Oregon's growing spirits industry

Oregon's growing spirits industry

By Emma Hall

Oregon's craft distillers are beginning to hold their own when it comes to national attention right alongside the big boys of local beermakers and Willamette Valley winemakers. From House Spirits' Aviation Gin to Clear Creek Distillery's pear-in-the-bottle brandy (and 27 other products), Oregon's spirit entrepreneurs are making waves in the industry. Though the industry's evolution has been tending towards growth, Washington's recent liquor privatization means the future of this niche market is unclear.

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New Deal Distillery founders Tom Burkleaux (left) and Matthew VanWinkle,  pictured above in a photo from the August 2010 issue of Oregon Business.
// Photo by Paula Watts

Both industry heavyweights and newcomers were featured at the Portland Business Alliance's December forum. Moderated by Oregon Historical Society executive director Kerry Tymchuk, the panel included Steve McCarthy of Clear Creek Distillery, Meghan Zonich of Northwest Distillery, Tom Burkleaux of New Deal Distillery, and Ryan Csanky, executive director of the Oregon Distillers Guild. PBA members and guests gathered at Portland's Governor Hotel to hear about the growing industry and sip on Bloody Marys — despite the fact that the forum took place at 7:30 a.m.

Tymchuk traced the industry's history, explaining that Oregon began getting winemakers in the 1960s, and they now number over 300. Then in the '90s came the first craft beer brewers; the state now boasts more than 100. Now there are over 40 registered craft distillers in Oregon, a number that continues to grow. Some of the local culture that supports craft brewers is the same that encourages craft distillers, making Portland an epicenter for the unique industry. "If I was in another city I wouldn't have even come up with the notion that I can do this," Burkleaux said.

But the positive local business climate hasn't come easily – or overnight. McCarthy began distilling after bringing a still home from Germany in 1984. It was only the second eau de vie still ever brought to America. Despite his hard work, Clear Creek Distillery struggled for many years before turning a profit just a few years ago. Now, "Grandpa McCarthy's" company is experiencing a record year.

Perhaps his recent record profits explain McCarthy's disagreement with the other panelists about Washington's recent liquor privatization. Everyone else on the panel thought that the costliest initiative in Washington's history was not conducive to their businesses.

Csanky explained that the Washington rule has already hurt small Oregon spiritmakers as long-standing orders were canceled. The new liquor law puts the power in the hands of large corporate chains, which are unlikely to stock small distillers whose products come in a low volume at a high price, he said. Many people believe a similar ruling could be coming to Oregon next.

"Access to the liquor store shelves is egalitarian [in Oregon]," Burkleaux said. "If the OLCC goes away...the number of establishments that even considers small spirits will diminish."

McCarthy disagreed. "This is easily the best thing that's happened to the Pacific Northwest," he said, adding that his sales in Washington have already increased fourfold. He chastised his younger colleagues for being fearful of the free market, saying that if you concentrate on high product quality over brand building, "the wonders of capitalism kick in" to help your business grow.

And growing they are indeed. Portland's Bull Run Distilling Co. is negotiating shipping its products to China. House Spirits' products can already be found in New Zealand and parts of Europe. Other craft distillers are also expanding on a smaller scale. "Right now, I'm excited about the foreign countries of New York and San Francisco," Burkleaux said.

Csanky says that there is still much work to be done by the distillers as well as by the Oregon Distillers Guild, a 501c6 which was formed in 2007 as the first distillers guild in the nation. "Over the past year I've been completely devoid of sleep, and fairly intoxicated the entire time," he joked. "It's worked out quite well."

Emma Hall is web editor for Oregon Business.