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Still Waters Distillery

by on March 2011

Starting a distillery from scratch can be a daunting task, especially in Canada, but the gentlemen at Still Waters Distillery have succumbed to their passion and taken the leap anyway. For cocktail aficionados they are planning to produce a 100% rye whisky, but with aging that is a few years away. Single malt whiskies seem to be their true passion, but again good whisky takes time. While they are laying down stocks of malt and rye for aging they have put the still to work making a 100% barley malt vodka. This may be the best use of vodka yet--to support micro-distillers.

Historically, Canada had hundreds of small distilleries and some of the biggest names in liquor started here like Seagram's and Hiram Walker (Canadian Club). The Bronfman family dismantled the Seagram's empire so they (Edgar Jr. mostly) could buy into Vivindi, a former water and sewage company in France turned high flying entertainment conglomerate during the Internet bubble. And we all know how that turned out. The once vibrant history of Canadian distillers has languished for decades and sold off piecemeal, only to become an industry of discombobulated, mass produced whisky and vodka brands, and not much else.

Ontario is a unique place to start a distillery. The Liquor Control Board of Ontario (LCBO) stores are the number one purchaser of alcoholic beverages in the world, doing about $4.27 billion worth of sales annually for a populous of 12.8 million. The LCBO has over 600 store and currently has access to 22,000 products from 77 countries in their system. The number of different products isn't what is available on the shelves, I believe it also includes products available through distributers (full case orders).

This may sound great, but the reality for small Ontario distillers is that they have to compete globally, even in your own back yard. If they can't market and sell their products as fast as Bacardi, Pernod and Diageo the LCBO really doesn't want the product. Because of the LCBO's iron fisted monopoly, a small distiller cannot sell their product at independent stores because they don't exist. They have to go through the same process as the larger companies, which is proportionally more expensive for small distilleries, and compete for shelf space with the very well funded international conglomerates.

Still Waters Carl Still

Across Canada there are roughly 20 to 25 distilleries, however the vast majority of Canadian spirits are produced by only eight of them. Most are foreign owned. The only reason these distilleries remain open is Canadian law states: to be called a Canadian whisky it must be distilled and aged in Canada for a minimum of 3 years. If it wasn't for that little inconvenience there might be only two or three distilleries in Canada. 

Canadian Distilleries

Crown Royal in Gimli, Manitoba
Canadian Club & Wisers at Hiram Walker in Windsor
Gibson's at the Schenley Distillery in Valleyfield Quebec
Bacardi rum and vodka at FBM Distillery in Toronto
Canadian Mist in Collingwood, Ontario
Alberta Whisky at Alberta Distillers in Calgary
Black Velvet Distilling in Lethbridge, Alberta
Meaghers in Montreal (owned by Corby)

There are some smaller distilleries including Kittling Ridge (Ontario), Glenora (Nova Scotia), Highwood (Alberta), Iceberg Corp. (Newfoundland). Then there's a handful of micro-distilleries like Still Waters. Magnotta Winery in Ontario, Prince Edward Distillery in PEI and Okanagan Spirits in British Columbia.

British Columbia seems to be the area in Canada where micro-distillers are taking root, but not easily. Frank Deiter, master distiller of Okanagan Spirits was key in forming the B.C. Artisan Distillers Guild. With Frank's help, other micro-distilleries starting production like Victoria Spirits, Island Spirits and Merridale Cidery. For every micro-distillery in Canada it remains a difficult task to work within laws that treat spirits as morally reprehensible.

The most frustrating aspect for distillers are the different laws for wineries and breweries. A key issue is that beer and wine are taxed at lower rates, making them more competitive. In some provinces beer and wine can be sold at corner stores or in winery owned boutiques at malls and grocery stores, but spirit sales are severely restricted. In addition to the tax and distribution issues, distilling artisanal products is expensive. The cost of raw materials, operating a still and the warehousing of product for aging can really add up.

These ghosts of temperance laws are a significant reason why white spirits, sugar laden liqueurs and malt beverages have become so popular. Unless a distiller is independently wealthy, it is near impossible to start a distillery without producing a product that can be sold immediately. Flavourless white spirits and sweet liqueurs meet this criteria, but they also attract (or target) young and underage drinkers, leading to binge drinking.

People like vodka because, if made in the modern fashion, it is easy to drink and "doesn't taste like alcohol". Well, it actually does taste like alcohol, those people mean it doesn't have the higher levels of congeners found in other spirits--you know the ones that slow down the drinking rate because you learn to appreciate them. These flavourful spirits also cause young, inexperienced drinkers to refuse to drink more because to their pristine pallets, its harsh.

Even though governments are loathed to take responsibility for poorly written laws, they should really look at the causality of their legislation. The "grand experiment" of prohibition was proven to be a failure but many of the temperance influenced laws are still enforced 80 years after the fact.

The Ontario government is the largest retailer of alcohol on the planet, but their regulations make it almost impossible to start a distillery, leaving the door open to alcoholic beverages like Black Fly, a sickly sweet combination of fruit juice and industrial distilled alcohol. Really, just mix, bottle and distribute. Why employ coopers, copper smiths, distillers, chemists and engineers when you can make alcoholic koolaid. It's just what the kids like. Cliché, but yes, this is clearly hypocrisy.

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Considering the fact that Germany has 800 small and medium-sized distilleries and approximately 23,000 licensed distilleries, really makes Canada look truly prohibitionist. The last time I checked, the great people of Germany make some of the finest, precision engineered, equipment on the planet. I drive a Volkswagon Jetta (Wolfsburg), shave with a Mekur razor and my toaster and electric kettle (Krups) are made in Germany. Who else could put 1750 watts of power into a kettle? When I want my hot water for coffee, I want it now! Even at the lab I work in, we use a multitude of German made Leica Microsystems equipment. We use microtomes that can cut down to 1 micron. That may not mean much to most readers, but trust me, it's a feat of precision engineering.

Anyway, my point being that I don't think you can connect the number of distilleries with poor economic and social performance. Germany is still an economic powerhouse with a highly educated population. Teetotallers would have you believe that easy access to alcohol, similar to Germany, is the downfall of a nation. This makes Canada look even more like an outdated temperance haven, except for the government controlled liquor stores which generate billions of dollars in revenue from the sale alcohol. This duality is a perfect example of what happens when politicians talk out of both sides of their mouth.

The reality is that the Canadian system outsources political headaches to foreign distillers. It is a perfect instance of "have one's cake and eating it too". Strict laws regarding the manufacture of alcohol remain on the legislative books to appease uptight prohibitionists, while abundant, clean, attractive and nicely organized LCBO stores cater to the imbibers. Political gold!

There is also the factor of political laziness. As they say "the squeaky wheel gets the grease" and considering the wheels fell of the Canadian distilling industry decades ago, there's no-one left to squeak. With a renewed interest in cocktails and a new generation of distiller entering the market place the current laws will start to face some pressure. The problem is the Canadian bureaucracy has no motivation to improve the situation, and the few remaining major distilleries are quite happy to keep it that way. The liquor store monopolies are complacent because their job is to sell booze and they don't care where it's from, they collect the same amount of tax regardless.

It isn't as hopeless as it may seem. The wine industry successfully lobbied the government for special privileges, and it worked out extremely well. The Canadian ice wine industry created an exquisite product that is world renowned and a source of pride for once reluctant politicians. The wineries are even producing quality wines that are defined by their own unique character. Breweries in Canada are also making headway with dozens of microbreweries popping up around Canada and open discussion about relaxed laws.

Changes for distilleries will require some form of critical mass. Obviously, a few brave soles will need to lead the charge and take the risk of opening distilleries in the hostile Canadian market. From there a core of other supporting businesses will need to develop, but given the history of the wine industry development, the Hollywood phrase "build it and they will come" may be a bit bromide, but it's applicable.

Given the opportunity, I'd open a distillery in a second, but the current laws make distillation of quality products an arduous task with limited chance for success. The bureaucratic gallimaufry of contradicting regulations is odious enough to repulse all but the most ardent and well funded champions of artisanal distillation.

The growing interest in cocktails will be a factor, as will the quality versus quantity argument. This idea of quality needs to be explored in an effort to reduce stupid consumption levels of alcohol. Creating products that don't require a Red Bull or insulin chaser would help redirect some of the bravado of binge drinking. From an employment aspect, distilleries require many skilled trades and they also support local farmers. Distilleries have their benefits, people and politicians just need to open their eye's to see them.

Still Waters Distillery is still in the very early stages of their existence. Unlike many of the other small distilleries that have developed as an extension of a winery, Still Waters is a pure play operation making it a bit more risky. They do import limited edition single malt scotches from hand picked casks, under their Premium Bottlers banner, but again regulations stymie their ability to sell these product in many Canadian markets.

In Canada, spirits can only be imported if they are going to be blended with domestic product. This means that Premiers unblended Littlemill and Braeval cask strength bottles cannot be sold in Ontario, so they can only be found in Alberta at this time.

Still Waters first distilled product, a single malt vodka, is a good, clean vodka, as good as any other premium vodka on the market. It's triple distilled and chill filtered, but still has a subtle hint of malt character. Refreshingly there are no hokey marketing gimmicks attached to the product.

Even though I'm not a big vodka drinker, and have been known on occasion to give it a hard time, I will whole heartedly say go out and buy the Still Waters product if you like vodka. It supports small business, in an industry that is important to bar professionals and as I stated before, it's as good as any other vodka. The real benefit of buying this single malt vodka is about three years away, when young, spicy rye whisky starts to get bottled.

Still Waters Single Malt Vodka available at the LCBO and you can follow along on their adventure via Twitter.