Boom in craft spirits lifts Sonoma County distillers
Growing up, twin brothers Chris and Brandon Matthies not surprisingly tried making homemade wine and crafting their own beer, given the abundance of both in Sonoma County.
But when it came time to turn their hobby into a business, they instead turned to something that isn’t as ubiquitous locally: spirits. In 2012, they cobbled together savings and borrowed against retirement accounts to start Sonoma Brothers Distilling Co. in Windsor. A crash course at Michigan State University also provided crucial education.
“It’s a little more up and coming. ... There’s not a lot of craft in the market,” said Chris Matthies, 32, who is a firefighter for the Santa Rosa Fire Department while his brother, Brandon, works as an officer for the Santa Rosa Police Department.
The two brothers teamed up to make their own non-GMO three-grain vodka and a four-botanical gin, while their whiskey aging in barrels will be ready by next month. They produce about 400 bottles a month that can be bought in stores such as Oliver’s Markets and Bottle Barn and is served in restaurants.
“We just wanted to do something unique,” Brandon Matthies said.
A lot more people are joining the two El Molino High School graduates in that pursuit in Sonoma County, where the number of craft distillers has climbed from a single producer in 2008 to roughly a dozen today who are operating or are in the planning process, according to statistics from the Sonoma County Economic Development Board.
Like wine in 1970s and 1980s and beer in the 1990s, the spirits industry is experiencing a craft boom among small providers looking to take a slice of the ?$23.1 billion of revenue generated by distillers last year, up 4 percent from the previous year, according to the Distilled Spirits Council of the United States.
The industry is dominated by large multinational companies such Diageo, Constellation Brands and Brown-Forman. California’s market, which represents about 11 percent of the shipments in the U.S. spirits marketplace, provides a telling example.
In the Golden State, less than a third of the shipments in 2014 came from major California providers that have recognizable names such as E&J Gallo, which produces New Amsterdam gin and vodka and Familia Camarena tequila, and Guerneville’s F. Korbel and Brothers, which makes its own brandy, according to an analysis of state Board of Equalization tax records by industry consultant Jon Moramarco.
The other two-thirds came from big national and international firms. Craft distillers accounted for just 0.53 percent of shipments in California last year. Though just a fraction of the market, it represented a 40 percent increase over 2013 shipments.
The growth can be seen locally. In Sebastopol, Spirits Works Distillery doubled its shipments last year to 968 cases, each consisting of nine liters of alcohol, according to state tax records.
For comparison’s sake: California craft brewers produced ?9 percent of the beer sold in the state last year, while 52 percent of wine shipments in the Golden State came from non-major wine companies, according to Moramarco’s analysis.
“It’s very, very small,” Moramarco said of the craft spirits industry. “People are trying to equate spirits with craft beer, but craft beer has been around so much longer.”
The growth in craft spirits is not only coming from up-by-the-bootstraps entrepreneurs like the Matthies brothers but also from more well-established local businesses, such as Bear Republic Brewing Co. in Cloverdale and Graton-based Purple Wine + Spirits.
Bear Republic is planning to open a spirits unit making whiskey and rum and is currently looking to either Cloverdale, Healdsburg or Santa Rosa to house the 500-gallon still it purchased from a Scottish manufacturer, said Richard G. Norgrove, who owns the company with his family and is its brewmaster.
Bear Republic has already collaborated with Charbay Family Distillery and Winery in Napa to make high-end whiskey (think $150 a bottle) that will be released in 2017.
“That’s my next creative venture,” said Norgrove, who added that he could eventually see a time in the future when “I stop being the master brewer and become the distiller.”
Meanwhile, Purple Wine + Spirits - which is the nation’s 30th largest wine company, according to a ranking by Wine Business Monthly - changed its name this year to reference its new spirits business. The new venture is a passion of owner Derek Benham, who first became intrigued by witnessing the gin culture in Barcelona. It hopes to produce its first bottles by the year’s end.
“Derek’s always looking for what’s next on the horizon,” said Lisa Erlich, executive vice president at Purple Wine + Spirits, who oversees the new spirits division after a long career mostly devoted to the wine industry. “I think there’s a lot of experimenting and a lot of creativity.”