America’s Farm Distilling Scene Was Just Hitting Its Stride, But 2020 Set Up New Hurdles

‘Grain-to-glass’ has been a catchphrase for many liquor distillers trying to ride the sustainability wave. But few do ‘grain-to-glass’ like farm distillers, a small subset of distillers who not only distill and age on-site, but grow all grains (or potatoes, sugar cane, or raw materials) needed for the final product by hand. 

Over the pandemic these distillers faced a unique predicament: not only did they have the same hurdles a craft distillers faced (closure of tasting rooms and looming tariffs being particularly chilling difficulties), but they had to grow and harvest all materials in a pandemic setting. 

“As a small distillery, we live and die off our tasting room,” describes Richard Kneipper, the CEO and manager of Shady Knoll Distillery, a farm distillery in New York. Kneipper and team conjure 126 different varieties of apples into uniquely New York apple brandies, pommeaus and whiskeys. “But I was just doing the numbers, and we’re now down 60% of our visitors from this year—and 50% of our profits come from a tasting room.”

Just like small distilleries across the U.S., farm distillers are particularly hit during 2020. “We’re just a small little industry—Everybody in this craft is trying to make a career out of thoughtfully crafted spirits,” says Kniepper. “Something like the pandemic is truly painful because craft distillers have our life savings tied up in this. A lot of us aren’t going to make it.” (America’s distillers have been begging the government for help amidst lack of support and incoming tariffs.)

Unlike a standard distillery who can outsource grains or work with contract distilleries, every single step is controlled by the maker. A growing number of distillers in North America are adopting this labor-of-love process that produces spirits with a true sense of terroir—Willibald Farm out of Ontario, Canada produces exceptional gin, while Frey Ranch is crafting cult-loved bourbons. 

But these small producers are facing big hurdles in 2020. 

“Our primary concern for the craft spirits industry is that the federal government extends the Federal Excise Tax Reform Act to help so many small and mid-sized distilleries that have been devastated by the effects of the pandemic,” describes Colby Frey, the CEO, co-founder and “Whiskey Farmer” at Frey Ranch. “As farmers we can’t just shut down operations; we have to continue tending to our fields and growing our crops. Each year nature gives us exactly one opportunity to plant and one opportunity to harvest. If we miss this opportunity, we won’t have corn, wheat, rye or barley for our distillery and that would mean no Frey Ranch Whiskies five years from now.”

Distribution is particularly tricky. The rigmarole of navigating the antiquated three-tier system makes it incredibly difficult for independent distillers to get product in the hands of consumers. And as a small-scale distillery, Kneipper doesn’t have the backing of a major spirits group to help him navigate state-by-state laws. “Distribution roles are coalesced into a small number of very large players. And they’re not interested in anything that doesn’t sell full skids, ” explains Kneipper. 

“But we’re never going to be a high-volume distiller. They don’t even want to talk to us.” So Kneipper is left to drive around with the product in the back of his truck, bringing the juice to retailers and letting the quality speak for itself. “We never had a problem selling it that way, but now, with the pandemic, it’s hard to do.”

Frey agrees that distribution has been a struggle in this new landscape. 

“The biggest impact has been dealing with bars and restaurants being shut down to varying degrees throughout the pandemic, since our initial channel strategy was centered around introducing Frey Ranch Straight Bourbon to consumers through on-premise. Essentially, we had to completely change our launch strategy within a matter of weeks, pivoting to reach consumers in liquor and grocery stores.”

These distillers marketing efforts are being forced to change along with the shifting distribution channels.

 “We were also forced to find new and innovative ways to get our message out to consumers,” says Frey, “which included a shift away from in-person events—because they simply weren’t happening—and instead finding opportunities to reach consumers through digital opportunities, including virtual tastings and virtual tours of our farm and distillery.”

“At first these felt a bit clunky and awkward, but now that we’ve gotten the hang of it we’re having fun with them and enjoy consumers virtually inviting us into their homes almost every week.”

By the American Distilling Institute definition, “Farm distilleries typically produce spirits from grain, potatoes, fruit or sugarcane grown on their farm or brought from local farms. Many of these distilleries not only grow their own ingredients, they also harvest, store and grind them – all in preparation for their final product.” ‘Grain-to-glass’ in the truest of senses. 

“At Frey Ranch we have total control of our process from start to finish,” says Frey. “We specially select seed varieties to plant with the intention they are destined to be bourbon. For example, we sacrifice yields and quantity to achieve a higher quality grain. These bourbon-specific grains are distilled into a cleaner, purer spirit, and we believe, a more flavorful bourbon. With better inputs we end up with better outputs.”

Farming was basically the only options for distillers before prohibition. But with the 1933 repeal, the costs for operating both a farm and distillery sky-rocketed, to prices so prohibitive that distillers started sourcing raw materials elsewhere. 

Now, a group of zealous craft distillers are bringing back the laborious traditions of farm distilling.

“When I started Shady Knoll 20 years ago, there were only five farm distillers in the United States, and no one was making Apple Brandy. If you go back in the history books of American Apples and American farm distillers, Brandy was one of the mainstays in early Colonial drinking,” describes Kneipper. (And American bartending—a peek back into the cocktail books of the late 1800s and early 1900s call for brandy over whisky in recipes like the Sazerac and Old Fashioned.)

But prohibition-era laws that make up the three-tier system make it difficult for craft and farm distillers to thrive. “It’s back to my earlier point,” says Kniepper. “We want to get treated like wine. We should be able to have our stuff shipped intra- and inter-state.”

“The classic level playing field would make a giant difference, but that said, states like New York have done a really good job of helping craft distilleries.” 

The reemergence of farm distilleries like Shady Knoll and Frey Ranch reflect a huge change in consumer interests, one towards transparency and community.

“There are so many craft distilleries in the States, and a lot of them are people who are buying products and putting a brand on it,” Kneipper explains. “We’re seeing a number of studies saying that more and more people are interested in sustainability, and really understanding where their food and drink comes from. But most people don’t read the label on the bottle.”

Many brands tout being ‘grain-to-glass’, weaving romantic stories of hand-crafted spirits born from local ingredients. But often these tales are merely a product of great marketing, with grains coming from Europe and distilling handled by a third-party contractor. That’s no snub to the quality of the liquid, but it’s not the local experience the bottle suggests. 

 “I love the word terroir,” says Kneipper. “But when people come to the countryside, we’re starting to understand that people don’t really understand terroir in the craft distilling industry.” While the concept of ‘terroir’ (the three-dimensional impact of soil, topography, and microclimate on a spirit and/or plant) is a driving force of the natural wine movement, the term feels decidedly absent from the American distilling scene’s vernacular. But farm distillers are trying to revive the authentic, grain-to-glass narrative.

Frey continues, “As a farmer and distiller, I have to act as a mechanic, equipment operator, problem solver, optimist, electrician, plumber, engineer, supply chain planner, scientist and weatherman!  If you taste our bourbon—and hopefully enjoy it—you’re experiencing this entire production process in each sip.”