It’s a matter of life and death—Balcones

I have NEVER met anyone that didn’t live in Texas or wasn’t a Whiskey Aficionado that was a Balcones fan. Balcones customers aren’t Jack drinkers. They know their way around a Whiskey Bar and aisle better than most selling it. I put Brimstone in a BBQ sauce I made then recommended to several owner chefs (that never heard of it) to cook with it and put it in the bar. I got one State to start carrying it. I’ve gotten lots of people to try it that had no idea what it was. Balcones is one of a small handful of real craft Distilleries actually making something good enough to drink regularly or at least IT USED TO BE. I’m not close to being alone in this regard. There is a very good reason when you read anything about Balcones that Chip Tate is mentioned right before or after the brand, especially the awards, lots and lots and lots of awards.

It doesn’t taste like nail polish, smell like newspaper or paint thinner like so many “Craft Whiskeys”. Someone busted their ass to get it that way, Tate!

Throughout the history of where Booze and Business meet there have been laws, lawyers, heartache, deceit, fortunes, failures, hero’s, villains, good and horror stories. The Sippin Corn blog http://sippncorn.blogspot.com/

covers many of these.

If there is an old Whiskey company, most likely there is a power struggle that happened. During prohibition and other times people that entrusted their barrels for storage, aging and safe keeping later found their “goods” had been sold or missing. Many times it was due to unpaid fees or other valid/invalid reasoning.

Modern history put the Van Winkle family at odds and in 1971 Pappy’s daughter had a much different idea on what to do with the family’s distillery and it gets sold. This post isn’t going to be a history lesson. You can find thousands of pages on how people were screwed out of fortunes invested in whiskey which brings us to Balcones.

http://www.wacotrib.com/news/business/management-quarrel-threatens-waco-s-popular-balcones-whisky-distillery/article_73ad1ba7-f23a-51f4-8592-afb993e0a001.html

http://www.wacotrib.com/news/business/waco-whisky-distiller-fires-back-in-ongoing-balcones-dispute/article_aa7dd794-c095-53eb-b3dc-155cad40ea91.html

http://www.wacotrib.com/news/business/judge-rules-balcones-distilling-founder-in-contempt-of-court/article_5ff51a06-a2ce-5bfa-be91-6075e5eb6da8.html

There is no shortage of the drama that unfolded after Charles “Chip” Tate brought in more investors to expand the hugely successful 7-ish year old business. To make a long story short, the now majority investors and Tate had a falling out and Tate is somewhere between suspended and fired. Reading through what’s going on, fired seems like the best guess and he has lost control of the distillery and brand. He’s “Technically” suspended, as in “Your Suspended and if we ever let you come back you’re going to need to wear a dress and sing show tunes to the winnos outside all day”.

I had avoided getting mixed up in the drama of it all. Watching from afar was fine with me until a Twitter thread was started that Chip got involved in. Many of my tweets were more for general discussion, Chip surprisingly became part of the discussion. I had meant to privately tell Chip to be careful, I never did and regret not doing so. In either case I never took a word he said to be negative toward his brand and he was neutral at worst. Much of the conversation was complementary of things.

In the Waco Tribune on Chip being held in Contempt of Court-

“———- ———-, a marketing specialist for Balcones, testified about tweets Tate had made on Twitter feeds that included comments from others in the distilling trade. In at least one feed, the issue was raised about whether those sympathetic with Tate’s cause should boycott products made by Balcones.

Tate’s response, according to a tweet, was that people should let their conscience be their guide. Jeff Armstrong, an attorney representing Balcones, suggested that Tate should have strongly opposed a boycott if he wanted to do what was best for a company in which he still owns interest.

But Tate’s attorney, Clouston, said the full text of the Twitter feed shows that someone was inquiring about whether a boycott would harm Tate, not the company. It was in response to that scenario, he said, that Tate suggested people make their own choices.

Tate, Clouston said, has not been critical of the company in his tweets and other messages on social media. Tate acknowledged that he does receive inquiries about the controversy and often directs those with questions to websites and news sources that discuss the matter fully, giving both sides of the issue.”

A few things about me and Balcones. I liked the brand but felt a bit slighted after busting my ass to get a bottle or two of the 5th Anniversary Bourbon. I was genuinely told to go screw myself by a person within Balcones that was not Chip. At the same time bottles of this were popping up in a few places, bars, stores, and regularly carried around and tasted by the same Marketing Rep that told me to go screw while his pals got what they wanted.

I had never met or talked to Chip till the twitter that got him in hot water. The same Marketing Rep was sort of a Whiskey Groupie that Chip took under his wing. Chip let him pour for him at Whiskey Shows and eventually gave him a real job at Balcones. If one were to read between the lines, the very Rep that Chip helped threw him under the bus in court. Who knows if it was to save his own job or what but I’ve been on the Chip side of things the deeper I read into things (nothing to do with a couple twitter lines).

I can understand Tate’s plight. A while back I had a guy that I essentially took off the street, gave him a job, trusted him to run things and eventually he’d tell me if I didn’t sell the company to him he’d take it and force me out with nothing. So to say the least, been there done that so I’m sympathetic to Chips situation—from afar.

As I see it, these investors (now controlling things) turned on him. I NEVER had the impression in my tweets I read from or with Chip that he had any intent to offer any information about his situation. He avoided it. He was about as diplomatic as he could be. I haven’t heard a word from him since. Some of us discussed non-compete clauses holding up and if it would hold up in Texas if Chip had these expected contractual restrictions. I don’t remember if he was part of this thread or not but that’s the last thing I remember. More importantly a bunch of us discussed a boycott and WE put Chips twitter handle into the discussion he had not been part of till that point. He had nothing to do with it. When the Contempt Order was issued and I read it I had to speak up on my own. As stated in the Contempt of Court from the Tribune article—-

“In at least one feed, the issue was raised about whether those sympathetic with Tate’s cause should boycott products made by Balcones. Tate’s response, according to a tweet, was that people should let their conscience be their guide. Jeff Armstrong, an attorney representing Balcones, suggested that Tate should have strongly opposed a boycott if he wanted to do what was best for a company in which he still owns interest.”

In a nut shell Chip trusted these guys, he needed them they didn’t need him. Shit happens, people got pissed off and they tell Tate to get lost. Reading the reports and documents of this court battle it looks like they are painting Tate out to be a crazy hot head wanting to destroy his place and shoot people. Due to the assertions in the documents his career in the business as a result is very possibly irreparably ruined. That’s how it looks to me and many that don’t know him.

I only know of Chip. I know any time you see “Balcones” you see his name with the brand as if it IS the brand. If a Whiskey geeks hears “Jeff Arnett” they don’t think Jack Daniels which he’s the Master Distiller of or even who he is. I needed to look his name up but most of us instantly know Chip Tate and that’s only after a few short years. To write this piece I needed to learn more and dig. I read old stuff from 2009/10 about Tate and the brand that I never had any interest in or cared about. I knew he was different and intrigued that the stuff he made was pretty damn good and I was surprised a place in Texas could do it right.

Before I set out to take 8 hours of my life on writing this post I needed to find out some important things from the way I interpreted the court filings. I needed to figure out if this guy is/was as crazy as a box of starving rats. Had he lost his effing mind?

I couldn’t find anything other than passion. Passion to do it right. Sometimes sticking to your guns (no pun intended—OK maybe a little) can make you crazy though. Through whiskey history the “investors” and money people almost always put money before passion. People like Tate in Whiskey History would rather see their “baby” fail than see it tortured. It happened to Stitzel Weller a couple times and to many others but not recently or this publicly.

I have not spoken or written a word with Tate on my theory which is Tate wanted to see it done right and the guys he let in his house and life wanted money. I can’t see money guys having much pride or ownership when blinded by greed— then things go to shit. Most Bankers want to do more, faster, cheaper and fill their pockets real fast. In what I read of Tate’s background, he spent his adult life dreaming about success. He finds it and for the last 7 years has poured his life into turning knobs, grinding corn, making booze soup, filling out labels, and touring the world with his babies.

He now seems to be like a farmer that realizes he screwed up badly giving the henhouse keys to the fox.

The fox doesn’t realize the hens won’t lay eggs if the farmer doesn’t sing to them so the fox eats them. If a Big Giant Bourbon Factory losses their farmer no one cares or notices. When Balcones losses Tate they do. I haven’t really seen anyone major come to his defense. I’m not sure why although Dave Broom in Whisky Advocate handles it as close as anyone-

http://whiskyadvocate.com/whisky/2014/09/11/the-balcones-controversy/?utm_source=SilverpopMailing&utm_medium=email&utm_campaign=ShankenNewsDaily9-15-14%20(1)



Some words from Dave in the article—

“Here’s what’s happened. The distillery was established — indeed, was literally built — by president and head distiller Chip Tate in 2008 and has subsequently become one of the flagships of the U.S. craft scene internationally. With demand for the Balcones range rising, Tate needed to increase capacity and in, 2013, he and second round investor Michael Rockafellow accepted a substantial offer from a group headed by Greg Allen, along with a number of smaller investors, which bought out Stephen Germer (Balcones’ initial investor), giving them a majority stake in the company.

Allen’s background is with his family’s food processing business. Prior to that he worked in Goldman Sachs’ mergers and acquisitions department and as an attorney specializing in venture capital financing and emerging growth companies.

It appears that a combination of differing philosophies as to future strategy, a clash of personalities, and concerns over the rising costs of the distillery expansion has resulted in a deterioration in relations between Tate and the new board, with them moving to significantly reduce his role within the company he founded.”



As I see it, Tate is a poor a judge of character and worse at huge business decisions. The new owners know even less about what makes a craft Distillery and its customers tick. Some people help a guy up after they knock him over, these guys keep kicking while he is held down.

In a large part of the Twitter conversation I had with Tate and others we discussed the Barrel Proof Whiskey and how hard it was to get. After all Tate had been through I was a bit shocked he didn’t have any sitting in his garage as he wanted some. He was proud as hell of it and asked if we saw some around to grab some for him. He has pride for the brand, was very positive of it and stayed very neutral in his take on things. When it was suggested we boycot the brand he said to do whatever we thought was right. He still has an interest in the brand and gets paid from them.

Who knows how much he owns or his deal but rather than a boycott this is what I’m going to do and urge you all to do. Repeat this and let it go whiskey viral.

Chip Tate is Balcones and Balcones is Tate, they need to coexist or the brand will be run into the ground. Tell the bars, stores and the company that you want him involved the way he has made whiskey the last 7 years or the brand will never be as good or remotely the same.

No matter what Tate still owns it’s irrelevant if it shuts down in a worthless mess and he gets nothing!

From an astute outsider’s perspective he had no pull in the decisions others were making in the brand he built. A role as a glorified ambassador or singing to the winno’s is nothing at all unless you are OK with becoming the Col. Sanders of your brand, literally selling out and collecting a check. The Distilling community is already too short on real genuine figureheads. We don’t need another “rocking chair Master (Head as Tate calls himself) Distiller”. Too often the Master Distiller is the nice guy they show in the pictures and PR, the guy that hasn’t made a batch of whiskey since The Love Boat went off the air.

I hope that smart people that make money can wise up and realize that they can make much more money with a happy Chip Tate then they can with pissed off customers or Tate beating his non-compete and taking many with him.

If not, there’s plenty of other smart money that pays Tate’s legal bills, opens another Distillery with him in-charge in Texas or another state. Then customers flock to Tate’s new endeavor leaving the current Balcones owners with a crap ton of bad whiskey they thought they knew what to do with and devaluing a losing investment no one wants.

http://www.brownemploymentlaw.com/Practice-Areas/Non-Compete-Agreements.shtml



If the new masters of the brand were smart they kiss and makeup, make it right, do it right and continue to build a large successful brand together.

Unless of course they really want to screw Tate out of his rightful legacy, sell the company which is what many majority investors do after they make it look prettier than it really is and flip it.

Yes, Chip, its your fault that you were out maneuvered by really smart people and the situation you now find yourself is because you Zigged when you should have Zagged. I uncovered some video of your final Board meeting that tells it best—

http://www.youtube.com/watch?v=zOXtWxhlsUg

Mr. Allen, if Tate isn’t the victim here then have the balls to release the gag order preventing him from saying a word without getting hit with a Contempt of Court order. Greg Allen, if you have a shred of decency do what’s right for the man who created the very company that many think you are stealing from under his nose. The same long time loyal customers that will stop buying the product. There are many more than you think (or any potential interested buyers of the brand think). When Tate left, a big hole was left in your future and profit. You and your board missed that one in a big way. Make things right, make good whiskey together and don’t ruin any chance you have of ever seeing a profit because you won’t.