's infrastructure there, and asking as many questions of the distillers as he answers.
He is followed by Kevin Settles, owner of the Bardenay Distillery/Bar/Restaurants in two or three locations in Idaho. Kevin shares his experiences, frustrations, and learnings in making the transition from a brew-pub style of enterprise to the current distillery-oriented facility, focusing on the problems that are peculiar to smaller distillers.
Kevin is followed by Nahor Gustavo, who may LOOK as though he should be carded before serving, but who is actually the very knowledgeable and professional master distiller for Fazenda Mae De Ouro, one of the premier companies trying to introduce world consumers to Brazil's unique rum, Cachaça. Gustavo knows the ins and outs of producing and marketing non-standard spirits and unique spirits, and is able to pass some of that information on to the distillers at the conference.
That's three lecturers, and it's time to get up and see something happen. In an adjacent building is the gleaming copper and stainless-clad Christian Carl still that Starlight uses to make brandy. Today it is being used to distill rum from molasses, sugar, and some citric acid to speed up the fermentation a bit. This is the first run, and distiller Ted Huber has already taken the heads off and is now accumulating the middle cut. He will redistill this later today. Members watch, ask questions (the Christian Carl representative who installed this still is here to answer technical questions about it), and sample the distillate as it progresses through the cycle. Afterward we return to the main room for a salad and buffet luncheon, followed by the afternoon speakers.
Zac Triemert, brewmaster and distiller at Upstream Brewing Company in Omaha, Nebraska, opens up this afternoon's presentations with a talk about his adventures with the Nebraska laws governing brew pubs and especially distillery pubs. He also takes a little time to talk about how he came to be on the agenda this afternoon, and that underscores Bill Owens' contribution as a leader and facilitator. Zac was not originally scheduled to speak. As the conference was starting, Bill called him aside and asked if he would agree to say a few words. "Just a few minutes, Zac, no more than fifteen". "Okay," says Triemert, "I can do that". When the agenda prints out, he picks up a copy and finds his fifteen minutes are from 1:15 to 2:00. That said, Zac's tales are fascinating and humorous, and Bill's choice was, as usual, exactly what was needed.
It also tied in well with the next speaker, Joan Carpenter of the TTB, who spoke about Federal regulations and how to go about licensing one's distillery. Basically, the process is very easy; everything you need is easily obtainable. But timing is important, as is getting every "i" dotted and every "t" crossed in order to prevent (or at least minimize) delays. Joan showed us just how friendly the process CAN be, even including printing up special checklists and source sheets to make it even easier.
It is now time for the second distillation of the Huber Experimental Rum. Some go to observe, others wander among the vendors' displays, and some who are judges will adjourn to taste and rate the rums that are competing here today. At about five o'clock the banquet room is opened and we proceed to a dinner of garden salad, beans & ham, and country fried chicken, as well as a chance to sample all of the rums that had been entered into competition. Following dinner there is an award ceremony, with medals being given for each of several judging classes. We board the buses back to the hotel at about 8:00 this evening.

SATURDAY

It's 7:45 in the morning.
My teeth itch.
My tongue is asleep.
A quick glance around the Holiday Inn lobby confirms that not everyone went directly to bed upon returning last night. Nor for several hours afterward. Eyes are red and drooping. An occasional snore can be detected on the bus ride out to Huber/Starlight. But there are just as many eyes today as there were yesterday. No one's found a need to go home and wash their socks or anything. And by the time coffee and juices have been poured and nut breads have been consumed, all those eyes appear to be open for ADI Vice President Pennfield Jensen's welcome speech.
Penn then hands the podium over to one of the Distilling Institutes favorite characters (and a character he certainly is), Phil Pritchard, of Pritchard's Distillery in Kelso, Tennessee. Phil, like many spokesmen for industries that benefit from talks such as these, spends much more of his time than he'd ordinarily care to doing presentations such as these, with accompanying slide show. And like any professional entertainer, his "show" is not ad hoc, but well-rehearsed and predictable. At least to him. It's a funny and refreshing talk, and although he may be familiar with it, his audience probably isn't. Unlike some others who use a standard "script", the contents of what Phil says is knowledgeable and accurate, as well as funny, and he connects well with what must be the hardest possible audience to play to -- a room full of professionals, and somewhat over-stimulated professionals at that. He came in with an advantage; everyone loved him. He finished with even more of an advantage; everyone loved him even better.
Wayne Curtis is different in one way: he isn't already an icon among the distillers. But he's similar in another: his presentation is both educational and entertaining. From my own point of view, Curtis is particularly attractive as a speaker, because he deals with the history and cultures of rum more than the practical aspects of distilling it. The fact that I've already read the book several times and am familiar with it doesn't diminish from his presentation, though, and I enjoy it very much.
Conversely, my non-technical background (or is that "technical NON-background"?) probably prevented my enjoying Brown-Forman's cooperage research/development guru Theo Lioutas' talk as much as many of the distillers obviously did. Once the charts and statistical deviation lists and such go up on the screen, my eyelids begin accumulating lead weights at an alarming rate. I feel I am certainly in the minority, however, as there were several members who are hanging on Theo's every word. Lioutas' focus is on the barrel, its structure, and its effects over time on the content stored within.
Before Lioutas speaks, however, we spend an hour with Wade Shanower, president of the Big Red Liquors organization, and the chief marketer of beverage spirits in Indiana. Shanower takes the position that, as a representative of the merchants who will actually be selling a distiller's rum to the consumer who will drink it, walks the members through what the process looks like from his point of view. This is very heady stuff. Wade names names, calls 'em as he sees 'em, shoots from the hip, and takes no prisoners. His brutality is well-intentioned, and vitally important. He begins with a very adroit fact to keep in mind: He shows a list of major beverage spirits companies. He points out that he has no empty shelves; those companies have products filling all of them. And what does that mean? It means that if you want your product to occupy a position on those shelves, you have to knock one of their products out of that position. There are a number of reasons for a product to be displayed. Among them, of course, are "pressure" issues, such as a distributor's refusal to provide needed product unless a particular other product finds a home somewhere. But mostly the reasoning is simple business sense -- if Wade feels he can make more money selling your product, you're in! He then points out what to do... and what NOT to do. With examples. Including negative examples. No offense meant; just the truth. If the product is of poor quality, it doesn't matter what you do -- it won't be successful. Yesterday, Michael Delevante noted that you need to sell your product three times before you make any money. A customer can be enticed into buying a product that looks attractive, or that's cheap, and he might even buy it again. But he won't buy it a third time if he doesn't like it. Shanower expands on that idea by pointing out that, although the quality is certainly the most important part in the long run, the customer won't have a chance to experience that quality unless the marketer believes he can make money selling the product. And to do that requires packaging and a price point that sells. He shows us samples of products that will sell themselves (and some that won't), and products that will require different degrees of salesman participation in order to move. He explains (in detail) what his different commissions are, and why. He explains what to expect from a distributor, and what not to.
I'm neither a seller nor a distiller of beverage spirits. I'm not trained in separating ethanol and assorted esters and congeners from one compound and transferring them to another. But I understand how to transfer ideas from one individual to another, and Wade Shanower's presentation was really fascinating to me. I think if I were an artisan or craft distiller of rum, his presentation all by itself, without regard to any of the other wonderful parts of this conference, would have been worth twice the admission price.
The last speaker for the day, as well as for the conference, is Ed Hamilton, a writer specializing in rum, whose subject was dealing with wholesalers. At first glance, it might appear as though this would be a similar subject to Shanower's, but it didn't cover the same issues. Hamilton's session concerned mostly his own experiences, which are exotic, adventurous, and entertaining. Who wouldn't love to live on a sailboat in the Caribbean, sailing from island to island and being welcomed with open arms (and bottles) everywhere? He didn't even need to bring up dancing girls and pirate treasure, because we all visualize those as part of the package. Well, at least some of us. I suppose the dyed-in-the-wool distillers fantasize about copper containers and toasted oak. Good for them; I'm with Ed, thankyouverymuch, although by the time he finishes, the burnout is beginning to overtake us. My eyes are getting droopy and I find myself trying to figure out how he got to this part of a sentence when I can't remember hearing the beginning. I look around to find other bowed heads and closed eyes, and I don't think they're praying.
But you know, anyone who can get drifty during a talk about sailing the Caribbean and bootlegging rum like a real pirate has got to be suffering from conference overload.
And, typical of Bill Owens' planning, this begins to happen only at the last sentences from the last speaker on the last day.
Folks, it just doesn't get any better than that. Next year's conference is about whiskey. Looks like I'm gonna do it again!
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Hudson Valley Spirits is under construction. An amazing project.
Check out.
harvestspirits.com
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I will be traveling for the next three months photographing craft distilleries for a book.
If, I have not already photographed your distillery, and your city is not listed below, contact me. I will make an effort to come by and photograph your distillery.
I will be traveling with my computer and email is the best way to reach me: bill@distilling.com. Also, you can call me on my cell: 510-566-9566


Here is the itinerary

Hayward, CA 94541
Santa Barbara, CA 93101
Los Angeles, CA 90012
San Diego, CA 92101
Los Angeles, CA 90012
Las Vegas, NV 89044
Flagstaff, AZ 86001
St. George, UT 84770
Salt Lake City, UT 84111
Palisade, CO 81526
Denver, CO 80205
Colorado Springs, CO 80906
Santa Fe, CO 97505
Liberal, KS 67901
Dodge City, KS 67801
Emporia, KS 66801
Kansas City, MO 64108
Lee’s Summit, MO 64064
Weston, MO 64098
Atchison, KS 66002
Omaha, NE 68102
Muscatine, IA 52761
Cedar Falls, IA 50613
Dubuque, IA 52001
Chicago, IL 60626
Bloomington, IN 47404
Louisville, IN 47150
Kirkwood, MO 63112
St. Louis, MO 63139
Nashville, TN 37219
Memphis, TN 38103
Kelso, TN 37348
Baton Rouge, LA 70801
New Orleans, LA 70122
Mobile, AL 36602
Panama City, FL 32401
Tampa, FL 33605
Miami, FL 33179
Key Largo, FL 33037
Key West, FL 33040
West Palm Beach, FL 33401
Cape Canaveral, FL 32920
Homeland, FL 33847
Atlanta, GA 30303
N. Charleston, SC 29405
Asheville, NC 28801
Wilmington, NC 28401
Buxton, NC, 27920
Elizabeth City, NC 27909
Durham, NC 27701
Sperryville, VA, 22740
Culpeper, VA, 22701
Mount Vernon, VA 22121
Morgantown, WV 26505
Pittsburgh, PA 15122
Washington DC, 20001
Annapolis, MD 21401
Baltimore, MD 21201
New York, NY 10001
Providence, RI 02903
Boston, MA 02130
Portland, ME 04101
Boston, MA 02130
Burlington, VT 05401
Utica, NY 13501
Rochester, NY 14603
Buffalo, NY 14209
Cleveland, OH 44103
Detroit, MI 48203
Holland, MI 49423
Muskegon, MI 49440
Sheboygan, WI 53081
Green Bay, WI 54304
Milwaukee, WI 53202
La Crosse, WI 54601
Sioux Falls, SD 57103
Rapid City, SD 57701
Lead, SD 57754
Sheridan, WY 82801
Cody, WY 82414
Canyon Village, WY 82190
Livingston, MT 59047
Idaho Falls, MT 83401
Twin Falls, ID 83301
Boise, ID 83702
Baker, OR 97814
Seattle, WA 98116
Portland, OR 97210
Chico, CA 95926
Loomis, CA 95650
Hayward, CA 94541
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Modern Spirits responds to Charles Cowdery article on "craft distilling"

Charles:

Thanks for the slap upside our collective heads on this important issue. As you noted, we call ourselves some version of artisan, craft or micro boozemaker without having kicked around what these words really mean. We use them because they so effortlessly fit the image of small-to-medium operations and also because we think they will help set us apart from the big, industrial (and slightly evil) liquor establishment. But do they accurately describe what we make and what happens if someone -- like the Wall Street Journal (remember that Jan. article on the proliferation of small vodka brands) -- calls us on it?
At Modern Spirits, we struggle every day with the opportunities, responsibilities and potentially enormous pitfalls involved in calling ourselves artisans. Like most companies in our field, shy of distilling the base neutral spirits (which seems to be made pretty well by the "industrial" folks), we do everything else ourselves. So what's the artisan bit? We work with individual farmers to source most of our ingredients and grow an increasing number of them ourselves. We hand select and taste every single ingredient. (Sounds excessive, but it's the best way we've found to ensure high quality and consistent flavor.) And we taste and adjust our batches on a daily basis to produce vodkas that can be paired with food outside of Siberia.
What we've learned in hawking our handiwork around the country is that consumers seem to have a pretty good idea of what they'll accept as an artisan product or, to put another way, be willing to pay more money to drink. Here's our short list:
- Quality: This doesn't seem open to debate, except to friends and family (because they love us). Everyone else wants to taste the kind of uncompromised quality that the big companies can no longer justify producing. Styles, traditional vs. innovative products and categories of liquor seem to matter less.

- Passion: Why did you get into this line of work? No, really -- why? Hope it wasn't for the money, because people can smell greed better than the complex, layered experience a few of us may fantasize about selling to Diageo. Better have a compelling and credible story. Chronic backache and scars help make the case.

- Authenticity: Consumers want the "artisan" involved in making whatever they've paid a lot of money to drink. The higher the maker's involvement in the process, the more authentically artisan the goods. In other words, someone other than a handful of nameless companies or hired guns better be making the hooch.
This isn't a complete list. I hope others will pitch in with what they think are important additional qualifiers or more thoroughly define the ones above. Why bother? Because to a great extent our handiwork represents the best consumers expect from liquor companies, and because defining and living up to our artisan-craft-micro moniker represents the best chance each of our companies has to succeed and have its work matter. Let me run down some of the more specific ways that I think an industry-wide consensus on what are artisan spirits can help:

Sales
- How much would our sales increase if retailers, restaurants and bars featured "artisan spirits" aisles and sections of their menus. They do for "micro brews." A general guideline for what qualifies for "artisan spirits" would make persuading them a lot easier. - Do customers want to visit your plant and buy directly from you? If they don't now, they will soon. With a definition of the class of spirits we produce, we could much more easily appeal to state and federal lawmakers to allow us to sell to the public (like wineries and brandy makers).

- Similarly, we could appeal to ease regulations that prohibit sales at events and sampling at retail in key states around the country (e.g., Calif.).

Marketing
- Our products have a certain cache right now. We need to protect and nurture it for the day when (not if) the big liquor companies start positioning mass-market liquors as "artisan" and "craft." A widely-accepted definition of "artisan spirits" would help retailers, the media and, ultimately, consumers resist the hype.

Taxes & Regulations

- We pay the same taxes and are burdened by the same paperwork as the largest distilleries. Not so in the beer industry, where "micro brewers" pay a lower excise tax rate. And I know many of us would rather pay our excise taxes and file inventory paperwork quarterly, rather than every month. (We can do the former now, but it's the latter that's a real pain!)

I hope this puts some real-world context to the importance of this first step in defining our industry. It won't be easy but I think the rewards will be well worth the effort.

Cheers,
Melkon

Modern Spirits
The Sipping Vodka
ModernSpiritsVodka.com
626.771.9469
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William Grant builds Ayrshire distillery

WILLIAM LYONS

Source: The Scotsman
April 8th

WILLIAM Grant & Sons, the family-owned distiller and one of Scotland's biggest private companies, is to build a malt distillery in Ayrshire to meet booming demand from emerging markets.
The maker of the world's best-selling single malt, the Glenfiddich, is understood to be investing up to £10m on its site in Girvan to expand both malt and grain production.
The news comes just weeks after Diageo announced it was building its first malt distillery in more than 30 years in Roseisle on Speyside.
The new distillery, yet to be named, will sit alongside the firm's existing grain whisky distillery in Girvan. The site was previously home to its Ladyburn single malt distillery, which closed in 1975.
Containing four wash stills and four spirit stills it will take nine months to build. Senior management at the company are expecting the first spirit to flow from the stills by the end of this year with the whisky hitting the market in 2012.
Chief executive Roland van Bommel, who has just masterminded Grant's best ever year financially, said the new facility will produce a high-quality single malt for blending.
He said: "Thanks to the continued profitable growth of our Scotch whisky brands and the likely increase in demand in the future with new markets opening up, there is a need to increase capacity and supply of malt whisky for blending."
Last week the 121-year-old firm outlined its plans for a massive £23m global marketing push for its flagship Glenfiddich brand in an attempt to make it the world's first single malt whisky to sell more than a million cases a year.
Sales of Scotch whisky are beginning to look very interesting as demand from expanding markets such as the US, China, Russia and India comes on stream.
Figures from the Scotch Whisky Association show that Scotch now accounts for a quarter of all of British food and drink exports by value.
More than one billion bottles were shipped in 2006, an increase of 6% on 2005, contributing £2.5bn to UK exports.
Last year shipments to China were up 27% to £58m, though the market is only the 10th largest in terms of value. The US is the biggest export market, with sales of £400m.
John Wakely, a former investment banker who has been analysing the drinks market for more than 20 years and is now a consultant, said: "If the BRIC (Brazil, Russia, India and China) countries do actually open up then we will see across the board increases in production. If that happens, for the first time in 25 years you may begin to get a bit of a shortage."
Latest results show that Grant's saw an 8.1% leap in pre-tax profits to £77.3m for the calendar year 2005. Turnover climbed to £352.6m, compared with £339.5m the year before.
The firm is currently looking for more acquisitions. In January it expanded into the tequila market with a 30% stake in Mexican brand Milagro. It also owns Cognac producer Raynal & Cie and Hendrick's Gin, which sells more than 100,000 cases annually.
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http://distilling.com/backissues.html
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--To obtain a distilled spirits permit go to: http://www.ttb.gov/spirits/index.shtml

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--To obtain TTB list of DSPs go to: http://www.ttb.gov/foia//err.shtml

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--To obtain TTB statistics on distilling go to: www.ttb.gov then scroll down to "spirits" and then the "year".
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--To obtain Distilled Spirits Laws and Regulations go to: http://www.ttb.gov/spirits/spirits_regs.shtml

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--To obtain label regulations go to: http://www.ttb.gov/spirits/bam.shtml distilled spirits manual circular.
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