Newsletter

--Past Issues--

WELCOME! This is the eighth edition of our monthly newsletter. It's the best way to keep up on changes to our extensive American whiskey selection as well as a general source of information about whiskey and whiskey culture.

NOTE: If you no longer wish to receive this newsletter, please scroll down to the bottom and click on the 'unsubscribe' link.

New Arrivals on the Wall


Lost Spirits ‘Ouroboros’ Single Malt 54%, $24
From our library. Byran Davis made this some years ago as part of his initial experiments with his "reactor" designed to simulate the effects of oak barrel aging using heat and light, AKA oak esterification. This is a bold assertive malt which was "aged" using sherry seasoned Hungarian oak. Definitely not for timid palates. It's also notable for its use of native Californian peat, harvested near Mt. Diablo.

Old Potrero ‘Hotaling’s’ 16yr Single Malt (100% Rye) 50%, $30
The original Hotaling's was a malted rye aged in six used oak barrels and released, one barrel a year for six years after the first barrel turned twelve. The last of that series (the 18 year) was released over ten years ago. Apparently, the distillery held some of the bottles back, possibly from each of the barrels, and has just re-released the 16 year. We were lucky enough to get a bottle that we can now offer to you.

Orphan Barrel Rhetoric 20yr 45.1%, $30
Another pick from our library. This now lets us offer the complete series of three Rhetoric whiskies released to date. We're offering a mini-flight of the all three: 20, 21, and 22 years old so you can make your own conclusions as to which is the best.

Ransom ‘The Emerald’ American Whiskey 43.8%, $15
A light bodied whiskey made from malted and unmalted grain in style that supposedly emulates what was being distilled in 18th century Ireland. David Wondrich was the historical consultant on this project. While still a little young and grainy, it's quite enjoyable now.

Et Al...

Our usual reminder that we don't announce ALL our new arrivals. We like to leave a few things as surprises for patrons scanning the wall on their own. There's a couple of very special and very limited bottles up there right now as I write this. In fact, looks like some people have already discovered 'em.

Our complete February whiskey list can be found here.

The Flagship 'Whiskey 101' Flight Revised


Of all the flights we offer at Hard Water, the 'Whiskey 101' is certainly the most popular with our guests (maybe followed by the Pappy flight but that's a zebra of a different stripe). We depend on it to provide a starting place for guests otherwise unfamiliar with the variety of American whiskey. And of all the flights, its the one most consistently reformulated. Last month we gave it another 'once over' to encompass a few more styles including a peated single malt from Westland and a sherry cask finished bourbon from Belle Meade.
New Whiskey 101 Flight at Hard Water

Talking Whiskey at the Distillery:
Dave Smith & Lance Winters @ St. George

St. George Spirits in Alameda, CA
Working at a bar like Hard Water obviously comes with many benefits. One of these has been the “perch” it provides for observing the so-called craft whiskey market as it continues to undergo considerable expansion, at least in terms of the number of distilleries being opened (though perhaps not market share). The Distilled Spirits Council of the United States (DISCUS) defines a “craft distillery” as one that produces no more than 100,000 nine-liter cases a year. (For comparison, Jack Daniels, the largest American whiskey brand, shipped 11 million cases globally in 2013.) According to the American Distilling Institute (ADI) there are already over 1000 distilleries operating at, or more usually, well below, this capacity, with more coming on line every year.
 
While not all of these small distilleries are making whiskey, most are and as a result competition for space on our shelves has been heating up. In fact, recently we made an informal decision to give preference to regional distilleries when it comes time to bring new products aboard. Visitors from all over the US come in every day and ask if we have the whiskey they tried at the distillery that opened down the street from them. (About which they rave, of course.) Well, we just can no longer just say yes to everything that’s pitched to us anymore.
 
Another change that’s starting to influence our decision making process are age statements. Two years ago there weren’t many straight whiskies (whiskies aged two years or more exclusively in new barrels) available from craft distilleries. (Unless, of course, they were sourcing products, but that’s another story altogether.) We saw products bottled as young as one month old---and still do. But this last year we saw a big leap not only in craft whiskey qualifying for straight labeling but also in four year olds that qualified for ‘Bottled-in-Bond’ status at 100 proof. This is probably just the beginning of more mature products coming from very small producers.
 
All of this started to raise some interesting questions in my mind:
  • How many more new distilleries can the market bear? Are we heading for a correction? (Fun fact: in the 1880s there were approximately 8000 distilleries and rectifiers in operation in the US. We were a nation of drinkers!)
  • Has drinking young whiskey shaped the palates of Millenials, generally attracted to anything local and “hand made”? Can a preference for young whiskey sustain a new distillery or do they ultimately need to produce more mature products to remain relevant?
  • Can small distilleries really ever hope to produce whiskies that are as good and as cheap as their “all growed-up” relatives in Kentucky? Is that what they should even be trying to do?
  • What does the increased availability older craft whiskey portend for distilleries just starting up today? Will they be able to compete?
While I have my own ideas about answers to these questions, I decided that it would be more educational (and more fun) to “ground truth” what I was thinking by talking to some actual distillers---the “boots on the ground” people. As northern California is something of a ground zero for the craft distilling moment, there are a lot of folks with whom I could have a sit down chat.  So, with a few quick phone calls and email exchanges, I am now set to learn what I can from these pioneers. These chats will be the subject of the next few issues of the Hard Water newsletter.
 
To start things off, I’ve decide to stay close to home by visiting our friends at St. George in Alameda: Dave Smith and Lance Winters. Here are the two handsome distillers, posing in front of one of the three Holstein hybrid pot/column stills used at St. George:
Dave Smith and Lance Winter, distillers @ St. George
While still very small by the standards of DISCUS, St. George, located in an old aircraft hanger on the former naval airbase in Alameda, is a firmly established distilling business with diverse portfolio of products. The distillery was established in 1982 and it predates the general use of the term “craft” by many years.
 
In 1996, Jörg Rupf, the founder of St. George, hired Lance Winters, a former Navy nuclear engineer who had been making beer and playing with distilling at home.In 2002, Lance hired Dave Smith, a former school teacher looking to turn pro. Jörg retired in 2010 and today Lance and Dave oversee a small team of motivated apprentices whom they see more as extended family than mere employees.

It was during Lance’s first few years at the distillery that St. George started to make their now famous single malt whiskey. The first one was bottled and released in 2000. In 2011, Lance and Dave went to Kentucky and purchased a bunch of Bourbon, still in the barrels, and had it shipped to Alameda. This was used to create Breaking & Entering, a blended Bourbon that was only available for a couple of short years before all of the purchased whiskey ran out. More recently Lance and Dave introduced a new malt whiskey in the Japanese-style, called Baller. This is currently only available in California.
 
I arrived with a list of questions and the intent to ask them “interview style” and record the answers on my phone. I quickly abandoned that idea, feeling a free-form conversation (without any tech in the way) might lead in more interesting (and unanticipated) directions. Our setting further reinforced this instinct: large overstuffed chairs and a couch in Dave’s office, facing the bay and the San Francisco skyline. The following then was reconstructed from memory and my hand written notes.

We started out by talking about the challenges faced by small distilleries when it comes to aging. This wasn’t so much an inquiry into barrel sizes or even how to keep your business afloat while waiting for whiskey to mature, as it was one of environments. Most small distilleries don’t have, and never will have, the kind of traditional multi-story warehousing that you see in use by the established Kentucky brands. It’s those warehouses that make it possible for a distillery to take a single formula whiskey (one yeast, one mashbill) and then turn it into a range of brands, each with its own flavor profile.
 
So, realistically, what are the options for a small distillery, possibly operating out of a single story facility located in a suburban industrial park, to create and define more than a single brand over time?

Lance and Dave both suggested that the solution lies not in warehousing but by making many different whiskies (yeast and mashbill combinations, as well as a variety of barrel types/finishes) and using them as elements for blending. It’s actually an advantage that a small distillery has over its larger cousins that operate one huge column still round the clock. My mind immediately turned to Westland in Seattle. While they are still selling only relatively young whiskey they are already doing just this and so able to offer a range of distinctly different single malts. They’ve turned what at first seemed like a disadvantage into a feature.

On a related topic, we also briefly talked about the variety of climates in which American whiskies are now being made and the effect this has on aging. We’ve all grown up accustomed to drinking whiskey that was aged, in un-insulated warehouses, in the southeast: Kentucky, Indiana, and Tennessee, where winters are cold (but not too cold) and summers hot (but not too muggy). Now that whiskey is being made and aged all over the U.S. it will be exciting to see the differences this makes over time. What will a whiskey aged on the damp coast of Maine taste like versus one aged in the dry heat of the Arizona desert?

Next up was a question about growth trends. As mentioned when I started, new distilleries are coming on line all the time. No way all of these are going to succeed and anyone entering the market now has to know that. So, how much longer can (and will) this continue?

The opinion was that capital will continue to remain available for new distilleries as long as the economy is strong. Which is to say that distilleries (and probably breweries) remain attractive as investments to folk working in the tech sector, where a lot of this capital is being generated. Dave and Lance were both also adamant, however, that what the market doesn’t need is a glut of poorly made and conceived product of questionable quality. And of course, this is to a certain extent already happening, as newly minted distillers (and their investors) rush some pretty young products to market. It’s hard not to imagine some kind of correction in the next couple of years, maybe sooner. At this point we all made jokes about all the “pre-owned” distilling equipment that will be available when that starts to happen.

An additional factor is the recent spate of acquisitions and investments made into craft distilling by established brand portfolios (High West, Westland, and Smooth Ambler). This has two immediate effects. First, distilleries that are already doing well get an influx of cash necessary to expand their capacity and improve infrastructure (better stills, more cooperage, etcetera). Second, distilleries that may have only been distributing product in a few limited markets now have national and international reach through their investor’s portfolio. The overall effect is to make what had once been a very level playing field a little less so, especially for distilleries just starting up today.

Next I asked Lance and Dave about what I call the “Millenial palate,” that is the preferences of younger whiskey drinkers who may have cut their teeth on small production whiskies aged for less than two years. These same drinkers may also be embedded in the “local and small is always better” subculture. These are folks who come into the bar specifically asking about small production whiskey rather than more established (and famous) brands like Van Winkle or Willett Family Estate.

Dave and Lance acknowledged this is certainly a thing but posited the notion that rather than ends in themselves, younger whiskies might serve the function of a “gateway drug” for these folks. So as the whiskies created by their favorite small distillery improve (by dint of better distilling technique and longer aging) so would their palates and expectations for what a small production whiskey can and should taste like. Lance actually went as far as to say that he felt it was somewhat incumbent on a small distillery to do just this. I heard that as almost a kind of antithesis to mainstream branding that sells products based on their prestige and history. Small distillers need to create their market by directly raising the expectations of their customers.

As a final question for Lance and Dave I asked them what advice they might have for new distillers and distilleries. Here’s a partial list of what they had to say:

Don’t start in California! The first thing a small distillery is going need is a direct-to-consumer sales channel and state laws make that difficult here. Consider a state like Utah (where you can have on-premise sales) or New York (were you can sell out of a stall at a local farmer’s market).
 
Find a unique POV for your product. It’s not enough just have a “make it and they will buy it” attitude. You need to have a long-term vision that you can articulate to your customers even if you don’t yet have the whiskey that fulfills it.
 
Resist the urge to push product out before it’s ready. Distilleries are capital intensive and investors want a return, so there’s a lot of pressure to get to market as fast as possible. Also, it’s very unlikely your first attempts at making whiskey at scale will be any good anyway.
 
With scale, reduce your price. Hopefully over time (and with more experience) some of your costs will start to come down. As soon as you can, start to bring your prices down. It passes the benefits of your success onto the folks who got your there: your loyal customers.

My last written note simply says: “eschew elitism.” I am pretty sure neither Dave nor Lance used those words at any point in our conversation. Rather, I think it’s something I felt as a presence in the room that morning. And it’s the feeling I have always gotten at St. George, whether I was standing at the bar in the tasting room or sticking my finger in the stream of new make coming off the still. No visitor is ever made to feel excluded at St. George. Everyone has been invited. I like to imagine that’s the final bit of advice Lance and Dave wanted to pass on. Thanks, gentlemen!

More questions? Feel free to ask any of the bar staff or just send us an email: here.
The view from above: Stills and barrels aging at St. George
The view from above: Stills and barrels aging at St. George

Ask Hard Water

 
We're always standing by to answer your American whiskey questions. This past month we had some questions about bottled-in-bond whiskey that stumped a number of "experts" so we're feeling pretty saucy about ourselves. Maybe your question will stump us!
 
We look forward to hearing from you! Write soon! Ask Us Here.
 
Not to be confused with our Rock 'n' Rye
Reflections in the eye of the still