In good spirits

Growing demand for craft liquors inspires regional distillers

Posted on Dec 1, 2016 :: Cover Story
Sean P. Johnson
Posted by , Insight on Business Staff Writer

The nerves nearly got Peggy Hendricks.

When her son Karl requested a family meeting, Hendricks braced herself for the bad news. After all, the Hendricks rarely had family meetings, and in the past the news that was delivered was seldom good. A new business opportunity never crossed her mind, she says.

That trepidation worsened as the appointed day approached — trying to get all four members of the family together is a herculean scheduling task — and Peggy admits to more than a few frayed nerves when the family finally gathered in the same room.

Then Karl put a single piece of brown paper on the table and announced it contained the family’s future. Concern gave way to confusion.

“I had a lot of butterflies going into that meeting,” Peggy Hendricks says. “Then he threw this at us and my first thought was ‘what are all the red things?’”

At first glance, the contents of that paper most closely resemble an electrical circuit. But as you look closer, arrows to words such as filter, bottling and fermentation reveal a carefully planned proof to build a commercial distillery and immerse the family into the growing industry of craft spirits.

The “red things,” by the way, were valves.

Her nerves calmed, it was only a matter of minutes before Peggy and the rest of the family could see the opportunity in Karl’s proposal, even if the presentation left a bit to be desired. For a family that was no stranger to side projects — the distillery is located on the family elk farm — the idea of operating a distillery seemed to fall neatly into place.

“It was a good time in everyone’s life,” Peggy Hendricks says. “And between the four of us, we knew we could design it, build it and sell the product. The timing was perfect.”

With no objections, the Hendricks Family Distillery was born that spring day in 2011. By 2013, the distillery had been built, the recipe for Pur Class Vodka perfected and the first bottles were ready for sale. By October 2016, the family’s award-winning spirits were available in more than 500 bars, restaurants and retail outlets around the state.

And they are not alone. In the past seven years, more than 20 craft distilleries have begun production of premium spirits in Wisconsin — five of which call Northeast Wisconsin home. Like the vintners and brewers that preceded them, they are tapping into a growing consumer demand for an artisan, locally crafted experience.   

“I think that local flavor is what people really want,” says Karl Hendricks, explaining the growth of the industry in Wisconsin. “I think it’s nice to buy local, and people want to support that when they can.”

The big picture

The origins of the artisan distillery boomlet are about as clear as the mash in a fermentation tank. In 2004, the first distillery since Prohibition opened shop in the state when Great Lakes Distillery in Milwaukee crafted its first small-batch spirits.

Still, the industry was hampered by federal and state restrictions that did not apply to the wine and beer industries, chief among them the prohibitions against tasting rooms and the ban against a winery or brewery also distilling spirits.

Wisconsin lifted those provisions in 2009, and has seen the industry steadily flourish since then.

“That can really be seen as the origin of the craft distilling boom,” says Paul Santoriello, production manager and wine maker for Door Peninsula Winery and Door County Distillery. “There were only two distilleries in the state before that time.”

Long established as a regional landmark, Door Peninsula Winery for many years had an interest in distilling its own brandy, says Santoriello, who had previously worked in California where many wineries also produced their own brandy.

Once the statutory prohibitions were lifted, Santoriello quickly realized there were opportunities beyond the production of brandy, driven both by consumer demand and some simple economics of the industry.

“When we purchased a still, we bought one that would allow us to do whiskey as well,” he says.

Operating as Door County Distillery, the company now produces 10 different small-batch products, including three types of brandy, three types of vodka, gin, bitters, whiskey and even a cherry-infused moonshine. Door County Distillery products are also served at Lambeau Field.

The move into spirits has been a successful one, and Santoriello expects the focus to remain on small-batch production for regional and statewide markets.

“When people are looking for local spirits, they want small, artisan distilleries,” he says. “I think that’s why you are seeing other distilleries opening up. We are going to focus on what we do and do it the best we can.”

Regionally, the diversity of Door County Distillery’s product line is a bit of an outlier. Most small-batch distillers in Northeast Wisconsin have opted to concentrate on a single spirit, preferably one that does not require aging.

For Hendricks Family Distillery, vodka was the spirit of choice.

“It’s about purity and quality, and about getting it clean and smooth,” Zac Hendricks says. “It mixes well with everything  — except decision making.”

Grant Van Driest, founder of Van Drastic, Cedar Grove, also chose vodka when opening his distillery in 2013.  Since its founding, Van Driest has seen his vodka appearing steadily across the state with other top-shelf, small-batch products.

“Things are going OK, especially since we started real heavy with the social media marketing,” says Van Driest, who taught school before launching Van Drastic Vodka.

Van Driest had previously made his own wines, and moving into distilling seemed a natural extension, he says. He purchased a small still and “began playing,” with the end result being the recipe for Van Drastic Vodka.

“I’ve always liked vodka,” Van Driest says. “It’s versatile and can mix with just about anything. Just a personal preference, I guess.”

The fledgling industry has also supported startups celebrating their cultural heritage. Brussels in Southern Door County has been home to the Lo Artisan Distillery since 2010, an artisan distillery producing a traditional Hmong rice liquor that truly gives meaning to the phrase hand-crafted — the yeast and rice balls that begin the process are still formed by hand.

Po Lo, who came to the United States from Laos as a child and grew up in the Green Bay area, has referred to his products as “Hmong moonshine,” but has grown the line to now offer three products: Yerlo, Yerlo Reserve and, debuting in 2013, a rice whiskey named Yerlo X.   

Though the state’s craft distillers are competitive on the shelves, they also understand the need to act cooperatively to help their fledgling industry grow. In 2014, the Wisconsin Distiller Guild formed to promote the industry, and nearly 20 of the state’s licensed distilled spirits plants have joined.

In addition to promoting the industry and weighing in on governmental regulation, the guild is also involved in related issues such as promoting Wisconsin agriculture, tourism and the safe enjoyment of alcoholic beverages. 

Truly local

For the Hendricks family, the plan presented by Karl was simple enough on paper. Moving from a diagram to a working distillery was quite another matter.

There would be plenty of challenges along the way — such as the rule that requires a distillery be 90 percent complete before you can apply for a distilling license — but in true family business style, everyone contributed according to his or her individual talents.

Karl brought the knowledge of the distilling process from more than a decade spent working in the ethanol industry. He had worked with, and absorbed knowledge from, distilling experts from around the world.

The talents of his family also gave the project an edge,  he says.

“Between the four of us, we can design and build just about anything,” says Peggy Hendricks.

Drawing on the construction and fabrication talents of his brother Zac and his father Jim, the family took Karl’s designs and both constructed the building and fabricated the components of the still. They can recount the trial and error behind the thousands of holes drilled and re-drilled in the custom filtration plates that make up the distillation columns.

By doing the work themselves, the Hendricks saved on construction costs and kept the project on schedule. Peggy, who in addition to working a full-time job with Appleton Coated in Combined Locks is also the town clerk for the town of Rushford, provided the government knowledge and contacts for navigating the permitting process.

It was truly a family affair.

“This is one of the most complicated things we have ever built,” says Jim Hendricks, Peggy’s husband and father to Karl and Zac. “We are standing in my retirement. That’s why I’m so adamant we do this right and make it a success.”

While the family does not disclose its sales figures, Zac says they are making enough to not only pay the bills, but reinvest in the business.

Keeping with their local theme, the Hendricks sourced the potatoes for Pur Class Vodka from Plover, and each batch of vodka uses the equivalent of 9,000 pounds of potatoes.

“Mom had all of the grandkids convinced they would be peeling potatoes the rest of their life,” jokes Zac.

The grandkids can rest easy. Instead of truckloads of potatoes, the distillery uses a pure, concentrated potato starch — it’s much easier to work with and store. Each bottle of vodka represents the equivalent of 15 pounds of potatoes, which are distilled and filtered until it reaches 192 proof. The product is completely gluten free.

By contrast, gin is 170 proof and whiskey is 160.

The high proof produces a smooth vodka that can be sipped as well as used in mixed drinks. The Hendricks’ approach is to produce a high-quality, “top-shelf” spirit rather than crank out batch after batch.

That approach led to an interesting problem early on: bottles. In their quest to keep all components of production local, the Hendricks wanted to buy bottles as close to home as possible. But if they weren’t interested in ordering by the thousands, they couldn’t even get suppliers to return calls.

While they have capacity to produce about 600 bottles per batch, the Hendricks are currently running half-batches of about 300 bottles per week, allowing them time and space to ramp up production as demand grows. A backlog of inventory is nothing more than wasted resources, Zac says.

The strategy has worked well so far. Pur Class Vodka has won multiple awards at tasting competitions across the United States, and has never earned less than a gold medal in any competition where it has been entered.

As demand continues to grow, so too, do the Hendricks’ ambitions for the future. Discussions of an expansion are already in the works, and this time a pot still that can be used to craft whiskey is part of the plan. Whatever new products are brought online, they will concentrate on producing local, hand-crafted spirits for local and state markets.

Their success so far can be attributed largely to word-of-mouth marketing. It’s been enough, however, that Zac will soon work for the distillery as its first, full-time, paid employee. His job will be to hit the road and sell.

After all, there are plenty of Wisconsin markets to conquer.

“The next few years should be pretty exciting and I can see new products, but no need to leave the state,” Karl says. “There is plenty of money to be made in Wisconsin.”