This blog post is about definitions, perceptions, and truth in advertising.
What is a craft distillery?
There are many definitions that are used to describe distilleries like ours. Our permit calls us a “Manufacturer Craft Distillery Type 1”, but we are also referred to as a “craft alcohol manufacturer” and “micro distillery”, among others. Until recently, the Saskatchewan government had loose criteria to qualify as a micro distillery, namely that the distillery in question:
- Is located in Saskatchewan
- Produces less than 200,000 litres a year
The most common term used, “craft distillery”, carries with it the public perception that the products are crafted and made by the company; this is not always the case. The truth is, most craft spirits are just sourced bulk alcohol that is rebottled by a distillery and labelled as their own. This bulk alcohol may come from a huge commercial distillery, or it may come from an ethanol plant; it may be vodka, whisky, or rum- or tequila-flavoured bulk ethanol. Regardless of what form it takes, the common theme is that it is a product that has been cranked out in bulk by someone else and sold to the public as a distillery’s own “craft” product. Unfortunately, the majority of “craft” spirits that are sold in Saskatchewan are the products of rebottled sourced bulk ethanol and are not made by the distillery who calls it their own. This loophole is not unique to Saskatchewan; in fact, this occurs all over the world.
So why would a company spend the time, money, and effort to build a distillery that then sells rebottled products? While I may not be able to pin down an exact answer, I will give you some of the common reasons behind why this happens:
First of all, it is less expensive to build a distillery that sells rebottled products than to build one that makes everything in house. Most craft distilleries make the same mistake from the outset (we were no different): they start out too small, with hobby-sized equipment, but are faced with commercial-sized bills. Distilleries then hit a fork in the road and have to choose between either upgrading their equipment (with many upfront costs) or purchasing sourced alcohol in order to pay the bills. Unfortunately, most distilleries choose the latter option, leaving only a few distilleries in the province that mash, ferment, and distill their own product.
Another reason why some distilleries choose to source their alcohol: they may not have a distiller to make their own product. Without the ability to create and distill their own spirits, they are forced to use sourced alcohol and spend their time bottling and promoting their product as house-made.
The next-most common reason for distilleries using sourced alcohol is the workload and profit margins. Like any other bulk product, sourced alcohol is cheap as dirt compared to the cost of making your own. The taxes on craft alcohol are very low, as long as you can legally call yourself “craft”, whereas the workload, equipment, and manpower needed to make your own spirits is mind boggling. Sourced alcohol can be sold at the lowest legal price and packaged in cheap plastic bottles, resulting in huge profit margins. On the flip side, when you take into consideration the cost and work that is required to see one’s own product through from start to finish, it is not feasible to sell it for the lowest legal price.
This brings us to the next line of reasoning: a distillery that purchases sourced alcohol may be banking on the fact that the public will never know the difference or simply won’t care. Saskatchewan people have a great reputation for supporting local industries and local people. As the number of distilleries grew in Saskatchewan, so too did the support for locally craft made products. Now we see that support is dropping as more and more people find out that they’re buying a sourced product and not a handmade one. Some people don’t care to know where their alcohol comes from or whether or not it is handcrafted. Others feel deceived, as they should.
The reasons for why people do what they do is as varied as the people who are doing it, and what people consider craft, handcrafted, or locally made is entirely up to them. We all have our own definitions.
Up until December 1, 2020, the provincial government had allowed distilleries to use sourced alcohol and enjoy the benefits of being a craft distillery. There was no distinction between a company that was truly handcrafted and companies that simply rebottled sourced alcohol. This all changed when the Saskatchewan Liquor and Gaming Authority laid down some crystal clear distinctions by creating a two-tiered system, Type 1 and Type 2. This brings to end the era of distilleries who are able to continue to mislead consumers into thinking that their product is made by them, and them alone.
In order to be a Type 1 distillery, the distillery must mash, ferment, and distill 100 percent of their products on-site. Type 1 distilleries do not source any of their alcohol, which is something that the general public has been led to believe that all craft distilleries have been doing all along. Distilleries who wish to begin or continue sourcing their alcohol and sell it as their own are free to do so, but they now fall into the Type 2 category and are classified as such. So that’s the government’s distinction between the two types of alcohol producers in the province - the big question is now whether or not the public will recognize the importance of these differences.
At Hudson Bay Distillers, our spirits are created by our own mash bill and milled on-site by us into the specific grist that we need. We mash all of our own grist on-site using mash protocols that we designed. Fermentation takes place on-site using our own yeast strains, and fermented mash is distilled on-site by us using our own unique distilling process. The finished product is bottled and/or canned on-site by us as well.
Our spirits are all ours and we are extremely proud of that. We don’t make clones, or knock offs, or use someone else’s ideas. I guess we are just too proud to allow someone else’s alcohol be behind our labels. Now you may say that we’re not hand crafted because we don’t grow our own grain, legumes, or fruit. That’s correct - we don’t. But we also don’t claim to be farmers or an orchard. We are distillers in our own distillery and that’s what we do. We are a grain-to-glass distillery and we make sure to tell our customers that we are proud of that, of doing it the hard way.
We know what’s in our bottles - do you know what’s in yours?
So whether you use the term craft distillery, micro distillery, batch distillery, or another term, in the end the decision is made by the consumers. And while it is their own definition of craft that ultimately influences their decision, I believe it is our responsibility to remain transparent. Thankfully, we now have a clear definition from the provincial government to help restore some truth in advertising and to move this industry back into the realm of classy, high-end Saskatchewan spirits. Hats off to all Saskatchewan Type 1 distilleries that have stuck to their dreams of creating their own spirits and sharing their dreams with fellow Saskatchewanians.