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Q&A: Eric Zandona, the American Distilling Institute

In our September/October 2022 issue, Eric Zandona, director of spirits information for the American Distilling Institute (ADI), spoke with writer Susannah Skiver Barton about how the quality of craft spirits has evolved over the years and how that’s reflected in the influx of newcomers winning medals in the ADI spirit competition. We talked with Zandona to learn more about where he thinks the craft spirits industry is now heading, which craft distillers are worth watching, and which American craft whiskeys are his current favorites. This interview has been edited and condensed.

Where do you see the craft spirits industry heading? 

The industry, in terms of new entrants, is still pretty strong. Even a couple of years ago from some of our projections modeling, we were anticipating that the craft distillery boom is generally following similar trends in wine and craft beer that happened decades before. 

We’re at this inflection point where it’s still growing rapidly, but some of that growth is probably going to slow down. Some of the current economic circumstances are probably going to contribute to some of the slowdown. But as far as I can tell, new brands are still in the process of entering, new distilleries are in the process of opening. And obviously, larger companies are acquiring other smaller distilleries or similar-size companies. Everything in the market is still showing that overall shift and premiumization that’s been happening for the last decade. And that process is continuing.

The really interesting thing that I didn’t anticipate was how much agave grew over the last year and a half. It had been growing steadily for a long time now. But it really seems like it got turbocharged with the pandemic and sales of tequila. But also mezcal and some other agave spirits have skyrocketed in the last year. And you’re seeing tequila and agave get into the top three slots of overall spirits in terms of value sales, not necessarily volume.

Whiskey has been popular with craft distilleries, but does it look like agave will take its place?

All tequila has to be made in Mexico. A 100 percent agave tequila has to be distilled and bottled in Mexico. Whereas what industry people refer to as mixto tequila—that’s 51% agave, 49% other sugars—can still be sold in bulk and then bottled in the U.S. So that’s probably what’s primarily going into a lot of the tequila-based RTDs and then some of the other level bulk brands of agave spirits. But all that is coming out of Mexico. Whereas on the American side, there’s been a small but growing movement of California distillers to create California-distilled agave spirits. Venus Spirits in Santa Cruz; St. George, obviously, is one of them; Ventura Spirits was another; and Shelter Distilling. They all are buying agaves—I believe, they’re blue agaves from a farmer in Yolo County in California—and then cooking them, distilling them into a California agave spirit. 

“There’s been a small but growing movement of California distillers to create California-distilled agave spirits.”

That’s not gonna dramatically shift the market because it’s such a small volume that they can create, but that’s an interesting thing. Outside of that, there’s been a number of U.S.-based craft distillers who’ve been making agave spirits from syrup, like the agave syrup that people will use instead of sugar. Basically, that commodity product is sold in bulk and then they ferment that and distill it into an agave spirit. That has been happening for a decade or so as well. 

So that market is a little bit limited on the American side. Though the ones that are doing it, they’re finding success and, in their tasting rooms, selling it. People are interested in it and buying it. But by and large, American craft distillers, where they’ve largely been focused, has been whiskey for a long time. We had some data a few years ago that over 50% of new craft distillers were focused on making a whiskey. 

Is there anything particularly interesting happening with craft whiskey?

Lots of stuff going on with whiskey. I have a book that came out last year that looked at the re-emergence of regional styles of whiskey. So Missouri created a state law defining what Missouri bourbon is. The Texas whiskey association created an industry definition for what Texas whiskey is and what the rules are around if you want to use that term on your label. There are a number of different states adding to this conversation. We used to talk a long time ago about rye whiskey from Maryland or Pennsylvania. Those styles died out during the post-World War II period and when everything consolidated into Kentucky and Tennessee. And those are re-emerging. And then with the growth of craft distilling around the country, you’re starting to see people trying to define their styles in their region. So that’s kind of fun.

“…With the growth of craft distilling around the country, you’re starting to see people trying to define their styles in their region.”

And it’s hard to say right now what is truly the defining characteristic of bourbon made in Missouri compared to Kentucky. But, I’m sure that those things will emerge over time. Texas is so intense that you can get fully mature-tasting whiskeys in a very short period of time. So because of the intense heat and cold that they get, you can have 36-month, 48-month-old whiskeys that taste fully mature and developed. 

Whereas, if you get a bottle of Kentucky bourbon, that’s been aged for 36 months, it’s not going to be great. But that has everything to do with their aging environment that they have that’s so much different compared to Kentucky. And a lot of the Texas distillers are really leaning into that to take advantage of their environment and the difference that makes.

And so, a lot of drinkers have been trained on age statements. “Oh, it’s 10 years old or it’s 23 years old. It must be fantastic.” But you can still get really great whiskey in a different aging environment that’s much younger in terms of the amount of time it’s spent in the barrel but, because of the environment, has a really rich and fully developed profile. 

Do you see RTDs growing in craft spirits?

RTDs have really caught on among craft distillers. Venus Spirits in Santa Cruz is a great example of this. They had their existing line of gin and whiskey that they make. So you can basically take some of that production that you’re already doing and package it as an RTD. And then, as far as I know, the margins on your per unit of alcohol for the RTD versus in the bottle are better.

It’s a more complicated process to make a good cocktail and have it be shelf stable. There’s a lot of food chemistry that comes into this. Melkon Khosrovian of Greenbar Distillery in LA, when I talked to him, said, “I didn’t realize that when I got into RTD, it was basically gonna be like creating a whole new business for my distillery.” The processes that are involved and the things you have to think about can be very different from making a gin or making whiskey and bottling that. But people are buying it, people are really interested. And the quality of today’s RTDs is so much better than what existed five years ago. 

Before the last couple of years, the main RTD producers were awful whiskey and Cokes and really bad margaritas. And that was kind of it. But then, people like Cutwater and others put a lot of effort and thought into making quality stuff, and they’ve really taken off. So that’s a great opportunity for craft distillers. It can help them in their regional market get some more penetration into grocery stores.

Which craft spirits do you find most intriguing?

“One of the great things about the U.S. is that we have people from all around the world that bring their cultures and traditions here.”

One of the exciting things I saw this year for our competition is that we had a couple of U.S.-made Asian-style spirits. We had a shochu that was made from rice here in the United States and then we had a Vietnamese-style spirit called rượu đế made in Texas by a Vietnamese family who lives there. And both of them did really well in our competition.

To me, one of the great things about the U.S. is that we have people from all around the world that bring their cultures and traditions here. And we get to taste some of that culinary and spirit influence that they bring in. There’s Vinn Distillery in Portland, Oregon, and they’re making a baijiu-style spirit. It’s a very small segment of the spirits market, but it’s exciting to see those sorts of things happening.

Any craft distillers people should keep an eye on?

You have Golden Moon in Golden, Colorado, have Peach Street, which is in the more western part of Colorado. And then obviously, you have a bunch in Denver that are doing good things. Leopold Brothers has been one of the oldest and most well-established. They’ve gotten some press over the years because they’re a favorite among a lot of the whiskey writers. They’re always somebody to keep an eye on because whenever they come out with a new innovative thing—whether it was their Three Chamber rye whiskey or their cult collaboration project that they did with George Dickel—they get a lot of press. 

And then California has always got some really great stuff. I’m a big fan of Spirit Works Distillery in Sebastopol. Greenbar is a really innovative company. They’ve been doing a lot in terms of RTDs recently. But their Slow Hand malt whiskey and their California Poppy liqueur have always been ones that I really enjoyed. 

Stark Spirits in Pasadena makes a fantastic American single malt. It’s one of the best being made in the country. And they’re a tiny husband-and-wife company. There are so many craft distillers doing good things. And some of them might be making some of the great spirits in the world, and yet it’s hard for people to get traction sometimes.

What you would like for people to know about craft spirits today? 

“I’m a big fan of encouraging people to be adventurous.”

One of the exciting things about craft spirits is the process of discovery and finding new, interesting things. And one of the reasons I think the market will eventually start to slow down—though, I think we’re not quite there, we’re still in the growth phase—is that there are only so many new faces, new things you can absorb before you find your niche. So I think when people are in that discovery phase, it’s really fun. You try new things and then people gradually find the few things that they really enjoy.

I’m a big fan of encouraging people to be adventurous. Don’t just say, “I’m a bourbon drinker.” Because there might be a gin or an aquavit that a distiller’s making that’s delicious that you find intriguing. So I am always encouraging people to expand their horizons a little bit. You’re a gin drinker? You might really like aquavit. If you’re a bourbon drinker, you also might like some American single malt that somebody in Colorado is making.

The post Q&A: Eric Zandona, the American Distilling Institute appeared first on Imbibe Magazine.

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