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

Two sides of the coin

Contributed Blogs
Monday, August 25, 2014
0825 thumb moneyBY JASON NORRIS | OB GUEST BLOGGER

Ferguson Wellman’s investment views on the economy and capital markets.


Read more...

Private liberal arts education: superior outcomes, competitive price

Contributed Blogs
Tuesday, August 26, 2014
0826 thumb collegemoneyBY DEBRA RINGOLD | OP-ED CONTRIBUTOR

Why has six years become an acceptable investment in public undergraduate education that over-promises and underperforms?


Read more...

What I'm Reading

September 2014
Wednesday, August 27, 2014

Kim Ierian, President of Concorde Career Colleges, and Deborah Edward, Executive Director of Business for Culture & the Arts, share their recent reads.


Read more...

The Diaspora

October 2014
Thursday, September 25, 2014
BY LEE VAN DER VOO

Former newspaper journalists move into brand journalism.


Read more...

Two Sides of the Coin

Contributed Blogs
Friday, September 26, 2014
0926 iphone6-thumbBY JASON NORRIS | GUEST BLOGGER

This post focuses on the recent release of the new Apple iPhone as well as Alibaba's IPO, the largest U.S. IPO in history.


Read more...

A Recipe for Success

October 2014
Thursday, September 25, 2014
BY LINDA BAKER

Two businesswomen, two iconic food brands and one food-obsessed city. We thought this sounded like a recipe for good conversation. So in late August, Oregon Business sat down with Wendy Collie, CEO of New Seasons Market, and Kim Malek, owner of Salt & Straw, to discuss their rapidly expanding businesses and Oregon’s trendsetting food scene.


Read more...

Fast Food Slows Down

September 2014
Tuesday, August 26, 2014
BY KIM MOORE

The ubiquitous fast-food restaurant may be on the decline.


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