Monthly Mash December 2017

The Monthly Mash
Volume 2.2
Member-Owned, Industry-Driven
ACSA Mission:
To elevate and advocate for the community of craft spirits producers.
From the Desk of Margie A.S. Lehrman, Executive Director
December is always a good time to look back and plan for the year ahead. It’s also a time to give thanks for past blessings.
Members and industry friends of ACSA float to the top of that list. Working together, we advanced the fight to reduce the FET. As of this writing, the Congressional action is yet unknown—will we or won’t we survive the tax package and will it or won’t it be passed? Not sure but despite the outcome, it is so rewarding to work with a stellar team of passionate, smart members in our community who, along with ACSA’s Legislative Affairs Committee, gave it their all through emails, letters, calls to Congress, industry outreach, and visits on the Hill.
Governance isn’t limited to our Federal Government. Last month, your elected Board of Directors met over the course of three days to strategize and plan for the future of craft spirits. Take a look at a newly approved Tasting Room Best Practices which you may wish to adopt for your own premises.
The board was able to witness the “heavy lifting” by the Judging Committee as ACSA’s spirits competition wrapped at District Distilling Co. A hearty thank you to the distillery team, the multiple stewards, and a stellar panel of judges.
The cooler temps have not slowed down ACSA education: it is HOT. Check-out the programs for this month and what’s in store for the annual Convention. And, a big THANK YOU to all past speakers who have shared their gift of knowledge.
Knowing a membership association helps forge lasting friendships and business relationships, see what’s new with our Vendor Trade Show during our Distillers Convention in Pittsburgh in March. And, don’t forget to register as the early bird rate disappears on December 18th (a registration for your distillery team makes an awfully nice gift!). A warm thank you to suppliers who have joined us in the past—will we see you again in Pittsburgh? It’s not too late as some booths remain.
Thinking of travel: Check out the scene in Washington State.
And, with thanks to our industry sponsors, come learn some little-known-facts about three of our biggest supporters: Park Street, The Barrel Mill, and Artisan Spirit Magazine.
Best wishes to you and your teams for a beautiful holiday season!
Cheers,
Margie A.S. Lehrman
Executive Director
JUST IMAGINE A REDUCED FET…CAN YOU MAKE ONE MORE CALL?
As of today, it not only is imaginable—it is quite probable. A Federal Excise Tax (FET) reduction is so close, but not final. On December 2nd, at nearly 2 a.m., the U.S. Senate passed a major tax reform bill. Included in that bill was a great victory for the craft distilling industry, a reduction in the FET for craft distillers from $13.50 to $2.70 for the first 100,000 proof gallons. The U.S. Senate and U.S. House is now in Conference to reconcile the differences between the House and Senate bill. The final product between the two bodies will be finished in the next week. We are encouraging our ACSA members to call their local Member of Congress and ask them to keep the FET reduction in the final bill. If we miss this moment, it may mean years before this opportunity arises again. As you may recall, our FET reduction was NOT in the original House tax bill, despite the fact that 300 Members of the House co-sponsored H.R. 747, the most co-sponsored tax bill in Congress. So we are not taking anything for granted. It is important to emphasize to Congress that this provides us “parity” with beer and wine (that already enjoys a reduced FET). Any tax savings will be re-invested in our businesses so we can continue growing. Finally, because of the high FET, other small business reforms in the current tax bill do not help distillers, who are struggling to gain profitability and invest in new equipment. Please call your Congressman and encourage them to keep the FET reduction in the final tax bill. This has the support of every major beer, wine and spirits group. Now we need your further support to make it happen.
YOUR BOARD OF DIRECTORS — OUR CRAFT SPIRITS FUTURE
Last month, your board of directors met in Washington, D.C. to review its strategic plan, starting with a thorough review of ACSA’s mission, vision, goals, and values. The ethics committee presented and the board approved the attached Tasting Room Best Practices. PLEASE review and consider posting at your premises. Revealing extraordinary, visionary acumen, the board departed the retreat with a list of two dozen action items to assist our craft spirits community. A tour of the Mount Vernon Distillery, led by Master Distiller Steve Bashore, highlighted the agenda.
EDUCATION – Where Knowledge is POWER
Craft Spirits Classroom Webinars:
Quenching Your Thirst for Knowledge
LibDib Founder and CEO Cheryl Durzy
Tips for Successful Distribution Amongst Rapid Changes and Consolidation in the Three-tier System
Distribution oftentimes can be tough. You make a GREAT product but cannot seem to sell beyond the confines of the tasting room. What should you do? Current problems with distribution in the three-tier system, market access, and the impact of consolidation of distributors will be explored by LibDib Founder and CEO Cheryl Durzy. As a small producer, she recognizes the pitfalls. Come learn how she navigated the system and hear firsthand positive outcomes for a small brand successfully working with distributors.
Join us on Wednesday to learn:
  • What Cheryl is seeing in the market right now
  • 5 things you can do to get distribution
  • 5 ways to make sure your distributors are working for you
  • Top things you can do to keep distribution going
When: December 13, 2017 3-4 PM EDT
Where: Online Webinar
Who: Cheryl Durzy, Founder and CEO, LibDib
$39 for members, $59 for non-members
Email Kirstin Webster, kirstin@americancraftspirits.org for member discount code
Rogue Ales and Spirits Head Distiller Jake Holshue
Quercus Garryana: Oregon Oak’s Effect on Whiskey Maturation
Oregon Oak is having a moment with wine producers, and more recently amongst craft spirits producers. What is “Garry Oak”? Where does it come from? What flavors does it lend spirit? Jake Holshue, Head Distiller for Rogue Ales and Spirits, takes you through the short history of the use of Oregon Oak and how Rogue Spirits is currently utilizing this variety of wood through its Rolling Thunder Barrel Works.
When: December 20, 2017 3-4 PM EDT
Where: Online Webinar
Who: Jason Holshue, Head Distiller for Rogue Ales and Spirits
$39 for members, $59 for non-members
Email Kirstin Webster, kirstin@americancraftspirits.org for member discount code
Convention Education
Join ACSA March 5th and 6th in Pittsburgh to see what ACSA’s Education Committee created to assist you in “Bridging the Future” of craft spirits. After reviewing a bounty of submissions from ACSA’s Call for Presentations, the Education Committee hand-selected 30 hours of educational content, split evenly into three tracks. Sessions will be an hour in length, with each track hosted concurrently. In 2018, attendees can look forward to increasing their technical know-how with presentations ranging from fermentation, aroma, and flavor optimization to how to engineer distilleries capable of producing different types of spirits under one roof. The marketing and sales track will include how to make the most of tasting rooms, as well as media relations and trends in craft spirits. And in business essentials, attendees will learn to traverse complex topics like acquisitions and routes to market in a consolidated distributor landscape.
Take advantage of early bird deals and save money on high quality education.
EARLY BIRD RATE DISAPPEARS ON DECEMBER 18th
Besides Education, What Else is Featured in Pittsburgh?
Expanded Trade Show Hours
Why wait for a good thing? This year, we’re helping you get more from your convention experience. Upon arrival on March 4th, come visit us at preregistration beginning at 4 p.m. and enjoy a complimentary libation and snack while visiting the trade show floor PRIOR to the official opening. Avoid the crowds and spend more time with suppliers and friends in our industry.
And, to our supplier friends, it is NOT too late to secure a booth. But, register now as the floor is quickly filling up.
Pennsylvania Consumer Tasting Event at the Heinz History Center
[Monday, March 5th]
ACSA has partnered with the Pennsylvania Guild to co-host a consumer tasting event at the Heinz History Center, an affiliate of the Smithsonian Institution. Luckily, we timed our convention with the last stop on a nationwide tour: AMERICAN SPIRITS – THE RISE AND FALL OF PROHIBITION. Come learn more about our industry and witness the first comprehensive exhibit dedicated to bringing to life the story of Prohibition.
Craft Spirits Judging Awards Dinner
[Tuesday, March 6th]
Help us close our convention with an unparalleled night of fun. Be a part of our community to celebrate medalists from our annual Craft Spirits Competition and toast our 5th year as a trade group created and run by licensed craft spirits DSPs.
PRECONVENTION PROGRAMS
Master Class: WSET Level 2 Award in Spirits
[Saturday, March 3rd – Sunday, March 4th]
**Separate Ticketed Event**
Do you wish to gain immediate credibility and a deeper understanding of spirits and liqueurs? If so, we’ve made it easy by offering a pre-convention Master’s Class with Nicholas King and Antony Moss, MW, of Wine & Spirit Education Trust (WSET). After two days of learning, followed by a certification exam, you’ll earn a professional certification recognized globally in the spirits industry. Come witness in-depth distillation techniques and the specific factors that influence the final character of the finished spirits.
Making Sense of Plans & Blueprints:
Building Your First Commercial Distillery
[Saturday, March 3rd – Sunday, March 4th]
**Separate Ticketed Event**
Dalkita Architecture and Construction, through its principals Scott and Colleen Moore, will provide the nuts and bolts of building your first commercial distillery. They will unveil the knowledge necessary to construct a safe and work-friendly distillery and provide practical advice on the concepts a distillery business owner must know.
CREATIVITY IN THE SPIRITS WORLD
Last month, well over 500 spirits entered the premises at District Distilling Co. in the District of Columbia for ACSA’s annual Judging of American Craft Spirits. Over 40 judges from all walks of the industry, 10+ stewards, and volunteers from District Distilling helped to make it a smashing success. When asked about what judges gained, comments included:, “-left impressed and tremendously enthusiastic about spirit quality and future of craft spirits “ and “seeing how the quality level is changing as the craft distilling industry matures, and finding noteworthy spirits from distillers I’d never previously encountered.” Medalists will be announced in March during our annual Convention. Nearly half of the entrants were in the whiskey category. A well-earned THANK YOU to Maggie Campbell, Privateer Rum, for chairing that event.
Regional Focus: Seattle, WA
Seattle may be known for its coffee shops and its gray skies, but craft spirits in the Pacific Northwest are on the rise! Washington state is home to several award-winning, innovative distilleries and Seattle itself has a vibrant cocktail bar scene. Here are a few suggestions for your next trip to the Emerald City.
Jaime Boudreau’s elegant Capitol Hill bar, Canon, features an expansive spirits list as well as a healthy mix of traditional and new cocktails. Don’t skip out on their food—angostura-bourbon nuts, pork belly, and more—either. Essex, located in the Ballard neighborhood, offers tasty bar food and craft cocktails that make use of house-made ingredients. Grab a quick drink while you wait to be seated next door at Delancey (a wood-fired pizza project owned by the folks behind Essex) or enjoy a quieter evening sampling through Essex’s expert cocktails. If you’re looking for your gin fix head to Bathtub Gin, a speakeasy style cocktail bar with an expansive selection of gins. The French restaurant Bar Melusine serves up delicious seafood and tasty cocktails in a bright space in Pike/Pine.
Visit Batch 206 Distillery in the Queen Anne neighborhood of Seattle to taste its award-winning products and tour the distillery. You can also reserve a barrel tour and sample directly from bourbon, gin, and/or rum barrels. Captive Spirits Distilling produces three varieties of Big Gin: London Dry, Bourbon Barreled, and Peat Barreled. Captive will be opening a tasting room in Spring ‘18 but, in the meantime, you can find Big Gin on shelves around Seattle. OOLA Distillery, named after “the greatest German Shepherd who ever lived” is located in Seattle’s Capitol Hill neighborhood and produces a series of vodkas, gins, and a bourbon whiskey as well as Whiskey Discourse, an experimental whiskey series. Visit OOLA’s tasting room to tour the facility and sample some of its spirits. Located in Seattle’s industrial SoDo Neighborhood is Westland Distillery. Visit Westland’s Cantilever Room to learn how the distillers produce their flagship Single Malt Whiskey, enjoy some bar food, and sample all of the Westland whiskey variants.
Welcome Newest Voting and Affiliate Members!
ACSA extends a warm welcome to a few of our newest members:
Find out more about becoming a member  here .
A Q&A with Your ACSA Team
We asked three members of the ACSA family to answer a few questions about the economics of the industry, different barrel-aging techniques, and the state of craft spirits journalism. Read below to find responses from Harry Kohlmann, Ph.D., CEO of Park Street Companies ( pictured left); Richard Hobbs, VP of Marketing at The Barrel Mill ( pictured below right); and Brian Christensen, editor and publisher of Artisan Spirits (pictured below left).
You’ve been working in Wine and Spirits for a long time, when and how did that work begin?
Harry Kohlmann: “I have been working in wine and spirits for over 20 years. When I finished my Ph.D. in economics in Germany, I started to work as a management consultant for McKinsey & Company which brought me to the States and introduced me to the world of fast moving consumer goods. Some of my clients at that time were leading players in the alcoholic beverage space.”
What is your background? How did you come to work at The Barrel Mill?
Richard Hobbs: “Our family has been in the lumber business for over 100 years and in 2004 an opportunity arose to buy a cooperage that went bankrupt. I had been living in S.C. selling commodities and took this opportunity to start a new career in a booming industry while getting a chance to reconnect with my father. It took us years to figure out how to make good products, but now we employ 50 people.”
How did you get your start in the craft spirits industry?
Brian Christensen: “Prior to the founding Artisan Spirit, which we started 5 years ago this winter, I had utterly no experience in the spirits industry, craft or otherwise. We were always honest with our audience that we had, “No idea what the hell we were doing.” For some reason that really resonated with people, I think because at that time so many other startup distillers were in a similar boat. We were all just looking for more information and education. Luckily for us the spirits industry is a special one that welcomes newcomers and is eager to share knowledge and experience. Our job was to ask a lot of stupid question, pass that information along, and learn with our readers.”
Park Street played a major role in the Craft Spirits Data Project. What were some of the biggest takeaways for you from this report?
HK: “We were excited to support the craft spirits industry and help put the project together. One of the biggest takeaways for me was that the craft spirits industry is still growing strong at more than 20% per year. This growth is remarkable especially given the handicap in the numbers as every year the volume of the companies that left the research universe (for example as a consequence of success such as being acquired or growth beyond the volume threshold of more than 750,000 proof gallons removed from bond in a particular year) has to be made up by the industry—both existing producers and new entrants— to show any growth. Another trend that is important to note is the continuous growth of the number of active craft distillers. If you look back ten years ago, who would have thought that there could be close to 1,600 active craft distillers, employing close to 20,000 people in the United States. The story of craft spirits in the US over the last few years is one of unbelievable growth and innovation.”
Can you talk about the lifetime of a barrel? Barrels can go through several lifetimes: aging bourbon, then aging stout, then aging another spirit or beer. What are your thoughts on processes like these?
RH: “Of course bourbon must be aged in a new charred American oak barrel, but a barrel will give off flavor and aroma for 3+ years and is good as a container for 20+ years. Brewers love putting their beer in freshly dumped whiskey barrels, which is great for our customers who can sell their used barrels for 50-100% of the purchase price. I really like what New Holland and Jameson (caskmates) are doing by putting whiskey in an old barrel which originally aged whiskey then beer.”
How have you seen craft spirits grow in the past few years?
BC: “There have been countless pages printed on the growth of craft spirits over the last several years, and they have all painted a similar picture. A growing premium and super premium spirit market, strong local consumer loyalty and demand, as well as an ever increasing number new spirits producers and brands. We have also seen a significant uptick in the number of mergers and acquisitions on the producer and wholesaler side of the industry. Inevitably we are also starting to see a few distillers close their doors as they face difficult decisions. It’s far from any sort of doom and gloom scenario, but a healthy industry needs to be aware that not every operation is ultimately successful, and we can do a lot as a community to improve the chances of everyone we work with.”
Artisan Spirits plays a role in the ACSA Craft Spirits Judging Competition. How did this year’s event go?
BC: “The 2018 competition moved to the fall of 2017. That wasn’t the only change. It moved locale, traveling to District Distilling in Washington, D.C. Previously, ACSA, held the event at Huber’s Starlight Farm and Distillery. Ted and Dana Huber spoiled the competition with their amazing location and hugely helpful team. District posed a host of challenges such as a smaller venue, a two-story building layout, and hard daily deadlines. Yet, everything progressed smoothly. A talented group of volunteers and judges came together to make sure the event was a success.”
The Barrel Mill is a major part of ACSA’s Convention in Pittsburgh, what do you enjoy about going to conventions and/or vendor trade?
RH: “We enjoy going to the trade shows to catch up with customers/friends other vendors and meet people and companies that are new to the industry.”
Where do you think craft spirits journalism is headed? Do you think it’s following the same trajectory as, say craft beer writing, or is it on a separate path?
BC: “The convoluted answer is yes and no. It’s fair to say a lot of spirits journalism has followed the path of craft beer, but the big difference is that there were already a fair number of consumer spirits publications that existed prior to the craft revolution. Most of those publications have wisely started to embrace craft and cover them more predominantly, especially as those spirits continue to win awards and recognition internationally. In addition, technology has changed the landscape with a larger focus on blogs, podcasts, and individual content producers. I think these digital journalists will continue to have a big impact, specifically on the consumer side of the industry.“
Barrels are used across the different styles of alcohol. What are some of the differences when working with distilleries, breweries, or even wineries/cideries?
RH: “For most spirits, charred barrels are the way to go. Beer, wine, and cider tend to do better in toasted barrels, which give off more subtle notes and don’t overpower the fruit and other ingredients. Barrel alternatives like our Infusion Spiral are much more prevalent in wine and beer but are catching on quickly with distilleries, like our good customer Blue Ridge Distilling/ Defiant American Single Malt, who produces a fine whisky which never touches a barrel.”
What do you see as some of the challenges facing US craft distilleries?
HK: “One of the biggest challenges for the majority of craft distillers is cash flow. There are over 1,300 active craft distillers that we labeled small craft distillers with less than 10,000 proof gallons removed from bond per year. At an average volume of 566 cases per year, it’s difficult to generate a positive cash flow. Growth is imperative for these players. Another challenge for all players is about the word “craft”. It is not being protected and can be used by pretty much anybody for almost anything. The risk here is that the average consumer might get oversaturated by craft-like products. Ultimately every craft distiller has to contemplate innovation that goes beyond the word ‘craft’.”
What are some trends or topics in the industry that you’re excited to cover in Artisan Spirits?
BC: “I’m a massive nerd at heart, so I get giddy whenever we have the opportunity to cover anything in-depth and technical. The nature of being a trade-side publication gives me the opportunity to call up literal geniuses in the distilling world and pepper them with my inane questions. It’s really the dream job! Specifically I enjoy topics of fermentation science, unique ingredients, and aging and maturation techniques. We are also excited to work with a large number of lawyers and regulators who help us share information on the sometimes archaic laws that vary from state to state.”
Are there any trends going on in barrels that you’re excited about? Specific barrels that are more popular right now or any techniques that are interesting?
RH: “Smaller than standard (53 gallon) cooperage is our specialty. The greater surface area to volume ratio allows our customers to put a great product on the market in far less time. Solera aging is really interesting and finishing in different barrels (i.e. sherry barrels) and the use of barrel alternatives–like French oak spiral–has shown really positive results.”
You were awarded the 2017 ACSA Achievement Award at last year’s ACSA Convention in Nashville. How did it feel to be recognized with the award?
HK: “Over the years, my team and I have spent a lot of time with ACSA members and have a high appreciation and admiration for all of them. Seeing these craft spirits entrepreneurs work alongside each other and build such an effective industry association has been truly inspirational for me, especially being an entrepreneur myself. Being recognized by the ACSA for the work we have done to support the industry is a great honor.”
Did You Know?
  • The TTB has issued 2,530 DSPs! Find the full list here.
  • The origins of the Manhattan cocktail are hard to pin down. One theory suggests, “The Manhattan was created in 1874, using rye whiskey, at the Manhattan Club in New York, at the behest of Jenny Jerome, a socialite better known in later years as the mother of Winston Churchill. The occasion was an elaborate party celebrating the election of Samuel J. Tilden as governor.” Read through the myths and history of the Manhattan here.
  • Looking for cold weather cocktails? Try these “rich and buttery” drinks via Supercall
December 1 – National Eggnog Month
December 2 – National Rhubarb Vodka Day
December 5 – Repeal Day
December 10 – National Lager Day
December 14 – National Screwdriver Day
December 20 – National Sangria Day
December 24 – National Eggnog Day
December 31 – National Champagne Day
Social Media
Do you have a new spirit release, an upcoming event, or some news to drop?
Follow our social media channels and tweet at us (@craftspiritsus), connect with us on LinkedIn, or post to our Facebook Page and we’ll be sure to share it!
ACSA Board of Directors 2017-2018
President
Treaty Oak Brewing and Distilling Co. (TX)
Vice President
Wood’s High Mountain Distillery (CO)
Secretary/Treasurer
New Liberty Distillery (PA)
East
Privateer Rum (MA )
Dogfish Head Distilling (DE)
Central & Mountain
Blaum Brothers Distilling Company (IL)
Garrison Brothers (TX)
Santa Fe Spirits (NM)
Headframe Spirits (MT)
Du Nord Craft Spirits (MN)
Pacific
Osocalis Distillery (CA)
Rogue Ales & Spirits (OR)
Bently Heritage Distillery (NV)
Woodinville Whiskey Co. (WA)
Ex Officio
[*Appointed by the Board of Directors]
Westland Distillery (WA)
Vermont Spirits Distilling Co. (VT)
Few Spirits (IL)
Thank you to our Sponsors!

©2018 American Craft Spirits Association; All Rights Reserved. Member Owned, Industry Driven.

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