Exploring the evolution of the ‘craft’ movement
When the ‘craft’ spirits scene emerged, leading producers were told to watch their backs – but has the category taken off as expected? The Spirits Business revisits brands grouped under the ‘craft’ umbrella – willingly or otherwise – to see where they are now.
*This feature was originally published in the November 2019 issue of The Spirits Business
Though many trends have come and gone in the spirits world, the interest in ‘craft’ has been unwavering. A lack of clarity around what constitutes a ‘craft’ spirit has led to some prickly debates between producers over the years, with some smaller distillers accusing their larger counterparts of appropriating the phrase to cash in on the sub‐category’s success.
Five years ago, craft was hailed as the ‘next big thing’ and everybody, big or small, whisky or gin, wanted to be seen as part of this new and exciting development. Big brands were told to expect fierce competition from up‐and‐coming craft producers – but not everyone is convinced the craft trend has lived up to its initial hype.
“Four to five years ago there were so many people saying craft is going to dominate the big brands, and that just hasn’t come true,” Lawson Whiting, Brown‐Forman CEO, told The Spirits Business this year. He said the expected takeover of the American whiskey category by craft producers has actually resulted in numerous company closures due to a mix of inexperience, lack of funds and small‐scale distribution.
Not for lack of quality, assures Tom Maas, the new owner of Death’s Door Spirits – “the products were outstanding”, he says – but in November 2018, the Wisconsin distillery declared bankruptcy. The ‘craft’ site opened in 2012 and used locally grown grains from Washington Island to create its whiskey and other spirits. Its troubles show the stark reality of starting a distillery and that success cannot be built on quality liquid alone – business acumen is also critical.
“Unfortunately for the owners of Death’s Door, they were great entrepreneurs, but didn’t manage business affairs as well as they might have done. They expanded rapidly with equipment but were outrun with paying the bills,” explains Maas, who also owns the Dancing Goat Distillery in Wisconsin. “When the possibility to buy Death’s Door came about, we saw a wonderful opportunity.”
Death’s Door was taken over by creditors, and the bankruptcy was finalised in 2018. Under Maas’s new ownership, Death’s Door’s equipment was moved from the rented building that housed the distillery and set up in the Dancing Goat Distillery. Maas continues to make the brand’s gin and vodka using its original recipe. Despite its rocky start, Maas lacks no confidence over Death’s Door Gin’s ability to step onto the global stage.
“The big thing we know about the Death’s Door Gin brand is that it’s phenomenal,” he insists. “Our goal for the next three years is to establish that brand. We’re not even looking at any new products right now. We’re really going to focus on the gin.”
In the UK, figures suggest the craft category is indisputably thriving. In October, law firm RPC revealed that the number of trademarks registered for spirits and liqueurs in the UK had grown by 12% in 2018, while the number of distillery businesses in the UK rose by 21% to 205 – up from 170 in 2017. The number of new spirits brands and products were on the rise as global drinks producers “[responded] to the boom in craft spirits”, the London‐based firm implied. It also noted how large conglomerates were releasing extra line extensions and more niche expressions to remain competitive among the growing number of independent brands flooding the market.
But the word ‘craft’ still sits uncomfortably with some producers, who have been shoehorned into this vast, unregulated contingent. “We’ve always prided ourselves in debunking the ‘craft’ myth that’s perpetuated by other producers,” says Alex Wolpert, founder of East London Liquor Company (ELLC), who insists his firm does not consider itself to be ‘craft’. “I can’t define it; I’m not sure it’s ever really meant anything,” he continues. “I think it’s used commercially to justify a look and price point that I don’t agree with. My feeling is that craft is not something we should be striving to articulate or define because by definition it’s indefinable.”
Instead, Wolpert is hell bent on “democratising booze for everyone” and creating “great spirits for everyone”, with accessible recipes and accessible price points. “What we strive for does mistakenly get boiled down to the ‘c’ word, but I think there’s a more articulate, better way of defining what you do than using the word ‘craft’,” he says. “Ultimately, it’s inarticulate and lazy, and we in business should be better at talking about what we mean and quantifying what we mean.”
Based in London’s Bow Wharf, ELLC was founded in 2014, and has become a staple within the London drinks scene. Last year, Wolpert and his team launched a crowdfunding campaign to raise £750,000 (US$966,563) to help the distillery increase its English whisky production, grow domestic sales channels and drive global sales opportunities in emerging markets. It took just 24 hours for that initial target to be achieved and by the end of the 30‐day fundraiser, the distillery had attracted £1.5 million worth of investment.
“Having founded the business it was quite moving to wake up and see you’ve hit your target in one day,” Wolpert recalls. “We started with fewer than 10 shareholders and now we have almost 1,000. We’ve just gone live with a California distributor, and it seems this affordable message translates from micro to macros, and we’ve got great accounts in Vienna, Stockholm and Berlin.”
In terms of distillation, ELLC is “at capacity, more or less” with its whisky production. Last November, ELLC released the first London‐distilled rye whisky in more than 100 years – a limited run of just 269 bottles. In September this year, the distillery launched three whiskies, including what is thought to be the first single malt from east London. ELLC’s gin offerings include numerous cask‐aged expressions, with bottlings that have been aged in ex‐cider barrels, ex‐ginger beer barrels and ex‐Moscatel casks.
“Gin is in the early to mid‐20% capacity,” says Wolpert. “There’s room to grow, which is great. The focus for us in terms of the next few years is to get whisky to a sustainable point of production and really build on our bar presence and focus more on the consumer. We’re looking to launch in Texas and Illinois in the first part of 2020, and Australia, Austria and Germany are three really important markets for us, plus Italy and the Nordics.”
Texas‐based Balcones is also not entirely convinced by the term ‘craft’. Co‐founder and head distiller Jared Himstedt prefers to refer to Balcones as a ‘small producer’ over ‘craft’ because it “can seem a little ingenuous and like a jab at larger producers”.
“I guess the only really valuable use of the term is that I think consumers use it and have their own understanding of what it means,” Himstedt says. “But as a producer, it’s a pretty fuzzy line, and many people have asked whether the term is meant to imply that there’s not a lot of skill and craft going on in the production of really big whisky producers – and that’s not the case.”
Balcones celebrated its 10th anniversary in 2018, and a lot has changed for the distillery along the way. One of the most notable developments has to be in 2016 when Balcones opened its new distillery in downtown Waco, Texas. It took two years to transform the 100‐year‐old Texas Fireproof Storage building into an operational distillery, providing Balcones with four times the spirit still capacity compared with its former site.
“The higher volume of whiskey we’re now laying down means we can do much better internal research on barrels, entry proof, and location in the warehouse,” explains Himstedt. “At our old distillery, you never had enough uniform liquid to do an experiment, but if you can lay down 20 or 30 barrels of the exact same new make and put them in different parts of the warehouse, then you’re getting some information that isn’t just anecdotal. One of my favourite things about growth is the ability to do legitimate research in product development.”
Some, such as the American Distilling Institute and the American Craft Spirits Association, have tried to solve the ‘craft’ conundrum by creating their own classifications. However, it is increasingly apparent that a definition that encompasses all categories on a global scale is a seemingly impossible task. However, as more brands that identify as craft have come to market, the notion that ‘craft’ is open to personal interpretation has become widely accepted.
Michael Vachon, head of brand development at Maverick Drinks in the UK, says it took a lengthy brainstorming session to agree what ‘craft’ means to him and his team. “We agreed on six points of craft: craftsmanship, authenticity, quality, provenance, founders and the purpose,” he explains. “It’s more about a set of values to adhere to rather than hard and fast rules. Things we took out of the definitions were probably what we argued over the most, which were first, being independent. We don’t think a brand being wholly owned by itself makes it more or less craft. And second, being on a small scale; just because something is small doesn’t make it craft.”
BEST PRODUCT QUALITY
Neil Mowat of Edinburgh Gin has similar views. “Craft is more about product than it is about brand,” the marketing director explains. “Just because you’re new and small and different doesn’t make you craft. Craft is about an intrinsic search for the best product quality you can offer, about ingredients, production techniques, the best people.”
Edinburgh Gin was at the forefront of the flavoured gin movement when it was founded by Alex Nicol in 2010 under the Spencerfield Spirit Company. Ian Macleod Distillers acquired the company in 2016 for an undisclosed sum, and last year revealed plans to build a multi‐million‐pound distillery for the brand, which would increase its production by a staggering 200%.
“Edinburgh Gin has played a pivotal role in the craft gin boom because we were the first to bring flavour to contemporary gin,” says Mowat. “More recently we’ve launched into full‐strength flavoured products because we want to bring all qualities and craft credentials of our gin liqueurs into our full‐strength flavour business. We’re starting to see some traction in key markets, such as the US, Germany and Australia, where the brand is starting to catch fire, so we’re really starting to focus on increasing our footprint beyond the UK.”
Gin is undeniably at the forefront of the craft crusade, so to tap into its growing popularity, in 2017 the team behind That Boutique‐y Whisky Company (TBWC) launched That Boutique‐y Gin Company, which was thought to be the world’s first independent gin bottler.
“That Boutique‐y Whisky Company was created to take marvels you discover on the secondary market and give more people access to them,” says Duncan McRae, head of brand marketing at Atom Brands. “The reason the gin company came about was because we thought there weren’t any independent bottlers in gin; nobody was making the experiments gin that producers do available to the public – and all these craft gin distillers, they’re experimenting outside of their core expressions.”
Since then, there has also been a rum iteration of the That Boutique‐y series, and further spirits offshoots are in the pipeline – including an agave spirits line. “Essentially, we can’t think of a category we wouldn’t go into,” says McRae. “Boutique‐y is about taking infinite flavour to people and helping them to discover new tasty things.”
BrewDog is another brand not afraid to try to shake up the spirits industry where it can and add oodles of flavour along the way. With strong affiliations to ‘craft’, the company has evolved massively in a short time. BrewDog’s distilling arm came to light in 2016 under the guise of Lone Wolf Distilling. This year, under the watchful eye of new managing director David Gates, BrewDog’s Lone Wolf spirits operation was renamed BrewDog Distilling.
“It’s one of the biggest changes we’ve made,” says Gates. “We made the conscious choice to use and leverage the BrewDog brand name. There has been a massive explosion in the growth of craft brands. Something like 285 gin brands launched last year, so when you’ve got that level of activity, how do you stand out? Leveraging the BrewDog name felt important, something we could use to our advantage.”
The brand overhaul didn’t stop there. A few months later, BrewDog Distilling unveiled new gin and vodka brands, a series of limited edition whiskies made to pair with craft beer, plus a redesign of its Lone Wolf Gin bottle. “We had a gin and vodka, both called Lone Wolf, that looked almost identical, so we’ve created separate identities,” adds Gates.
But the big vision for BrewDog Distilling really rests with the whisky side of the business. “In terms of where we’re looking to make the biggest impact, we would love to shake up the Scotch industry,” Gates explains. “We would love to make Scotch cool again to younger people in the UK and really lead a whisky revolution. Scotch was edgy in its heyday, it wasn’t pompous bullshit. Go back to the 1950s and 1960s and it was super cool – we forget that now because we’ve got used to pipes and slippers.”
Unashamedly proud to be a ‘craft’ brand, will BrewDog Distilling reach a point in its life when it is no longer appropriate to label itself ‘craft’? “No,” insists Gates. “I don’t think craft has to be small. Craft is in our DNA; it’s our obsession with the quality of the product over and above everything else. So for us, the word will always have meaning.”