11. The Packaging- What do you need?

Here is a basic list of the things you will need to bottle your product:

·       Bottles

·       Labels

·       Closures- corks

·       Safety Seals

·       Labeling Machine

·       Bottle Filler

·       Something to shrink the Safety Seals

We looked at a lot of different bottles from many different companies (there are about a dozen or so companies each having dozens of different bottles available). When we found a bottle that we liked we made a note and poured over the catalogs some more. When we were done we had about 6 bottles we liked so we contacted the companies and asked for a sample. 

Pictures may be worth a thousand words but holding something in your hand, feeling its heft and seeing it in person is priceless. Having the bottles in hand really made the final decision much easier for us.

--Christopher M Neumann

10. The "Feel" of the Product

Now that the “hard” part was done; all we needed to do was bottle it (right?). We had been looking at various bottles to see which one would suit our needs, but first we needed to identify who was going to be our customers because this would influence everything (we actually discussed who our customers were going to be before we made our first batch).

So who did we see as our customer base?

It came down to these statements:

Our customers are people who are very discerning about what they drink.

They care about the quality and aesthetic of their chosen libation and the experience it will provide.

They are people of higher class, education and income or people who aspire to be.

We had a profile of who we wanted our customers to be so we did some brainstorming to come up with a package that we thought would appeal to our chosen people.

--Christopher M Neumann

9. The Finial Product pt.1

By this point we should have the perfect coming together of all our pieces. We have the type of Spirit, our specific profile and the equipment to distill it on (we will assume you know how to operate your still by now). So now we make our first large production run (or in our case we did a bunch of small production runs added together); being new to this process and not completely trusting the equipment we did all our filtering only when one of us was present (later we realized how much more efficient it was to run the filter all through the night). Following our recipe we ended up with just under 125 gallons of Vodka or 52.5 cases (actual numbers). Of course the proof was in the pudding (so to speak); we tasted our newly minted Vodka and professed it to be worthy of bottling. I dread to think what we would have done if we weren’t happy with it.

A quick note:

The question arises; don’t we want everyone to like our Spirits?

And the answer is: No. If I made a Spirit that everyone liked I will have just reinvented vanilla and not everyone likes vanilla.

--Christopher M Neumann

8. Equipment

At this point we still hadn’t distilled anything yet. We were doing a lot of research on the various stills available and their respective prices. Because we weren’t coming at this venture with deep pockets we had to start really small. We opted for a 25 gallon pot still made from Hillbilly Stills in Kentucky (http://www.hillbillystills.com). It was small but it would have to do. All the other stills we looked at started in the 80 thousand plus dollar range. So we opted for the largest still they made (http://www.hillbillystills.com/product/6-plate-vodka-turn-key-distillery/). At that time the still only came with a 4 plate column. It worked wonderfully (and still does). Our first batch of Vodka was produced on this still. It took a full week of double distillation runs but we got it done. We named it TS Elliott (the TS is for tiny still). In the mean time we were looking at getting a small business loan (another blog post) so we could purchase a larger still and about 9 months later we put in our order for a 125 gallon copper pot still from Vendome in Kentucky (http://vendomecopper.com). If you look at our front page you can see the still in the background. We named it Jules (for Jules Verne). Jules is powered by a 450K BTU boiler (http://www.peerlessboilers.com). Having Jules has allowed us to jump up production by a factor of well over 5. What used to take five 13 hour days was now condensed into one 9 hour day. But to justify the cost we would have to sell a lot more product.

-Christopher M Neumann

7. Making the initial product (R&D)

Now armed with the knowledge of what I wanted to make; all I had to do was to translate that knowledge into a product, as my wife would say, “Easy Peasy”.

But first, how are we going to make our Neutral Grain Spirit? Our choices are to

A: make it from scratch (the idealistic view of making Vodka. This version could also include growing our own crops) or

B: Use a Neutral Grain Spirit purchased from a larger company that specializes in making NGS or

 C: Have a distillery make your product for you.

These are all legitimate options.

With A: You will need to buy grain (or grow your own, but then you will also need extra equipment to harvest and process your grain), have the necessary equipment to make a mash (think brewery here), have the correct column to rectify the NGS and have the filtering equipment (at this point I would also add have lots of cash on hand or in the bank.)

With B: You need to find a company that makes NGS from what you want your Vodka made from and you will need the filtering equipment.

With C: You need to contract with a distillery to make the whole product for you.

 After some searching, we chose to go with an Organic corn NGS that was made in Oregon (we like to keep things as local as we can) and we also chose to redistill the NGS we received to make even better cuts.

Once we received a barrel of the NGS we started working on the profile we were looking for. First I proofed down some NGS to 80 proof and then I started to play with different filtering media. Due to the small volumes involved everything was done by hand.

I had a couple of cups with small holes, I had drilled in them, to hold the different filtering media and I ran the proofed down NGS through them and tasted the results each time making notes. At some point I realized I had taken the filtering too far (which is why you keep good notes). In the case of the charcoal filtering, the vodka had become too “hard”.

After a few days of experimenting, we chose our filtering media, how many times we would filter it. We liked the results so I started working on a production batch. 

– Christopher M Neumann

6. What is your profile going to be?

After a lot of research we started talking about what we liked about certain vodkas and what we didn’t like. How did the Spirit smell? How did it sit on our tongue? What was the finish like? What was our overall impression of the Spirit (including the packaging)? (Sometimes knowing what you don’t want can be just as important as what you do want).

We then started to build the profile for our Vodka; it had to be smooth and it couldn’t smell like an antiseptic swab (think getting a shot at the doctors). That was it, pretty straight forward. For me the most important part was that it had to be sipping smooth. In the past I had noticed that fine Spirits were always sip-able. I had always enjoyed sipping on a fine Whiskey, Rum or Tequila so why not a Vodka? (This is so obvious to Eastern Europeans).

– Christopher M Neumann

We're in the News Paper!

The other day a gentleman, named Paul Omundson, dropped by Vivacity Spirits to interview us for an article he is writing for the Register-Guard. You can read it online here.

--Christopher M Neumann

5. Research into what’s already on the market (aka drinking)

So now that we know what Vodka is by definition I would go to the liquor store and browse the aisles to see what is available. Until recently the Vodka section was a fraction of what it is today. With the introduction of flavored Vodkas the vodka section has swelled to unprecedented proportions.

We felt that flavored vodkas were going to be a passing fad and frankly neither of us care for them, so why would I want to make one? (See previous post on making what you like to drink)

Next came the fun part. We purchased numerous bottles of different vodkas that we thought represented a broad cross section of the Vodka category. Sampling Spirits and really paying attention is a very fun activity. We approached it like we were judging a competition and I was actually surprised at how different vodkas were (given the definition of Vodka).

Which Vodka did we like the best?

The one we ended up making.

4.Ingredients for Making Vodka

You will have noticed that the definition for NGS uses the words “any material” and that Vodka is an NGS that has been “filtered with charcoal or other materials” so the notion held that Vodka is made only from potatoes is incorrect, in fact most Vodkas are made from wheat and they always have been. Vodka came into existence before potatoes made their way from the new world to the old world (and don’t get me started on how potatoes were considered peasant food and that a Czar or other Royalty would never drink something made from peasant food… but I digress.)

Traditionally, high proof Spirits have always been made from excess product you would have on hand. You could either throw away a crop or you could transform it into a high proof liquid that doesn’t spoil (and was in demand).

Today Vodkas are made from wheat, rye, corn or any grain, potatoes, grapes, again anything you can distill to 95 % alcohol. In Oregon there is a rice Vodka and I have had a vodka made from apples.

For a really good read try The King of Vodka: The Story of Pyotr Smirnov and the Upheaval of an Empire (P.S.) by Linda Himelstein.

--Christopher M Neumann

3.The Definition of Vodka

If you go to the TTB website (http://www.ttb.gov/spirits/bam/chapter4.pdf ) you will see a chart describing all the Spirit categories. At the top of this chart is the Class category for NGS (neutral grain spirit) and a definition:

Spirits distilled from any material at or above 95% alcohol by volume (190 proof), and if bottled, bottled at not less than 40% alcohol by volume (80 proof)

Next comes the Type of Spirit, Vodka, and a definition:

Neutral spirits distilled or treated after distillation with charcoal or other materials so as to be without distinctive character, aroma, taste or color

Although the definition states, “…without distinctive character, aroma, taste or color”, I believe that to be, mostly, an erroneous statement. I will grant you the no color. Vodka is a clear Spirit (although I did see a barrel aged Vodka the other day). As for taste, character and aroma; Vodkas have always had their specific tastes, characters and aromas. If you pay attention you can smell and taste the difference in Vodkas made from various ingredients (i.e.: Wheat, Rye, Corn, Grape, Potato, Rice or even plain sugar).

I, personally, classify being smooth as a character trait. If all the Vodkas in the world met the TTB’s criteria they would all taste and drink exactly the same. Yet they don’t.

2.What type of Spirit?

A quick note here; some of you may want to make “moonshine”. Moonshine is alcohol produced and sold that you have not paid the Federal taxes for, in other words illegal alcohol. If you find “Moonshine” in a liquor store, it’s not.

The traditional path for a multi-Spirit distillery seems to be that you are going to make a whiskey but since it needs to age for a while you will either need to sit on it for your ageing time or make something in the meantime to bring some money. Clear Spirits do not need to be aged and, therefore, have a quicker turnaround time. In our case we decided our first product would be Vodka. Now if you go to a liquor store and look at the shelves you will see that there are quite a few Vodkas on the shelf. But what is Vodka anyways?

-Christopher M Neumann

1.So you want to develop a Spirit

If you are just starting out or are looking to expand your portfolio with another Spirit, you will have to figure out what it is you want to make. Most people have an idea of at least the first Spirit they want to make so that part is made easy, however, if you are unsure the list can be a bit daunting. Do you want make Vodka, Gin, Rum, Brandy, Whiskey, a liqueur or maybe something a bit more exotic like Absinthe? I usually suggest that you make what you like to drink yourself. That way you have a direct opinion of what you are making.

I can’t imagine making something I don’t like. What am I going to do go, “OK let’s bottle it; it’s just the right type of nasty”?

-Christopher M Neumann

Introduction

In the following weeks I am going to write about the process of developing a Spirit from the idea to the shelf. I will be using our Fine Vodka as an example; however, I am confident that most of the information will transfer to other Spirits as well. So let’s take a look at making some amazing booze!

Rage Against the Darkness

Today is the 21st of December and that means that the sun will start coming up earlier and staying up later starting tomorrow. Here comes the Sun.....

Time

Time keeps on slippin', slippin', slippin'
Into the future…

The question is how fast is it slippin’ and what are you trying accomplish in that time? I am sure almost everyone has heard about Einstein’s time paradox.

"An hour sitting with a pretty girl on a park bench passes like a minute, but a minute sitting on a hot stove seems like an hour." -Albert Einstein

How many times have you done a task for a few, long boring, hours (can you say paperwork) only to discover that you have only been at it for fifteen minutes to half an hour? My problem is quite the opposite. I will be doing something for a few minutes and an hour or two flies by. When the day is over I look back at it and see that I didn’t accomplish much at all. The next thing you realize it’s a new week, a new month and what year is it again (dare I say what decade)? I hate feeling like I am wasting my time.

Of course time is a constant. It’s our perception of it that changes (and it only goes by faster as we get older). That’s why I am a big fan of “To Do:” lists and why I keep a daily log book (especially important for work). At the end of the day I can see what I have accomplished (and still need to accomplish). Sometimes I surprise myself with how productive I really was (other times it makes me want to cry).

Seeing how fast my life is passing by makes me understand that I must make the time for the important things, like spending quality time with my family and friends (be sure to tell them how much you love them), doing something you really enjoy (walking on the beach, in the mountains, or pursuing a hobby) or learning something new (maybe travel abroad?).

Sometimes it’s as simple as snuggling with my wife in front of a fire, at the end of a long day, and (this time of year) enjoying a Hot Buttered Rum together (using Vivacity Spirits Traditional Rum, of course!). Now that’s never a waste of my time.

Cheers!

Christopher M Neumann

Priorities

As I posted earlier, we need to have priorities in our life. Sometimes that priority is to work 12 hour days (6 days a week) but you can’t live your life that way, constantly, because that’s not really a life is it?

As a work-a-holic and a small business owner, it is easy for me to justify working crazy hours to get the job done (at the expense of everything else, including my family, health and sanity).

Thank goodness my wife sees things a bit differently. For her the priority is to family, to friends, to ourselves and then to the business.

Does this crazy attitude (of hers?) cause a bit of strife in our lives? Of course it does but it also balances out my crazy attitude. In the end priorities are interchangeable.

If I am in the middle of a distillation run and I get a phone call that one of our kids is decorating day care in vomit (and Caitlin is out of town) I must shut down the still (unless my assistant-distiller is around) and tend to the child; again, priorities shifting.

An unexpected day off (as it were) is never fatal to a business; inconvenient, maybe, but never fatal and sometimes it can be a blessing. Me not being at the distillery may mean I work from home and catch up on paperwork, the blog or read a book (between bouts of outwardly expressed illness of course).

As counter intuitive as it may seem to some the top priority must always be to yourself because if you go down so does everything else.

I once told a friend, who was a single mother of two young teen boys, who was running herself ragged driving her boys all over the county to their different events that she needed to slow down a bit and take care of herself first.

Her reply was that the boys came first.

My reply was “So what would happen to your boys if you got sick and (heaven forbid) died? Who would take care of them then?”

Her reply was silence.

Priorities People!

Cheers!

Christopher M Neumann

Dealing with Feedback

One of the more interesting things we deal with in our business is feedback. Feedback can be either positive or negative and it can either be face to face or online.

The best possible thing is when someone gushes over our product in person. I will admit this can make me feel a bit uncomfortable at times, especially when the person is really adamant in their praise.

However, I do love to overhear someone telling another person how good our product is. It is validation that we are doing a job well done.

Reading a good review of our Spirits is an amazing thing. There is something a little surreal about seeing it in writing though.

On rare occasions I have been the focus of someone not liking our Spirits. Wow, is that weird! I have been told point blank and at great length how bad (I’m being nice here) our Spirits are (“I hope you don’t have any connection with this company”). The first time this happened to me I was crushed and had a knot in my stomach (major ego deflation and panic). I wanted to get away from this person and they kept going on and on. With time you do get the thick skin required to weather these occasional assaults. In the end I became aware that what they were really telling me was that they didn’t care for our Spirits. Now, I don’t take it personally.

I have never had the experience of reading bad things about our Spirits, so I’m not sure how I would react.

In the end feedback, good or bad, can be valuable. Once you wade through all the noise you can usually glean a few nuggets of useful information from it and hopefully put it to good use.

If you decide to give someone feedback I would suggest you give them specific feedback. If you love it or hate it, what is it specifically you love or hate?

Cheers!

By Christopher M Neumann

Logistics/Organization

Have you ever tried to juggle before? I’m talking real juggling here, balls in the air and all that. At first you feel like a complete idiot because it’s only 3 balls and you are holding 2 of them in your hands at any one time. Once you get the rhythm down it’s not so bad and then you decide you need to go for 4 balls and the whole process starts again, maybe not as bad as the first time. Repeat.

Nothing is worse than trying to make a batch of Spirits only to find out you don’t have something you need to complete the process. It seems so simple that you would know you are running low on corks, safety seals, labels or, heaven forbid, an ingredient. There are whole divisions at large companies devoted to this daunting task.

Neither Caitlin nor I am a naturally organized person but where there is a will (or an overriding need) there is a way.

I have found that if you designate a place for something and you put that something back there after you use it, when you need it again you won’t have to go on a building wide scavenger hunt for it, thus avoiding lost time (not to mention the frustration, the screaming and the swearing involved). This is true for supplies too. Have one place for things so you can see what your inventory supply is (I still can’t remember where I set my coffee cup this morning).

I divide our needs into different categories:

Production- what we need to make our delicious Spirits

Events- what we need to go out and promote our delicious Spirits

Chris’ Stuff- what I need to keep the physical business going

Caitlin’s Stuff- Everything else

Production: Production supplies are what people normally think of as supplies. It’s anything I need to make our Spirits. The problem can be when you don’t take into account the lag time involved when ordering something.

So what do you do when you discover you don’t have something you need (besides panic)?

Over the years we have compiled a list of small local businesses that carry some of the botanicals we use in our Spirits. We can pay many times the price for them, over our wholesale prices, but we have them.

If we forget to order any of the hard inventory such as bottles, labels or corks we are dead in the water.

One of the cardinal sins of the distillery business is letting your inventory run out in the warehouse (for control states) or not being able to get inventory to your distributors. You always have to look ahead and this means you have to be, somewhat, organized.

Events: You will need to keep supplies for promotions in stock. Do you have business cards, information cards, fliers, a table (or two), table cloths, sample bottles and tasting cups? I like to keep a “tasting kit” handy and a list of supplies needed so when I go do a tasting or gear up for a larger event I just have to consult the list to make sure I have everything I need. It’s amazing what you will forget and there is nothing more frustrating than to get set up and realize you have forgotten something simple yet important (like the credit card swiper or your tasting cups).

Chris’ Stuff: My job is to make sure we have what we need to make all our products (keep track of inventory), to distill all our products, do some paperwork and to keep the physical premises in good repair (the easy job).

Caitlin’s Stuff: Caitlin gets to herd the cats (everyone who works at Vivacity Spirits, especially me). She does most of the paperwork (the hard job), orders supplies to meet our production needs, runs roughshod over the design of labels and promotional materials, keeps the books, pays the bills and does a dozen other things that I can’t think of at the moment.

Being a business owner forces you to get organized (not completely true but it does make your life so much easier if you are). Even when you think you are organized something can and will pop up to prove you are not organized enough. This brings to mind being able to improvise (a later blog post).

Cheers!

Written by-Christopher M Neumann

Funding Your Dream

Today’s post is about funding your dream distillery. I am assuming you are starting from scratch, more or less.

Money is the problem or I should say the lack of money is the problem. How are you going to fund your distillery?

Your options:

You have money: You, or your family, are wealthy or you have money in savings.

Investors: You are starting your adventure with capital from outside sources.

You and Investors:  Your money plus outside money.

Commercial Loan: Dealing with the banks. (So much fun)

There are many costs associated with opening a distillery. Depending on the scope of your distillery the costs will vary.

Except for your personal money, any outside money will need to be paid back (you will actually want to get your initial investment back, too).

Now that you have solved the opening costs problem, you will get to take on the cash flow problem. So you will need enough cash to keep the doors open until you start making money, also take into account ownership. It may be your dream and your sweat equity but in the end who has all the shares? If you give up too much control you could lose control of your business (it happens).

Cheers!

The Reality of Opening Your Distillery

 With micro-distilling being the new craze everyone wants to own a distillery and that’s great, except you should be aware of a few things about running a business in general and a distillery in particular. This is not an all-encompassing list, by any means, but I will attempt to make it a good start. I will expound on various points in later blog posts.

General Business Aspects

The first thing is that you are running a business. You will work longer hours, harder than any other job you have ever had and get paid less than you have ever been (it can be a big money hole for the first few years), but it’s your business and you are the boss. Many business’ fail not because the product or service is bad but due to poor decision making, poor execution and poor business practices. Read, take classes and talk to people who already own a business. Some information and situations are universal. Talk to someone who owns a distillery, in particular, they have the specific information you want and need. We are generally pretty open about talking about the business aspects of a distillery. If you are going to pick someone’s brain, though, please do it on their schedule. Try not to do it during a busy time or better yet make an appointment with them.

Some General Things to Consider

-Money: You are going to need it (duh!), but the question is do you have a ton of it lying around, ready to throw at your new project, are you going to get investors or are you going to operate on a shoe string budget? Each has advantages and disadvantages.

Note: This reminds me of the old joke. How do you make a small fortune in the winery business? Start with a large fortune. (Ba da bum!)

-Bills: The opposite of money is bills. Make sure you pay them. Wouldn’t you hate to have a shut down because you forgot to pay your electric bill?

-What is the Business: What are you going to do or make? Are you filling a gap or are you going to do something better than everyone else? If you are filling a gap; you should also do a little research to see if there is a need for this product or service.

-A Business Plan: you need one, even a basic one. There are books available and your local community college will have business classes available.

-The Business’ Name: You probably already have that one, but is someone already using it? (See below)

-Trademark Law: Get a lawyer who specializes in Trademark Law. Do your homework. There are online references available. http://www.uspto.gov/trademarks-application-process/search-trademark-database and don’t forget to do a web search!

Caution!: So, you have a friend/acquaintance/someone who knows someone who is a lawyer/knows the law and they want to give you their opinion on your Trademark issue (everyone wants to be helpful, right?). If Trademark Law is not their specialty, their opinion is as good as the average person’s. This is from personal experience. Would you rather have an expert neurosurgeon operating on your brain or the person who read a book about the brain, once, in grade school and is handy with tools?

-Location: Where will this business be located? You will have to look at local zoning ordinances. Different states/counties/cities have different rules on alcohol production.

Distillery Specific Aspects

The first thing is what are you going to make? Just because you can distill it will people buy it? Again, do your homework! Are you going to come into the business with something established (meaning you will have to compete with existing companies) or are you going to bring something new to the market? If you are going to introduce something new you will also have to educate the public about your new and different product (If you are introducing a completely new type of Spirit, you will need to jump through the government hoops to prove that it is safe to consume)

Caution: At this point I will warn you that your friends are not the best people to ask. I used to homebrew beer and my friends all loved it and said it was wonderful, that I should go pro with it. Then I asked them if they would buy it then the story changed. Free alcohol is always great. Once you have to pay for it is when reality starts rearing its ugly head.

-Paperwork: I hope you like it, because there is a ton of paperwork that goes along with a distillery (at least (most of) this “paperwork” is now electronic). Be sure to fill out the paperwork and submit it, preferably on time. Be aware you and any investors will be getting a background check by the Federal Government and expect visits from your state and local government officials (the Agriculture department, the Fire Marshal, the local Dog catcher, etc.)

-The Open Hand: Be aware that when said “officials” show up at your distillery most of them will come with an empty open hand and they will expect you to fill it with money, for the “services” they are providing you. You would not believe how many permits you will need to have just to open your doors (I’m not sure but I think there may be a permit needed to actually open your doors).

-Recipes: Again, what are you going to make? Everything has a recipe. When you are experimenting with recipes write everything down! That way you can replicate your happy accidents. Do not entrust this vital piece of information to your amazing memory. Also, if is not written down how can anyone else help you make your product?

-Taxes, Fees and Permits: There are a lot of different government agencies out there and they all want their piece of your pie. Right now the biggest one is the TTB (the Tax and Trade Bureau) formerly the BATF (the Bureau of Alcohol, Tobacco and Firearms). You pay them the excise tax for alcohol production (at present it is $13.50 per proof gallon). Make sure you pay your taxes!

-What are you going to make: (I know I am repeating myself here.) Are you going to make clear Spirits (Vodka, Gin or any unaged Spirits), brown Spirits (Whiskey, Rum and other barrel aged Spirits), colored Spirits (Spirits with color from non-barrel sources: Absinthe, Coffee Liqueur, Etc.) or any combination of the above. For barrel aged Spirits are you going to buy new or used barrels and where are you going to store them?

-New or Existing building: Are you going to build from the ground up or are you going to rent a space? The general thought, with a distillery, is to rent a space, which means retrofitting the building, until you can buy a property. Then the question becomes, build from the ground up or remodel an existing space? Another option is to have your product made by someone else. It is still your business but you pay someone to make the product for you, on a contract basis (to be addressed in another post).

Logistics: Logistics is gathering everything you need to make your product. (This will be addressed in more detail in another post)

Employees: You can only do so much work yourself. At some point you will need assistance. (See our previous post on hiring people. http://www.vivacityspirits.com/blog/2015/8/24/interviewing-people-for-a-job)

I am sure there are many things that I have neglected to put on the list. It is just a short list of the major things that came to mind. Again, do your homework! Owning your own business is exciting. How often are you the Captain of your own future?

Cheers!