Saturday, March 26, 2011

Las Vegas Distillery Starts It's Stills

There is a new distillery in Nevada.  George Racz, a native Hungarian now New York transplant to Las Vegas decided to put his roots down in nearby Henderson. His plans have remained in tact. He persisted in his dream investing hundreds of thousands of dollars and that of his family.  He wants to produce spirit and remains optimistic. George studied with Kent Fleischman and Don Poffenroth at  Dry Fly Distillery in Spokane, Washington before setting up his Las Vegas Distillery. Mr. Racz's grandfather used to run a still in Transylvania, so his Hungarian family was open to helping him with his dream. He has now taken his passion one step further.

The Las Vegas Distillery just began distilling yesterday on Thursday, April 24, 2011, but this was not as easy as it seems.  George had to lobby his way through the Nevada Legislature just to secure Nevada's first distillery license. The incline to trailblaze through Nevada's bureaucracy derserves our respect. He still has a fight so that he can simply offer samples of his products at the distillery. Soon, he will sell product and we understand that the Wirtz family will help with local distribution.

The Distillery has 111 of small casks made by a Minnesota cooperage known as Black Swan, which are for sale for $777. This is similar to what Glenglassaugh is doing with its cask offering, but with a few marketing twists.  For more information, contact the distillery.  The distillery offers tours, but it is very challenging for some taxi drivers, so it is wise to phone first and rent a car.

The distillery will start by making spirits that can be aged as well as sold with little aging. It does not have immediate plans to release a bourbon, but is using other grains. The owner has collaborated with Dry Fly Distillery, of Spokane, Washington, which is now selling a single malt, gin, and vodka. The owners of Dry Fly studied with Christian Karl Distillery in Germany.  The Las Vegas Distillery uses machinery manufactured in Germany, as well.

The distillery has and will continue to purchase most of its grain from Nevada farms, wherever possible. We understand that there is an emphasis on organic grains in the distillation process.  The distillery utilizes an reverse osmosis before water is introduced to the stills.

Plans are for eventually distilling multi-grain aged spirit, like the Tuthilltown Distillery, but expect Las Vegas Distillery to first cater to The Strip. To do so, it will produce vodka, gin, and network with bars to provide products that mixologists are anxious to see locally produced.  George is open to many alternatives, even the use of non-traditional, yet indigenous products that can be infused during the distilling process.

I wish George luck and consider myself fortunate to have visited him at the distillery's infancy. His positive attitude suggests that he will continue to persist in the trade.  George's motto is "Follow your heart and raise your spirit." Let's hope that his product is good enough to put Las Vegas Distillery on the map and his bottles on shelves nearer to you.

Tuesday, March 8, 2011

IB v. OB: The Cask Controversy; are Lessons Learned or Lost?

Most of us hope that the whisky, or is that whiskey, industry pays close attention to its own history. We now experience a whisky renaissance. I agree that this bubble may not burst, but it can get pin pricked and lose a bit of hot air.  Yes, when the pickens are good, the Official Distilleries [OBs] get upset and triumphantly insist they have little reason to sell to the Independent Bottlers [IBs]. Or do they?

It can be reasonably argued that when single malt is in demand, then selling off some casks to Independents at market can prove a wise investment.  Perhaps, even joining in the fun makes economic sense.When demand is low, name distilleries too often lose steam. In doing so, they may end up selling at bargain basement prices or getting mothballed in vain.  Furthermore, without cash to support those dry heave moments, the Ladyburns and Rosebanks of their times are subject to tumultuous takeover by the DCL's and Diageo's of the spirits industry.  When those distilleries fall, they no longer produce. Why not cask and sell planned allocation to the IB that can keep the potstills running? Perhaps, there are times when selling a distillery makes sense for the industry or a blend, rather than mothballing and dismantling it!

Diageo's main site has a pull down brand finder.  Has Diageo taken on too much out of fear? Does it deter or control perceived cannibalism, competition, and demand? If it does, does it lose more than it gains? To keep good distilleries alive and more expressions both efficient and profitable, timing is everything.  Predicting what the market wants and when the market will bottom out may prove evasive. Whose to know what cask will 'pop' and with which supplier? Can a good cask distributed by Adelphi or Cadenhead's help the official distillery when sales are down and blending seems the only option?  When was the last time that an official distillery supported an established independent in their mutual quest for market share?

If some whisky expressions can be sold quicker, with all factors considered, then it seems like there is good reason to do so, even if it means shedding a few pounds to the independent bottlers. An independent offering may be 150 to 1000 bottles compared to many more by the OB. When does the market gone down and why? Which distilleries or conglomerates will suffer most? Is there any predictability? That's the subject of debate.

Many in management find it too difficult to admit or determine whether they were licked and how. There is much pride in the whisky business and for good reason at times.  So much so that self defeating tactics are at play in the single malt market. The idea of hiding the names of distilleries and 'teaspooning' to deter Indy sales seems counterproductive, foolish, and juvenile to me.  However, I'm willing to read the arguments.

For those of us who enjoy single malt, we know that it's virtually impossible for a few blenders or masters at one distillery to know exactly what the public will like.  At this point, no one will buy everything.  There is a desire for consistency in flavor for each distillery, which defeats constructive change.  There is too much fear that it will become destructive.  At times, expressions like Ardbeg's Blasda may have been better off introduced by an Independent.

Status quo sales by the Official Distillers do not allow single malt to evolve as an industry. Yet, the risk experienced by distilleries like The Balvenie, Bowmore or Bruichladdich seems counterproductive for some retailers' shelves without well placed marketing muscle. As a result, and too often, the odd independent bottler makes a 'cask call' that proves brilliant and viable with support.

It's easy to detect DE, or distiller envy among Official Distillers.  Perhaps, there is a feeling of possible embarrassment at the selling off of the perceived Queen's silver. There seems to be a scapegoat mentality that looms. Yet, encouraging the Independents to shoulder some financial burden, while conserving the capital makes solid economic sense! It is a learning experience. This is what cask sales should foster, when encouraging the Independents to exist.

Not all Independent bottlers price below market.  And whose to know! Those from Adelphi, Murray McDavid, Douglas Laing, Duncan Taylor, Lombard, Signatory, Whisky Doris, and the Scotch Malt Whisky Society among a throng of others too often do justice to a distillery like no Diageo or Moet Hennessy has done before.  Yet, even Moet Hennessy has entered the IB Market with its takeover of SMWS.  I guess if you can't beat them, join them!  Yet, it seems that Diageo recognizes its priorities are the blends.

Those Independent bottlers with cask strength or vintage bottles create an aura all their own.  If a person is tempted to know, then they can find a segway to a more expensive official bottling.  In addition, there are limits when dealing with single cask selection, but these bottles can be used to gauge what a distillery is capable of doing and what the market has interest in.

For example, the Duncan Taylor Strathisla 35 year old, cask 7009, which was bottled in 1968 sold quite quickly.  Although the bottle was limited, an Independent bottler like Euan Shand, if encouraged, can keep tabs and a few bottles aside for the official distiller to consider as a future expression.

Although Port Ellen closed, we still see bottles that have kept its memory alive.  Yet, what Diageo, and its predecessors have done is to dominate. There is no doubt that with its dominance it is the master, but it has yet to reach its full potential to the benefit of the scotch industry as a whole. Yet, when a distillery is gone, the limited expressions left serve merely as ghosts lost in the machine, not found by those who once ran them. Therefore, allowing such a demise without trying to figure out market demand for flavor may be a mistake.

When such a decision seems inevitable, it is time to shed the distiller, not simply demolish or dismantle it! Yet, its understood that Port Ellen still serves a purpose for Diageo as a malting plant.  Certainly, Lagavulin is a Diageo Distillery to be reckoned with, but it had its fair share of Independent bottles, as well.

Perhaps, there is a reason why some limited Indy expressions sell out and others don't?  Maybe, some bottles are priced above the market based upon demand. Perhaps, a few IBs offerings are too obscure or similar enough to official expressions in both taste and price, so that few really notice except for a few die hard single malt drinkers.

This is the X Factor. The idea that distilleries will ignore what others don't to the benefit of the industry and the market.  I respect that some differ in opinion.  There is the belief that 'teaspooning' deters all. Some insist that keeping out the Indies somehow helps keep the single malt industry going.  As I said, if there are better marketers with different noses and tastebuds, then letting a few casks go does not hurt the bottom line; it can help profits.  However, I am writing to see if any have enough experience to coherently argue the distillers' position.  In a nutshell, the independent bottlers bring diversity to a spirits industry in need of perpetual change.