Edible Manhattan Highlights Tuthilltown Spirits

Tuthilltown Spirits

Stumbling into liquid gold in the Hudson Valley

By Pervaiz Shallwani

photographs by Michael Gross

September/October 2009

Edible Manhattan

New York’s first distillery since Prohibition, Tuthilltown Spirits is just four years old, but its vodkas, rum and signature whiskeys are in hot demand, poured everywhere from Babbo to Spago, fetching almost $50 for a little 375-milliliter bottle of clear, pure corn whiskey or spicy, ruddy rye—and twice that price in Paris. So you might think the Hudson Valley–based micro-distillery, which turns local apples, potatoes, corn and rye into liquid gold, is the love child of longtime liquor-lovers-turned-locavores who brought decades of distillery know-how to their lifelong dream. You’d be wrong. Neither of the 58-year-old owners had ever considered the spirits business or even knew the first thing about distilling.

Instead it was a last resort for Ralph Erenzo, one he tripped over when neighbors dashed his plan to open a “climbers’ ranch.” After more than 20 years in Manhattan building stunt sets and a climbing gym, in 2001 he and partners put up $650,000 for 36 acres on the banks of the Shawangunk Kill in Gardiner, New York (a site that happened to include the then-still-operational 221-year-old Tuthilltown Gristmill, listed on the National Register of Historic Landmarks). Erenzo and his crew had planned a sanctuary for rock climbers making the pilgrimage to scale the celebrated cliffs at nearby Shawangunk Ridge. But the townspeople didn’t want climbers coming in from all over the country, and two years of court battles slowly bled Erenzo dry; he sold off all but eight acres to cover his mounting legal and engineering bill and, defeated, approached the town’s code enforcement officer to ask what he could build without having to confront the townsfolk again. His answer: a winery. But then Erenzo came across a 2002 law encouraging spirit makers to set up small micro-distilling operations using locally farmed products. Before Prohibition, New York had been home to more than 1,000 distilleries, and, while today the state boasts both wineries and breweries, no one was producing aged grain alcohols. This law sought to change that: aspiring booze makers could now buy a $1,450 license allowing them to produce up to 35,000 gallons a year of any distilled tipple. Previously the only license available was for industrial operations and cost $50,000. “To do that, you would have to have a large distillery,” says Erenzo, who plans to produce just 4,000 gallons of spirits this year. Since passage of the legislation, 15 would-be distillers have secured a license, part of a national cocktail-fed craze that has seen the number of micro-distillers explode from five in 1995 to nearly 200 today.

But, to give it a shot, Erenzo would need an investor; luckily Brian Lee showed up. The broadcast engineer stopped by to ask about operating the gristmill as a side hobby. “I was looking at the mill, but Ralph was bending my ear about getting a [distilling] license. He was a born marketer.” It didn’t take much convincing. Recalls Lee, “I had been doing television stuff for coming on 30 years. I was looking for an exit strategy.” At Fordham business school he had written a case study on how Samuel Adams Brewing turned smaller-batch beer into big profits. After meeting Erenzo he crunched some numbers and was convinced to dip into his savings and take out a second mortgage for his share of the investment.

Read the rest at:

http://www.ediblemanhattan.com/september/october-2009/liquid-assets.htm