Winemakers are notorious for their wide-ranging curiosity. That is especially true when it comes to experimenting with different grape varieties, different terroirs, vineyard management techniques and wizardry in the cellar. But most have traditionally drawn the line at boiling their wines in giant copper pots and making the jump from 14% alcohol to 50% alcohol with the liquids they put into bottles.
At least until now.
In recent years, there have been developments that have tempted wineries small and large to cross the line from making wine only into also distilling spirits.
“I couldn’t make any money in selling to the big companies leftover wine I wasn’t going to bottle to make regional blends,” says Michel Marengo, owner of Château Hourtin-Ducasse in Bordeaux’s Medoc region, “so I took it to a travelling distiller who had set up shop in a nearby town.” The result: An almost gin called noGGIN.
"I couldn’t make any money in selling to the big companies leftover wine I wasn’t going to bottle to make regional blends."
Winemakers become distillers
Emma Swain, proprietor at St. Supery winery in Napa Valley, had trouble getting distributors to promote cocktails using the winery’s Muscat Canelli variety, because they all carried different brands of brandy.
“Our winemaker, Michael Scholz, made spirits as a teenager in Australia, so we decided to make our own brandy,” Swain says. Presumably St. Supery’s owner, French perfume maker Chanel, didn’t object, as perfume is another premium liquid that needs distillation.
Vara Winery in New Mexico was very successful with a popular tasting room that also served food. “But we noticed that craft distilling was all the rage locally, so now we serve cocktails in our tasting room using our own spirits made here at the winery,” says director J.P. Clement.
Even multinational beverage companies have caught, well, the spirit to make spirits.
“I was making my own spirits, but I was asked to join the family group,” says Nicolas Sinoquet, CEO of France’s Jean Merlaut Group which, in addition to owning Château Gruaud-Larose and other Bordeaux wineries, also produces Armagnac and other spirits. In Spain, master blender and technical director Paola Medina says, “I worked to create the Dos Maderas rum brand a year after starting at Bodega Williams & Humbert with the purpose of bringing together the two worlds of rum and sherry as a distinct expression of quality.”
"I worked to create the Dos Maderas rum brand a year after starting at Bodega Williams & Humbert with the purpose of bringing together the two worlds of rum and sherry as a distinct expression of quality."
Sensing the distillation opportunities
There have been several developments that have tempted wineries to become distilleries. One is the popularity of crafts distilleries in the United States which also have tasting rooms, and even cocktail bars, in many states. Additionally, the IWSR drinks market analysis reports that US wine sales by volume dropped by 2% in 2022 while spirits increased by 2%, the 25th straight year that liquor volume sales have increased – an enticing trend.
And just as Vara and other American wineries saw increased demand for craft spirits, producers in Europe noticed have similar opportunities in their home markets.
"French whisky [is] following in the footsteps of Japanese whisky, given the quality and savoir-faire."
François Thienpont’s Bordeaux wine distribution company, Wings, decided there was an unmet opportunity for Bordeaux-based spirits, so it helped created Maison Lineti to take advantage of it. “We had noticed a significant increase in the demand for French whiskies over the past few years that continues to rise,” says Lineti sales manager Xavier Payan. “Discussions with our main export partners confirmed this initial decision that the interest in Maison Lineti was already strong. Several of them see French whisky following in the footsteps of Japanese whisky, given the quality and savoir-faire.”
Even though the distillation process is meant to purify, or depersonalise, the terroir of its ingredients, whether grapes or grain, winemakers have sought ways to retain a sense of place with their spirits.
“We decided to make our own brandy to use with our Port-style fortified wine because we wanted to use our own grapes,” says Ryan Kearney, owner of Old House winery in Virginia. He chose a hybrid grape for the base wine, Vidal Blanc, “which we pick early to retain its acidity."
Marengo says with his French botanical, NoGGIN, “if you distill to 95% alcohol, as you are required by law to do if you make gin, you have no taste left, so we stop it at 50% while it still has the taste.”
He then adds botanicals, mostly gathered locally, and macerates them with the alcohol, as would a distiller making gin, then adds water to get it down to 40-80% proof.
John Delmare, owner of Rappahannock Cellars in Virginia, says, “In roughly 2015, we decided to make our own brandy to fortify our Port-style wines. My son was interested in distilling it for fortifying our wine, but also to sell it as brandy.” Today, Rappahannock’s Dida’s Distillery brand also produces a line of gin and vodkas.
Not surprisingly, several producers use their wine barrels for aging spirits – another way to maintain a sense of place.
Blending wine and spirits
Unless prohibited by local regulations, wineries are increasingly trying to combine production of wine and spirits in one centralised building or in adjacent structures. “When we started producing spirits in 2021, we had the space to put the distillery in the same building as the winery,” says Vara’s Clement. “It simplifies to have everything centralized, especially for our winemaker, Djuna Benjamin, who is also our distiller. The only difficulty is managing the temperature – a winery needs to be cool, while a distillery has to be warm.”
While St. Supery doesn’t have the license to have its own still, having the same source of raw materials is helpful. “Muscat Canelli has a little residual sugar, but we pick both for the wine and brandy at same time,” Swain says. “We ferment differently, taking it totally dry for spirits until dry.”
Wherever possible, American wine and spirits producers sell both products in one tasting room, although the spirits may appear as cocktails. In Spain, Medina says Williams & Humbert uses the same distributor for sherry and rum in those markets where both are sold.
But Sinoquet says there are definite limits to synergies within the Jean Merlaut group. “We have separate teams for each business,” he says, “but we do discuss technical and management issues together, have the same distributors and meet together from time to time. At dinners with clients, we may serve Gruaud wine, our Abetilles water and Mandracore spirits. But we don’t interchange personnel. You can’t have a distiller making wine.”
Navigating the roadblocks
In the US there can be various regulatory problems when it comes to how each category is shipped, marketed and sold.
For example, while Vara in New Mexico has no difficulties serving customers wine, spirits, foods and beer in the same facility, things aren’t as simple for Delmare at Rapphannock Cellars in Virginia. That’s because Virginia is one of America’s handful of “controlled states,” where the state itself is in charge of all retail sales.
“Our spirits tasting room in actually a small ‘state’ store,” he says, which means it operates under the same rules as the state’s giant retail megastores. “We’re not allowed to have special sales or anything like that,” Delmare says, “so it’s hard to grow the business.”
Swain says, “St. Supery once had a permit to make spirits, but we lost it and can’t get it back. So we have our brandy made in Petaluma.”
“St. Supery once had a permit to make spirits, but we lost it and can’t get it back."
Of course, while European countries often laugh at the US’s 50 separate states, each with its own laws, and the three-their distribution system, they are not immune from entangling regulations. “I can’t have my own distillery because we are not on a major highway,” Hourtin-Ducasse’s Marengo says, then quickly adds, “Don’t ask. It’s too difficult to explain.
Evaluating the economics
Ask anyone who makes both wine and spirits which is cheaper to produce once the investments in capital equipment has been made for each, and which adds the most to the bottom line, and you’ll hear, “It depends.”
“It’s easier to make white spirits than wine."
Even if using the same vineyards for wine and spirits, there are still issues. Take quality: “I thought you might be able to use secondary fruit when we started making spirits,” Delmare says, “but what you’re doing is taking that grape flavor and distilling it down, so the best and worst of it shows.” Take cost: “Even though we grow our own grapes, it’s very expensive to distill Napa Valley fruit,” Swain notes. Take volume: “I can make seven bottles of wine for what it costs to make one bottle of booze,” Kearney says.
It also depends on the kind of spirits you are making. “It’s easier to make white spirits than wine,” Sinoquet says, “but not if you’re making aged brandy.” Delmare agrees. “We’re making a premium brandy that is now five years in the aging barrels, but it will be two more years before we can release our flagship brandy.”
But once things are in place, white spirits have many advantages. “If we need more gin, I can have it ready in six weeks, so we don’t have to carry inventory, as we do with wine,” Vara’s Clement says. “And our margin is much bigger on spirits, so our strategy is to grow.”
Finally, winemakers turned distillers don’t have to give up their creativity, even though most things happen in a big copper pot. “Maison Lineti’s distillery has sophisticated production facilities that balance between tradition and innovation,” Payan says, sounding very much like a winemaker. “The fermentation of our wort takes place in one of seven egg-shaped concrete tanks – successfully used in the wine industry, it is a world first for whisky.”
