Hartford Business Journal

16 Hartford Business Journal • January 7, 2019 • www.HartfordBusiness.com By Joe Cooper jcooper@hartfordbusiness.com T he state's growing craft distillers industry is band- ing together to push for legislation that would al- low them to sell cocktails at their production facilities and offer visitors more bottles for off-site con- sumption, with the hope it will build greater awareness for their alcoholic concoctions, similar to the way beer brewers have grown their fan base. State law only permits craft dis- tillers to serve a 2-ounce sample to visitors during tours or tasting events, which industry experts say is too little to showcase their offerings and limits their ability to lure patrons on-site. Meantime, breweries and wineries don't have on-site drink restrictions, and can sell more bottles for off-site consumption. Distillers say they want more parity in the law. "Samples don't allow us to properly showcase how our spirits should be used," said John Taylor, the majority owner of Bloomfield's Waypoint Spirits, which makes vodka, gin, whiskey, rum and coffee liquor. "We watch our rev- enue walk out the door every single day." Despite those limitations, Con- necticut's craft distillery industry has grown steadily since 2015, and now includes 14 licensed distillers, about eight of which are in full operation. Four to six distilleries are in the plan- ning stages, industry experts say. Taylor and the owners of Hartford Flavor Co. and Litchfield Distillery are collaborating with some state lawmak- ers as they decide the specifics of their legislative wishlist, but it could in- clude a bill that would not limit on-site drink sales. They're also seeking to sell at distilleries more than two bottles of liquor (totaling 1.5 liters) per person for off-site consumption. (Breweries and wineries can sell up to 9 liters of beer and an unregulated number of wine bottles for off-site consumption, respectively.) A chief concern distillers may have to overcome is the higher alcohol content in some cocktails. But local distillers say having one or two drinks is less dangerous than beer or wine drinkers consuming an unregulated number of beverages throughout an afternoon or evening at a brewery or winery. Bars and restaurants can also offer patrons as many cocktails as bartenders deem appropriate, distillers note. Opposition could come from liquor stores, bars and restaurants that fear the extra competition, but distillers argue that increased brand recogni- tion, through tasting-room growth, would also help increase cocktail sales at those establish- ments. Securing parity with beer and wine producers, distillers argue, would allow them to expand their businesses and spur entrepreneurship. Distillers also pitch craft distilling as an agricultural business because of their dependency on locally grown grains, corn and malted barleys. "What we are looking for is to actu- ally sell a cocktail," said Tom Dubay, who co-founded Hartford Flavor Co. with his wife, LeLaneia, in April 2015. "That will help us fill a new larger tast- ing room, create more jobs and more revenue for the state." Industry scope Distillery laws vary greatly state-by- state. That is why nearby states like New York, New Jersey, Massachusetts and Vermont have far more distilleries than Connecticut, which is known to have tighter regulations within the indus- try, according to Alexandra Clough, a spokeswoman for the American Craft Trade Spirits Association. "Regulation has held back the indus- try's growth," Clough said. "Connecti- cut has historically always been a tight state as far as legislation." Nationally, craft distilling is a $3.7 billion industry and is considered the fastest-growing alcohol market. The number of distillers nationwide grew by 15.5 percent over the last year to 1,835 in August, the trade association said. In 2017, the industry's workforce grew by almost 4,000 to more than 18,300 workers. Investments in equipment and staff also soared by over $190 million to more than $590 million last year. The national market is fairly top heavy with five states — California, New York, Washington, Texas and Colorado — owning nearly 34 percent of all U.S. craft distillers. About 318 distilleries are in planning, the craft spirits association said. In Connecticut, the industry sup- ports over 100 jobs as far west as Mine Hill distillery in Roxbury and as far east as Westford Hill Distillers in Ashford — the 15th oldest distillery in the country. The local distillery market is con- centrated in central Connecticut, and also includes Onyx Spirits Co., cur- rently looking for a new location, and Central Connecticut Distillers, known as Peel Liqueurs, in New Britain. Sev- eral new distilleries are planned along the shoreline and in Fairfield County. Like brewers, Connecticut distill- ers say adding more competi- tion will benefit the state's booze industry. Creat- ing a cluster of distilleries, they say, will encour- age foot traffic and participation on the Connecti- cut Spirits Trail, which showcases the state's craft distillers through production tours and tasting events. Distillers doubt Connecticut will ever have as many craft distilleries as it does brewers — there are more than 80 breweries op- erating in the state — but they see that gap closing over time if state lawmak- ers help foster tasting-room growth through business-friendly legislation. "At the end of the day we need both avenues to be successful," Dubay said of growing on-site and retail sales. "Every- one is itching to get that business parity." Expansion pledges While local business owners say they feel slighted on certain issues, Connecticut currently provides at least one pro-distillery measure. Banned in certain states, Connecti- cut law allows distillers to sell their products outside the state's borders to boost sales. And with more relaxed tasting-room laws, many distillers say they will continue to expand their lo- cal footprint. Litchfield Distillery, producers of several craft bourbons, gins and vodkas, currently maintains a 35-seat, Unified Spirits CT craft distillers say tight regulations holding back industry's growth Active craft distillers in Northeast states State Distillers New York 134 Massachusetts 29 Vermont 24 Maine 19 New Hampshire 15 Connecticut 14 Rhode Island 3 Source: American Craft Trade Spirits Association Tom and LeLaneia Dubay, co-founders of Hartford Flavor Co., sell their liqueur products to 1,000 bars, restaurants and liquor stores in eight states. HBJ PHOTO | JOE COOPER

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