Brooklyn Might See the First Legal Still in NYC since Prohibition

April 24, 2009 at 8:45 pm Leave a comment

 

Tom Potter just can’t get enough to drink.

The 53-year-old entrepreneur, best-known for co-founding Brooklyn Brewery, is preparing for his next venture: New York Distilling Co.

Mr. Potter is hoping to locate the city’s first legal still since Prohibition in Brooklyn as well.  Potter plans to offer visitors a more worldly education, allowing visitors to experience the spirit-making (and tasting) process. The distillery will launch with production of several different gins and whiskies, including bourbon, American single malt and rye.

Mr. Potter has a strong track record. While he sold his stake in the beer business five years ago, the brewery that he founded in 1987 with Steve Hindy is still expanding; Mr. Hindy is now looking to double its space and add to its selection of specialty beers.

Mr. Potter says the brewery experience encouraged him to start another company.

Launching this particular business will be no small feat. The distillery has to pass muster with the state liquor authority, and the combination of a production facility and a tasting room will be a zoning anomaly, wherever it’s located. And given the current economic environment, the most significant hurdle will be raising $2 million in financing. Mr. Potter hopes to have $600,000 by the end of June so that he can lock in a space.

“Raising money will be challenging, but on the other hand, everything else will be easier,” Mr. Potter says. The entrepreneur says the recession has made new potential employees available and brought some ideal locations into his price range.

“I’ve probably walked every block in Brooklyn,” Mr. Potter says.

He’s checked out more than 50 spots in neighborhoods including Williamsburg, Red Hook and Sunset Park, but he’s partial to setting up shop in Gowanus. If all goes as planned, Mr. Potter will begin construction and equipment installation by the spring of 2010 and will have product at liquor stores next year.

Along for the ride is Milton Glaser, who created the logo for Brooklyn Brewery and the state’s famous “I Love New York” campaign. Mr. Glaser will provide design and packaging services for New York Distilling; Mr. Potter jokes that he’s getting an “old customer discount.” The team also includes Jason Grizzanti, distiller at Warwick Valley Winery & Distillery, who will consult on the spirit-making process.

The time is ripe to get into artisan distilling.

“Spirits have been gaining market share vis-à-vis beer for about six or seven years,” says David Ozgo, chief economist for the Distilled Spirits Council of the United States. “Anytime you have a fairly rapidly growing market, it allows room for niche players.”

Moreover, from pomegranate margaritas to old-fashioned gin and tonics, liquor is fairly recession-proof. Revenue for the spirits industry rose 2.8% last year, to $18.7 billion, with higher-priced “premium” brands seeing an increase of 4%, according to the spirits council.

Although consumers are nipping their expenses, Mr. Ozgo says that many are opting to entertain at home, where they can stock affordable food and alcohol.

“It’d be tough to serve yourself a $14 martini,” he says.

In addition to reeling in penny-pinching drinkers, Mr. Potter hopes to snag customers by appealing to hometown loyalty. New York Distilling will use mostly in-state ingredients, with an emphasis on organic and sustainable goods.

“People want to have a local association and regional pride,” he says. “If you make a good product locally, people will support you.”

 

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