Go to the mobile version of this Web site.

Login | Contact Us | Site Map | Paid archives | Electronic edition | Subscription Questions | Extras

Spirited times for craft industry

State's small distilleries flourishing as demand increases for handcrafted products

By Roger Fillion, Rocky Mountain News (Contact)

Published October 25, 2008 at 12:05 a.m.
Updated October 27, 2008 at 6:04 p.m.

Text size  

Please download the latest version of Adobe Flash Player, or enable JavaScript for your browser to view the video player.

A barrel of blackberry whiskey made by Leopold Bros. The business relocated to Denver from Ann Arbor, Mich.

Photo by George Kochaniec Jr. / The Rocky

A barrel of blackberry whiskey made by Leopold Bros. The business relocated to Denver from Ann Arbor, Mich.

Denny Cole, front, and Erich Harbowy label bottles for Leopold Bros., whose spirits are distributed in seven states and parts of Europe. The distiller uses fruits and grains from Colorado in many of its products.

Photo by George Kochaniec Jr. / The Rocky

Denny Cole, front, and Erich Harbowy label bottles for Leopold Bros., whose spirits are distributed in seven states and parts of Europe. The distiller uses fruits and grains from Colorado in many of its products.

Related Links

More More Business

More stories »

Economic times may be tough. But Colorado's infant craft spirits industry is undergoing one of the biggest growth spurts in the nation.

Tiny distilleries making handcrafted whiskey, vodka, gin, fruit brandy and other spirits are sprouting in the Front Range, the Western Slope and Four Corners.

The state has at least eight licensed craft distillers in operation. A ninth is poised to begin operation.

Three fired up their stills this year. A fourth, the new Mancos Valley Distillery, plans to begin producing white rum in Mancos in November.

The spirited growth here and nationwide comes as consumers seek out local, handcrafted products and foodies take a new interest in fruit brandy known as eau-de-vie, liqueurs and other spirits.

Craft beer makers also are jumping in. A craft brewer, for example, is the driving force behind Mancos Valley Distillery. Ian James, the owner, wants to be an early entrant to an industry that's expected to keep growing.

"There aren't very many craft distilleries," noted James, a brewer at microbreweries in the Four Corners and along the Front Range.

The more mature craft-brewing industry boasts in excess of 1,400 independent craft breweries nationwide.

By contrast, the American Distilling Institute counts 156 small-batch, craft distilleries in operation.

Another 32 are under construction.

"When I started six years ago, I could only find 60. But a lot of them are hidden," said Bill Owens, president of the American Distilling Institute, a craft spirits trade association.

Owens said the nation's ranks of craft spirits makers are growing by about 20 a year, although he cautioned that newbies shouldn't expect to turn a quick buck.

The fastest growth is occurring in California, which has 22 craft distilleries, and in Oregon, Colorado and Michigan.

"They're all fruit-growing states," he said.

In Colorado, craft distillers are taking advantage of the Western Slope's peaches, cherries, apples and pears to produce eau-de-vie - a clear, unaged spirit - as well as liqueurs and whiskey.

"There's a lot of fabulous organic fruit in the area," said Anna Hanson, co-owner of Peak Spirits in Hotchkiss, a maker of organic spirits including eau- de-vie and the Italian grape- based brandy grappa. Hanson and her husband, Lance, also operate Jack Rabbit Hill Winery.

Said former craft brewer Scott Leopold, co-owner with his brother, Todd, of Leopold Bros. in Denver: "A lot of our products use fruits and grains from Colorado."

Leopold Bros., which relocated here in May from Ann Arbor, Mich., makes a variety of spirits, including Rocky Mountain Peach Flavored Whiskey and Rocky Mountain Blackberry Liqueur.

Leopold Bros.' products, which also include the anise-flavored spirit absinthe, are distributed in seven states and parts of Europe.

Mystic Mountain Distillery in Larkspur has a different spin on local produce.

"Our moonshine is a sugar beet product," said Fred Linneman, Mystic Mountain's distiller and operations manager.

The moonshine is based on a recipe from his great-grandfather, who lived in Evergreen. The spirit resembles corn whiskey, Linneman said, and the sugar beets come from Fort Morgan.

The overall U.S. spirits industry - including distillers big and small - has posted gains in shipments of 2.9 percent a year since 2000, according to the Distilled Spirits Council of the United States.

"We've been getting market share from beer since about 2001," said David Ozgo, chief economist for DISCUS.

He said domestic lager beer - brewed by such giants as Anheuser-Busch and MillerCoors - accounts for 60 percent to 70 percent of the beer market.

"Today's consumer is fickle. They like variety," Ozgo said. "We're able to offer products for every taste, budget and occasion."

And consumers appear willing to pony up for quality. They're shelling out more than $20 or $30 for a bottle of handcrafted vodka or liqueur - or $50 or more for a bottle, say, of Stranahan's Colorado Whiskey.

"It's a very popular item," Pierre Barthle, owner of Wallaby's Liquor Warehouse in Denver, said of Stranahan's.

Ozgo, the DISCUS economist, noted that sales of more expensive, "super premium" spirits - including craft spirits - posted double-digit growth last year despite a slowing economy.

Those tracking the growth of the fledgling craft spirits industry in Colorado and across the nation liken its development to where the booming craft beer business stood in the not-too- distant past.

"We anticipate the next 10 to 15 years will hold the same growth for craft spirits that the last 20 years have held for craft beer," said Rory Donovan, co-owner of Peach Street Distillers in Palisade.

Donovan's two partners are owners of craft beer maker Ska Brewing Co. in Durango.

Why are craft spirits popular?

Distillery operators point to the growing interest among consumers for locally produced goods.

"People want handcrafted, Colorado-made products," said Tom Cooper, head distiller and co-owner of Colorado Gold Distillery in Cedaredge, which sold its first bottle of vodka in March.

The distillery uses locally produced corn and wheat.

Cooper also emphasized the handcrafted nature of his distillery, which also produces bourbon and whiskey: "We grind our own grains. We label our own bottles. We make our own boxes."

A growing interest in craft spirits among food enthusiasts also is stoking growth.

"Foodies are really leading the charge," said Todd Leopold, co-owner of Leopold Bros., noting a growing interest in cocktails that use the spirits.

Leopold Bros. suggests using its Rocky Mountain Blackberry Liqueur to concoct blackberry mojitos and rickeys.

But if you're thinking of opening a distillery, Owens of the American Distilling Institute offered caution: "Be prepared to lose money for two to three years."

He noted the steep capital outlays and the scarcity of professional consultants who offer advice to newcomers.

Owens did say an established distillery can be "very profitable."

"You're not going to be driving a Mercedes-Benz," he added. "You're going to be paying your bills. And you'll have an interesting life."

That said, newcomers will probably want to keep their day job. Alex Nelson, founder of Roundhouse Spirits in Longmont, has heeded that advice.

"I'm a lawyer by day," said Nelson, whose distillery recently began distributing its gin in Colorado.

"I've always been a spirits drinker," he said of his decision to expand into a new line of work. "Basically, it's a hobby gone wild."