Craft distilleries savor changes in state rules

Craft distilleries savor changes in state rules

By Kari Andren

Tuesday, April 2, 2013, 10:09 a.m.


Self-proclaimed Scotch whisky aficionado Bob Begg once spent $700 on a bottle of 23-year-old single malt.

But now he and longtime colleague Bob Sechrist are set to take a stab at mashing, fermenting and distilling their own special brew at Disobedient Spirits, the Homer City distillery they hope to open later this year in a former supermarket on the Indiana County community's Main Street.

Begg, a retired Indiana University of Pennsylvania geography professor and Sechrist, who still teaches geography at IUP, are the latest local entrepreneurs to take advantage of a new limited distillery license approved by state lawmakers a little over a year ago.

The license, specifically designed for small, craft distillers, reduces the cost of acquiring a state license to $1,500 and permits the companies to sell their products on their premises, not just in state wine and spirits stores. The distillers are permitted to produce up to 100,000 gallons of liquor a year, a fraction of what large-scale, mainstream distillers generate.

“Pennsylvania has jumped out front to have this law,” said Bill Owens, founder and president of the California-based American Distilling Institute. “Whoever did this is forward-thinking and progressive.”

Craft distilleries have more than quintupled since 2003, when the American Distilling Institute was founded with 69 members. Today it has more than 450 members, Owens said. About 50 more craft distilleries are opening around the country, he added.

When the new license became available, five Pennsylvania distilleries traded their existing licenses for a new limited license, state Liquor Control Board spokeswoman Stacy Kriedeman said.

“It evens the playing field between breweries, wineries and craft distilleries,” said Prentiss Orr, a founder of Glenshaw-based Boyd & Blair Potato Vodka. “They've always had the right to sell product right from their brewery or winery. Distilleries never had that.”

Orr said the reduced license fee helps, too. Boyd & Blair paid about $5,200 a year before switching to the limited license, he said.

Financial hurdles can be among the toughest for start-up distilleries to overcome.

“It's not easy to get into,” said Owens. “You need to save your money and keep your day job.”

Owens said a typical small distillery needs about $450,000 to start, though many invest up to $1 million. Starting an operation in large cities is even more expensive, he said.

“We invested a lot of capital in the build-out, the equipment, into the space ... two years before the law was passed,” said Meredith Grelli, co-founder and co-owner of Wigle Whiskey in the Strip District.

Wigle makes rye and wheat whiskey and gin in small batches using local, organic ingredients.

“It's about the most inefficient way to make things you can imagine,” Grelli said. “We wouldn't be able to sustain the business in existing channels. Really the only way to make this work is to sell directly to the people who are drinking it.”

That's the odd nature of starting a distillery, said Sechrist. You have to find a building, buy the equipment and go through state and federal licensing and label registration all before you turn the stills on and start making your product.

“I don't think we'd have been able to pull it off” without the new law, Sechrist said. He and Begg hope to have Disobedient Spirits for sale by November in time for the holidays.

Initially, they will distill whiskey and vodka.

“I'd like to try to approximate Scotch whisky,” said Begg.

“But I don't want to throw old socks in,” said Sechrist, referring to the medicinal taste of Scotch.

Begg doesn't promise that his product will be on par with that $700 bottle of Scotch he purchased years ago.

“We will not be making anything that wonderful,” Begg said.

“Except maybe by accident,” Sechrist joked.

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