In February 2012, the Pennsylvania Liquor Control Board began to allow limited distillery licenses, and by year’s end there were seven small-batch craft distillers.
Today, the Keystone State has 76 active limited distillery licensees with 12 more pending.
It’s still a new industry in the Greater Lehigh Valley with a gradual expansion that has seen the opening of about 14 craft distilleries with at least one more on the way.
Distillers here say they took time to learn the craft and formulate a business plan before diving into production, and that they are finding their niche in the spirits landscape. And they’re coming into their own during a period when more consumers are choosing to go craft, local and fresh.
“American drinkers have a clear preference for craft spirits,” said David Farran, founder of Eau Claire Distillery in Alberta, Canada, which recently surveyed American spirits consumers.
Social Still, one of the first craft distillers in the Greater Lehigh Valley, opened in December 2014. It operates as what can be described as a craft spirit version of a brewpub on Bethlehem’s South Side.
Social Still serves its spirits on-site alongside an extensive food menu of primarily locally sourced food and locally produced wine and beer.
“About 40 percent of what we needed to know we came in with,” said Adam Flatt, who runs the business with his wife, Kate. He is the son of Elaine Pivinski, the owner and founder of Franklin Hill Vineyards in Bangor and a partner in the Social Still.
NEED A LARGE BASE OF CUSTOMERS
Flatt’s background working at Franklin Hill gave him a foot in the door in the alcoholic beverage manufacturing industry.
“But there is quite a big difference between the wine and spirits industries, probably more than I realized,” he said.
Flatt said one of the biggest differences is the frequency with which spirits customers buy their product as compared to wine customers.
“People don’t repurchase as quickly as they do with wine, so you need to have a much larger customer base,” he said.
LABOR OF LOVE
Mountain View Vineyard in Monroe County had a similar jump on the learning curve. A working winery since 2009, the company had experience in alcoholic beverage sales.
Co-owner Randy Rice said spirit distillation was added to attract people who might not like wine but still like the idea of a winery and tastings.
Anthony Brichta, who co-owns County Seat Spirits in Allentown with his uncle, John Rowe, is a full-time lawyer. Learning to be a distiller meant hitting the books.
He had to learn how to craft spirits, to do it well and how to turn the product into a business plan. It was a labor of love, however, and the research was enjoyable.
“I’m a lawyer who actually enjoys being a lawyer,” Brichta said.
UNTAPPED MARKET
Distillers entered the market at the right time. As the farm-to-table food movement continues to remain popular, the accessibility of farm-to-glass cocktails – a term coined in the craft distillery industry – also is growing.
Eau Claire Distillery surveyed U.S. consumers who drink alcohol and spirits to explore preferences, spending habits and purchase influences.
It found that for those given a choice, most prefer a craft-distilled spirit over one mass produced.
“Nearly 70 percent of survey respondents stated that they either ask for or prefer craft spirits when ordering a drink at a restaurant or bar, and three-quarters of respondents would drink more craft spirits if they were more available,” according to the survey.
So, with a wide open arena, those who ventured into the nascent market simply need to find a good product and their corner of the market.
FAMILY ENDEAVOR
Chad Butters, who with family friend Jesse Tyahla owns Eight Oaks Craft Distillery in New Tripoli, said it was all about getting to the very core of the farm-to-glass concept.
Butters not only distills vodka, gin, rum, whiskey and applejack, he grows the ingredients on his farm.
He came to the business after two major life events. He retired from the Army and his wife faced life-threatening cancer.
On the other side of those events, the couple decided that life was short and they wanted their family’s second career to be based around home, family and fun.
DOWN ON THE FARM
After much research, the two decided that operating a farm and distillery would bring the life balance they sought.
Growing their grains adds variety to their work year, since much of their time is spent farming, while the tasting events they host provide fun for family and friends.
Butters said his main goals are to put out a high-quality product with complete control on what grains are used and how they’re grown to the recipes he’s perfecting. And to have a business that sustains his family’s lifestyle – offering fun and comfort, if not great fame and fortune.
HYPERLOCAL
While Adam Flatt doesn’t grow the grain, it is grown locally, as are all the ingredients for spirits, food, wine and beer at the Social Still. And that is crucial to his business plan.
He said customers are attracted to the quality and craftsmanship of everything they make, as well as knowing that everything on the menu is as locally sourced as possible. That’s what keeps them coming back.
“We want to be the most hyperlocal bar in the Lehigh Valley,” Flat said.
That means a do-it-yourself mindset.
“If we have a cocktail on the menu with a cherry cordial, we won’t just go to the liquor store and buy some and add it to our vodka,” Flatt said. “We’ll find a recipe and make it ourselves.”
SYNERGY HAPPENS
Brichta said he sees the County Seat as a distiller and a destination because of the synergy at the Allentown Bridgeworks manufacturing incubator on Harrison Street, where he makes his products.
The facility also is home to a beer maker, HiJinx Brewing Co., and a mead brewer, The Colony Meadery.
They share product – County Seat recently made a bourbon out of a HiJinx beer – and host events that make the Bridgeworks a weekend destination for those looking to sample craft alcoholic beverages.
WHERE THE BUYS ARE
Creating an identity is only a part of the puzzle. While distillers said their facilities are one of the key points of sale, if customers don’t go to them, they need to find them.
Distillers said that in addition to their retail stores on-site, farmers markets throughout the region, from Reading Terminal Market in Philadelphia to the Easton Farmers’ Market, are a great place for distillers to find fresh sales.
“That seems to be where the customers are and where they want to shop,” Butters said.
He said it is clearly a good crossover market, because people shopping at farmers markets tend to be those who want to know where their food originates.
He said he expects as more distilleries open, consumers will find more craft spirits being sold through such venues.
TIME TO CAPITALIZE
Distillers say they also find decent sales at Pennsylvania liquor stores and special events. Those, too, are an important component of their sales plans.
As they develop their young businesses, they keep an eye not only on craftsmanship of their product but on the quality of their sales channels as the industry grows and evolves.
As the Eau Claire survey showed, industry growth seems certain.
“The pent-up demand is quite similar to what we saw prior to the craft beer boom,” said Farran of Eau Claire Distillery.
Distillers, with the right product and planning, have nothing but potential.
