Small vodka distillers on the rise in Michigan

Valentine Vodka is now winning national accolades as a craft distiller

By Michael Martinez
The Detroit News

FERNDALE, Mich. (AP) — Rifino Valentine wanted the perfect dirty martini.

Big-name and mass-produced vodkas weren’t cutting it, so the former Wall Street trader took matters into his own hands and opened a distillery, using Old World techniques and equipment to create a hand-distilled vodka with Michigan-grown grains.

“Whenever I’d go to a bar and ask for a dirty martini, I noticed it was always made with an imported vodka,” he said. “At one point, I just thought ‘Why can’t we make a world-class vodka right here in the U.S., and why can’t it be from the manufacturing capital of the world?’”

Three years later, Valentine Vodka is not only winning national accolades, but the Ferndale-based distillery is at the forefront of a renaissance in artisan or craft distillers in Michigan and across the country.

Michigan is home to at least 22 small distilleries, up from just four in 2008, crafting a wide variety of liqueurs, aged whiskeys, vodkas and brandies. The Great Lakes State ranks fourth in the country in the number of small distilleries, behind California, Oregon and Washington state, according to the American Distilling Institute.

Nationwide, there’s been an explosion in the number of small distilleries, from a couple dozen in 2000 to 350 today.

“What you’re seeing is a restoration of American history basically shut down by Prohibition,” said Frank Coleman, senior vice president for public affairs at the Distilled Spirits Council of the United States. “It’s a little bit of a gold rush mentality.”

The American Distilling Institute predicts there will be roughly 450 small distilleries nationwide by 2015.

The rise of small distillers follows in the wake of the resurgence of craft brewers and wineries and movements in Michigan and across the nation to buy locally.

“It’s growing; it’s a good market,” said Kent Rabish, owner of Grand Traverse Distillery, which opened in 2006 and produces vodka and whiskey. “The main point I try to make is that, when you’re buying a bottle from me, 100 percent of the corn, wheat and rye was grown right here in Michigan.”

Small distillers were commonplace before Prohibition, but nearly all disappeared from local landscapes by the 1980s.

With its proximity to Canada, Michigan was at the center of the illegal booze industry in the 1920s.

Bootleggers ferried the contraband across the Detroit River for sale at secret bars, called speakeasies, which dotted Detroit and other cities.

Although Prohibition was repealed in 1933, strict and sometimes illogical laws regulating liquor replaced the outright ban.

For years, many states, including Michigan, prohibited Sunday liquor sales and taste-testing. Distillers were restricted from selling their own products on-site; high licensing fees made opening a small operation all but impossible.

Things began changing in 2008, setting the stage for the return of small distillers. The state amended regulations to allow for the licensing of small distillers — no more than 60,000 gallons a year.

It reduced licensing fees dramatically, to $100. And it lifted restrictions on Sunday sales and tasting rooms.

“Legacies of the post-Prohibition era are beginning to clear themselves out,” Coleman said.

Even something as simple as allowing tasting rooms has been an advantage for small distillers.

“If you’re a small distiller, the way to get people to go to a shelf and pick up a bottle of True North Vodka over Ketel One is by having them try it first,” said Rabish of Grand Traverse Distillery.

Spirit sales can be liquid gold for an economy.

The distilled spirits industry — comprising both large and small distillers — generates $100 billion in U.S. economic activity annually, according to the Distilled Spirits Council. More than 1.2 million people are employed in the production, distribution and sale of spirits, the council said.

“It’s a nice mechanism for tourism and economic development,” Coleman said.

Some Michigan wineries and breweries — already popular tourist destinations — have added distilling to their portfolios, a logical extension, because the processes of making wine, beer and spirits are similar, Coleman said.

Like the Grand Traverse Distillery, many of the Michigan distillers buy state-grown grains and other products.

“Using local supplies, ingredients and labor was our number one goal,” Valentine said.

He said roughly 90 percent of his supplies — everything from the grain used to make the vodka, to boxes for shipping — are made in Michigan. He said the impact on the state is huge.

“If one out of 10 bottles of alcohol consumed was made in Michigan, it would represent close to $100 million made in the state yearly,” he said.

Despite the industry’s growth, challenges still remain.

Distilled spirits are among the most heavily taxed consumer products in the nation, according to the Distilled Spirits Council. The multiple markups make it hard for small distillers to turn a profit.

“It almost takes the fun out of it,” said Doug Stanke, owner of Big Cedar Distilling Inc. in Sturgis.

Stanke’s distillery, which makes vodka, rum and “Michigan moonshine,” opened in 2009 and uses Michigan-grown corn in most of its products.

“We’re going to have to get some black ink before we can say it’s a success,” he said. “Our wholesale sales have dropped off, but our tasting rooms have helped.”

Still, Michigan spirit makers think their products will be a major part of Michigan’s future.

“The state’s evolving,” said the Grand Traverse’s Rabish. “Automobiles are still important but you’ll need other industries to succeed to help support the state.”

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