Sonoma County distillers display high spirits as whiskey drives growth of spirits sector
The moves Adam Spiegel has made with his whiskey and bourbon business along a patch of State Farm Drive in Rohnert Park depicts the growth of the spirits industry in Sonoma County.
A quick synopsis over a decade: Spiegel and a local partner started nano-distillery 1512 Spirits in 2010. Three years later, Spiegel bought out his partner in an attempt to treat it more like a business than a hobby. He moved a few blocks to a 6,000-square-foot space and launched Sonoma County Distilling Co.
That space - big enough for four 250-gallon pot stills - served its purpose until last year when Spiegel went on the move again to a tract next door. The new 12,000-square-foot structure houses a vast array of malting and distilling equipment, including a 3,000-gallon pot still imported from Scotland. And he plans to add a 9,000-square-foot barrel room. The enlarged operation also comes with a new name, Sonoma Distilling Co. It's slated to open in May.
Spiegel, 34, of San Rafael, said he now has enough space to grow for years and still be considered a craft spirits producer. He is constantly thinking about the future since whiskeys and bourbons take at least two years of aging until they're ready to go into the marketplace - and even longer for special batches.
“Whiskey is the absolute long game,” Spiegel said.
That long game also is being played by other distillers around Sonoma County, mirroring the growth nationally in the U.S. spirits industry that posted record sales of $27.5 billion in 2018, according to the Distilled Spirits Council, the industry's main trade group.
Much like wine and beer, Sonoma County has emerged as a hotbed in the craft distilling space in California along with San Diego, said Cris Steller, executive director of the California Artisanal Distillers Guild who also owns his own spirits business, Dry Diggings and Amador Distillery in El Dorado Hills.
In one sense, that shouldn't be surprising given that Northern California has been at the forefront of the movement it started in the early 1980s with pioneers such as Hubert Germain-Robin in Ukiah - whose luxury brandy brand was bought by E. & J. Gallo Winery in 2017 - Miles Karakasevic's brandy at Charbay in St. Helena and Jorg Rupf of St. George Spirits in Alameda.
Spirit industry boom
There are 1,550 licensed distilleries nationwide, a sharp increase from about 200 a decade ago, said Eric Owens, vice president of the American Distilling Institute. The growth has been driven by upstarts that have carved a niche in making and bottling artisanal booze on their own premises.
The crafts spirits market still is a small segment, representing 3.3 percent of the overall spirits sector, according to London-based market researcher IWSR. Yet craft products contributed 31 percent of the overall growth in spirits from 2017 to 2018.
Under California law, any distiller that produces less than 150,000 gallons a year, which equals 70,000 9-liter cases, is considered a craft spirits maker. Those that fall under that rubric receive special breaks such as having the ability to sell directly to their customers via tasting rooms, having their own restaurants and holding additional retail licenses.
Growth in the county
There are about 20 spirits companies around the region, which include veterans such as Spiegel and Timo and Ashby Marshall at Spirit Works Distillery in Sebastopol, and younger distillers like Tara Jasper and her Sipsong Spirits in Windsor, which features her modern-style botanical gin.
The optimism is translating into expansions beyond Spiegel's Sonoma Distilling. Hanson Organic Vodka of Sonoma, for example, has opened a tasting room in Sausalito.
“The craft distilling movement is becoming more recognized among society as a whole,” said Timo Marshall, who has established a distiller apprentice program for Spirits Works. The sector has greatly lagged in training locally compared with the wine and beer industries.
The county, however, is a hospitable place for distillers because it pairs well with the food-and-wine culture along with the number of tourists who visit each year, Spiegel said. He said the term “Sonoma” conjures up premium products in the marketplace. That made it easier to ditch “county” last year in a rebranding of his spirits business.
“From my perspective, it was just one more word longer than it needed to be,” he said.
The growth in the spirits sector has been especially pronounced in brown spirits. The Distilled Spirits Council said annual sales of American whiskey last year increased 7 percent, or $224 million, to $3.6 billion; cognac rose 14 percent, or $250 million, to $1.8 billion; and Irish whiskey grew 12 percent, or $108 million, to $1 billion.