Roughstock Whiskey: Rough Road Great Product
Tuesday Jun. 1st, 2010
Recently I had the opportunity to go on a tour and meet the owners of the new Roughstock Whiskey distillery in Bozeman, husband and wife Bryan and Keri Schultz. It was a very educational experience, and our group helped bottle 20 cases (240 fifths) of whiskey which was headed out of state to Tennessee, home of Jack Daniels. We even signed our names on the labels and wrote the batch and bottle number on each label. And afterwards, we went through a fun taste-test exercise.
While the experience sounds like a lot of fun, the business is extremely difficult to start up and be successful at. It seems that every small town in Montana has a beer brewery. And there are a half dozen vodka distilleries in the northwest, some as close as Rigby and Helena, but whiskey distilleries are few and far between. Roughstock is the first whiskey produced in Montana since prohibition.
When researching whiskey production in the United States, I uncovered some interesting historical facts. George Washington, our first president, levied the first excise tax against small business in the US in 1791 upon the producers of whiskey. In western Pennsylvania, distillers refused to pay the tax, and in 1794 when Washington sent US marshals to collect taxes, they were met by 500 armed citizens. This uprising became known as the Whiskey Insurrection. Eventually the army was sent in to suppress violence, and the tax was repealed in 1800 by president Thomas Jefferson.
It also turns out that George Washington built the largest whiskey distillery in the country in 1797 at his Mount Vernon plantation. That whiskey was made with corn and rye grown at his plantation. Washington died two years later in 1799 when the distillery produced 11,000 gallons of whiskey. Operations continued until 1814 when a fire destroyed the building. But in 2006, the George Washington distillery was reopened and is in business today.
The owners of Roughstock distillery, Bryan and Kari Schultz, have had a difficult road to follow to get to the point where they are today. First, there are no recipes or “Whiskey for Dummies” books out there, and it is illegal to home produce whiskey. So you kind of learn how to make it during the initial production runs. The Roughstock whiskey is different than most US whiskeys as it is made from local Montana barley rather than corn and rye.
Breaking into the whiskey market is difficult, as the owners explain, it’s like trying to start a new automobile manufacturing company. Jack Daniels is the GM of the whiskey world, and so a goal of capturing just 1% of the US market would be considered wildly successful for Roughstock.
When starting out, state and federal permits must be obtained from the federal departments of Interior and Revenue, and from the state of Montana. Bryan said that the application was over an inch thick and took about a year to complete. Then there was a 90 day review period before the application was approved. Then a federal bond had to be posted of $13.50 per gallon of estimated yearly production. At an estimated 5,000 gallons a year, that’s an $80,000 bond.
The equipment expenditures are tremendous. The copper still in which the distilling takes place was hand-made in Kentucky at a cost of $100,000. The holding tanks, bottling facilities, dozens of oak kegs for aging the whiskey, cooling equipment and other equipment cost another $100,000, so the owners were into the business several hundred thousand dollars before the first bottle of product was produced. The Schultz’s mortgaged their home, dumped in their life savings, and borrowed from relatives to start the business. Aside from the high cost, there’s also a lot of production and administrative work which the owners do themselves.
There is a lot of paperwork. Bi-weekly reports, accounting for every bottle sold, and state and federal taxes on every bottle sold. Even the labels on the bottles have to be approved by the government. The cost of a fifth of Roughstock whiskey is around $50, but of that cost, the federal taxes are around $3, and the state taxes around $18. Then there’s the retailer markup. After production costs, the profit per bottle is very little.
Bryan explains that production costs are higher, but that’s what it takes to make a truly high-quality product. High quality local grain, a hand-made whiskey process, a custom still, attention to detail, high-quality charred oak aging barrels which are only used twice, pure Rocky Mountain water, two distilling cycles, and other small processes that ensure consistency and quality in every batch.
That attention to detail has got Roughstock some national attention. Recently Roughstock was featured at the Whiskies of the World Expo in San Francisco, and also in April at WhiskeyFest in Chicago. Locally Roughstock will be on display at the first annual Bozeman Stampede Rodeo at the Fairgrounds on Sweet Pea weekend, August 6-7, so stop by to visit the owners and experience Roughstock first hand.
It’s the love of making whiskey that keeps the Shultz’s going. Kari continues to work at a local Bozeman high-tech which pays the bills and provides health insurance. The Roughstock Distillery is located on Osterman Drive on the east frontage road past the Montana Import Group auto dealership. Their website can be found at www.MontanaWhiskey.com, and they have a great facebook page too. Roughstock can be found in most Bozeman bars and in the local liquor stores. It is by far my favorite whiskey, two thumbs up !! *Please drink responsibly.