Business: Strange Brew
When Colorado-based Stranahan’s Whiskey was sold to a liquor conglomerate last year, its devotees were dubious. Have their fears been realized?
Let’s get this out of the way: I ditched work to spend a day at a distillery. On a crisp, February morning in 2010 I reported to a warehouse on Kalamath Street at 8 a.m. to fill a spot on the bottling crew line for Stranahan’s Colorado Whiskey. Rumor has it the company’s volunteer list is 3,000 strong, making it about as exclusive as the one for Broncos season tickets. I made the cut for Batch #53.
Our ragtag team of 20 people—a retired whiskey lover, a few business people, some Metro State students—listened to head distiller Jake Norris explain what our morning would entail. We’d handwrite on the label the date of the youngest barrel used in this batch—Stranahan’s is a marriage of two-, three-, and five-year-old whiskeys—before taking spots on the 20-foot-long production line. We’d work for four hours, take a tour, and walk away with a free bottle of Stranahan’s. The whiskey usually retails for around $60, so we were making $15 an hour, paid in sublime, wood-aged nectar. Not bad for a morning’s work.
A Stranahan’s employee performed the most important job—filling the glass bottles—but we did the rest: punching down the corks, topping them with Stranahan’s signature silver cap, using heat guns to shrink-wrap the plastic around the top, slapping labels on the glass. I inspected the finished product and placed a tag on each bottle. As the shift wound down, we peppered the Stranahan’s employees with softball questions over bottles of Great Divide’s Yeti stout that were lying about. How was it made? How did the company start? What’s the best part of their job? We should have been asking tougher questions, though, because within 10 months Stranahan’s would be purchased by Proximo Spirits, a New Jersey–based mega-distributor, for an undisclosed amount. Things on the small-time bottling line were about to change, big time.
On April 2, 1998, volunteer firefighter Jess Graber had responded to a call near his Woody Creek home but couldn’t do anything to save the burning barn on George Stranahan’s property. After the flames died down, he struck up a conversation with Stranahan, who owned Flying Dog Brewery in Denver. Graber told Stranahan about how he’d been experimenting with homemade stills for nearly three decades—when he wasn’t too busy running his construction business—making spirits for Christmas presents out of his horse shed. But the shed was freezing in the winter. When you rebuild, Graber told Stranahan, I could dabble a little in your new barn. Stranahan said there was no need to wait; he had another barn.
Graber went to work right away amid leftover kegs of warm, flat Flying Dog brews. As any distiller knows, beer and whiskey, along with most spirits, have identical roots: You combine a grain, water, and yeast to create alcohol. (This is basically beer, but distillers call it “grain mash.”) To make whiskey, the mash is repeatedly heated to evaporate water and leave behind an ever more concentrated alcohol. The clear liquid is aged in oak barrels to add flavor (caramel, toffee, and vanilla) and color (amber-brown). The Flying Dog beer wasn’t mash, but Graber wondered how the now-skunky beer would change the whiskey’s flavor. Would it be palatable? Would it be refined? Would it be garbage?
The results were surprisingly tasty— clean and fruity. Graber asked Stranahan for more beer and kept at it. He didn’t have oak barrels, so he’d soak pieces of oak in a jar of spirit, and he eventually abandoned a beer base. He kept tinkering, jotting notes, and talking to Stranahan. “I came up with a mash formula that had four types of barley,” Graber says. “I mortgaged my house. I started the process of getting a license. Once I had things underway, I asked George if he wanted to invest.” He did, and he even lent his name to the project. (To them, Graber’s sounded more like buttermilk than booze.) In 2003, the new company moved into a space next to Flying Dog in Denver.
Graber hired Jake Norris to tinker with him. Norris had built his first still when he was a teenager, plus he was the resident whiskey expert at the Celtic Tavern. The two distilled their first batch of two-year-old straight, Rocky Mountain whiskey on April 9, 2004, and bottled it in 2006. People seemed to like it, and by that holiday season they had trouble keeping up with deliveries. (They were self-distributing with Graber’s pickup truck.) “At that point, I had already ordered a second still,” Graber says. “We knew it was going to go.” He became a whiskey-dealing Johnny Appleseed who’d walk into liquor stores, attend trade shows, and try to cajole anyone he could to just try one sip of his Colorado straight whiskey.
It was sometimes a hard sell. After all, whiskey drinkers are notoriously finicky and loyal, much like Champagne aficionados. And, like the French bubbly, American whiskey is highly regulated. A straight whiskey must be aged no less than two years in charred oak containers. Barrels can only be used once. Coloring and caramel additives are verboten. And it comes mostly from southern states like Tennessee and Kentucky, not Colorado.
Stranahan’s starts with a barley mash—an homage to Scotch or Irish whiskey—but is aged in new oak, like bourbon. The result is unique—a style the company dubbed “Colorado Whiskey”—and many say it is more approachable than other American whiskeys. Stranahan’s is milder, with a smoky, peppery, and subtly sweet aftertaste. It’s the type of whiskey that men and women rave about. And if Graber got you to take just one taste, you’d probably agree.
The strategy worked. Production quickly grew from three barrels a week to six. When Flying Dog closed down its Denver operations in 2007 and moved to Maryland, Stranahan’s found new, bigger digs at a vacant brewery/restaurant on Kalamath Street near the railroad tracks. Graber mortgaged his house again, and soon the company was cranking out 12 to 15 barrels of whiskey—or almost 3,000 bottles—each week and selling them in 38 states and seven countries.
The accolades came fast, too. Jim Murray’s Whiskey Bible 2009 picked Stranahan’s as the best small-batch distillery of the year. The following year, Malt Advocate named it the best artisanal whiskey. Rave reviews appeared in GQ, Men’s Journal, and other publications. It was a homegrown Colorado company that made it big, without the help of a major liquor brand to buy advertisements or gussy up their image. Heck, they didn’t even do much marketing; word of mouth was working just fine.
Maybe too well, in fact, because soon Stranahan’s reputation was outpacing its output. The company had moved to the new warehouse to grow, but Graber’s five-year plan couldn’t keep up with demand. He decided it was time to let someone else take his born-in-a-barn idea to the masses.
About 50 million gallons of whiskey are produced in the United States each year. (Stranahan’s accounts for less than one percent of that.) Behemoths in the multibillion-dollar industry, like Jack Daniel’s, churn out Stranahan’s annual production in mere hours. Graber started talking to Proximo Spirits in 2008, and Proximo finally bought the company last December.
Soon after that, Stranahan’s ads started to become more ubiquitous. There was a massive billboard on I-70, near Golden. Watch the Colorado Rockies play at Coors Field, and you can’t miss the Stranahan’s sign in the outfield, its logo changed slightly so “Colorado” is smaller and “Whiskey” is bigger. Almost overnight, it seemed like Stranahan’s had moved from being a local craft spirit to a legitimate national contender. And that made fans nervous, about what Proximo had in store for the company and whether mass-producing the whiskey would remove what makes Stranahan’s so unique. Graber insists there’s nothing to fear. “Proximo’s financial strength is taking my five-year plan and doing it in a year,” he says. “There’s nothing about the product that is going to change. The mash is still the same amount of grain—but there will be more.”
You wouldn’t know that now, though, because Stranahan’s supply is scant. Liquor stores and restaurants don’t have stock and don’t know when they will—could be weeks, could be months. While researching this article, I tried four liquor stores in vain before raiding my dad’s stash for a bottle. (No, he doesn’t have any more to share.) When I asked company officials about the drought, they were befuddled because in the past year the company has scaled back distribution. You’ll only find it in the Centennial State now (and at a few places near the Proximo Spirits offices in New Jersey). The problem is a lag in supply. While Stranahan’s doubled its production in 2008 with the move to Kalamath, each new bottle includes whiskey that’s been aged two to five years, meaning that the company has a whole lot of whiskey in its rackhouse that just isn’t ready for bottling—and won’t be for years.
While they wait, Stranahan’s nine full-time employees will be producing more and more whiskey. Three recently installed stills will double the company’s capacity once more. The good news for people who loved Stranahan’s the way it was is that Graber, Norris, and most of the original staff have stayed on after the Proximo sale. They joke about things like having health benefits for the first time, but when it comes to their whiskey, they’re damn serious about keeping the product’s quality consistent. “I have a boss for the first time in seven years,” Norris says when I ask him how his job has changed. “It was a challenge to hand over something I was so passionate about. But these guys are businessmen. I’m a craftsman. My place is behind the still.”
And my place is on the bottling line—I hope. The volunteer list keeps growing, and there’s also a chance that the company will automate its bottling line and nix volunteers. (A machine has already replaced the heat guns.) The free beer at 8 a.m. is gone, but workers still get paid with bottles of whiskey at the end of their shift. Given how scarce Stranahan’s has become, the bottling crew lottery may just be your best shot at getting some of the good stuff.
Natasha Gardner is 5280’s associate editor. Email her at email@example.com.