Vancouver Island’s New Age of Artisan Alcohol

Move over craft brewing and VQA wine, the island is entering the age of artisan alcohol.

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Photograph by Jeffrey Bosdet.

It’s an explosion in distilling not seen since the end of Prohibition. From DIY home stills to an ever-expanding league of legitimate artisan distillers, we’re experiencing a bit of a booze boom in British Columbia.

But this isn’t your granny’s bathtub gin. We’re talking select spirits, handcrafted to the highest standards. And some of the finest new craft distilleries are right here on Vancouver Island.

A GAME CHANGER
Every province has its own regulations when it comes to distilling, but it’s generally agreed that the B.C. legislation is most favourable to small craft distillers, resulting in more small operations here than in other parts of the country.

The province created its “craft distillery” category in 2013, waiving government distribution fees that gobble up to $30 for every bottle sold. It was a major game changer that put B.C. in the forefront of small-scale distilling.

According to the new rules, a “craft distillery” is one that uses “100 per cent B.C. agricultural input to ferment and produce its own product on-site while falling below a specified production volume,” says Viola Kaminski, senior communications officer for the B.C. Liquor Distribution Branch (LDB).

What that translates into is this: if you make your liquor from scratch, at your own production facility, start with local raw materials (whether you’re fermenting and distilling barley, wheat, apples or honey) and keep production below 50,000 litres of alcohol a year, you can sell direct to bars, restaurants, private retail stores or consumers, saving LDB fees.

That’s a huge deal. Before the law changed, small distillers followed the same rules as big commercial distillers. That is, they had to sell through LDB stores and pay the government taxes and shelf-stocking fees, a situation that only makes economic sense for companies with massive sales.

“Before the law changed, it was a 167 per cent markup for LDB shelf space,” says Tyler Dyck, CEO of Okanagan Spirits Craft Distillery and president of the B.C. Craft Distillers Guild. “Basically, the government was taking $28 from a $40 bottle to put it on the shelf.”

Direct sales suddenly made the business viable for small distillers, but it’s why most B.C. spirits are not sold in government liquor stores.

The new regulations led to the rapid proliferation of new distilleries, some 31 active craft distilleries in the province as of mid-March 2016, with 12 applications pending. That’s about half of the craft distillers in Canada.

It’s a drop in the bucket when you look south — there are more than 600 craft distillers and counting in the U.S. — but the volume of B.C. craft-made spirits is rising rapidly, from just about 29,000 litres in 2013 to nearly 139,000 litres in 2015.

Still, not all small spirit producers operating in B.C. qualify as craft distillers. Several small distilleries, including Victoria Distillers, Arbutus Distillery, Island Spirits and Shelter Point, use imported agricultural inputs or NGS (neutral grain spirit), so they work outside the craft rules. They have formed the B.C. Craft Distilling Association (BCCDA) for distillers who use pot stills and produce less than 100,000 litres of absolute alcohol annually.

DISTILLING WITH A MODERN FEEL
Victoria Distillers’ eponymous Victoria Gin may be the most familiar artisan spirit in the city, and the trajectory of this local brand mirrors the evolution of distilling on the Island.

Started in 2007 by Bryan and Valerie Murray, the company was recently sold to Grant Rogers of the Marker Group. It reopened this spring as Victoria Distillers in Sidney, in an expanded oceanfront space Rogers owns next to his Sidney Pier hotel and condo development.

A wall of glass opens to a picture-perfect waterfront view and the new facility, with its sparkling new copper still and dedicated lounge, takes the business beyond alcohol production and into the realm of destination tourism, complete with tours, tastings and a cocktail bar.

Peter Hunt, still manager and master distiller, says the brand is changing to reflect the company’s plans for larger production and wider distribution.

“We’re still leading with clear spirits, but we will be expanding our whisky production here and selling Victoria Gin in the U.S.,” says Hunt, pointing to a new slender bottle and clean label, the young Queen Victoria no longer part of the brand narrative.

“Most people didn’t recognize her anyway and it made the product look more traditional,” says Hunt. “This has a more modern feel.”

Another ambitious new multi-faceted operation is the Victoria Caledonian Distillery and Brewery, set to open this summer in a 17,320-square-foot warehouse next to the Patricia Bay Highway in Central Saanich.

Company president Graeme Macaloney has hired a team that includes longtime Diageo distiller Mike Nicolson and former Lighthouse brewmaster Dean McLeod, who will run the craft brewery side of the business, and create the base for their malt whisky. The facility will include a brewpub, growler refilling area and shop for on-premise whisky sales, says McLeod, with regular tours, tutored tastings and a five-day distilling school for the 200-plus “founder-owners” who have invested in the new venture. For $4,800, whisky enthusiasts can also pre-order their own personalized 30-litre cask to be aged on site.

The distillery is designed to “produce premium branded whiskies for international sale and distribution” and the craft brewery will provide cash flow while the whisky ages in the facility’s 600-barrel cask room, says Nicolson.

With $2.4 million from Agriculture Canada, the company will employ innovative “rapid maturation technology” to produce a B.C.-sourced single malt it plans to export to 25 to 30 countries around the world within the next three to four years.

SPIRITED EXPANSION
There are now 10 small distilleries on Vancouver Island, including Sheringham Distillery, run by former chef Jason MacIsaac and his wife Alayne in Shirley, north of Sooke; Arbutus Distillery in Nanaimo; and Merridale Cidery in the Cowichan Valley, where heirloom cider apples are distilled to create spirits from brandy to vodka and gin. Wayward Distillation House in Courtenay uses honey as a base for all of its spirits — marketing its Unruly vodka and gin with the tagline “Fundamentally against the grain.”

Ampersand Distilling Co. in Duncan is at the other end of the small distillery scale, focused almost exclusively on its flagship product, Ampersand Gin, although the distillery recently began producing Per Se Vodka as well.

Father-and-son team Stephen and Jeremy Schacht concocted their small-batch business plan to capitalize on their shared strengths — a five-acre organic farm in the Cowichan Valley and degrees in chemical engineering — and make pure spirits in a 500-litre column still that they designed and built themselves. A classic gin, made with organic B.C. soft white wheat, their own spring water and organic botanicals, Ampersand fits the company’s marketing moniker: “Gin, defined.”

They’re small, producing just 250 bottles a week, with plans to increase production by 50 per cent this year.

“Islands attract creative people, and the smaller the island, the more creative it gets,” says Jeremy Schacht. “Vancouver Island has a lot of artisans and craft people who want to do things for themselves, and I think that’s the major reason why there are so many distilleries here.”

WHISKY IN THE JAR
Every distillery has its own story, but it’s probably safe to say that it was the love of whisky — especially imported single malts — that lured many into the small distilling business.

Still, with Canadian law requiring that whisky be aged in barrels for a minimum of three years, we haven’t seen much local whisky on the market yet.

Instead, there’s been a bit of a gin boom, as small distillers work on building their brands by creating white spirits infused with unique flavours. From Merridale’s Cowichan Gin flavoured with native “trees, ground cover herbs and roots,” to Phillips’ Stump Coastal Forest Gin, infused with grand fir and cascade hops, distillers are distinguishing themselves with gin.

“White spirits are something to build a business on, to build cash flow,” says Hunt. “Vodka sells 10 times more than gin, but gin has so much more character. That’s why we started with gin.”

At de Vine Spirits in Saanich, the base for their Vin Gin is a spirit distilled from its own Pinot Gris and Grüner Veltliner grapes. Its New Tom Gin is aged for two months in used bourbon barrels and de Vine’s Sloe Gin is infused with locally-grown sloe berries.

Meanwhile, B.C.’s fledgling craft distillers are just starting to release their first whiskies.

Okanagan Spirits Craft Distillery released 1,500 bottles of its Laird of Fintry single malt whisky in 2015. More than 4,500 people entered a lottery to buy one bottle, and a similar lottery is planned for this year.

Victoria Distillers has had one limited release of its Craigdarroch Whisky, with plans to increase whisky production in its new Sidney distillery, while many craft distillers are still waiting, anticipating releases in the next one or two years.

The Shelter Point Distillery near Campbell River may be the largest single malt producer on the Island to date, with stunning copper pot stills imported from Scotland and an impressive facility to tour. While its whisky has been “technically ready” to release since 2014, it remains in the barrel, with a line of flavoured single malt vodkas currently available for sale.

Ken Winchester, winemaker and distiller at de Vine Vineyards and Spirits, hopes to release the first bottles of his Glen Saanich single malt by the end of this year, a unique whisky made with barley grown and malted on Vancouver Island.

“It’s a Scottish seed, grown here in Saanich,” says Winchester of the barley grown and malted in small batches by local farmer Mike Doehnel. Most other B.C. craft distillers are using malted barley from two main sources, Gambrinus in Armstrong or Canada Malting, he adds.

“There are only two places in B.C. where barley is grown and everyone is using the same barley. This will show both variety and terroir, how a Saanich whisky will taste.”

THE ISLAND ADVANTAGE
It’s a little more expensive to run almost any business on the Island, and in the distilling business, added costs include those associated with raw materials, transportation and importation of other supplies and equipment.

There are other challenges, too, including costs related to waste-water management and treatment for whisky distillers in the Capital Regional District (CRD), says Hunt.

But the flip side of the Island equation for small distillers is a captive and committed market — customers willing to pay a little more to purchase something made locally. There’s also the Island’s $1.7-billion tourism industry, which attracts visitors year-round.

Small-scale distilling is impacting other Island businesses, from Metchosin farmers growing Red Fife wheat for Sheringham Distillery to the state-of-the-art distilling system at Victoria Distillers built in Saanich at Specific Mechanical Systems. Matt Phillips recently opened his own malting plant, Phillips Maltworks, behind his downtown brewery, the first Canadian microbrewery and distillery to malt its own local grain.

It’s all about being “100 per cent Island,” says Phillips, something customers here consider a priority.

“People are really strong supporters of local here,” adds Hunt. “They like to feel a connection to their producers.”