Van Hawxby will open DogMaster Distillery and begin making whiskey and vodka this summer in Columbia after overcoming the craft industry’s greatest hurdle: time.
Hawxby had to lease a renovated warehouse in the downtown arts district before he could start the licensing process and buy and register the equipment for the distillery operation he wanted to set up in the building, a process that took 15 months.
“A year and three months– without manufacturing a drop,” Hawxby said as he sat at the black-and-red bar he built near the tall steel and copper still. “Be prepared to take a long time, because even as we speak there are more and more people getting into the industry.”
DogMaster Distillery will join the craft distilling industry during a boom period. The number of small-scale distilleries has grown from about 60 in 2004 to more than 600, according to Pennfield Jensen of the American Craft Distillers Association. There are 28 licensed distillers in Missouri, according to a document from the Alcohol and Tobacco Tax and Trade Bureau, and most of them are small-scale operations opened in the last few years.
The craft distilling market has also increased its share of the premium and ultra-premium beverage markets. Craft distilling is showing comparable growth to the $10 billion craft beer brewing industry with less than a third of the number of producers, according to a study by Nielsen Associates.
Hawxby’s still can produce 200 gallons of liquor for further stilling and at capacity could produce 500 bottles of spirits a day. Hawxby plans to distribute to local liquor stores and grocery stores. An iron fence separates the still from the bar, but customers will be able to see liquor being made as they drink samples of the product.
Hawxby wants to inform customers where he’s buying the grain used to make his spirits and hopes he’ll be able to buy all of the raw material from local farmers.
“This operation is going to be very transparent,” Hawxby said.
“Columbia is a town full of what is called locavores — people who want to know where their products are coming from, who want to know that it’s grown locally, and how it’s produced and how it’s grown,” Hawxby said.
Hawxby is from Northwest Missouri and moved to Portland with his wife, Lisa, in 2010 after he got a business degree. They were ready to begin something together and wanted to reinvent themselves in a different part of the country.
“Throughout my MBA program,” Hawxby said, “I had thought if there was ever some sort of a product, a tangible product that I could manufacture, market, promote, advertise, how wonderful a thing would that be.” But trying to start a business in a highly competitive market during the recession proved too difficult for the couple.
“At some point you just say, ‘We have gambled,'” Lisa Hawxby said. “And we didn’t lose necessarily, because we learned a lot about ourselves. But we didn’t win in the way we were hoping.”
Soon after, the Hawxbys returned to Missouri and decided to try their hand at craft distilling.
Creating DogMaster Distillery was a natural fit for Van Hawxby, who spent three years tending bar in northwest Missouri. “Now I’ve learned a lot about the manufacturing process,” he said. “I put together my business plan and I just started working from the business plan.”
There are many obstacles to breaking into this burgeoning industry and reaching the distilling phase, Jensen said.
“In general, the barriers to entry reflect the high cost of supplies and equipment,” he said, “and the rigorous effort required to secure all the necessary permits as well as the expense of compliance and marketing.”
Financing the distillery was difficult for the Hawxbys. They were turned down by local bankers who had never invested in craft distilling.
“We tried to keep things local but they were fairly upfront,” Lisa Hawxby said. “They were like, ‘Look, this is just not an area that we’re necessarily comfortable with.'” So the couple turned to family and friends to finance their business venture.
Learning the art of distilling also takes time and is usually done through domestic or international apprenticeships. Van Hawxby turned to Garrett Burchett, co-manager of the Mississippi River Distillery in Davenport, Iowa.
“It’s kind of learn as you go,” Burchett said. Burchett’s training took place in Bavaria, Germany with a professor, something Burchett worked to set up on his own. There are also distilling courses offered through universities, including Missouri State University, some of which are offered online.
“It is kind of like a club,” Lisa Hawxby said of the craft distilling community. “Everybody is really interested in each others’ success and learning from each other and carving out their own little niche.”
The competition for market share in craft distilling isn’t as crowded as that of craft brewing, with more than 2,500 breweries compared with about 600 distilleries operating in the United States. There is a “long runway” for craft distillers to build their brands before the growth is slowed by an abundance of competitors, said Danny Brager, head of the Nielsen Co.’s Beverage Alcohol Client Service team.
“Nobody is doing it the same way,” Burchett said of the competition within craft distilling. “Some people are doing it thinking they’re going to make millions of dollars; some people are doing it just as a hobby.”