"I think you've got something really special here," says Edwin Vargas, who is holding a small cordial glass filled with a straw-colored liquid. One minute prior, that liquid was deep inside a wooden barrel, where it has been sitting quietly for the past 12 months. It will be a full year or more until that potion – bourbon from Tom's Foolery in Chagrin Falls – hits store shelves. But based on that glowing appraisal, which came from a founding member of the Cleveland Bourbon Club, it looks like owners Tom and Lianne Herbruck are on their way to whiskey infamy.
You might have heard of Tom's Foolery for their matchless apple brandy, a fine spirit they've been distilling and selling for about three years. But last year, Herbruck lucked into a find that forever altered the direction of his distillery. He purchased a mash cooker, wooden fermentation tanks and copper potstills that for years were used at Michter's in Schaefferstown, Penn., one of the oldest American whiskey distilleries.
"This is one of the first potstills used for whiskey in the United States following the Prohibition," Herbruck explains. "It is built for whiskey."
So whiskey he started making – first bourbon, and now rye, both of which are eased into charred American oak barrels and stacked like Lincoln Logs in a freshly built rickhouse. Currently, there are roughly 171 barrels of premium whiskey slowly aging until they're done.
"It's really great right now," Tom says of the still-young spirits. "But to tell you what that will taste like in four years... We have some ideas, but we'll have to let you know in four years."
Though Herbruck was the first in the region to launch a craft distillery, he is by no means the last. Recent legislation eliminated the restrictions on statewide distillation permits, opening the door for many more to follow in his footsteps. But newcomers to the trade are quickly learning that starting a small distillery is anything but wine and roses.
Kevin Suttman's first batch of moonshine was birthed in a Mason jar filled with pilfered kitchen scraps. He was 13 years old – and the fermented results were far from award-winning.
"It didn't work out so well in the short run," he says. "But in the long run, I guess it did."
After a decade or so of homebrewing, Suttman launched Seven Brothers Distilling outside of Painesville, where he crafts small-batch vodka, silver rum, and wheat whiskey. But making a good product, Suttman is quickly learning, is just one part of the equation: You still gotta sell it.
"Going in to this I guess I was a little naïve about how much marketing is required to sell the product," he says. "We don't have the big marketing budgets that the huge multi-national distilleries do."
So Suttman decided to try something different – very different. He built a unique vacuum distillation system that allows him to distill at lower temperatures, which he says adds considerable more flavor and sweetness to the final product.
"I can't compete with the big companies so I'm trying to create products that are unique and not just clones of what's on the market," he says.
It's not just sales and marketing that's killing the little guys; it's the paperwork. There's a saying in this industry that goes: "How do you make bourbon? You take some moonshine, put it in a barrel, and add a bunch of federal regulations." And, according to practitioners, it is anything but hyperbole.
"The record-keeping requirements on a federal level are utterly ridiculous," says Suttman. "I have to fill out daily reports, monthly reports, monthly inventories... I have to fill out a form every time I move the product. It is definitely geared to large companies that have a staff of lawyers who do nothing but paperwork."
Of course, distilling is so highly regulated because there are so many state and federal tax dollars at stake. It might seem like prices are steep for a bottle of fine spirits, but that's just the half of it – literally.
"When somebody walks in our door and buys a bottle of rum, more than half of the price goes to pay taxes," explains Dan Malz, founder of Portside, Cleveland's first distillery since Prohibition. "Of the $29 price, $2.14 goes to the feds and $13.90 goes to the state."
It is partly thanks to Malz himself that a small Ohio distillery can even sell their booze on premises to the customer, a practice long enjoyed by similarly sized wineries. In an effort to alter the legislation, he testified before the Ohio Senate, which ultimately passed a bill that Governor Kasich signed.
The reason those state taxes are so high, Malz explains, is that Ohio treats the bottle that never leaves his plant the same way it does one that travels down to Columbus, gets shipped up to Mentor, and ultimately lands on the shelf of a state liquor agency. What's worse, Malz and distillers like him don't even get the retailer's share for selling it.
"I knew going in that there would be a lot of issues, that's why we designed a broad operation," he says, referring to one that ultimately will include a brewery, restaurant and gift shop.
Brewing and selling beer, which like wine is taxed at a much lower rate, nets an operator significantly more profit than one who strictly distills and sells spirits. That's why Portside and Market Garden Brewery – who will begin distilling this spring using Tom Herbruck's original potstill – are better situated for the long haul.
"This is an expensive game to get into – especially when you're talking about aging products," explains Suttman. "You invest in the equipment, the raw materials, the time and energy to produce it, the barrels, and then you sit and you wait two or four years for it to be ready. And in the meantime a portion of it is evaporating!"
What would really help, says Suttman and distillers like him, is if they were treated the same as small vintners and brewers and not mega-distillers like Jim Beam.
"They need to lower the federal excise taxes like they have done in the wine and beer industries," says Suttman. "That's what really helped spur the growth of the family-owned winery and the small brewery. That 50 cents a bottle is your profit margin."
Over at Tom's Foolery, Herbruck keeps copious notes on everything from the grind and ratio of the grains to the length and temperature of the mash. Everything is written down with an accountant's precision. Only by being able to look back in time one, two or four years can you repeat something that turns out magical in the future.
"Each step of the process can be improved, and if cumulatively every step is better, you end up with a much better product at the end," Herbruck explains. "We have a great product right now. If we never changed a thing we would be happy for the rest of our lives. But we want to constantly make it better."
It takes 855 pounds of grain, one very expensive wooden barrel, and at least two years of patience to end up with about 260 bottles of bourbon. Given that math, shortcuts, tricks and cost-cutting measures have no place in craft distilling. Vodka might be fast and cheap, but whiskey? Well, that takes obsession.
"This is our passion," says Tom. "Aside from our kids and family, this is what we love."