Inside Breuckelen Distilling's Labor of Love

Entering the light-filled space that houses Breuckelen Distilling, a small-batch producer of artisanal gin and American whiskey, you may find owner Brad Estabrooke taste testing Mason jars of alcohol. He does this to find the "heart" of the batch that has just been distilled, the middle portion that has the right balance of flavors. The spirit is tongue-scorchingly intense stuff: It has yet to be diluted and turned into the marketable liquor for which the distillery is known.
Estabrooke, 34, is a lean, intense man of average height. On the day Entrepreneur.com visits, he is wearing stained work jeans and a gray T-shirt advertising 77 Whiskey, one of his products. One of his employees, Osiris Martinez, 30, sits at a work bench nearby bottling whiskies and sealing them with wax. To do this, he dips the head of each bottle in a tub of hot black wax -- something like a fondue fountain -- and then places them on a rack to cool.

When Breuckelen Distilling sold its first bottles in July 2010, it became the first gin distillery in Brooklyn since Prohibition. Micro-distilleries have popped up around the country in the past several years, ever since new laws were passed making small operations economically viable, for instance by reducing the cost of getting a distiller's license. Estabrooke's entire operation employs five people, including its founder, and runs in a 2,500-square-foot space in the borough's Sunset Park neighborhood. The location once served as a boiler r
Like so many entrepreneurs these days, Estabrooke began his journey as a result of the recession. After eight years of being a bond trader, including a stint at Fidelity, he was laid off in December 2008. By then he had already decided to found a distillery. The layoff accelerated his plans.

He went to his friends and family for money. He managed to raise a six-figure amount -- he won't say exactly how much, but notes that it was only a third of what his original business plan called for. Still, he was grateful for the votes of confidence. "Some of them believed in the vision, but I think most of them just believed in me," he says of his investors.

Now his libations are available in 13 U.S. states and in Washington, D.C., and are also distributed in Europe and Australia. "We've sold as much gin in Europe this year as we have in the U.S.," Estabrooke says.

Breuckelen Distilling is part of a resurgence in manufacturing in a borough once known for its huge factories. But where Brooklyn's old-time manufacturers employed thousands of workers, most of the borough's producers today are small-scale, artisanal affairs.

Which is not to say their growth isn't impressive. Although Estabrooke originally thought his distillery would be the only one in Brooklyn, it now has plenty of company -- Kings County Distillery in Bushwick and New York Distilling Co. in the Brooklyn Navy Yard, among several others.

Among his fellow Brooklyn artisans, Estabrooke singles out for praise Rick and Michael Mast, two brothers who have been producing upscale chocolate bars in Williamsburg since 2007. He also tips his cap to Brooklyn Brine Co., a four-year-old manufacturer of specialty pickled vegetables, and to Gorilla Coffee, which operates a café in Park Slope and plans to open a 4,000-square-foot roasting facility and coffee bar in the Gowanus neighborhood this fall.

But Estabrooke has harsh words for 3D printing, a phenomenon often lumped together with businesses like his when describing Brooklyn's new wave of manufacturing. "That's a crock of shit," he says. "That's not manufacturing. That's designing." As he sees it, "five guys sitting around a 3D printer" is a world apart from the hard work of turning grains into spirits.

Spirit distillation is indeed a labor-intensive process, at least when you do it from scratch, as Breuckelen Distilling does. It begins with pallets of organic grain shipped from a farm upstate, whose contents are milled into flour. The flour is dumped into a mash tank, along with water and enzymes. The resulting mixture is heated, then cooled, combined with yeast and pumped into one of four 18-foot-high steel fermenters. Then a custom-built copper pot still receives the now-alcoholic liquid, known as the wash, and heats it to the point of evaporation. The alcohol steam passes through a condensation coil and re-condenses into a colorless spirit which is drained into Mason jars. This product can either be placed in oak barrels to age into whiskey, or re-distilled with botanicals to become gin.

Breuckelen Distilling sold about 1,500 cases of liquor in 2012, Estabrooke says. It is on track to sell 2,000 cases this year, and should turn a profit for the first time. (At Astor Wines and Spirits, a major retailer in New York City, the distillery's gin sells for $32 a bottle, while both whiskies sell for a little more than $40 a bottle.) So far, the distillery has stayed afloat with traditional loans and additional seed funding. He raised a second friends-and-family round shortly after opening.

Although money is a concern, Estabrooke is more focused on perfecting his craft. He enjoys discussing the many variables that influence a spirit's taste, including light, temperature and climate, even the type of soil in which the grain was grown. "At the end of the day, you have to surrender to what you have and where you are and to your ingredients," he says, regarding an oak barrel and its slowly aging contents. "This is going to be a New York whiskey."

Startups Eschew the Made in America Label

From Martha Stewart's American Made event to Entrepreneur magazine's recent spread on the theme, the obsession with the Made in America label has reached a fever pitch. But what do you do when your product idea can't be made in the U.S.?
That's the question Simon Ford and Malte Barnekow found themselves pondering in 2009, when they were canvassing different locales to house their spirits brand, The 86 Company. "We actually looked to distillers and suppliers in several countries to partner with on making an old school Carta Blanca rum, like the ones that came from Cuba during Prohibition, There were distillers that make excellent rum and were willing to work with us, but didn't have the knowledge and capabilities for the style we wanted to create."
And while the two New York City-based founders considered facilities in the U.S., which accounts for most of the company's sales, they noted a lack of manufacturing capabilities as a core reason why America was out. "Local manufacturing in the U.S. is simply not competitive," says Barnekow. "In my experience, it's twice the price for half the quality, across the board."
In recent years, the U.S. has certainly seen a resurgence in manufacturing, with companies like American Giant and Black & Denim making a commitment to produce products stateside. And various marketplaces and services such as Etsy and Maker's Row have sprouted to support them

Still, some startup founders, who would normally choose to set up shop or source ingredients in the U.S., are either finding the process prohibitively expensive or impossible due to a lack of resources.
Runa is a Brooklyn-based beverage company (with a nonprofit branch) that makes tea and an energy drinks. Yet the main ingredient for the company's tea is called guayusa, a leaf from trees that grow in the Amazon. To harvest the leaf, which required making connections with farmers in Ecuador, was a challenge in itself. "We had to figure out if and how [Ecuadorian] communities wanted to work with us, and we had to get a product regulated and accepted in the U.S. that hadn’t been sold there before," says Dan MacCombie, Runa's co-founder.
MacCombie and Runa co-founder Tyler Gage spent the first six months of the company's life traveling around South America, scouting out places to source their guayusa. The trek also required "convincing people we were legit, had good intentions and we weren’t a bunch of North Americans coming to screw them out of their money and their land, which unfortunately, is something they’ve experienced in the past," adds MacCombie.
Despite its benefits, having a global operation, comes with many headaches. Just ask Jamal Motlagh of Acustom, a New York-based custom clothing company that uses digital technologies to create bespoke menswear.

"Legal issues such as tariffs and import duties have been problematic," says Motlagh, whose company uses fabric sourced everywhere from North Carolina to Turkey but operates mainly out of a factory in China. "Import has been the biggest issue into China. The problem there is that you need a ground logistics team that you can trust. Fabric production and supply is still an old-school game. There aren’t good websites or ways to get a hold of them or their offices globally."
The 86 Company's Barnekow adds that working with distillers from around the world comes with its own set of challenges. "Our caps are from England, our bottles from China, our liquids from Canada, England, Mexico and Panama," he says. "So, yes, we deal with the tedium of time differences, currency fluctuations, regulation, complex tax constructs and a shipping industry that has very little time for small entrepreneurs like ourselves. It makes for a very nice story from a marketing and product perspective, but it does make our day-today lives extremely difficult."
To minimize this difficulty here are three tips that have helped these founders make their international operations work:
Right size your expectations.
"In my experience, a general rule is work with suppliers that are the same size as you," says Barnekow. "Large suppliers are designed to serve large customers. If you are a small company, look for small suppliers. You will speak the same language and have an understanding for each other’s incentives."

Focus on the positive.
"The moment where we think everything would be easier [if we were based] in the U.S. happens every day, but it wouldn’t make me want to run this company," says MacCombie from Runa. "We connect the farmers to the land to the supply chain to the market… I know people starting tea companies now -- good people, more power to them -- but I don’t feel that’s what I want to contribute to the world. The complexity of working with farmers, supporting ecosystems -- that’s what keeps it interesting. I spend more of my time selling tea, but it’s always in the back of my head that I’m doing something that really aligns directly with what I believe in."
Make the most of your situation.
Working directly with the people in the factories as well as the sourcing companies has been very interesting, and I use the time difference to my advantage," says Jamal from Acustom. "I send questions during my work day and later in the night, I’ll get an answer back… So when I wake up, they’ve had a full day to work on whatever the question or problem was."