MICRODISTILLERIES IN HIGH SPIRITS
With tight restrictions due to be loosened soon, Ontario’s tiny craft liquor industry is hoping to uncork a boom in business
When longtime friends Rocco Panacci and John-Paul Sacco visited some Kentucky bourbon distilleries a few years ago, they dreamt of taking their passion for whisky to the next level, and figured they could just set up shop in Toronto.
The software developer and the construction contractor wondered why there weren’t more small-scale spirit makers in Ontario considering the explosion on the craft brewery scene. Then their research really got them woozy. “We quickly figured out that all of the restrictions and very little profit margins make it really difficult to sustain as a business here,” Panacci said.
Canada is famous around the world for its whisky. It’s the home of Crown Royal, Canadian Club and Seagram’s.
So the duo were amazed to discover that very few craft spirit makers have sprouted up across the country, unlike in the U.S., where the industry is on fire.
In fact, there are as many craft spirit makers (a dozen) on Vancouver Island — and even in B.C.’s Okanagan Valley — than in all of Ontario today. British Columbia has experienced a recent microdistillery boom after introducing legislative changes in 2013 to encourage startups. To date, the province has more microdistilleries than all other provinces combined.
Meanwhile, in Ontario, the focus of late has been on levelling the playing field by allowing craft beer and winemakers to sell their products in grocery stores. But the Ontario government has promised support next for spirit distillers in its 2016 spring budget. Promised changes, which include reduced regulatory barriers, are creating a buzz in craft spirit circles.
“I get lots of calls from people saying, ‘This is so cool,’ and want to know more about how to get into it,” said Don DIMONTE, treasurer of the Ontario Craft Distilling Association. He is preparing to open the Last Straw Distillery in Concord, as soon as he gets licensing finalized.
DIMONTE is one of five whisky, vodka, rum and even moonshine makers that are set to launch or that have just opened in Ontario, and many more are expected to get into the game once the province loosens what the industry says are restrictive barriers to selling craft booze.
For instance, unlike microbreweries and small-scale wineries, small spirit distillers can’t sell directly to bars and restaurants, “which makes it pretty difficult to get our product in the hands of bartenders,” Panacci said.
They are also prohibited from serving cocktails directly to customers who visit their locations, while beer and winemakers across Ontario are renowned for hosting tasting tours that have translated into highly successful retail operations.
Last June, the Alcohol and Gaming Commission of Ontario got changes started, announcing that licensed distillers in the province would no longer be required to maintain a minimum production of 5,000 litres of alcohol per year — a huge amount when you’re just starting out — to be eligible to run an on-site distillery retail store.
That was encouraging for Panacci and Sacco, who are planning to open Yonge hurst Distillery Co. in Toronto in April on a very small scale at first, with the introduction of white rum, triple sec and amaro, an Italian liqueur. It will take three years before they can release their own whisky at their cozy distillery near Dupont St. and Dovercourt Rd. That’s the federal government’s aging require- ment before the liquor can be called Canadian whisky.
“Because home distilling is against the law in Canada, we had to start the business, rent space and get licensed before we could do all of the necessary (research and development) we needed to really perfect the craft,” Sacco explained.
“We had to do all of that on our dime for close to two years without having sold any product. A distillery is an expensive venture to start up,” he said.
About 10 years ago, Canada had just eight mostly large-scale distilleries, all making various forms of whisky, and each satisfying a niche market.
Now more than 60 smaller spirit makers have joined the club, and there could be many more once Ontario opens the doors legislatively, said Canadian whisky expert Davin de Kergommeaux.
He said the focus is more on white spirits such as vodka and rum, since they can be made and released quickly. “Otherwise it would be very difficult to keep the lights on.”
Luckily, the guys at Yonge hurst aren’t easily deterred when they set their minds to something. “We both grew up in homes where making things as opposed to buying them was just a way of life,” Panacci said.
“Our families made wine, cured meats and jarred tomatoes, so for us to think we could make our own quality spirit didn’t seem like a very big jump outside of our comfort zone,” he said.
“But it’s not easy to get in.”