This is our 22nd episode of the Brain Brew Whisk(e)y Academy. We will discuss changing your mind to transform whiskey - and the Craft Whisk(e)y Cocktail - the Italian Manhattan. This podcast episode features Whiskey Maker - Doug Hall and Whiskey Drinker - Tripp Babbitt.
Show Notes
[00:00:04] Brain Brew Whisk(e)y Academy
[00:00:26] Change Your Mind to Transform Your Whisk(e)y
[00:00:56] Don't Copy the Big Companies
[00:01:36] Change the Game Against the Big Guys - Brain Brew Focuses on the Wood
[00:03:12] Quit Copying and Make Something Unique - Meaningfully
[00:05:28] Will the Big Whisk(e)y Companies Change
[00:06:42] Big Kills the Small Companies They Buy
[00:08:54] Edrington Partnership
[00:09:40] Craft Whisk(e)y Cocktail
[00:09:56] The Italian Manhattan
[00:12:38] Problem, Promise and the Proof - The Five Woods
[00:15:57] Brain Brew Recent Focus on Local Products
[00:16:52] On-Line Sales of Whisk(e)y -Chang is Coming
[00:19:04] Spirits and the Law
Transcript
Tripp: [00:00:04] This is the Brain Brew Whisk(e)y Academy podcast where we're going to take you behind the scenes on what it takes to build a whisk(e)y distillery business. The Eureka ranch team led by Doug Hall are creating a craft whisky company like has never been done before.
Tripp: [00:00:26] Ok well let's talk about the Brain Brew Whisk(e)y Academy. Change your mind to transform your business. So how are you using change. I mean it's pretty obvious you guys are put in the last episode we talked about failures and that's certainly a type of change. So it's one of the things that happens when you have changes. You're also going to have failures associated with it and because you're pushing the edges. So how are you. How are you using change in the brain through whisk(e)y.
Doug: [00:00:56] Well this is inspired by the keynote talk at the craft spirits Association up in Minneapolis recently. The opening keynote was a guy who makes snowboards and his whole the gist of his story was he tried to sell through the normal distribution channels his innovative snowboards. And he tried that whole process and he had massive failure. And then he changed the game. He started doing them custom. He started selling them direct. And his whole message was You can't use the same playbook as the multinational conglomerates. You can't do it you know.
Doug: [00:01:36] And. And he was trying to get these people to do it. And sadly his message fell on totally deaf ears. You know because so many craft spirit companies are interested and in fact they're embedding it in following the rules and thinking about how they make whisk(e)y the same way it's been done for generations. You know Johnny's Jim's and Jack's whiskeys. Those companies have systemic advantages. You can't beat you can't compete with them. You can't play through the three tier distribution system for the rest. You can't do that. You've got to come up with how you're going to make money. And what's your system for doing it. And you got to change the rules and that means a transformation of the business and a transformation of your mindset. And in it comes from. In this case here with the crafting there's nobody you can look to except the founder and the leader of this thing is you've got a vision on how you're going to do something different then than others. You know in our case mastering Wood is our playbook. I mean we are about becoming the absolute best at managing the alcohol wood relationship. I think it's probably fair to say we know more about that relationship than everybody else in the world combined. Just because we've run you know too close to 3000 experiments now we've just done more experiments than anybody else knows and we we understand a lot more of this because we can and we are incredibly focused.
Doug: [00:03:12] And so if you like it finishing with different woods and you like to have different flavors and tastes we can create amazing things for you. That's ours. Now other people we work with you know we encourage them to do it that way. And as I've said before you know we had a guy just recently he said Can I have your paddle wheel bourbon. I go No that's my product. And he says Well well but I just want to sell it. I said no. Do something original create your vision. I'll work with you. I'll help you. We're called Brain Brew custom whisk(e)y. We're not Brain Brew stock whisk(e)y we're custom whisk(e)y. We will sell you a customized whisk(e)y to your specifications at a fair price that you can bottle and sell in your marketplace and and that is like being a blows people's brains out because they're just so used to thinking well if I just do something that just like Johnny Jim and Jacks whisk(e)y I'll have something. Well now you're just going to have another mass market mediocre whisk(e)y to be by and I'm not doing them. It just it is what it is. They're just cheap whiskies. All three of them in their categories.
Tripp: [00:04:23] So what was the outcome then of this. These people are they. Are they going to try and craft their own.
Doug: [00:04:30] Interestingly there were two partners OK. There were two partners sitting at the table. OK. And one was a chemist. And the other one is is is a manufacturing guy. So there wasn't even a marketing person in the room really. There was one is sort of a chemist a scientist and one is a production person. And interestingly the chemist surprisingly was like I totally get that. It's like the scientist in him of discovering something new or something. Got it. And he swayed swayed the other partner.
Tripp: [00:05:06] So are they going to do it.
Doug: [00:05:08] Yeah yeah I do it. Yeah. I mean he said on the way he says we're going to business we're gonna make this work. Thank you.
Tripp: [00:05:13] Interesting. Are they going to. Are they going to bring you in to help well I'm just gonna try it on their own.
Doug: [00:05:21] Well. Well they can't. I mean. I mean the equipment's ridiculously expensive. What we've got. So now we're going to do it together. Yeah. OK your partner.
Tripp: [00:05:28] Cool. Yes sir. So when you look at some of these other ones you know when you talked about Jack and you know Jimmy and all those guys will you think they'll ever make the change. Or do you think that they're just smug. Well you know I we're making money doing what we're doing or what. What's your thought there.
Doug: [00:05:54] Well I think I think the same as what's happened with Budweiser and Miller and all the rest of them. You know bourbon is hot right now so they're doing fine. whisk(e)y is hot right now so they're doing fine. And so they'll play with a few little fake craft washing things that look craft but aren't really craft.
Doug: [00:06:12] They'll play with a little bit of that stuff but you know they've got a juggernaut. They've got a machine that makes a lot of money. And by the way that's fine. That leaves the other market for crazy people like us well OK. It's beer all over beer. Beer is going to happen all over again.
Tripp: [00:06:27] So we'll have to see what happens Doug like every other industry unless you're Amazon. Obviously they were able to kind of keep it keep it separate and you're still kind of you know you're growing. But the Jack comes along says OK we'll buy it.
Doug: [00:06:42] And some will sell. And then those products historically what's happened is this will then kill them because they go into the system. I mean let's face it most corporate acquisitions never work out. Yes. You know. So you know though they'll milk it for a while every now and then they'll get lucky but most of them will fail because the heart and soul that made that thing what it is the mindset that came from that will die.
Tripp: [00:07:08] Mm hmm.
Doug: [00:07:10] And that's the cycle of life. And then the entrepreneur will drink umbrella drinks down on the beaches. Then they'll decide they'll do it again. And then they'll say
Tripp: [00:07:20] Well I just I you know and I look kind of at your history because I know you that I remember you telling the story of I think it was a kind of polling business that you had at one point you wound up selling it and you remember your comment and there was always sell when you're not trying to sell it. Yes I could do. And if people are.
Doug: [00:07:40] And then I went back and after a number years I invented a even smarter system which is a truth health system so you know I mean that's just life. I mean in this case here I built the distillery is right here my house. We're on 80 acres here with a private lake in that just east of Cincinnati. And so the distillery is you know in the lot right beside my house and and everything's right here so I put it here because I I this is not for sale.
Doug: [00:08:09] I intend to do this because there's just a lot of fun to do. And there's just so many different things that we can do with it that I just really enjoy it. Now could somebody come around and do something. Yeah. Pop that's always possible but it's highly unlikely in this case because this is just too much fun. I have too much to do with this now. Ten years from now who knows. But but right now my intent is to do this and help enable other craft distilleries around the world to be able to do amazing things.
Tripp: [00:08:35] Ok but you don't see because of the nature of at least the way I listen to the words that you say when you talk about some of the big companies the big spirits companies that they're not going to get this that third day they think they might be by trying different things but you don't think they're going to.
Doug: [00:08:54] Wow wait we've got you know we have a pot. We have a wonderful partnership with Edrington. It's a non-profit trust to the benefit of the children of Scotland. They make the Macallan and others and so we have a partnership with them which is a very wonderful wonderful partnership. And we make products for them. And that's all the big companies can get out. And they're good. These guys are way better than most because I know all the different big players.
Tripp: [00:09:20] Well you've worked with them over a long time.
Doug: [00:09:21] Yeah I've taught over 20 years and so. So they're just wonderful people. They're just just just great people. So we work with them and that's enough you know. And so then we go work with others. So but mostly with small people. That's that's that's where it's fun because that's where we can do crazier stuff and learn things together.
Tripp: [00:09:40] Okay. All right well let's talk about this week's craft whisk(e)y cocktail which is the Italian Manhattan which if that name came up before I think it one of the other drinks that I can't remember the context now and I think.
Doug: [00:09:56] Yeah we've done it we've done some different Manhattan so. So Manhattan is the classic Hardy drink sweet vermouth and rye. It's a drink of old men. And so you wouldn't have a Manhattan or it's got a manliness to it. You know. And so the idea of changing your mind. We've flipped it on its ear to make it lighter cleaner and fresher. And we did this by taking lemon cello which is an Italian liqueur. Where do you use just the Peel not the white pith but just the peel. You soak it into high alcohol solution and it comes the there's no juice in it when you do it properly and in it. And then you add some sugar to it and it's very light and fresh and so mixing. An ounce of lemon cello with. All right.
Tripp: [00:10:54] In this case rye deckhand rye some ice and stir it and it just gives a brightness so a way to think of this is it's it's a good spring Manhattan or when we want to have some spring in the dark months to bring some lightness and brightness to our sort of more whisk(e)y forward cocktails.
Tripp: [00:11:16] And so looking at that I guess I've not really had the lemon lemon cello or at least say that I know of I might have ordered a drink that might have had it before. Are there other drinks that that contain that I would assume so.
Doug: [00:11:29] Oh yeah. That's all kinds of things. We've got two or three of them actually that we do. But this this gives us it's just fun. It's a really fun light kind of thing for you to try.
Tripp: [00:11:41] So is it from for people that drink the classic Manhattan than the day. This would be a natural different yeah.
Doug: [00:11:48] I mean what we've done is we've taken the sweet vermouth and and put it in a sweet lemon flavor. OK. So the carrot the body of the drink is the same body that you'd have in Manhattan. It's just instead of the removed you're getting LEMON OK. And and and so and and a brightness just I mean that's the best way I can say it. It just has a brightness to it.
Tripp: [00:12:14] All right. And then the Deckhand is your.
Doug: [00:12:17] Five wood Rye. Yes that's right. Ninety five percent rye Five woods IN IT THREE OAKS maple and cherry. And so it's just got a stupid complexity to it. And so that complexity gives a good base upon which to bring the lemon with it.
Tripp: [00:12:38] Ok. We talked a couple episodes ago about the you know the problem the promise and the proof. What is it what is the proof of the deck hand then what would you say fibroids.
Doug: [00:12:47] It's a five to five would. OK. All right. The proof is is you know using those five different woods which was interesting as we were going into a competition and I was messing with different things and I was with a buddy of mine Tim Hogan and while the night had gone on for some time as one would say.
Tripp: [00:13:10] Say no more.
Doug: [00:13:11] And at one point I said I said we were tasting different woods and you know individual samples. And I said I wonder what the hell happens if we mix some of these. And while one thing led to another next thing you know there were five Woods added to it. I go What do you think of that. Damn that's pretty good. And so we mixed up some others I put it in a bottle I said well let's try it tomorrow. Maybe as a first drink the next morning we tasted it and we gave it to our wives we're staying over their house and we gave it to their wives and they went. Go ahead. That's pretty good.
Doug: [00:13:47] And thus was born. It's also known as the working man's rye right as it because the deckhands of course were the working men on the on the riverboats. And so it sort of celebrates them and it's the kind of drink that bartenders really like because bartenders generally tend to like a rye rye generally will have 48 percent alcohol by volume as opposed to 40 percent from for many whiskeys or 45 for bourbons.
[00:14:14] So it's can be a little bit higher. It's gonna be a more whisk(e)y forward thing it's not for newbies but it makes it really stands up to just about any cocktail you're going to do and the five words really just give you a complexity that it's really really quite nice compared to summarize can have a bit of a bite to them. And this this has got a smoothness and it's just a stupid complexity to it.
Tripp: [00:14:40] You know it's interesting I'm finding I like I'm kind of gauging my taste and I seem to like the ryes a little bit better than the others. I'm not sure why that seems to kind of fit my fit what my what my tastes are but I mean well.
Doug: [00:14:56] The more you drink them the more you drink. And that's not uncommon. OK.
Doug: [00:15:01] Every Friday night when I get your your your text messages the more you drink them the more you're gonna tend to go. But I would encourage you to also go back though because the even just our Keelboat our easy drinking product there are there are cocktails that are still better with that than they are with rye rye. Okay. Yeah yeah. It's just it depends on the taste. Depends on what we're trying to do.
Tripp: [00:15:28] And apparently the cocktail that you have out there. So so one question I have I need you. We talk about your Deckhand you're Tall Stacks and your keel boat and the paddle wheel on all those types of things and you've already stated that it's pretty much local to Cincinnati but if somebody is going through Cincinnati it's the only place to get it. Is that your. At your place in Newtown. Are you starting to distribute it through local liquor stores or through the spring we'll get it into the local liquor stores.
Doug: [00:15:57] Okay. Okay. I been look at liquor stores and there is there's some conversation we may go to a couple of other states out. I haven't decided yet but we've had some people approach us about bringing it into some other states and some some other things. So it was designed totally to be a su ultra local. That's one of the things I recommend to craft people is do an ultra local product that's where you've got the leverage against other people. And so it really is made to celebrate Cincinnati which was as you know I mean like 80 percent of the whisk(e)y was coming from around this area but this was the home of American whisk(e)y pre prohibition 80 distilleries in Cincinnati alone like it was not a beer town. It was a whisk(e)y town. I mean the value of spirits that went out was like five or seven times or something like that the amount of beer even though it was a German population. This was this is a whisk(e)y town is what it is and that's what we're hoping to bring back.
Tripp: [00:16:52] Very good. Well one last question I have for you and I'm not sure exactly how it works I'm just gonna ask the question for sure. Probably 90 percent of our audience probably already knows the answer but so so is his whisk(e)y. I mean I know you like for instance Indiana is a weird state. So I'm not gonna use that as an example but can you order online and get it get whisk(e)y delivered or the rules against that or when you have this rules.
Doug: [00:17:19] There's a Supreme Court case that may change that wine. Got it broken.
Doug: [00:17:23] But when they overturn prohibition they put the authority into the States. And so each state has its own rules. And so there is not it is not. There is a few states where you can buy stuff or there's some online people who basically what they basically do is give you a thing and they have a local retailer in the state that that mails it inside state lines doesn't go over state lines and there are retailers who illegally will ship to you. You know I'm just acknowledging it not supporting it but as a general rule you cannot buy whisk(e)y or spirits of any type in order to them across state lines. It would be few. There's like four states where you can do it if you register in the States but it's really not something that's able to do the general system that people use. And again I'm not condoning it. I'm just reporting what I've observed is that they'll get a friend who's near the area and they'll have them get one and send it to them. Is is I've I've heard stories of people doing that. But again that's not that's not the way it's supposed to be. You're not supposed to do that.
Tripp: [00:18:36] What if what if you're driving through the city. That's right. That's OK.
Doug: [00:18:40] It's totally fine. OK. All right.
Tripp: [00:18:42] OK. So what's the Supreme Court case. Is this something you're following or.
Doug: [00:18:47] Yeah yeah. So it's a Total Wine case. Tennessee says that they can't open up a retail outlet unless they've lived there for 10 years or 15 years or something like that. And that's in front of the Supreme Court. And this has to do with. Does.
Doug: [00:19:04] So what what you got in the Constitution and I'm not an expert at this but there's a contradiction in the Constitution between the commerce clause that says there's gonna be free trade across states and alcohol which the states can regulate. And so the question is you know the basically the amendment to the Constitution contradicts the commerce clause. And and so you know eventually this has got to get resolved. And they did resolve it for wine but they only mentioned wine. They didn't mention spirits which is why you can oftentimes buy wine across but even then some states say you can't. And then eventually they get challenged in court and gets overturned sometimes so. So it's long term this is going to get resolved. It's just a matter of time. Same in Canada. Canada had a case. They thought it was going to do it. Their Supreme Court punted on the issue. Eventually there will be an opening of this stuff. You know a crossed and a mechanism because right now the states make a lot of money on booze and I think primarily the biggest thing is going to be is making it possible for the states to collect their money when it's shipped in. And you know this is it will be I would be surprised if five years or indefinitely 10 years from now if this is still the case I think it's going to happen quite quite broadly. You're going to be able to get it in most other countries you can ship. We just happen to have a kind of a frankly a backwards system. You know it was done to protect people the three tier system and all these things it was done to protect people from stuff. And there's people that lobby a lot. But the pressures on this are are severe. And you know the question is is it in the public interest honestly. And the reality is no it's not.
Tripp: [00:20:53] So would you would you find. So for instance as the growth of these craft whisky companies come around I would think there'd be even more pressure to to open it up and that the big ones would probably say no is that kind of where the battle lines.
Doug: [00:21:09] Some some but it's mostly the distributors. It's mostly the distributors that will fight that. The three tier system they the ones so you can do it more so than the manufacturers. Okay. I mean it's really the distributors who you know right now have a hammerlock on it so that you get to go through them. So I understand it. I mean it is what it is. They built a business on it and you know and they they risk money and stuff at the beginning I I respect all of that stuff. But at the same time I am you know I'm for free trade whether it be from here to Indiana or here to London.
Tripp: [00:21:46] Well in Indiana just got Sunday liquor sales a year ago. So I don't plan on a big change in Indiana. We are going to be leading that charge little pits a little bit. Oh just just a tad. So I was a big celebration to get Sunday. Sunday liquor sales in Indiana which was it's so bizarre. But anyway. OK. All right. Well interesting change change in the whisk(e)y business.
Doug: [00:22:17] Right to change the mindset change right. Play by your rules not others
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