Home Back Issues August 2010 Portland craft distillers grow up, evolve

Portland craft distillers grow up, evolve

| Print |  Email
Articles - August 2010
Wednesday, July 21, 2010
Article Index
Portland craft distillers grow up, evolve
Page 2
Page 3
Page 4, Reader Comments
0810_Distilleries08cropped
0810_Distilleries10
Tom Burkleaux (left) and Matthew VanWinkle funded the startup of New Deal Distillery themselves. The business partners continue to work day jobs as they grow the business. They produce spirits for outside clients, a common strategy in an industry with high overhead costs and a required federal license for a distilling space.

Like Martin, Tom Burkleaux and Matthew VanWinkle, the owners of New Deal Distillery in Southeast Portland, lead double lives. For the past six years, they’ve spent weekdays in an office, where they crunch code as programmers at the same company. At night and on weekends, they become craft distillers — monitoring stills, ordering glass bottles, coordinating label designs and keeping an eye on cash flow.

In 2004, New Deal opened in a 120-square-foot room in ActivSpace in Southeast Portland with $3,000 of starting seed from Burkleaux’s and VanWinkle’s personal credit cards. Two years ago they maxed out the rest of their credit cards to move across the street, into the distillery’s current 5,000-square-foot space, where they produce a line of vodkas.

“Now New Deal is supporting itself, and I’m repairing my balance sheet,” says Burkleaux. “I’m glad we got to this point. If we didn’t believe in this industry, it would have been easy to get discouraged.”

With the additional space, New Deal was able to begin producing spirits for outside clients, including Loft Liquors and J. Witty Spirits, both based in the Bay Area. These types of subleasing partnerships are common in the industry, which has high overhead costs and a required federal license for a distillery’s physical space.

Burkleaux says he’s finally reached a point where he can seriously consider phasing out his day job, especially as New Deal works toward developing brandy, gin, whiskey and moonshine. Still, he warns prospective distillers about the financial realities of the industry.

“I don’t think it’s the route to fabulous wealth and riches, but hopefully you can find a sustainable living, express some creativity and be part of the community,” he says.

Unfortunately for Highball Distillery, another dot on the Distillery Row brochures that no longer exists, circumstances took a less fortuitous turn. In March of this year, Highball lost its lease, which spooked one of the two founding business partners, who backed out of the project entirely.

Highball founder and current owner Michael Heavener is trying to figure out how to re-establish the business before his existing stock of organic vodka runs dry. In the meantime, his homemade distilling equipment is collecting dust in storage at Integrity Spirits.

The equipment itself poses a problem; when assembled, Highball’s stills are too big to fit in any existing Distillery Row space. That’s because Highball took the purist approach to distilling by starting with whole, organic wheat and boiling it into a mash, instead of starting with a purchased neutral grain spirit, the common practice for most craft distillers.

The extra step meant extra costs, so Highball was forced to sell one bottle of vodka for $35, a high price point during a recession. “Our vodka was the same price as Grey Goose, but it was a local and organic product,” Heavener says. “But the marketing blitz of Grey Goose was tough to contend with.”



 

More Articles

Trends in business succession

News
Thursday, July 03, 2014
TrendsBY TED AUSTIN & MIKE BAELE | GUEST CONTRIBUTORS

The Office of Economic Analysis announced that Oregon is currently enjoying the strongest job growth since 2006. While this resurgence has been welcome, the lingering effects of the 2008 “Great Recession” continues to affect Oregon businesses, especially with regard to estate planning and business succession.


Read more...

Podcast: Interview with Steve Balzac

Contributed Blogs
Tuesday, August 19, 2014

082014BalzacBY TOM COX | OB BLOGGER

Tom Cox interviews Steve Balzac, author of "Organizational Psychology for Managers."


Read more...

South Waterfront's revenge

News
Thursday, July 24, 2014
MoodyAveBY LINDA BAKER | OB EDITOR

Remember the naysayers?  Those who called the South Waterfront aerial tram a boondoggle?  Those who rejoiced at the massive sell off of luxury condos at the John Ross and Atwater Place?


Read more...

Community colleges and sustainability

Contributed Blogs
Thursday, July 31, 2014
sustainabilityBY MARY SPILDE | OB GUEST CONTRIBUTOR

Faced with the aftermath of the “great recession,” increasing concern about the environment and dwindling family wage jobs, we have some very important choices to make about our future.


Read more...

Q&A: David Lively of Organically Grown Co.

News
Tuesday, July 01, 2014
OGCLogoBY HANNAH WALLACE | OB BLOGGER

Demand for organic food continues to soar: Last year, sales of organic food rose to $32.3 billion — up 10% from 2012. In Oregon, organic produce wholesaler Organically Grown Co. has been championing organic growing methods for four decades.


Read more...

Portland rises

News
Monday, August 18, 2014

IMG 2551Portland is in the middle of another construction boom, with residential and office projects springing up downtown, in the Pearl and Old Town. OB Web Editor Jessica Ridgway documents the new wave.


Read more...

Who said we should sell in May?

Contributed Blogs
Friday, July 18, 2014
BullMarketBY JASON NORRIS | OB GUEST CONTRIBUTOR

Back in May, we shared a common Wall Street quote about investing, “Sell in May and go away.” Fast forward to July and the most common question we have been getting from clients is, “When is the market pullback going to occur?”


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS