Link to Owner Dr. Robert B. Pamplin Jr.



Difference between 'made' and 'produced' in PDX bubbles up

by: TRIBUNE PHOTO: CHRISTOPHER ONSTOTT - Tom Burkleaux, owner of New Deal Distillery, adjusts a steam valve while keeping a close eye on his still, used for making gin and vodka. New Deal handcrafts its spirits starting with the grain.  In the past two years, Portland’s Distillery Row — the collective of small distillers within a 1.5-mile swath of the now-hip Lower Eastside Industrial District — has been featured by local and national media almost more times than than the city’s food carts.

The boon in craft distilleries is seen as yet another wave of small entrepreneurship, artisan innovation, economic growth and trendiness, Portland-style.

But what’s missing from the buzz is a dirty little secret in the distilling industry that no one likes to talk about: A large share of Oregon’s spirits are not made here.

In other words, the gin, vodka, whiskey or bourbon may be bottled and “produced” in Oregon but not necessarily distilled here — unless its label explicitly says so.

“There’s a difference between a local brand and a local product,” says Steve McCarthy, owner and founder of Clear Creek Distillery in Northwest Portland, one of the many distillers contacted by the Tribune this week.

For example, he says: “Nike’s a local brand, but those shoes are not a local product,” which certainly hasn’t deterred the millions of loyal Nike fans worldwide.

McCarthy is a granddaddy in the industry, one of the first three to spring up in the United States when he opened in 1985.

Now, Oregon is home to 35 distilleries that have spirits on the shelf, 23 of which are members of the Oregon Distillers Guild. Another 15 distilleries have submitted their application for licensure, which could soon bring the total number of distilleries to 50.

That’s a big boon for the guild, the nonprofit trade group that started in 2007 with the goal of promoting Oregon spirits both locally and nationally.

In his 28 years of business, McCarthy’s observed that “a great percentage of what’s being sold in Oregon as an Oregon product is not an Oregon product.”

Other local distillers wholeheartedly agree, but they are quick to shy away from naming names since they want to build the industry, not tear it down.

It’s also not as simple as claiming that a product is “made” here.

There’s a broad interpretation of what it means to be “handcrafted,” since it’s more like a spectrum that could start with the distiller’s operation of a farm, acquisition of the grain or mash, or rebottling of a product from a wholesaler.

Much of the country’s straight bourbon, for example, comes from a wholesaler in Indiana called Lawrenceburg Distillers Indiana, commonly known as LDI.

LDI ships its “Kentucky straight whiskey” all over the world, to be sold under different names.

Local distillers say they don’t cast any judgment on whether a product comes from that source or a similar one; they recognize it is widely done, and it’s up to the individual distiller to make those decisions.

They say they do have a problem with how a company represents itself.

“I think that when people are dishonest about it is when there’s a problem,” says Christian Krogstad, founder of House Spirits, one of the original members of Distillery Row, having started in 2007. “If somebody’s bottling something they just bought from LDI or whatever, and pretend they made it, that’s different.”

Marketing and image

Some distillers are candid about where they source their spirits from, others not so much.

For example, Hood River Distillers’ Pendleton Whiskey is “distilled and oak barrel-aged in Canada,” the company explains. Then it’s blended and bottled in Hood River.

Northwest Portland’s Bull Run Distillery sells a Kentucky bourbon under the name Temperance Trader Straight Bourbon Whiskey, that says on the label it is “distilled in Indiana and bottled by Bull Run.”

Big Bottom Whiskey, a new distillery in Hillsboro, makes an American Straight Bourbon Whiskey that the label says is “aged and bottled by Big Bottom,” but owner Ted Pappas has said publicly that he is using another product until his own aged bourbon is ready.

Others are a bit harder to read.

Eastside Distilling, one of the Distillery Row members around since 2010, just picked up a prestigious International Review of Spirits Award for its flagship product, Burnside Bourbon.

According to its label (featuring the mutton-chopped General Ambrose Burnside himself), Burnside is a “4-year barrel aged straight bourbon whiskey” that is “produced and bottled by Eastside Distilling.”

Burnside is popular — it’s also won a gold medal in the MicroLiquor Spirit Awards, a gold medal from the American Wine Institute, and a silver medal from the MicroLiquor Spirits Awards for label design.

Eastside’s website declares that “making great-tasting, quality spirits is our passion.” It says that since 2009, the distillery has been “producing high-quality, hand-crafted spirits in Southeast Portland’s Distillery Row. ... We believe that locally produced spirits simply taste better, so all of our unique products are made right here in Portland, Oregon from natural ingredients in small batches for unparalleled quality and taste.”

The Tribune contacted co-owner Lenny Gotter, who, with his business partner, were known as Deco Distilling prior to 2010. They made small batches of rum in the same warehouse space they occupy.

Gotter was surprised by a question about his spirits’ origins, and didn’t want to elaborate: Then he referenced a popular brand of Kentucky straight whiskey that’s actually made by London-based Diageo, the world’s largest producer of spirits whose brands include Smirnoff, Johnnie Walker, Crown Royal, Captain Morgan and Jose Cuervo, among many others.

“People drink hundreds of cases of Bulleit Bourbon every year. Everyone assumes there’s a Bulleit distillery, but there is none,” Gotter said. “It says right there on the bottle.”

When pressed further, Gotter told the Tribune: “There’s a lot that goes on in the industry that’s complicated... . Not everything ever consumed is handcrafted — that’s just the way it is.”

Eastside offers public tours and gave a quick tour to the Tribune, but there weren’t any barrels visible in the living-room sized space, just a small still.

“The Bourbon Intelligencer,” a Sacramento blog that follows whiskey trends and releases around the world, weighed in on Burnside Bourbon last March, soon after its release.

“They are not being forthright on the fact that they are blenders when it comes to their bourbon — and in my view, this needs to change in the industry,” the blogger, Wesley Scoville, wrote. “If you are a micro-distiller, being transparent is even more of an issue. The problem here is less about the intrinsic quality of the product and more about the marketing and image being pushed. If you want your product to be a CRAFT product, then don’t try and make a campaign like the Kraken Spiced Rum — consumers are smarter than that.”

Classes of distillers

McCarthy, back at Clear Creek Distilling, has been concerned about the claims distillers have made on their labels for years. He said he raised it at one of the first meetings of the distillers guild in 2007, but “it didn’t get a single vote,” and he hasn’t had time to push the issue since.

But he says the pioneers of the Oregon wine industry did make that effort to get a legal definition of Oregon-made pinot noirs and other products, and the state is benefiting as a result.

Craft spirits should receive the same level of distinction, McCarthy says. Part of the reason is cost: It takes 30 pounds of pears to make one bottle of pear brandy, which he buys from Oregon farmers, then ripens, crushes, ferments, distills and barrel-ages it at the distillery.

“It’s an important underlying factor for these expensive products that we believe we have something special to offer,” McCarthy says. “The consumer and the trade have to know exactly what they’re getting.”

Washington state, in fact, does have two classes of distillers: craft distillers, which must source at least 51 percent of their ingredients from Washington state; and other distillers, for which there are no such regulations.

House Spirits’ Krogstad says there’s a reason Oregon distillers haven’t gone in that direction. “Because there were these distinctions, there was so much infighting among distilleries,” he says. “In Oregon, we managed to avoid a big pissing match. We started a guild and invited everyone to join, even people who were brand owners. ... We said it doesn’t matter, it’s Oregon brands, we’re taking the big tent approach rather than trying to tear each other down when we’re in fact only half a percent of the market.”

Brad Irwin, owner of the four-year-old Oregon Spirit Distillers in Bend, is proud that he can call his product grain-to-bottle. But he doesn’t do it because it’s trendy, he says — it’s just more economical.

“Sometimes it’s nice to be local,” Irwin says. “It makes sense on a large economic scale to support your neighbor. But historically in spirits, it almost has to be local — that’s what the local crop is.”

For example rum originated in the Caribbean because of its sugar cane; vodka is Russia’s product because of potatoes; bourbon is home to Kentucky but can be made elsewhere in the U.S. as long as it’s made from at least 51 percent corn, with the rest being wheat, rye, and/or malted barley. To be called straight bourbon, it has to be aged at least two years.

Making bourbon from scratch wasn’t possible at first, Irwin says. He started Oregon Spirits by buying his flour from Pendleton; two years ago, he bought a grain mill and began buying about 70 tons of grain for his three whiskey products, two of which are still barrel-aging.

Their C.W. Irwin Bourbon is one of only two straight bourbons distilled in Oregon; the other is Stein Bourbon, another grain-to-bottle operation in Eastern Oregon.

When it comes to being entirely locally made, Irwin says, his tune has changed over time. “Four years ago, I thought it was really important,” he says. This year, he’ll be making a spiced rum that will be fermented and distilled on site in Bend, with molasses and brown sugar from Mexico and spices from around the world.

Why? “Because it’s awesome,” he says.

As far as Irwin is concerned, craft distillers are all in it together, and what consumers care about most is taste, above all. “I believe the most important thing is we have to make great spirits,” he says.

Distillery Row growth puts spirits in the spotlight

Since the first craft distillers began popping up in inner Southeast Portland in 2004, two are still thriving, three have folded and three more have taken their place — with a third set to move in later this year.

Rolling River, owned by a Camas, Wash., family, could be operating this summer, depending on the speed of the license and permit process.

Rick and Joan Rickard and their son, Tim, will bring their engineering and business background to their soon-to-open space at 1215 S.E. Eighth Ave., complete with a still they will be crafting by hand.

They'll be starting with vodka and gin, and diversifying. The family says they're looking forward to helping to grow the craft spirits movement.

"Really, it's providing more choice for consumers," says Rick Rickard, who started occupying the space in December, after searching nearly two years for space in both Oregon and Washington. "If we can all work together to grow the pie, I think that's what we see as the path to success."

As president of the nonprofit Distillery Row trade organization, Mike Heavener has charged himself with managing and promoting the growth of the row.

This summer he expects local and visitor interest to skyrocket. He’ll continue his regular promotions — radio ads, corporate tours, bachelorette parties, pedicab tours — and add new ones, like a summer event that will showcase and teach the art of cocktail making with local products.

He’ll also update the Distillery Row Passport, a discount promotion tool he designed to let visitors explore the row at their leisure.

The $20 passport includes free tastings at seven tasting rooms (normally $5 apiece). Bushwacker Cider and Alchemy Wine Productions, also in the vicinity, are included.

Proceeds from the passport sales go back to the distillery and Heavener’s promotion efforts. “I don’t even know what to expect this summer — scary big,” he says. “We have to be careful. It’s not a party scene. Our mission is to promote the craft aspect. We’re managing a destination.”

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