Spirited Startups: Colorado's Microdistilleries Follow an All-American Path

Ted Palmer of Roundhouse SpiritsReinvention is something Americans are known for, and in this current economic climate, lots of us are trying to reinvent our careers and our lives.

Colorado 's new governor, John Hickenlooper, was a laid-off geologist who opened the state's first brewpub back in the 1980s. As he says in his official biography, "I didn't know anything about starting a business. I didn't even know what a pro forma was."

But Hickenlooper's efforts helped revitalize Denver's run-down downtown district, pioneered the region's booming microbrewery industry and in turn launched his political career.

Discovering a Family Recipe


That entrepreneurial spirit is thriving in some of Colorado's newly minted microdistilleries – most of which have been up and running for less than three years. For Steve Viezbicke, founder of the Boulder Distillery and Clear Spirit Co., Hickenlooper is a role model. "He started from nothing, just like I did," says Viezbicke – whose Polish-style potato vodka has a loyal customer base along the Front Range.

A Boulder native, Viezbicke's adventure into microdistilling reads like a movie screenplay. Several years ago, while working as a design engineer in the audio industry, he found a family secret -- a recipe for vodka hidden in the lining of his grandfather's steamer trunk. The senior Viezbicke was a teenager when he emigrated to the U.S. from Poland just before World War I. No one in his family ever talked about the recipe, he says, "but there were some hints of my father and my uncles up in northern Minnesota playing with some distilled spirits."

Viezbicke also played with the recipe, which got raves from his friends. And after he was laid-off, he says, "everybody was going, 'why don't you start a company? [This vodka] is blowing what's on the market out of the water, we don't care what it costs, it's so much better than what is out there, and it's hand-made, it's local, it's real, you can see it being made.'"

Viezbicke started his company in July of 2008 with an investment of about $110,000. He's since expanded from a mom-and-pop business (with his daughter running the company website) to having nine employees. He's also having new stills delivered, which he says will boost his current production from 200 bottles of vodka a week to around 1,000 by mid-summer.

Like a most microdistillers, he's aiming for an educated audience but also one that takes pleasure in buying local products. "Colorado's got this pride that if we can buy it all from in-state, then we can keep our economy rolling," he says. "I'm buying potatoes from Colorado. I'm getting the water from Colorado. I'm a Colorado native. You tag "Boulder" on something and it sells, because it is a true, clean product."

From the Navy to the Distillery


"A lot of people have begun to realize that localization is good for the global economy and helps lift up our neighbors," says Ted Palmer, the self-proclaimed "Presidente" of Boulder-based Roundhouse Spirits (pictured above). "But that money has to come from somewhere, and people are starting to realize it comes from us. A lot of people are looking at locally made products. It may cost a little bit more, but you're getting quality and more for your dollar."

Palmer's story also involves reinventing himself. He spent a decade in the U.S. Navy, including two years in the Persian Gulf. There were no alcoholic beverages in the region, "so I started making wine on board, as were most other ships. And I would distribute among the crew, and everybody thought it was fantastic, including my captain. They all said, 'you should get out of the Navy and do that for a living.'"

Palmer took that advice to heart, working his way through three alcohol- related businesses before purchasing Roundhouse in 2008 from an amateur distiller.

Using a three-gallon still, he started producing what he calls a "melting-pot gin, because it takes the best parts of the different gin styles from around the world." Through word of mouth, he's gone from selling 190 cases (12 bottles in a case) in 2009 to 375 cases of gin last year -- and is currently expanding beyond his flagship gin with two new brands.

"Our biggest target audience is the younger 21- to 30-years-old, that's into microbrewed beer," he says. "They're really knowledgeable about what they drink, and they want to know what the news is and what's the best among their friends. Go into any brewpub. . .and listen to what they're saying. The older people talk work. The younger set -- they're talking about what they're drinking. They're the ones that we target the most, because those are the ones that are most interested. "

Even the Big Guys Think Small

"I celebrate the microdistillers. I think it's really cool," says Kevin Smith, director of bourbon distillery operations for Jim Beam. Smith entered the industry from college in the late 1980s as a floor-level supervisor. Working his way up the business, he eventually become a master distiller and plant manager.

Jim Beam is no microdistiller: It's the world's largest maker of bourbon. The company keeps its actual production numbers close to the vest. But blogger and bourbon aficionado Chuck Cowdery estimates the big U.S. whiskey distilleries "each fill between 500 and 1,500 barrels a day. Those barrels go into aging warehouses where they will sit for the next several years. As they fill, so shall they dump. And the major American whiskey distilleries each empty between 500 and 1,500 barrels a day, too."

Still, as for the microdistillers, quality control is a priority when it comes to producing Jim Beam -- from its major white-label product to its top-shelf, small-batch bourbons. "Unlike a lot of things that are out there, mass-producing bourbon doesn't really happen," says Smith. "The things that were important when you were small are still what's important today. The grain quality, where the grains come from, what kind of grains we're using, the yeast that we make -- all the way through the cooking, the fermentation and the distillation. As you get larger, you don't lose sight of the craft that got you to where you are."

"The U.S. Owns Bourbon"

Smith believes it's mass communication that has helped to change market tastes. He remembers how bourbon was disdained as "something your grandfather would drink" in the 1960s. But by the 1980s, he says, people started looking for unique tastes in their alcoholic beverages, and came back to traditional American spirits. The wide spectrum of food and lifestyle cable channels have also helped educate consumers. "Our audience has a desire to become expert in things," he says.

Smith believes the microdistilleries are a good thing for his industry. "Their passion is what our passion is," he says. "They're not going to be competition but will generate interest in bourbon. They've got challenges, the [microdistiller] in Texas, the guy in Wyoming. But it can be done. We don't own bourbon -- the U.S. owns bourbon."

And whether it's bourbon, gin or vodka -- or whether they hope to thrive independently or eventually be snapped up by the corporate giants -- microdistilleries appear to be putting down roots as they cater to local audiences. Cheers!



See the full Special Report:

From Prohibition to Microdistilleries: Changing How America Drink

New York's Microdistillery Law Is Building a New Industry
Bringing Cheer to the Local Economy
Pennsylvania's Small Liquor Makers Bottle a Heritage



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