Monthly Mash May 2018

The Monthly Mash

Volume 3.5

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

Dear Members of Our Vibrant Community:

Can you believe it’s almost June? A moment ago it was hot toddie season and now we’re about to be surrounded by refreshing, beachside cocktails.

With 2018 nearly half over, that means there’s a little more than a year and a half before the FET relief from the passage of the Craft Beverage Modernization and Tax Reform Act expires. I want to personally thank everyone who joined us in Washington, D.C. earlier this month to fight to prevent that from happening. (See coverage of the event below). This will remain our top legislative priority until Congress commits to making small distillery tax relief permanent.

And speaking of priorities, there are few on the operational side of the business that are as critical as distillery safety. That’s why this month we kicked off our FREE Safety Webinar Series, generously sponsored by Haskell. And we invite you to join us in Cincinnati next month for the first of our regional education programs, a two-day master class titled “Distillery Safety Management 101,” presented in partnership with Industrial Safety & Training Services. Find out more details on both of those in this issue of the Monthly Mash. Additionally, this month’s poll questions are all about safety.

One last thing before I go. We’re still seeking your input for this year’s edition of the Craft Spirits Data Project. You can find more information and the link to the survey below. The survey will close this month.

I know that we’ve all got so much on our plates, but I hope you’re able to find some time to thank our military service community and remember why we celebrate Memorial Day. Use a moment of silence to reflect on our freedoms and express gratitude to all who serve our country.

Cheers,

Margie

Craft Distillers Head to the Hill

In mid-May nearly 100 spirits industry professionals from across the country climbed Capitol Hill as part of the ongoing effort to ensure that the reduction in the Federal Excise Tax (FET) passed last December is made permanent.

The Craft Beverage Modernization and Tax Reform Act (CBMTRA)—passed as part of Congress’s broader tax reform bill at the end of 2017—reduced the tax burden on the first 100,000 proof gallons of distilled spirits from $13.50 to $2.70 per gallon. The reduction is set to expire at the end of 2019 and members of The American Craft Spirits Association (ACSA) and the Distilled Spirits Council made preventing that from happening priority No. 1 at the two groups’ joint Public Policy Conference mid-May.

ACSA Executive Director Margie A.S. Lehrman said it’s okay to take a bit of “victory lap” for CBMTRA’s passage, but it’s also time to refocus on the battle ahead.

“Now is our time to take that same energy—that same vision of where we can go—to Congress and make that happen again,” Lehrman said.

Mark Gorman, Senior Vice President of Government Relations for the Distilled Spirits Council, says the industry is already reaping the benefits of the tax reduction as member companies are putting the money back into their companies.

“We’re working overtime to make sure this becomes a permanent part of the U.S. tax code,” Gorman said.

The attending craft spirits producers were heartened by the words of some allies from the Hill, as Senators and Senatorial staff offered their support in the fight.

Attendees greeted Senator Ron Wyden (D-OR), who co-sponsored the bi-partisan Senate version of the bill with Senator Roy Blunt (R-MO), with a rousing ovation as he entered the conference room at the Senatorial office building.

“You were clapping for me, but just put it on the Congressional record that I am clapping for you,” Wyden told attendees. “This is a product that is on the right side of history.”

Wyden pledged to continue to push to ensure the benefits of the CBMTRA do not expire. “We’re going to keep at it,” Wyden said, “until we make the law you all worked so hard for permanent.”

Attendees greeted Blunt with equally enthusiastic applause, underlining the bi-partisan nature of the tax reform effort. Blunt reminded the audience that the greatest tool they have is their own authentic stories.

“[FET reduction] is a good idea and it would be much better to have it as a permanent idea,” Blunt said. “Make a case for why this matters, make a case for how it allows you to compete, make a case for what this does for you.”

Senator Todd Young (R-IN) also stressed the importance of a good story.

“I went to business school where they tell you all businesses are basically the same,” Young said. “I never really bought into it. I find that some businesses are more fun than others, and I find your business fun. Telling your story has made it easy for me to be a key player in this.”

For example, it will be critical for small distillers to emphasize how the FET reduction is enabling them to hire more staff and re-invest in their companies, spurring economic growth in their home states.

Mark Isakowitz, chief of staff for Senator Rob Portman’s (R-OH) also offered some insight for spirits producers. Portman was instrumental in getting CBMTRA included in the broader tax reform bill at the eleventh hour. The future of FET reduction, he noted, depends greatly on support from both sides of the aisle. “We thought it was a great victory to get [FET reform] in the law and we’ll keep fighting for it,” Isakowitz said. “We’re going to have to make this a bi-partisan to keep it.”

Distillers also heard from Liz Strimer, legislative assistant to Senate Majority Leader Mitch McConnell, who called the larger tax bill—officially, the Tax Cuts and Jobs Act of 2017— “a once in a generation opportunity.”

Earlier in the day, spirits producers heard some encouraging words from the regulatory side of the government. John Manfreda, Administrator of the U.S. Alcohol and Tobacco Tax and Trade Bureau, expressed a desire to see all spirits producers succeed.

“I’m a real believer that that the regulators and the people they regulate should get to know each other,” Manfreda said. “The more we interact, the better we understand each other. And the better we understand each other the better we understand each other’s needs…We’re here to help you comply, we’re not here to put you out of business.”

The three-day ACSA/Distilled Spirits Council Public Policy Conference kicked off with a reception at One Eight Distilling, where attendees sampled its District Made spirits line and toured the production facility in Washington, D.C.’s Ivy City section.

At the conclusion of the conference and legislative meetings, attendees, local media and other industry insiders celebrated the launch of American Whiskey Magazine during a reception co-hosted by ACSA, the Distilled Spirits Council, the Wine & Spirits Wholesalers of America and American Beverage Institute (ABI). Attendees sampled a vast array of American whiskeys, many produced by ACSA member distilleries and toasted the unveiling of the new quarterly publication from Paragraph—the U.K.-based publisher of Whisky Magazine , Gin Magazine and Rum Magazine , among others, and the producer of the WhiskyLive tasting event. Paragraph founder Damian Riley-Smith serves as publisher of American Whiskey and whiskey journalist Rob Allanson is editing the magazine. Contributing writers include some of America’s greatest whiskey commentators: Fred Minnick, Lew Bryson, Peggy Noe Stevens and Davin de Kergommeaux. “American Whiskey Magazine writes about the people and places that make great whiskey,” says Riley-Smith. “Our journalists will take you to the heart of the distilling world and bring you the human stories and great landscapes. Each edition will also feature in depth tasting notes of the latest whiskeys to hit the shelves and some of the nation’s firm favorites.”

The magazine’s creation reflects the increasingly prominent role that American-made whiskeys—particularly those from craft spirits companies—are playing on the world stage.

A very special “guest” attended the event: the 1799 letter that George Washington wrote to his nephew seeking to purchase grain for the then-retired president’s whiskey distillery at Mount Vernon (pictured above).

(L-R: Frank Coleman (Distilled Spirits Council), Margie A.S. Lehrman (ACSA) Damian Riley-Smith

(Paragraph Publishing), Sarah Longwell (American Beverage Institute) and

Rob Allanson (Editor, American Whiskey Magazine)

‌

LAST CALL

We Still Need Your Help: Please Respond to the

2018 Craft Spirits Data Project Survey

We’re still seeking your input for the annual Craft Spirits Data Project. The Craft Spirits Data Project, which ACSA conducts in conjunction with Park Street and the IWSR, provides the industry’s most detailed picture of the size, scope, growth trajectory and economic contributions of the craft distilling industry. This information will be critical as we continue our fight to keep the reduction in the Federal Excise Tax. We invite you to follow this link and spend a few minutes answering the survey.

ACSA 2017 Annual Report

You still can get a copy of our first official Annual Report, which attendees received at the ACSA Convention in Pittsburgh. The report includes a look back at all of our activities throughout 2017, as well as state-specific regulatory and legislative information, highlights from the most recent Craft Spirits Data Project and ACSA’s full annual budget. If you would like to receive a copy of the report, please e-mail Teresa McDaniel at teresa@americancraftspirits.org and be sure to include the subject line “2017 Annual Report.” Also, watch for the link at the ACSA website, where you’ll soon be able to download a PDF of the report.

SPIRITED RESPONSE: MONTHLY POLL

Question 1 (of 2) Do you provide regular, in-house safety training?

Yes

Select

How important is safety training in your facility?

Top priority

Select

Moderate priority

Select

Low priority

Select

EDUCATION – Where Knowledge is POWER

Safety Webinar Series &

Cincinnati Master Class: Distillery Safety Management 101

Enhancing distillery safety should be high up on every craft spirits producer’s agenda. That’s why ACSA is making safety a key theme of our educational efforts this year. Earlier this month, we kicked off our free safety webinar series, sponsored by Haskell, with a roundtable discussion on the subject, featuring John McKee ( Headframe Spirits ) Colton Weinstein ( Corsair Distillery ), Colleen Moore ( Dalkita Architecture and Construction ), Ryan Quinlan (Bently Heritage ), Jason Lippa ( Five x 5 Solutions ) and Lance Simons ( Haskell ). Watch a replay of the webinar here. We’ll be announcing the date and topic for the next free safety webinar soon, so stay tuned.

Next month we’ll be kicking off our 2018 Regional Education Programs in Cincinnati with the two-day master class: ” Distillery Safety Management 101,” presented in partnership with Industrial Safety and Training Services . Learn about hazard recognition, requirements of written policies, regulatory training, general OSHA compliance and much more on June 27 and 28 at the Hilton Cincinnati Netherland Plaza. The registration fee is $399 for members and $699 for non-members . ACSA members can register an additional participant from their companies for $299 each. The additional-participant fee for non-members is $529. You won’t want to miss this intensive, two-day course that will provide you with the tools and techniques to ensure a safe operating environment. Register here . If you care about your people and your livelihood, you cannot afford to miss this program. (Special discounted room block at the Cincinnati Hilton expires on June 5th. REGISTER NOW!)

Regional Focus: Montana

According to our most recent Craft Spirits Data Project, there were, as of August 2017, 20 distilleries in the state of Montana. Not bad for a state with a population of only 1 million. That’s a distillery for every 50,000 people. To put that in perspective, California, the most populous state in the country and the state with the greatest number of distilleries (148) has a distillery for every 267,000 people. So, it’s no exaggeration to say the Montana craft distilling scene is off and running.

A half-dozen years ago husband-and-wife duo Jenny and Ryan Montgomery opened Montgomery Distillery in a nineteenth-century building that once housed a liquor warehouse and saloon back in the day. Now, Montgomery’s tasting room serves an eclectic array of spirits produced on site, including Whyte Laydie Gin, Sudden Wisdom Rye, Montgomery Single Malt and Skadi Aquavit. Try them neat or in cocktail form. Rattlesnake Creek Distillers takes its name from the small body of water that bisects the distillery’s home base, Missoula’s northern Rattlesnake neighborhood. That’s where it crafts Hogan’s Hooch Light Whiskey—distilled from malted barley, red wheat and rye—as well as Crystal Springs Gin, Circle Square Vodka, Rattlesnake Reserve Malt Whiskey and Saddle Bronc Bourbon.

About a half hour outside Missoula in Potomac, Steel Toe Distillery is celebrating its fifth anniversary this year. The 13-botanical Show Pony Gin, black tea, mint and rose hips-infused Settlers’ Tea liqueur and the 120-proof Uncle Carl’s Prohibition Whiskey form the core of Steel Toe’s portfolio. A couple of hours outside of Missoula, in the mountain resort town Whitefish, you’ll find Spotted Bear Spirits, which draws upon the inspiration of its outdoorsy environs for its earthy Spotted Bear Gin, its pure Spotted Bear Vodka and Coffee Liqueur—a great addition to the morning cup of joe whipped up on the campfire. The tasting room is open seven days a week.

Head southeast to Butte and you’ll encounter Headframe Spirits in the city’s historic uptown section. Owners Courtney and John McKee opened its doors in 2012 and have been attracting spirits-loving Montanans ever since with Neversweat Bourbon, Anselmo Gin, High Ore Vodka, the mostly unaged Destroying Angel whiskey and Orphan Girl Bourbon Cream Liqueur.

Historic downtown Bozeman is home to Bozeman Spirits Distillery, whose tasting room serves up Montana 1889 Whiskey—named after the year the state entered the union—made with a trio of grains: corn, Montana malted barley and Montana rye, all milled in the state. Bozeman also makes Cold Spring Vodka, naturally flavored Huckleberry Vodka, Cold Spring Lemon Vodka, Prairie Schooner Spiced Rum and Ruby River Gin.

Drive two hours east and you’ll hit Billings, the site of a well regarded distillery in its own right, Trailhead Spirits. Great North Vodka pays the bills, but Trailhead also crafts Highwood Rye Malt Whiskey and Highwood Wheat Whiskey, as well as Healy’s Gin. The tasting room, which capture’s the area’s Old West heritage, is open every day except Sunday.

Q&As with Your ACSA Family

Wiggly Bridge Distillery

On Saturday, May 19, 2018, York, Maine-based Wiggly Bridge Distillery filled its 500th barrel during a ceremony with local political and business dignitaries. In honor of this milestone, we asked the distillery’s founding father-and-son duo, David & David Woods, Jr. & Sr., a few questions about their operating ethos and the types of flavor profiles to which they gravitate.

Tell us a little about how Wiggly Bridge got started

David Sr.: It all started during a family dinner with a joking statement of “lets make our own whisky.” With a shared love for good whisky and fascination to see how things are made, this father and son team decided to explore the idea. We researched and studied (and some say obsessed) over how to build a still and process alcohol. Being fortunate enough to travel to the Caribbean we decided to build and operate a small handmade copper still on the island of Montserrat to put their research to the test. Turns out we were quite good at it and grew even more intrigued by the craft of small batch distilling.

What we made rivaled some of our favorite brands, with a bit of a twist. Now, winning awards, we understand that we have created something very special. Small Batch distilling requires lots of time, love, and constant monitoring, but we believe the extra work is worth the end result. We will not stop until our products reach our high standards. Our spirits are distilled from sour mash recipes in small batches using our handmade copper pot still. Yes, it is a handmade, hand rolled, hand riveted copper still. Some would say it is a labor of love. We chose this route because it yields superior taste found only in authentic hand-crafted spirits. We started Wiggly Bridge Distillery with the belief that being small is an advantage. By utilizing long-forgotten styles and techniques in building our still, every dent and angle uniquely contributes to the flavor of our spirits.

What is your overall ethos?

David Jr.: Work hard while keeping it real. Keep your eye keen to the future. Make the best products without willing compromise. And to improve yourself, your process and products daily.

The Woods family are an old-fashioned, hardworking bunch that run numerous businesses in York, Maine. Our passion for hard work is unprecedented. Wiggly Bridge Distillery, like the other businesses, is family owned and operated and committed to providing quality products and customer service.

My father has always been self-employed and is the true embodiment of an entrepreneurial spirit. With several handfuls of business ventures under his belt, he half-jokingly attributes his enthusiasm for launching so many projects to a slight case of ADD. He is always thinking of ways to develop and improve his businesses. And with Wiggly Bridge Distillery, his passion for excellence means that he tries and tests many recipes and is always striving to make each batch better than the last.

I have been part of the family business since a young age and it is where my heart belongs. I’m a jack of all trades and my current adventure is building Wiggly Bridge Distillery’s copper still. I’m a self-taught welder who learned how to make copper stills by watching YouTube videos. With a knack for knowing how things work and extremely reliable taste buds, I’m an expert at picking up certain subtleties in his spirits.

You recently filled your 500th barrel. Tell us about that experience and about the significance of the milestone for you and for the industry.

David Sr.: It was a journey filled with surprises and fulfillment. This being a self-taught profession we’re in there was much to figure out along the way. We made many new friendships within the industry and received guidance from most of them. We took the good ideas and expanded on them while the ones that we felt fell short are just filed away for maybe another day. Filling the 500 ^th barrel for us was a very humbling, to see our fans assembled around us knowing that we created a brand that touched their souls and we created a camaraderie. It also puts a bit of life’s perspective in what you do when you think of the aging process needed for spirits.

Briess Malt & Ingredients Co.

We also caught up with Mike Scanzello, Director of Brewing & Distilling for Briess Malt & Ingredients Co . , to talk about key spirits flavor, grain and ingredients trends driving the market today and over the next handful of years.

What are the flavor profiles you see consumers gravitating towards and how do those reflect the type of grain your distillery customers have been asking for?

Mike Scanzello: I think you are seeing some movement away from the fruitier flavors towards the stronger bolder flavors. Smoked malts have been seeing an increase as have the darker more roasted malts such as caramel, chocolate and black malts. These malts would provide those bolder flavors such as toffee, burnt sugar, chocolate and coffee

There’s been an increase in the number of brewery/distillery hybrid businesses, with brewers getting into distilling and vice versa. Do you service a lot of those sorts of businesses and how do you approach the brewing versus the distilling side?

M.S.: We do, and to tell you the truth the approach is not much different. Craft distillers are starting to be as creative with the ingredients they use as the brewers. While specialty malts do not provide any color for the distiller, the unique flavors they impart to the wash do come through in the distillate.

What do you see the big trends that will be driving the craft spirits business in the next 3-5 years?

M.S.: Maybe not specific to the spirits business, but there is a trend for health and wellness, which is already driving the demand for lower-alcohol beverages. Sessionability: people want to be able to have a few drinks while out socializing with friends instead of just one or two. Speaking of socializing, folks are also seeking and desiring an enhanced experience when they are out, which has given rise to the popularity of taprooms in the brewing industry. We are starting to see states loosen laws to allow tasting rooms, but I expect that to increase as acceptance for craft sprits grows and as the ACSA helps remove the legislative obstacles in states that still have prohibitive laws on the books. Lastly, variety will be the name of the game, so innovation will be important to keep your customers engaged to your brand.

A Word of Caution

Recently you may have received an email from a marketing group(s), alerting you to an offer from ACSA to obtain a list of attendees for your marketing and sales initiatives. This was neither authorized, sanctioned nor known to ACSA prior to its delivery. ACSA has no relationship with Global EXPO LIST. To be clear, ACSA does NOT sell your data to outside parties as we hold confidential your membership contact information.

Welcome Newest Voting and Affiliate Members!

ACSA extends a warm welcome to a few of our newest members:

Cedar Ridge Winery & Distillery (IA)
Swamp Fox Distilling (GA)

Find out more about becoming a member here.

Did You Know?

The TTB has issued 2,664 DSPs! Find the full list here.

Prepare to get bitter, as June 4-10 marks the sixth-annual Negroni Week—a tradition spearheaded by Imbibe magazine in 2013. No one is 100 percent sure who invented the gin-Campari-vermouth cocktail, but the tale that most in the industry like to tell is that it was first mixed 99 years ago at Caffe Casoni in Florence, Italy. According to that particular origin story, Count Camillo Negroni asked the bartender to make his favorite drink, the Americano, a bit stronger by replacing the soda water with gin. (A genius move). Learn more at GinFoundry.

Summer is nearly upon us. Check out these warm-weather cocktails from Liquor.com.

Don’t miss these upcoming drink holidays:

May 30: National Mint Julep Day

June 4: National Cognac Day

June 5: National Moonshine Day

June 9: World Gin Day

June 14: National Bourbon Day

June 19: National Martini Day

Social Media

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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!