Small Business

Handcrafted Hooch for Highbrows


By Gerry Khermouch He likens his drab labels to brown paper towels and admits that customers deride his cheap plastic caps as cheesy. But for three years now, Burt Butler "Tito" Beveridge II hasn't been able to keep up with demand for Tito's Handmade Vodka, which he produces in an Austin (Tex.) still that is cobbled together from industrial parts paid for by more than $50,000 in credit-card loans.

The attraction? A purity and smoothness that comes from distilling the liquor six times. "We throw away a lot of good vodka," says Beveridge, a former geophysicist who used to run helicopter loads of seismic dynamite in South America. His generic-looking 750-milliliter bottles, at $18, have won loyal drinkers in 20 states. "It's amazing stuff, with a cult following here," reports Tony Abou-Ganim, beverage specialist at Las Vegas' Bellagio Resort & Casino.

STILL LIFE. Multiply Tito by a few dozen like-minded entrepreneurs, and you get a quiet boom in handcrafted liquors (table). In a pattern that recalls an earlier blossoming of U.S. wines and microbrews, orchard operators from Oregon to Michigan to New England are producing clear, fruit-flavored brandies called eaux-de-vie, mastering a European tradition as a way to garner more cash from their crops.

Distilling has proved a logical extension for vintners, who often created their first eau-de-vie for use as an ingredient in fortified wine. Even some microbrewers have been making the transition, taking a cue from Fritz Maytag, the appliance heir who revived San Francisco's Anchor Steam Beer before turning his attention to distilling single-malt whiskeys, ryes, and gins.

Then there are the dogged amateurs like Beveridge, who started making vodka as Christmas presents for friends, and Jim Busuttil, a high-school teacher in Southern California who has hung onto his day job while building a buzz for Saint James Royale Hawaiian Original Pineapple Rum and Peregrine Rock California Pure Single Malt Whisky. Many of these newcomers model themselves on a handful of artisans who started crafting liquor in small batches on the West Coast in the 1980s. Among them: St. George Spirits in Alameda, Calif., Germain-Robin in Ukiah, Calif., and Clear Creek Distillery in Portland, Ore. Bill Owens, publisher of American Distiller newsletter, figures there are now close to 50 active pot-stills, the

type of still used by most microdistillers, with lots more on the way.

TOP SHELF. Small distillers are convinced there is a market -- albeit a tiny one -- for distinctive, handcrafted alternatives to mass-marketed spirits. Eaux-de-vie, for example, are dry and intense in flavor -- distillers may use 30 pounds of fruit to produce a 750-milliliter bottle of 80-proof brandy. They offer a sophisticated alternative to the sticky, sweet, colored cordials many U.S. consumers associate with fruit brandies. "It's a natural move for people who have been drinking top-shelf vodkas and tequilas," says Donald Coe, managing partner of Black Star Farms, an orchard in Suttons Bay, Mich.

A good eau-de-vie is best drunk chilled and neat or used as a creative element of a cocktail. Eau-de-vie is also increasingly a key cooking ingredient, both in main courses and desserts. "Chefs oftentimes are my biggest crusaders when I call on restaurants," says Margaret Chatey of Westford Hill Distillery in Ashford, Conn. Over the past three years, the former marketing exec has made a mark with fruit brandies packed in elegant, oval-bottomed bottles. Saveur, a magazine for gourmets, heralded her "clean, gloriously intense" raspberry, cherry, and William pear brandies as among this country's 100 food treasures.

The boom goes beyond eau-de-vie and other fruit-based drinks such as grappa, made from wine-grape pulp. Artisans are also going into vodka, gin and rum, as well as whiskeys. Many are crafting classic styles at higher quality than mass brands, while others are giving their inventiveness free rein. Thus, after years of experimenting with high-strength beers, Dogfish Head Brewing in Lewes, Del., has plunged into spirits with entries such as Wit Spiced Rhum, patterned after Belgian wheat ales flavored with coriander.

CHEESE ON THE SIDE. While some products, such as Tito's Vodka, are being distributed more widely to restaurants and liquor stores in major cities, others can be obtained only by mail order or online, or just at the place of production. Of course, that's part of their charm. Paying a visit to a producer can make for a picturesque, and flavorful, excursion.

Take Black Star Farms, a former horse farm north of vacation resort Traverse City on Michigan's Leelanau Peninsula, a major cherry-growing area. Coe led an investor group that acquired Black Star after he retired from spirits giant Hiram Walker in 1998. His hasn't been a quiet retirement: Coe quickly acquired an adjacent orchard, started a winery and then the distillery, converted the farm's estate house into an eight-room bed and breakfast, and talked a pair of local cheesemakers into moving into a creamery set up on the 160-acre site. He offers a Spirit of Cherry brandy, along with those made from

pears, apples, apricots, and plums.

Another producer worth checking out is Nashoba Valley Winery, set on 55 acres of rolling hills northwest of Boston. There, a former real estate attorney, Richard Pelletier, snatched a failing orchard from under the noses of housing developers to create a humming agricultural enclave. He reopened the farm's winery, added a gourmet restaurant and a brewery, and says he's drawing more than 150,000 visitors annually for fruit-picking, dining, and weddings. Come Nov. 2, he will have a

distilling license. First out: Foggy Bog cranberry brandy, previously available only as an ingredient in his 48-proof Foggy Bog fortified wine.

TOT OF KEY LIME. Far from resenting the intrusion of such newcomers, pioneers such as Steve McCarthy, founder of Clear Creek, view them as helping to educate American palates. Nor are the veterans remaining idle. Some are branching out from eaux-de-vie and cognac-style brandies into the far larger market for vodka and whiskey. St. George Spirits and Germain-Robin have teamed up to create a $36 vodka called Hangar One (named for the still's location at the former Alameda Naval Air Station in California) in such flavors as citron, mandarin blossom, and kaffir lime. Another brandy pioneer, Domaine Charbay Winery & Distillery in Ukiah, Calif., has launched Charbay Vodka in key lime, Meyer lemon, and blood-orange flavors.

Where is this all heading? Given the punishing economics of the business, with its high costs and clogged distribution channels, some independent distillers will inevitably fail. The upside, though, is the emergence in America of what has been a rewarding tradition in Europe. Khermouch is an associate editor at BusinessWeek


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