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|Thursday, May 16, 2013|
STORY AND PHOTO BY ERIC FLOWERS | OB CORRESPONDENT
Brad Irwin is no stranger to a shot of whiskey. He’s picked up a bottle almost every day since the early 1990s when he started tending bar in Bend. Still, it took more than a decade of pouring other people’s bourbon before Irwin realized that his passion wasn’t serving spirits — it was making them.
In 2009, Irwin formally launched what is now Central Oregon’s second craft distillery, Oregon Spirit Distillers, in a small warehouse building just a block or two from the Parkway on Bend’s eastside. Since then Irwin and his team, which includes wife Kathy, have churned out small batches of gin, vodka and an award-winning absinthe. But the real coup came last fall when Irwin uncorked his first barrel of handcrafted whiskey, C.W. Irwin Bourbon, a three-year aged spirit, named for his younger brother who provided a key infusion of capital when the elder Irwin was still experimenting with mash recipes in his garage.
A decade ago, Irwin would have been considered a pioneer, a renegade just a step removed from a backwoods’ moonshiner. Today, he’s part of a growing class of craft distillers who are catering to the public’s appetite for artisan spirits. This year Irwin plans to move roughly 20,000 bottles of vodka, gin and the aforementioned Irwin bourbon in Oregon alone. He’s also expanded his distribution network to California and several other Western states as well as some East Coast markets.
Statewide, there are now 46 distillers actively operating and perhaps a dozen more in the works. While many of these are still relatively small operations, the industry accounts for roughly $53 million in annual sales and accounts for about 12% of total hard alcohol sales in Oregon. And if the craft brewing scene is any barometer of the industry’s potential, places like Central Oregon could be ripe for significant growth. In Bend, a third distillery, Cascade Alchemy, is already in the works.
The growth potential for craft distilleries is huge, says Bendistillery President Alan Dietrich, mostly because they still command a relatively small share of the overall market.
“If we could get one percent of Grey Goose’s market we’d all be millionaires,” said Dietrich, whose company sold roughly 50,000 cases of its signature Crater Lake Vodka last year and expects to see double digit sales growth in 2013.
A decade ago there were four breweries in Central Oregon, two of which were doing little, if any, off-site sales. Today there are more than a dozen with many of them shipping bottled and canned beer out of state. Piggybacking on that trend, the craft distilling industry is similarly fueled by the public’s growing appetite for artisan products.
“I think as a general rule the consumer public is getting more aware of what they consume, where it is made and how it is made,” Dietrich says.
There may be another reason that the local distilling scene could mirror the craft brewing boom: The water.
Anybody who really knows what they’re doing in the beverage making business, whether it’s Crazy Dave’s Ginger Ale or Deschutes Brewery, knows it’s the water, says Dietrich. "It's spectacular."
Enthusiasm notwithstanding, would-be distillers face significant financial and logistical hurdles. So far, only Cascade Alchemy has reached the point of pre-production and public marketing.
Seed and start-up costs for a small operation at $250,000, estimates Irwin. There’s also the delicate dance of developing and testing products, which often happens before securing a federal license necessary for such experimentation. Irwin gave away hundreds of bottles of un-aged whiskey, referred to as “white dog” that he distilled with a makeshift operation in his garage before settling on a final corn mash recipe.
And after all the money has been raised, the equipment bought, the space leased and permits secured comes the hard part – the waiting. Vodka and gin can be pumped out in a matter of days and weeks, but whiskey can’t be rushed. It has to be aged three to five years in sealed oak barrels before it can be bottled and sold. Irwin has dozens of barrels stacked floor to ceiling in orderly rows of iron racks that are filled with whiskey that needs nothing more than time.
“We’re still putting away more whiskey away than were selling, which puts us into negative cash flow but were investing in inventory,” said Irwin. While sales are good and growing (20%-30% annually), Oregon Spirit Distillers is still in the red, underscoring the importance of having enough seed money to bridge the gap between slow developing revenue and ever present expenses.
“I thought we’d be rich in three years, and we’re doing well," Irwin says. "It’s just taking longer than we thought."
But if it’s taking a little longer, the potential payoff for Irwin and other craft distillers is also growing as consumers hand them a larger and larger market share of the $21 billion spirit industry. “We are following in the footsteps of the beer and wine industry," Dietrich says. "And frankly, there is no reason to drink crappy spirits. Bad vodka is just bad."
Eric Flowers is a freelance journalist based in Bend.
Friday, March 27, 2015
BY COURTNEY SHERWOOD | Photos by Jason E. Kaplan
Pacific Seafood, one of the world’s largest processors, is rebranding as a more transparent and consumer-friendly operation. A controversial CEO and monopoly accusations from coastal fishermen complicate the tale.
Monday, April 13, 2015
BY GRANT KIRBY | OP-ED CONTRIBUTOR
The mega-shift from technology-driven to data-driven organizations raises questions about Oregon’s workforce preparedness.
Monday, April 27, 2015
BY AMY MILSHTEIN
Companies can benefit when they use software to meet staffing requirements and address employees' family and life commitments.
Thursday, March 26, 2015
Janet LaBar, Executive director, Greater Portland Inc.
Monday, April 27, 2015
BY JACOB PALMER
Live, Work, Play with Christine Jump.
Friday, March 27, 2015
BY JOE CORTRIGHT
The CRC is a cautionary tale about how we plan for, finance and invest in transportation infrastructure.
Thursday, April 23, 2015
BY JACOB PALMER | DIGITAL NEWS EDITOR
The entrepreneurial spirit was alive and well at the Oregon Angel showcase, an annual event for angel investors and early stage entrepreneurs.
|The Good Hacker|
|It's a Man's Man's Man's World|
|Short Shrift:The threat of just-in-time scheduling|
|Downtime with the director of Barley's Angels|
|Fighting Fire With Fire|
|Shades of Gray|
|Man for All Seasons|
|How to court millennials|
|Wal-Mart wants meat suppliers to improve treatment of animals|
|Scandal negatively impacts Tom Brady's endorsement value|
|John Kerry pushes TPP in Seattle speech|
|Big banks hit with $2.5B fine|
|Six Chinese nationals allegedly stole trade secrets|
|Lane Bryant owner to buy Ann Taylor, Loft|
New conference aims to solve challenges, quell fears amid regulatory changes.
Tourism marketing supports entrepreneurship by attracting visitors to all corners of the state.
Beaverton firm's business intelligence platform rivals that of industry heavyweights.
The Oregon Entrepreneurs Network (OEN) will be presenting its third annual Entrepreneurial Summit on Friday, June 5 at Castaway in Portland, Oregon.
On June 13th Mayor Charlie Hales will attend nonprofit organization Dream Change’s inaugural Love Summit and will introduce one of its keynote speakers, Dan Wieden of Wieden+Kennedy advertising agency.
34 spots for food, 17 places to sip, and 7 sites to choose a brew beckon visitors.