Craft New York Act Unleashes Craft Distillers
Small-Batch Spirits Makers Start Pouring
By Kara Newman Dec. 14, 2014 8:47 p.m. ET
Wall Street Journal
After months in limbo, Van Brunt Stillhouse is finally able
to pour a stiff drink.
The Red Hook, Brooklyn, distillery, which crafts rum and
whiskey, is among a growing number of small-batch spirits makers around the
state that can now offer new and expanded beverage service after the Craft New
York Act went into effect on Saturday.
Originally passed in June, and signed into law by Gov. Andrew Cuomo
in November, the legislation was designed to ease regulations and
promote growth for the state’s surging craft-beverage industry.
One thing the law will do is permit small distilleries like
Van Brunt to serve full-size pours of their booze—not just the quarter-ounce
samples previously allowed—without having to obtain a separate license. And
that opens the door to a wider world of cocktails, on-site cafes and private
events.
“Straight shots turn some people off; that’s not how they
drink at home,” said Jason Barrett, head distiller at Black Button Distilling
in Rochester, N.Y., which makes gin, vodka and bourbon. Before, he said, when
he poured a small sample of gin, people would ask for tonic water as well—but
that wasn’t a legal option.
The ability to offer mixed drinks, experts say, is critical
to drawing locals and tourists alike to visit boutique booze makers, some of
which are in remote rural areas.
At Van Brunt, which has been producing spirits since
2012—and has been a licensed farm distillery since December 2013—owner Sarah
Ludington expects the new law will help bolster an important revenue stream.
Even before the law was enacted, Van Brunt’s tasting room accounted for about
16% of 2014 revenue through early November, said Ms. Ludington—behind only
sales to traditional retailers and contract distilling.
Paty Zeccola pours the Red Hook cocktail, made from Punt E
Mes, maraschino liqueur, and Van Brunt's rye at the Van Brunt Stillhouse. Hayley Bartels for The Wall Street
Journal.
With fewer regulations, New York already is “one of the best
states in the country to be a craft distiller,” along with Oregon and Michigan,
said James Rodewald, author of a book on American craft distilling. Since early
2011, New York’s so-called farm distillers—which needn’t operate on an actual
farm, but must source at least 75% of raw materials in-state—have grown to 61
from 10, according to the New York State Liquor Authority.
With the new law easing restrictions further, some
operations are thinking beyond just bare-bones bar expansions. The owners of
Hudson Valley Distillers in Clermont, N.Y., envision a “cocktail cafe,” where
leaf-peepers can linger with drinks and local charcuterie. Dutch’s Spirits, in
Pine Plains, N.Y., has plans to construct a farm-to-table restaurant on site. And Black Button is planning to rent out its century-old building for parties and events. In the past, said Mr. Barrett, the head distiller, the limits on alcohol service undermined such space-rental requests. “Tasting doesn’t cut it—people want to order a drink.”
Opening up diverse income sources, experts say, can help
fledgling booze makers stay in business long enough to properly age their
spirits.
“Distilling is a capital-intensive business, when you think
about the machinery,” said Chris Moyer, co-founder of Hudson Valley Distillers.
“And it’s a long revenue cycle.” Adding potential money makers like cafes and
private events is “a very big deal,” he said. Spirits producers aren’t the only businesses that stand to benefit. Some plan to hire local providers to bring in charcuterie, cheese plates and other light fare that doesn’t require on-site cooking. Others plan to hire caterers for local events.
Also likely to benefit: local tour operators, “booze buses”
and car services that will help keep intoxicated drivers off the road.
Which may or may not appease wary neighbors. After Warwick
Valley Winery and Distillery’s cafe and tasting room became a popular
destination for drinkers of hard cider, a sign turned up on a nearby bucolic
road, admonishing people, “Don’t Drink and Drive.”
Co-owner Jeremy Kidde appeared unconcerned. “We really
haven’t had a problem,” he said.
For its part, Hudson Valley hopes to avoid upsetting rural
residential neighbors by closing its cafe by 8 p.m., and connecting with Safe
Ride vans to shuttle guests home.
While the ink is still drying on the law, farm distilleries
are still learning what they can and can’t offer. Spirits produced outside of
New York state, for example, can’t be served without a special license. And
vermouth is off limits in these settings as well, said Ryan Malkin, an attorney
representing the New York State Distillers Guild, a nonprofit trade group.
“It won’t become a full-fledged bar,” said Ms. Ludington of
Van Brunt’s newly refurbished tasting room with its rustic wood-plank walls,
rope-wrapped chandelier and blue marlin model hanging in front of tall windows.
“But it will become more of a draw.”
Colin Kennedy, 31, of Ditmas Park, Brooklyn, for one, was
willing to give it a try. “Red Hook is a little further afield than I would
usually go,” he said, sipping on a white whiskey Old Fashioned at a recent
preview of Van Brunt’s tasting room. “It’s an exotic trip.”
Read more at:http://www.wsj.com/articles/craft-new-york-act-unleashes-craft-distillers-1418608074