The growing herd of Texas craft distilleries is pouring a new and affordable shot into their marketing plans: direct sales.
Since Sept. 1, when a state law took effect allowing them to pour customers a cocktail and sell them a bottle of liquor, craft distillers around the state have been welcoming a new walk-in revenue stream.
“It’s a huge deal,” said Dan Garrison of Garrison Brothers Distillery in Hye, where 25,000 visitors a year have been touring his off-the-beaten path Hill Country operation.
“Since Sept. 1, about 50 percent of our guests buy a bottle. It’s a big number if they can take a bottle home. It could mean we turn our first profit this year,” said Garrison, who produces two releases of high-end bourbon each year.
“About 50 percent of our tourists aren’t even from Texas. We get people from Asia and Europe and they want to buy something,” he said.
The new law makes distillery tours considerably more appealing, said Leonard Firestone of Firestone & Robertson Distilling Co. in Fort Worth.
“We’re excited about it because it is much more satisfying for our visitors. It’s a great way to share the product, and clearly that is a revenue opportunity for a young business,” said Firestone, who with partner Troy Robertson opened the microdistillery last year in a restored warehouse at 901 W. Vickery Blvd., just south of downtown.
The city’s first legal distillery seemingly caught lightning in a bottle with its initial product, TX Whiskey, a blend of sourced whiskeys from Kentucky.
When TX was released in June 2012, demand was so high that local liquor stores had to start waiting lists.
That local buzz was validated this year when TX was named “Best American Craft Whiskey” and was awarded a double gold medal at the 13th Annual World Spirits Competition in San Francisco.
The distillery, which has grown from four employees to 14, fires up its two copper stills daily and has filled hundreds of barrels with its bourbon, which will be released in 2014 or 2015. The company is selling across Texas and expanded distribution into Louisiana this month, Firestone said.
About 40 to 50 people pay $15 for a 90-minute tour of the Fort Worth distillery every Saturday, Firestone said, and more than half buy a bottle and many sample a cocktail beyond the free half-ounce sample that the state allows.
“We’re not going to replace a liquor store; we’re not a bar,” Firestone said, adding that the new law limits bottle sales to two per person each month.
A distillery can sell no more than 3,000 gallons in individual drinks, which is a lot of cocktails, annually according to the Texas Alcohol and Beverage Commission.
Texas distilleries have been popping up like mushrooms for three years.
Forty-nine distillers are licensed with the TABC, spokeswoman Carolyn Beck said. That’s up from 40 in July 2012, 25 in 2011 and 18 in 2010.
Firestone said, “That’s a trend which is going to be a growing story over the next five years.”
Chip Tate of Balcones Distilling in Waco says the new law is a big step forward for craft distillers.
“I was surprised we got it through. It opens a new door for small, growing brands. It’s really great for special releases like our new rum,” he said.
Balcones, which has won dozens of national and international awards for its diverse lineup of spirits, is tripling the production capacity in its cramped distillery.
On Sept. 1, Balcones sold out of tickets for a tour day and rang up $11,000 in sales.
“We had 15 people going through every 30 minutes. We set aside a certain number of bottles and we sold out,” Tate said.
“We’re only going to do it once a month. We’re trying to find a middle ground between running a distillery and showing it to people,” he said.
“We’re having a tough time keeping up with demand. It’s a good problem to have. We’re trying to do better but it takes time to build a distillery,” he said, adding that the operation will be moving into a huge new plant in 2015 that will boost production capacity by 50 to 60 times.
‘Huge success’
Garrison Brothers isn’t selling drinks on its tours, but at the Quentin D. Witherspoon Distillery in Lewisville an employee lunch area has been converted into a bar.
“All in all the new law has been a huge success for us,” said Kirk Wilson, one of four general partners in the distillery, which started out with a white rum, recently added a straight bourbon and will debut a single-malt whiskey in six months.
“People are absolutely loving coming to the distillery and trying a drink after Quentin gives a very in-depth hour-and-a-half distiller’s tour,” he said.
“We’re doing three free tours on Saturdays. We’ve had people leaving liquor store tastings and coming straight to the plant,” he said. “When they taste it in a drink, they buy it.”
Mark McDonald, co-founder of Ranger Creek Brewing and Distilling in San Antonio, said the new outlet for its small-batch whiskeys “has been awesome.”
Customers pay $10 for a two-hour tour and then get a price break on buying a bottle.
“It helps drive people to our retail partners. It hasn’t had an impact on them. In fact, our retail numbers went up in the first month,” McDavid said.
At Firestone & Robertson, many of the visitors are conventioneers and tourists.
“Now we can sell them a bottle and they can bring a little piece of Fort Worth back home,” Firestone said.