Tuesday, October 28, 2014

Craft Distilling?

St. Nicolas Abbey Small Batch Craft Still
     With all of the class action suits going on over Tito's Vodka's use of the word "Homemade" I find it very interesting that there is no "legal" definition for "Craft Distilling".  This article I found in "The Spirits Business" does a good job of exploring the subject.

     When Diageo announced its confidence at the end of last year that it could become the number-one craft distiller in North American whiskey, there were more than a few puzzled expressions in the spirits industry.

      Some believed the drinks colossus was tainting the seemingly pure values of the craft sector, flippantly adopting them in mere marketing trickery for its new Orphan Barrel Whiskey Distilling Company, which bottles “forgotten” whiskies and markets the product under a new name. Others viewed the move as positive for growth in an industry that suffers from small budgets, red tape and a lack of aged stock.

     The news and its reaction perfectly summarized the ongoing craft spirits conundrum: in a sector with no overarching national or international regulations, how do you decipher crafty marketing from the genuine article?

     What is clear is that craft spirits have experienced a renaissance across the globe, something which many have attributed to – as Chip Tate, head distiller at Texas Bourbon distillery Balcones, puts it – “a return to older values. In the US in particular, there’s a sense that whiskies and other spirits are no longer just commodities. This is in an industry which has been driven by marketing and not necessarily by content for a long time. But that is now changing.”

Craft on the rise

Key West's Chef Distilling Still
     For others, the growth of craft spirits is the result of the general premiumization trend taking hold across the industry. As Michael Kinstlick says in his paper The US Craft Distilling Market: 2011 and
Beyond: “Often consolidation to a few large firms in an industry creates opportunities for new, smaller entrants to fill market niches and reach customers large producers cannot.”

     In sum, craft brands have the ability to fill a consumer desire that cannot be satiated by big businesses. In the US, the number of new craft distilleries has increased near enough every year since 2007, despite the worldwide economic downturn. There are now 636 craft distilleries operating in the US and, although this represents huge growth compared with the 24 working craft distilleries in 2000, the sector still only produces about 1% of the total spirits sold.

     It is in this exclusive marketplace that larger corporations are beginning to make tracks. But
questions abound whether these drinks giants have any place in the small entrepreneurial world of craft spirits. Although in the minds of the many, the term “craft” should be reserved for small-batch, independent producers, no labelling laws exist to prevent Diageo or Rémy Cointreau from slapping it on their bottles.

The closest the industry has come to gaining “official” certification is the criteria provided by the American Distilling Institute (ADI), which stipulates: “Craft spirits are the products of an independently owned distillery with maximum annual sales of 52,000 cases where the product is physically distilled and bottled on-site.”

“Fair game”

     Executives at the ADI are currently applying to the US Patent and Trademark Office to have its definition officially recognised by government; however, until then, craft spirits labelling is fair game. Larger companies have been quick to defend their craft credentials, claiming that in the face of conflicting and unofficial definitions, they have an important part to play in the movement.

     “The conversations and debates occurring around the craft sector are part of what is making this incredible growth period for whiskey so much fun,” says Ewan Morgan, master of whiskey at Diageo’s Orphan Barrel.

     “Everyone has their own opinion and should have the right to voice it. Craft is about artisanship, passion, experience, great liquid and great products. Not all small distilleries are craft, and not all craft distilleries are small.”

     Sean Harrison, head distiller at Chivas Brothers’ Plymouth Gin, similarly believes that, in the wider gin industry, distillers in both independent and larger companies abide by the “exact same values”.

Big producer prejudice

Angostura High Volume Column Stills
     Speaking to The Spirits Business earlier this year, Harrison said: “Artisan and craft brands are great, but most gins are handmade and follow the same principles. It’s the nature of the beast that people might have some prejudice towards these bigger companies and have a belief they might not be in the business for the right reasons.”

     This thought has even been reiterated throughout the craft industry, with producers willing to acknowledge the virtues of large scale production. “The distillers across the mainstream and craft sectors are a nice family,” says Jonathan Clark, director of the City of London Distillery. “Instead of being direct competitors, we all help each other and, although there’s a huge difference between what we do, neither one is wrong.”

     The industry therefore appears not to be dividing itself into craft and non-craft, authentic and disingenuous, but what most members of the sector want is honest labelling. As Tate puts it: “All too often, the level of disclosure on bottles claiming to be craft is not enough and as a consumer, you have to ask the right questions about the brands. It’s not a bad thing to source liquid from a third party, but brands should represent themselves truthfully.”

Read More at http://www.thespiritsbusiness.com/2014/10/are-large-distillers-hijacking-craft/