I’ve discussed the Craft Whiskey movement many times but not recently. Two things happened to make me start thinking again to update. The first is visiting a regional whiskyfest. Second, a follower asked for my thoughts on starting a distillery. Here are some thoughts and where I stand in my response to him-

Your taking such a huge gamble.

Everything needs to work perfect (it won’t)

The booze needs to be great (it won’t be)

You have to be able to afford leaving it until it’s better (you won’t/can’t)

You will need to find customers that are going to keep buying it (get in line)

You will need to find a distributer good enough to get your message out and product on shelves without going broke.

You will need to find and listen to people you trust that will tell you the complete truth you’ll listen to (unlikely)

A month or two back I got into it with the Hartfield Distillery and their “Exceptional Barrel”. Their website says this stuff that’s a few months old is “Lightning in a bottle. The releases of The Exceptional Barrel will happen when ever we find one. No release schedule. Just luck.”

The lucky part is never drinking this swill lighter fluid I had the unfortunate experience to try.

They are typical, very. When lies or at best, a vivid imagination win over logic, it’s time to rethink another small distillery.

Then, if the miracle happens you’ll have the same shot as a new Restaurant selling a good hamburger.

Dude, really bad idea. You risk emptying the kid’s college fund, pulling money from your home, borrowing what and from whom you shouldn’t. Depending on the wife’s income, she won’t be happy and that’s another matter. Then again in addition to your own savings you could drain your friends and family’s savings that believe in you. Uncle Ernie and Aunt Mable freezing their asses off, living in their 1998 Ford Taurus (because you wanted to be Elmer T Lee) just isn’t a good idea!

Established names like Jim Rutledge and Chip Tate have the experience and track record for a new place, you don’t.

Do more research, attend events, learn, talk to the right people that are smart. The ones that will tell you it’s a money pit are the ones to listen too.

If all else fails at least buy used. Unfortunately, lots of people before you that went broke are getting cents on a dollar on used equipment and a few are upgrading and selling old stuff.

http://adiforums.com/index.php?/forum/26-for-sale-peer-to-peer/

http://bringmethenews.com/2016/07/28/a-mn-distillery-is-folding-and-selling-all-of-its-equipment-on-craigslist/

http://www.fredminnick.com/2016/07/29/craft-distillery-posts-equipment-craigslist/

Then again lots and lots of budding entrepreneur Distillers get hurt badly and some lose their lives. Call it inexperience, laziness, stupidity etc. When your building a still using beer kegs and propane you’re always a hair’s width away from you or some other person having the worst day of their life.

http://www.wkyt.com/home/headlines/Fire-marshal-releases-findings-of-distillery-explosion-318444931.html

http://www.ksat.com/news/explosion-blasts-man-through-wall-at-vodka-distillery

http://usatoday30.usatoday.com/news/nation/2008-11-07-3897373327_x.htm

http://newsok.com/article/4919580

More bad news.

About 4 years ago the big guys were cranking up their production. Ever since, Stills and Fermenters are running close to 24/7 maxed out. The current 1280 estimated distilleries are most likely 1600 before you ever make a drop.

http://www.americancraftspirits.org/2016/05/09/report-finds-more-than-1280-active-craft-spirits-producers-in-u-s/

Woodford started expanding in 2013

Diageo started a new big distillery in 2014 and its almost done.

Chatham finally opened.

Wild Turkey finished a new distillery in 2011.

A bunch of new places have opened or will be opening on or near Whisky Row in Louisville soon.

Four Roses, Makers and many many others are expanding or starting new.

From the KDA-

“More than $1.3 billion in capital projects has been completed or is planned and underway in the next five years, including new distilleries and aging warehouses to bottling facilities and tourism centers.

Bourbon production has increased more than 170 percent since 1999 (485,020 barrels compared to 1,306,375 in 2014), with premium small batch and single barrel brands driving the Bourbon renaissance.

At 1.3 million barrels, Bourbon production in 2014 reached its highest mark since 1970, and a third straight year with a million barrels born.

Total Bourbon inventory topped 5.6 million barrels in 2014, the highest it’s been since 1975. That means there are one million more barrels of Bourbon aging in Kentucky than there are people (4.4 million) living in the Commonwealth.”

http://www.kentucky.com/news/business/article78391652.html

Kentucky bourbon makers filled almost 1.9 million barrels in 2015, a 44 percent increase over the previous year and the most in 48 years, according to state revenue data and the Kentucky Distillers’ Association.

The all-time high, according to the KDA, was 1,922,009 barrels filled in 1967.

The 1,886,821 barrels joined millions already in warehouses to give the state 6,657,063 barrels of aging bourbon, the most since 1974. The state counts the barrels to know how much tax the distillers owe; this year distillers will pay $17,814,134 in barrel taxes.

Read more here: http://www.kentucky.com/news/business/article78391652.html#storylink=cpy

So whom are they selling all this new whiskey to that will be ready real soon? It will be at a fraction of what you’ll sell for, older and taste better. You think the local farm to bottle highlighting farmers will help. It won’t be. The industry is running out of stories and the moonshining grandfather’s recipes and “farm to bottle” is as boring as watching paint dry.

Whiskey history repeats gluts about every 20-30 years. I speak to many Whiskey drinkers and read lots on the current events. It’s been an exciting ride but I’m sure people are losing interest. It’s natural to get bored and move on. It remains to be seen if new markets open up in Asia and more new Bourbon and Rye lovers join the fold. With double the supply nearing, ages and quality dropping, I would not be opening a distillery.

I told you to put it out of your mind and you said you couldn’t and it’s all you can think about. Stop! It’s not too late! Don’t jump!

“Every man is a damn fool for at least five minutes every day; wisdom consists in not exceeding the limit.”

― Elbert Hubbard