The Atlantic

July 29, 2011

For American Distillers, a Whiskey Crisis Looms on the Horizon

One of the biggest obstacles facing a startup whiskey distiller is time. No matter how quickly you can turn yeast, water, and grains into alcohol, you still need to mature the product in oak barrels to get something you can legally call “whiskey.” Most big distillers use 53-gallon charred barrels, which they fill, plug, and stick in an uninsulated warehouse for a few years—or longer, depending on the qualities they’re looking for. During that time, the barrels impart color and flavor to the liquid, while absorption and evaporation remove unwanted chemicals. Eventually the distillers decide the whiskey is ready, move it into bottles, and ship them to stores.

All this waiting takes money—a lot of it, and all before you’ve sold your first bottle. If you’re an established distiller, you’re covering the upfront costs of your new batches with the profits you’re making off the finished ones. But a startup doesn’t have that sort of cash flow, which is why many new distillers start with “white” spirits like vodka and gin, then invest in whiskey once the money is flowing.