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What Does the "Craft" in "Craft Spirit" Really Mean?

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Craft distilling has rocketed onto the scene in the last decade. According to the American Craft Distilling Institute (A.D.I.), there were 24 craft distilleries in the whole of the United States in 2000. By 2011, that number had grown to 234, and as of 2014, there were almost 600, with more opening all the time.

Market researchers claim that more and more people are looking for brands with craft credentials, spirits made by real people in a traditional way.

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Photo by Emily Vikre

When we were researching the craft spirits market four years ago, before starting our distillery, sales of craft spirits (in this case as defined by the analysts as a distillery selling 100,000 cases a year or fewer) were an unmeasurably small portion of the spirits market. Now they make up over 2% of the market, and some project that these numbers could follow the trajectory of craft beer, growing to 15% over the next decade.

With stats like these, it makes sense that suddenly everyone wants to be craft—and that many companies that make spirits in a very non-craft way have claimed the craft mantle.

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It's challenging because "craft" is ill-defined. When it comes up in discussion at our distillery, even we can’t agree what the definition of craft should be. We know what we do, but I wouldn’t feel comfortable declaring this is the only way to be craft.

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Perhaps it's more useful look at different issues within the craft value proposition—flavor and quality, size, and the production process—to understand the wide spectrum of practices and characteristics within the brands people think of as craft.

That way, you can decide which elements are important to you and learn to look for them.

Photo by Emily Vikre

The flavor and quality issue.

The craft distilling movement is often compared to the craft brewing movement, but the parallel is imperfect. When craft brewing began, big beer companies were brewing only a single style of light, easy-drinking lagers. There was a gaping flavor and quality hole to fill; old styles of beer that had all but disappeared were rediscovered and new flavors were created.

More: How to find the craft beer that's right for you.

Barley wines, stouts, Belgian ales, and super hoppy I.P.A.s were all obviously craft—they were something the giant, corporate beer companies were not making. This is not true of the spirits market. There are many bad industrial spirits out there, but many spirits made by massive liquor conglomerates are excellent, and a wide variety of styles are already produced.

A few craft distilleries are innovating flavors and styles in the world of spirits, but many, maybe even most, are trying to make the same styles of whiskey and gin that are already out there, just on a smaller scale. Sometimes this leads to the creation of remarkable quality spirits.

But all too frequently, especially because craft distilleries are young and haven’t had time to age their spirits for decades, what they make just isn’t good. It’s really hard to “out-Maker’s-Mark Maker’s Mark” (a phrase we first heard at a conference from master distiller Dave Pickerell, who actually was the distiller for Maker's Mark), and it’s expensive, too; it costs a ton to make spirits in small batches without the massive economies of scale that large industrial distilleries have.

In an interview with Mash Tun Journal, the founder of Letherbee Distillers in Chicago bluntly explained:

Imagine how slow the craft beer movement would have been if nobody could make better beer than A-B (Anheuser-Busch)! The spirits world did not have the same quality vacuum that beer has had. So, new start-ups catching up to the value and quality of America’s Bourbon industry is no small feat. It will take a generation’s time and lots of capital.

He also compared craft whiskey to a “polished turd.” Edgy!

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Does size matter?

If we can’t necessarily rely on the quality of the product to differentiate craft spirits, the next obvious indicator is size. That’s been the ever-moving yardstick craft beer has used, both to differentiate itself in the public imagination and also for tax and regulatory advantage.

The two main national associations in the U.S. for craft distillers are the American Craft Distilling Institute and the American Craft Spirits Association, both of whom offer membership to distilleries that sell about 50,000 cases a year or fewer (the precise number actually depends on the proof of what’s in those cases).

By comparison, it’s estimated a large brand like Johnnie Walker (which itself is owned by Diageo) sells in the hundreds of millions of cases a year, and a smaller industrial brand like Bulleit (also owned by Diageo, and mostly produced at the same distillery that makes Four Roses!) sells a few hundred thousand cases a year.

Boo Radley
Boo Radley

There are a couple of things that are confounding about the size issue. One is ownership. As a craft brand becomes nationally recognized and competitive, there is a tendency for larger liquor companies to swoop in and offer the distillery owner a check to buy their company and make it part of the larger company (we’ve met people who have said the check was literally blank; they could pick their number).

Often the distillery can be run precisely the same way it had been, by the same people, producing the same products. But if it is owned by Diageo, or Pernod-Ricard, or one of the other big guys, is it still a craft distillery? By the definition of some associations, like the A.D.I., it isn't. A.D.I.’s craft certification program will only certify distilleries for which less than 25% is “owned or controlled (or equivalent economic interest) by alcoholic beverage industry members who are not themselves craft distillers.”

Conversely, large companies also create their own “craft” brands. They produce much smaller volumes under these labels, but these spirits are made at the same huge distillery as the company’s non-craft labels. This is the rule, not the exception in the industry, and has been since prohibition.

For example, Buffalo Trace (which makes fantastic whiskeys, no bones about it) is a vast distillery that produces not just Buffalo Trace, but also Eagle Rare, E.H. Taylor, Stagg Jr., Blanton’s Single Barrel, Elmer T. Lee Single Barrel, Sazerac Rye, W. L. Weller, and everyone’s favorite Pappy Van Winkle. (And they’re all owned by the Sazerac Company.) They’re completely upfront about this on their website; it’s not an industry secret that this is how things work. But, it’s not widely known by the drinking public. So I ask you: Is something that’s available in as small of quantities as Pappy but made in the same large distillery as many other labels "craft"?

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A related question: What do we think of craft distilleries that grow beyond the size designations for craft? As one would hope, pioneers in the craft distilling industry—those prescient people who opened small distilleries two decades ago, before anyone else was even thinking about it—are now being rewarded with opportunities to grow, expand, and produce ever greater quantities of their spirits for sale while remaining independently owned.

So does it make sense for there to be a certain size or volume point at which suddenly these distilleries are too big to be craft? Perhaps it depends on whether they continue producing their spirits in the same manner as they always have or whether they switch to giant industrial stills and mechanized processes? And that brings us to the issue of how spirits are actually made, and whether they’re even made at the craft distillery.

The production process.

Here is one of the stickiest issues in craft: whether or not a craft spirit is made by hand or from scratch. There is a remarkable spectrum in how distillers define "handmade," making it as tricky a term as craft itself. And terms like "handmade" or "made from scratch" or "small batch" are certainly not regulated.

Further complicating the matter is the fact that there are several components of the process that may or may not be done by hand, including whether the distillation of the spirit itself is done by the distillery or whether already-distilled spirits are purchased in order to be modified, infused, or blended.

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Allow me to explain a little further. I think most people, when they think of a craft distillery, think of a smallish space, a few stills, and a team of distillers making all the product right there. That’s certainly what I thought when we got into this business. It turns out this is not necessarily the case for a variety of reasons. Many distilleries, both small and large, use something called neutral grain spirits, or G.N.S., as the base for flavored spirits like gin or liqueurs.

G.N.S. is very clean neutral alcohol that is made in large industrial factories, the same kind of factories that make fuel ethanol, actually. It's very cheap to buy and has some another big thing going for it: It’s actually very hard for a small distillery to make an ethanol that is clean enough to use as a neutral base for a spirit like gin. In our distillery, we choose to make our gin from scratch, which means we have to work really, really hard to distill a neutral base from grain first. (About 75% of our equipment time and distilling labor goes into making a neutral spirit—we have to distill our fermented base at least 4 or 5 times to get it to clean ethanol—that we can then use as a base for our gin, vodka, and aquavit.)

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Many small distillers we know feel like they simply couldn’t afford to make gin if they made it this way, so they buy G.N.S., infuse it with their choice of botanicals, and distill it a final time. This is, in fact, the traditional process that has been used by all the big gin brands like Tanqueray or Hendricks since they began because in England it was required to use G.N.S. as a base for gin!

So, if something is traditional is it craft? Or should G.N.S. products be considered differently than spirits distilled entirely at the distillery? And what about the other far end of the spectrum, like small handful of distillers who even grow their own grain? Are they different categories or are they all craft together? (As a side note, many distilleries also buy G.N.S. for making vodka. Just add water, or perhaps filter it once, or maybe distill it one final time and your vodka is ready to go! One major craft brand of vodka that I dare not name is made this way: distilled at a factory in the Midwest, then distilled one last time on site to give it the veneer of craft. )

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There are similarly confusing lines around whiskey. Plenty of distilleries are making whiskey entirely by hand onsite. But, there are also many that don’t. It can be hard to know whether a whiskey from a craft distillery has actually been made at the distillery, or made elsewhere but blended at the distillery, or bought elsewhere and simply bottled at the distillery.

All of these approaches are commonplace. For example, Templeton has fairly recently come under fire (of the law-suit variety) for selling rye whiskey they touted as being made in Iowa according to Prohibition-era recipe but that turned out to be made in a whiskey factory in Indiana called Midwest Grain Products (M.G.P. as everyone in the industry calls it). And Templeton is far from the only company bottling M.G.P. whiskey and selling it as their own. Thanks to a recent enforcement push requiring the state of distillation be listed on whiskey bottles, I’m discovering a whole lot of whiskey marketed as craft actually come from Indiana! The whiskey is good, smooth and flavorful, but it’s definitely mass-produced.

Whiskey Punch
Whiskey Punch

Some distilleries take more of an individual and artistic approach by buying whiskey produced elsewhere, but blending it to create a new whiskey (aptly referred to as a "blended whiskey"). Blending is its own type of craft with a long history, but it’s different craft from the craft of distilling.

And since whiskey has to age for years, sometimes new craft distilleries begin by buying whiskey and selling it (or blending then selling it) while waiting for their own whiskey to age. This is the approach some well-respected distilleries like High West and Hillrock Estate have taken. Even though the good guys make what they're doing clear, it's easy to come away with the wrong idea if you don’t know what you’re looking for. It’s reliably fun to ask a High West enthusiast how an 8-year-old distillery is making 10-year-old whiskey.

The ones that don’t make it clear are recently getting sued. You should have seen my husband’s disappointment when he found out WhistlePig was sourced from Canada.

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So what does it all mean?

What craft means when you see it on a label or in an advertisement is about as clear as mud. Craft is confounding, and for the moment at least it means different things to different people.

To this end, there are some things that are helpful to look at on a spirits label to understand how a spirit was actually made: Ignore words like “craft,” “handmade,” “artisanal,” and “small batch” and instead read the small print on the various parts of the label. Does it say “distilled and bottled by” before the name of the distillery? Or just “bottled by”? Or “blended and bottled by” the distillery? Or “produced and bottled by”? If it says “distilled by” that means they distilled it at least once, but not necessarily from scratch.

The bottle is also supposed to tell you the state of distillation (though that is only recently being enforced), so that you can check if it was distilled in the same state as the distillery or elsewhere. You’ll also find small print that tells you whether something is “distilled from grain,” “distilled from neutral grain spirits,” or from other ingredients like “distilled from molasses,” though these rules vary from one spirit to another. Sometimes you’ll find in tiny print on a bottle that the distillery is actually owned by another company, but most of that type of digging you have to do with an internet search.

Virago
Virago

Our own journey with this has been slightly fraught. We started by partnering with a small brewery a couple miles from us. They do the fermentation, then we do the distillation. This is how we make all of our products, from vodka to whiskey. We’re installing our own brewery now so we can have the whole process in-house. Meanwhile, we’ve struggled financially but chosen not to use G.N.S., and we’ve endured millions of questions while we wait for our whiskey to be ready.

Nonetheless we’ve had other “craft” distillers tell us we’re not craft since we’re partnered with a brewery, even though they themselves are using G.N.S. And compared to some distilleries that grow their own grain, we feel like our “craft” hardly even counts. And this isn’t even touching on the specifics of the production process: the equipment, the level of manual controls versus computerized controls, and so on. So there you go: Even for people who live and breathe it, it’s complicated.

So here’s what I think: Drink something that tastes good to you. If you like its story, do enough Googling and reading of the small print on the labels to find out if it's true or not. If it turns out not to be true, find something else that tastes good to you. If you want. And while you sip, you can ask the question of yourself, “What is craft?”

What do you look for when you're choosing a spirit to buy? Tell us in the comments!

Tags: cocktails, alcohol, spirits