A Spirited Revolution

Wine isn’t the only way to get your drink on in the North Bay.

 

Northern California has earned a well-deserved reputation as an Eden for those who love food and drink. And thanks in large part to culinary trailblazers like renowned chef Alice Waters, the Bay Area has been in the forefront of the slow food movement. This “locavore” philosophy of consumerism has, in turn, spawned a renaissance in locally produced wine, beer and, most recently, craft spirits.

The micro-distillery industry, which was virtually destroyed during Prohibition, has enjoyed unprecedented national growth in the past decade, buoyed no doubt by America’s love affair with all things artisan. According to the American Distilling Institute, these niche liquor producers, which numbered just 50 in 2005, are more than 250 strong across 45 states as of 2012. If this growth trend continues, there will likely be more than 1,000 craft distilleries nationwide in the next decade.

The Distilled Spirits Council of the United States (DISCUS) classifies micro-distilleries as businesses producing less than 100,000 gallons of spirits annually. For perspective, compare that statistic to industry giants like Bacardi, which generates more than 100,000 gallons of spirits daily.

Artisan distillers focus on quality over quantity, crafting small-batch and ultra-premium liquors with unique flavor profiles. Many feature organic, locally sourced ingredients. Sold in limited release, these spirits also command premium prices ranging from around $30 to several hundred dollars per bottle.

Recent figures from the Wine and Spirits Wholesalers of America estimate the micro-distillery industry is generating $198 billion per year, despite occupying only 5 percent of the entire market. Not surprisingly, the North Bay is home to both seasoned and novice craft distillers, whose variety of unique products has put them on the map.

A family legacy

Leading the North Bay spirits revolution is 30-year veteran Charbay Distillery & Winery, nestled on Spring Mountain overlooking St. Helena in the heart of Napa Valley. Established in 1983, this highly lauded micro-distillery was one of the first key players in California and is the pride of the Karakasevic family, who were early pioneers in the American artisan distillery movement.

The family hails from a long line of European Grand Master Distillers who can be traced back more than 250 years to Yugoslavia (circa 1751), when Empress Maria Theresa of the Austrian-Hungarian imperial court recognized the House of Karakasevic for making wine and brandy.

Visionary patriarch Miles Karakasevic brought the family profession to the United States when he immigrated in 1962, using his degree in enology and viticulture from the University of Belgrade to get work as a professional winemaker in Michigan. There, he met his future wife, Susan, and, in 1972, the couple moved to Napa Valley where the wine industry was beginning to take off.

Before long, Miles became assistant winemaster at Beringer Vineyards. The couple eventually purchased a 17-acre property on Spring Mountain where they built Charbay’s home base, raised their two children and dreamed of starting their own venture. Eleven years later, Miles and Susan launched Domaine Karakash and began making wine and distilling fine brandy under their own label. In 1991, they changed the business name to Domaine Charbay, becoming the first and only family-owned and -operated winery and Alambic Charentais Distillery in the country.

In the years that followed, Charbay slowly began releasing a line of distinctive handcrafted spirits, including a black walnut liqueur called Nostalgie, a California apple brandy named Calvad’or, and an unusual spirit distilled from the tubers of indigenous American sunflowers they christened Pachanga—considered to be the first original American spirit.

Following in his father’s footsteps, 22-year-old son, Marko, joined the family business in 1995 and became the 13th generation of Karakasevics to continue the legacy. “My family survived in Europe for centuries by distilling,” says Marko. “Being able to carry on my family tradition is a dream come true.”

In 1998, Marko conceived a collection of four flavored vodkas, made by blending Charbay’s award-winning Clear Vodka with mostly organic seasonal fruit. To capture the fruit’s maximum flavor, he developed a proprietary method of extraction, called A.S.E.T (for “ancient Serbian extraction technique”), which involves crushing the whole fruit, skin and all. “When you taste our seasonal fruit vodkas, you taste the real deal,” says Marko proudly. “We use only fresh ingredients with no essences, dyes or artificial flavors. There are no other flavored vodkas like ours on the market.”

The initial release, which included blood orange, Meyer lemon, ruby red grapefruit and key lime flavors, was so popular that Food & Wine magazine dubbed him the “Vodka Visionary”—a distinction he alone holds to this day. He would later round out the collection with the addition of Charbay green tea, red raspberry and pomegranate vodkas.

The overwhelming success of Charbay relies heavily on the unique character and diversity of spirits Miles and Marko bring to the marketplace. To celebrate the company’s 20th anniversary in 2003, they introduced Charbay rum and Charbay Tahitian vanilla bean rum to their growing line. In 2009, they added tequila to the portfolio, becoming the first Americans to distill spirits south of the border. Charbay’s premium classic tequila blanco was a joint collaboration between the Karakasevics and the iconic Mexican distiller, Carlos Camarena, at his distillery in Arandas, Mexico.

In December of that same year, Marko earned the title of Master Distiller following a 26-year classical European apprenticeship with his father (now 40 years old, his apprenticeship started at age 10, when he began following and watching his father make spirits). The achievement defined him as having “equaled or bettered the skill level of his teacher,” and required that he source, distill and release his own spirit: Doubled & Twisted Light Whisky.

A year later, Miles was awarded the title of Grand Master Distiller; a rare distinction granted to only a few people, who’ve sourced, hand-distilled and marketed their own brand in all four major spirits categories: brandy, whisky, rum and tequila. This is a rare career achievement that crowns his life-long devotion to distilling. Thanks to the creative genius of this father-son team, Charbay’s vision has blossomed into an impressive portfolio of 27 hand-crafted spirits and wines that have earned them numerous industry awards and an ardent following of devotees.

Embracing new opportunity, Charbay stepped into the role of importer last year by reuniting with Mexican distiller Camarena. The Karakasevics gained exclusive rights to bring his old-world Tequila Tapatio collection to eagerly awaiting aficionados in the United States. Four premium hand-crafted tequilas currently make up the collection, including a recently released 110-proof Tequila Tapatio Blanco which has the highest alcohol proof allowed by law. Its silky texture, combined with bold floral notes and rich, slow-roasted agave, make for a rare and memorable drinking experience.

Among other offerings released this year is Charbay’s distinctive R5 whisky, made by distilling Bear Republic Brewery’s Racer 5 IPA beer (Marko pioneered the concept of distilling whisky from beer in 1999). Both the R5 whisky and its main ingredient earned 2013 Good Food awards. The distillery also plans to roll out a 30-year-old, limited release brandy to mark its 30th anniversary.

“The spirits industry is extremely competitive,” says Marko thoughtfully. “Our success relies on our reputation to make unique, quality products and deliver on customer service. Our growth has been slow and steady because we’re doing it right.”

New and notable

Poised on the opposite end of the continuum is micro-distillery newbie Spirit Works Distillery, located in downtown Sebastopol’s reinvented Barlow Center—a former apple cannery turned artisan warehouse that showcases locally produced products. Owned by enthusiastic spirit-makers Ashby and Timo Marshall, Spirit Works has set its sights on producing fine quality, small-batch gin distilled from their hand-crafted vodka.

While many of their competitors outsource the base alcohol used for distilling, this husband-and-wife team has elected to take control of the process in its entirety. Their “grain to glass” philosophy starts with California-grown, whole-grain organic wheat that’s milled, mashed, fermented, distilled and bottled onsite.

Crafting their product from scratch may be more labor-intensive, but it gives the Marshalls optimal control over the finished product. “It’s an approach that sets us apart from 95 percent of the micro-distilleries in the market,” says Ashby.

Like others in their industry producing a niche artisan beverage, the focus is on creating a superior product. “We use organic ingredients as much as possible,” she continues, “including most of our botanicals.”

The Marshalls considered more than 200 botanicals in the process of developing their recipe. “People don’t often think about what goes into a drink, but it’s a very intense, hands-on process,” Ashby shares. “We distilled each botanical separately so we could identify the essence of each. As we blended trial batches, we made one ingredient shine, then balanced different notes until we achieved what we wanted.”

The Marshalls have poured heart and soul into their business. Their debut market offering, Spirit Works Distillery Gin, launched in early June of this year. Unlike other alcohols that must age to maturity, the couple can process their gin in just nine days: eight days to create the base vodka, and one day to redistill and fuse it with botanicals like juniper, cardamom, coriander, fresh lemon and orange zest that define the finished product’s unique flavor profile. “Our gin makes a stellar martini,” Ashby confides with pride.

Producing their gin also led to an unexpected surprise: The vodka they made as a base was equally outstanding in its own right. Its sweet notes of caramel and vanilla were so enticing that the Marshalls decided to bottle and release it in tandem with their gin.

Having tested the market with a first release of 46 cases, the couple hopes to increase production to 3,000 cases by the anniversary of the distillery’s opening this December. Based on preliminary buzz, they’re cautiously optimistic. “We could produce as many as 10,000 cases with our current equipment and space,” Ashby predicts, “and we have room to expand.” Their warehouse also has a tasting room, complete with a viewing window so guests can glimpse the inner workings of the distillery. Facility tours are available by appointment.

Future offerings now in development include premium 100 percent wheat and rye whiskies, aged two years in new American oak barrels, and a classic sloe gin that pays tribute to Timo’s English roots. “We’re also experimenting with a gin aged in Chardonnay barrels from Sonoma County,” Ashby shares.

Spirits with Wine Country flair

Entrepreneurs Arthur and Lusine Hartunian are the force behind Napa Valley Distillery, the first business of its kind to operate in the city of Napa since Prohibition. Over the past three years, they’ve gained a following by crafting premium spirits with distinct Wine Country flair. “I’ve been a cocktail geek for a long time,” Arthur admits. “I’m on a quest to create the perfect drink.”

Driven by that passion, the couple invested two years researching the market, creating formulas, getting the necessary licensing and developing a brand before launching their premier line of craft spirits.

As a result, the Hartunians have carved out a Wine County niche by using local grapes to create their signature spirits. The distillery’s first market offering, released in 2010, was Napa Vodka Vintage Reserve made from single vintage Napa Valley Sauvignon Blanc fruit. A year later, the company launched its ultra-premium Napa Vodka Distiller’s Blend, a proprietary combination of soft American winter wheat mixed with their Vintage Reserve.

Touted by the distillery as “The World’s Rarest Vodka,” their signature spirit was recently named one of Wine Spectator’s ‘Top 50 Spirits in the World,’ a distinction that confirms the Hartunians are on the right track. Because of the distillery’s small capacity, releases have been limited to around 5,000 individually numbered bottles every 18 months. Consumer reception and word of mouth have been enthusiastic, and demand for their signature vodkas has steadily risen.

Rounding out the distillery’s line-up is a seasonal Meyer lemon liqueur, and eight pre-mixed, ready-to-drink specialty cocktails (think Manhattan, Sidecar, Mint Julep and more) made from Prohibition-era recipes. The mixes are aged in oak whisky barrels for 10 weeks to achieve authentic flavor profiles true to their historic roots.

In June of this year, the Hartunians opened a new retail outlet and vintage bar shop inside downtown Napa’s popular Oxbow Public Market. While Arthur channels his energy into product development and distilling, Lusine’s talents as a designer are apparent in the distillery’s vintage art labels and her vision for the new store’s “speakeasy” atmosphere.

In addition to Napa Valley Distillery vodka, cocktail mixes and liqueurs, the space offers a selection of 300+ artisan cocktail bitters, “shrubs” (a colonial-era cocktail made from sweetened fruit vinegar), syrups and an array of bar accessories. The couple is hoping to establish the outlet as a destination for visiting tourists and local aficionados alike.

Coming soon to the distillery’s portfolio is Old Hollywood Gin, which Arthur describes as “a scandalous blend of botanicals in grape spirits,” and two small-batch whiskies; California Cowboy Rye, finished in port barrels, and Son of a Bourbon (aka S.O.B), that promises to deliver “damn smooth” drinkability.

Hartunian, who also serves as current president of the California Craft Distillers Guild, is a passionate advocate for the industry. He notes the growth of the state’s micro-distilleries from just four to 31 producers in the past 15 years. “The craft distillery industry in the United States is relatively new,” he says. “Most are first-generation distillers with a passion for spirits and a desire to create something special from scratch.”

Linking to local history

“We fell in love with the amazing food and wine culture here,” says Amy, a former special events and wedding producer (Fred is a former environmental scientist), “and we thought, ‘This is the kind of place to follow our dreams.’”

Those dreams took hold years earlier during travels in Italy, when the couple first tasted a popular fresh lemon liqueur called Limoncello. For the next 16 years, they were consumed by a passion to recreate the regional specialty back home, making experimental batches in their kitchen to serve to dinner guests. Their Limoncello was well received, which encouraged them to follow their bliss and open a distillery.

Taking a leap of faith, they relocated to the North Bay in 2008. A year later, the Groths opened HelloCello—the first licensed distillery in Sonoma since the repeal of Prohibition—and launched their first product: Limoncello di Sonoma. “It was an instant hit,” Amy reflects. “We were the only company out there making organic local Limoncello.” Shortly thereafter, they attracted the attention of Sunset magazine and Whole Foods, and popularity skyrocketed from there.

The couple uses a brandy base made from local Wine Country grapes, and sources organic Eureka and Sorrento lemons, and agave from Mexico to craft a small-batch liqueur that’s true to its Italian origin. Attention to detail is what sets their Limoncello apart in the marketplace. “We use only fresh, organic ingredients—no chemicals, coloring, artificial flavors or preservatives,” says Amy.

Soon other “Cellos” evolved, including a hand-crafted OrangeCello made with California blood oranges; BelloCello, made with sweet navel oranges infused with Damiana flower (known for its aphrodisiac properties); and a bourbon barrel-aged FigCello that was developed by special request from Sondra Bernstein, owner of Sonoma’s the girl and the fig restaurant. This latter liqueur uses locally grown Black Mission figs and a blend of vanilla, star anise, oranges and herbs for an intense, seductive flavor profile.

The Groth’s success with HelloCello ultimately fueled expansion of a second artisan spirits line.

Prohibition Spirits cleverly incorporates local history with its product portfolio. Their Hooker’s House Bourbon label includes a Rye, a Twenty-One Year Old Reserve (already sold out), and a Private’s Select White Corn Whisky.

The Groth’s locavore philosophy is also apparent in their use of Sonoma wine barrels to age their spirits. Prohibition’s Hooker’s House and 21-Year-Old Reserve bourbons are finished in hand-picked Pinot Noir barrels from Schug Winery, which adds fruit-forward notes to the whisky. Their Rye follows a similar process, aging in Zinfandel barrels from Gundlach Bundschu, the oldest family winery in California. Hooker’s House White Corn Whisky—a smooth, sweet, 96 percent corn whiskey (aka “Sonoma’s moonshine”) bottled in mason jars—was launched in limited release last Christmas and sold out in three days. It’s now part of the distillery’s regular portfolio.

Recently added to the mix is a trilogy of fine Caribbean-sourced rums called Sugar Daddy. The label is named for Sonoma’s resident sugar baron, Adolf Spreckels (circa 1914), whose beautiful young wife referred to her wealthy and much older husband by that moniker. Like their bourbons, Sugar Daddy Rums are aged in used wine barrels that infuse notes of caramel, vanilla, butterscotch and spice to the rich tropical fruit base; the light and amber rums are aged in Chardonnay puncheons from Schug Winery, and the dark rum is matured in the Hooker’s House Bourbon barrels. “We think they’re perfect for sipping or mixing in cocktails,” says Amy proudly. “It’s like capturing summer in a glass.”

The Groth’s future looks bright. Between HelloCello and Prohibition Spirits, production has more than tripled in the last four years. Their products are now available at more than 300 distribution points in Northern California and Pennsylvania. And thanks to a call for investors in a Kickstarter campaign last Christmas, the couple raised enough money to purchase a custom-made still, so expansion is in the works.

Amy and Fred, who run all aspects of their business, from development to distribution, have never looked back. “We knew Sonoma was the right place to make our dream a reality,” Amy reflects. “People here appreciate and support our commitment to excellence.”

On the rocks?

Ask micro-distillers about the future of the craft spirits industry in California and you strike a nerve.

Although micro-distilleries have enjoyed national growth in recent years, California has lagged behind other states in passing legislative reform to address serious inequalities that exist between spirit makers and other alcohol producers. Unlike California wineries and breweries, which are legally permitted to offer tastings and sell product direct to consumers, micro-distillers have found themselves trapped by antiquated, Prohibition-era laws and monopolized distribution channels. The result threatens to stifle future industry growth in this state.

Case in point: Current California law requires craft distillers to sell their products through distributors. The distributors, in turn, mark up the spirits to retailers and bars, who pass their cost on to consumers. This three-tiered system drives up costs, while at the same time making it illegal for distillers to eliminate the middleman.

Distributors also have less incentive to promote the brands of small artisan producers, since there’s more money in selling highly recognized labels. These realities of doing business make it challenging for micro-distillers to compete and build an audience.

“As it stands now, consumers can go to a winery, drink samples and buy multiple cases of wine. But they can’t come to my distillery and buy a bottle of my spirits,” says Master Distiller Marko Karakasevic. “We really need to be able to sell our own products to tourists and locals who take the time to visit us and learn about our craft.”

His frustration is understandable. The beer and wine industries have powerful lobbies in place to protect their interests, while the comparatively small number of craft distillers struggle to get comparable reform. The California Craft Distillers Guild has been lobbying for new state legislation to level the playing field with regard to tasting restrictions and on-site sales. Current Assembly Bill AB-933, authored and sponsored by Assemblywoman Nancy Skinner, would revise existing law so licensed distilleries can offer onsite tastings, with or without charge.

Known as the “Taste California” proposal, the legislation would amend outdated state ABC “blue laws,” still on the books since Prohibition. If passed, reformed laws would open the way for new job opportunities, stimulate the economy and increase state and local tax revenues.

Distillers believe that’s a win-win for everyone concerned. “I would love to see the California craft distilling industry grow and prosper,” says Napa Valley Distillery’s Arthur Hartunian, current president of the Guild, “but unless we get archaic laws changed, other states will surpass us in market share. We need to actively work together to move the industry forward and into a profitable place.”

It’s a sobering reality, but Hartunian remains hopeful that change is imminent. “If we stand united in our efforts to revise these laws, we all succeed,” he says. “We have the ability to put craft distilling on the map as a main attraction of our state.”

 

Karen Pavone is a freelance writer, photographer, and passionate “farm to table” blogger (www.farministasfeast.com) living with her family in Novato, California.