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The rise of Montana’s microdistilleries

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Four years passed with no microdistilling activity in the state. Only after Wiseman revisited a second liquor tax during the 2009 session did the floodgates finally open. That same spring, in the halls of the state Capitol, he got word that Montana’s first microdistillery had finally opened: RoughStock Distillery in Bozeman.

Missoula Independent news
  • Cathrine L. Walters

Ask Bryan Schultz which of the whiskeys he distills is his favorite and he’ll tell you it’s “like asking which kid you love most.” So he defaults to RoughStock’s most popular bottle—the Pure Malt, which, to extend Schultz’s metaphor, happens to be his first child.

Schultz had first thought to open a microdistillery in 2005, following the passage of Wiseman’s original bill. But with the state’s liquor excise tax still set at 16 percent even for small producers, the distribution end of the business was financially unfavorable. Once Wiseman’s 2009 tax revision had leveled the playing field for microdistilleries, Schultz moved on to the next hurdle: brand recognition.

“Starting a new distillery from scratch, being a small guy and growing into our distribution shoes, so to speak, as far as what we could make, took a lot of education,” Schultz says. “It took a lot of just going out and talking to liquor store owners, bar and restaurant owners, [and] trying to get everybody to notice and realize there was something here, that we weren’t just some rebranded bulk alcohol made somewhere else that had some fancy marketing behind it.”

Schultz had traveled widely in Europe and seen firsthand the operations in Scotland and Ireland that perfected the art of distilling whiskey. RoughStock never really had much of a plan to manufacture anything else, Schultz says. The grain-growing regions of Montana reminded him too much of northern Europe for him to be interested in much beyond whiskey.

“The abundance of grain and natural water—good water—we have in the western part of the state was kind of the formula for what we wanted to do,” Schultz says. “We kind of modeled ourselves after a lot of the scotch distilleries and some of the other smaller whiskey distilleries that you never hear of that dot the western European landscape.”

Schultz and his wife, Kari, both came from agricultural backgrounds in the state. Through bottles of booze, the two thought to give Montana “a spot on the map.” Their tasting room, situated on the corridor between Bozeman and Big Sky, draws mostly tourists curious about what Montana can produce. That exposure helped the couple “put something in a bottle that’s representative of Montana agriculture.”

Tourism, in fact, has become the main driver for many of the state’s distilleries. As Brady Wiseman puts it, Montana’s population is a deceptive figure. The state may only have one million residents, but it averages nearly 10 million visitors a year. Each bottle of Montana spirits acts as a sort of ambassador, a sentiment shared widely among state distillers.

But these ambassadors didn’t arrive overnight. Microdistilling requires a hefty investment up front. Schultz estimates the initial overhead of legal fees, still equipment, raw materials and other necessities came to well over $500,000. Distillers have to secure licensing and equipment before they can even begin producing a product. Whiskey in particular requires aging, sometimes for years, so Schultz found himself looking far ahead from the very beginning, before the customer base was even there.

“We knew we weren’t going to make any money for a very long time,” Schultz says. “Talk to me here at the 10- to 15-year mark and I might have a better report for you as far as money making.

“We didn’t get into this to make a million dollars overnight,” he continues. “It’s a slow-growth process. We can’t make whiskey any faster than we do, and we certainly can’t age it any faster.”

For the first two years, Schultz and his wife did everything at RoughStock themselves. They’ve since moved to a larger facility, hired nine employees and opened a tasting room in May 2011. This year, the distillery is planning to move again. Schultz says that at this point, “we’re making enough to keep the lights on and increase production without amassing a huge debt.”

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