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Portland craft distillers grow up, evolve

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Articles - August 2010
Wednesday, July 21, 2010
Sebastian and Erika Degens bottle a batch of pear brandy, which was distilled from 800 pounds of Hood River pears. The Degans recently received approval to sell their products from their new tasting room, the most recent addition to Distillery Row.
These types of challenges don’t come as a surprise to veteran distiller Stephen McCarthy, who other Portland distillers refer to as “Grandpa McCarthy.” “They’re dealing with thin capitalization and little business experience,” he says. “You’ve got to have deep pockets to make an initial investment and still be smiley. Then you’ve got to be willing to work extremely hard for a long time.”

Twenty-five years after founding Clear Creek Distillery, which produces grappas and eaux de vie from Oregon fruits and herbs on Portland’s west side, McCarthy says his business only became profitable during the last few years, with the past year making a record $1.25 million in net sales.

Because most of Oregon’s distillers aren’t making spirits from scratch, like he does, McCarthy says they’re left to compete with big national brands with huge marketing budgets.

And even the most well-made products backed by a genuine story can be a tough sell, he says. “You have to hammer your way into the marketplace,” McCarthy says. “After 25 years, most of the sales trips I make are extremely productive, but that wasn’t always the case.”

Despite the long road to profitability, some long to follow in McCarthy’s footsteps. “I look at Clear Creek Distillery as the gold standard,” say Portland distiller Sebastian Degens, “but I don’t see them as competition. The market is large and growing and there is an interest in diversity of products.” Degens and his wife, Erika, have become the latest addition to Distillery Row with a new business called Stone Barn Brandyworks. So far the distillery has produced an oak-aged apple brandy, a pear brandy, a pinot noir grappa and brandy-based coffee liqueur.

The couple continues to work day jobs, a conservative approach that will help them continue to pay for a house and college educations for their two kids, as they focus on starting up a small business.

“I’d like to get to a point where our grappa is as distinctive as the pinot noir that it came from, and I don’t think that’s national conglomerate takeover material,” he says. “We’re just happy serving a niche of people who are like-minded and are interested in trying out distinctive distillates.”

Just a few months into business, it’s an easy and admirable aim. But considering the paths taken by other local distillers, Degens may yet learn that cranking out craft liquors comes weighted with complications.

“I don’t talk much about the nuts and bolts of running a distillery,” Stephen McCarthy says. “I had to learn it the hard way.”



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