The Canadian View

The Canadian View

Production | 28 Oct 2011 | Issue 99 | By Davin de Kergommeaux

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We are optimistic about Canada’s craft distilling industry,” says Barry Bernstein. He’s the voice of Still Waters Distillery based in Toronto, Ontario. From Okanagan Spirits, 2,500 miles further west in Vernon, British Columbia, Rodney Goodchild echoes Bernstein’s enthusiasm.

Karen Mortfield from the Liquor Control Board of Ontario (LCBO) agrees. “We have witnessed increased consumer demand for small-batch, locally produced and craft products,” she says. “Especially younger consumers. They are educating themselves about spirits and are seeking unique products that reflect their tastes.”

Tyler Schramm of Pemberton Distillery in Pemberton, British Columbia, responds more cautiously: “To be a craft distiller in Canada you have to be an optimist.”

Nonetheless, craft distilling now generates the same palpable excitement that craft beer sparked two decades ago.

Yes, the demand for finely crafted spirits is certainly growing in Canada, but there are also challenges. These, it turns out, are less to do with taste than government regulation.

Negotiating these regulations can make the path from a brilliant idea to a product in a store, tortured and expensive. Moreover, in nine of Canada’s ten provinces there is only one wholesale customer: the government owned monopoly store. It really is an “all-your-eggs-in-one-basket” market.

"You have to admire Canadian craftsmen breaking free of single malt and reverting to the rye and corn-based roots"

Once the aggravation, tedium, and sometimes heartbreak, of getting all their permits and licences in order are behind them, craft distillers begin the real uphill climb to finally get their lovingly crafted spirits to market.

This is especially difficult in provinces where regulations permit craft breweries and wineries to distribute their products to bars and restaurants but prohibit craft distilleries from doing so. As well, the very nature of hand-crafted spirits dictates that volumes are typically smaller than the minimums demanded by provincial liquor boards seeking to fill shelves in hundreds of outlets.

“We cannot sell directly to consumers,” Bernstein tells me. “And we cannot easily get our products into the LCBO. Most of what we make, therefore, is exported. This is not really the ideal model for a craft distiller.”

Certainly, the LCBO has been a huge booster of Ontario’s wine industry. When it comes to craft distillers, “We want to see producers succeed,” LCBO’s Mortfield tells me, citing high quality, competitive pricing, appropriate product availability, marketing plans, innovative and professional packaging, and enthusiasm as keys to the success of craft-distilled spirits.

Cash flow is crucial in most start-up businesses. While he waits for his whisky to mature, Tyler Schramm is financing his dream of making Canadian single malt by selling vodka distilled from locally grown potatoes. Schramm notes the financial contribution a visitor’s centre and shop make to a successful start-up. Visitors take tours and buy souvenirs, creating a steady income stream in those critical first years.

In the absence of a national craft distillers’ organisation to set standards, Canadian distillers must work independently to educate consumers about their craft. Some, by default, are adopting American Distilling Institute standards and practices while others reject them outright.

The Institute’s directory lists 257 distilleries, 17 of them Canadian. However the Institute’s idea of what constitutes a craft distillery may not mesh with the grain-to-glass image of whisky and craft purists. The Institute, for example, encourages craft whisky makers to save money by buying their mash from breweries. Regardless of the quality of the resulting whisky, somehow this just doesn’t seem like craftsmanship. The same can be said of the suggestion to buy pre-distilled “artisan spirit bases” advertised in the Institute’s catalogue.

Of those 17 Canadian craft distillers in the directory, two – Glenora and Shelter Point –are traditional Scottish-style malt distilleries, while Kittling Ridge’s volumes exceed the wildest expectations of most craft distillers. Of the rest, only Still Waters and Pemberton have grain-to-glass whisky operations.

In its seven years of distilling, Okanagan Spirits has established an enviable reputation for the quality of its fruit-based spirits. With just 12 barrels of malt whisky maturing on the premises, the oldest distilled in 2007, Goodchild says if they could do it over they “would start making whisky reserves from the beginning.”

Barry Bernstein and his business partner, Barry Stein, set out from the start to make malt whisky. Despite the success of their Still Waters Single Malt Vodka, their eyes are still firmly on whisky.

Even more encouraging, Still Waters also distills straight rye and a corn-based spirit. While it is easy to understand a craft distiller starting out by making Scottish-style malt whisky, you have to admire Canadian craftsmen breaking free of the single malt mould and reverting to the rye and corn-based roots traditional to Canadian whisky. Knowing that Pemberton Distillery and Okanagan Spirits have similar plans warms the cockles of this whisky critic’s soul. Now, if only they can get them to market.
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