The Times Union (Albany, New York), March 6, 2007, Tuesday

Copyright 2007 The Hearst Corporation
All Rights Reserved
The Times Union (Albany, New York)

March 6, 2007 Tuesday
3 EDITION

SECTION: BUSINESS; Pg. E1


HEADLINE: Orchard grows vodka venture;
Columbia County partners aim to tap a big market with apple-cider-distilled spirit

BYLINE: By ALAN WECHSLER Business writer

BODY:


VALATIE - Derek Grout is taking his family's apple orchard in a new direction - one with a much higher alcohol content.

Fifty years after his grandfather bought the Golden Harvest Farms on Route 9 in northern Columbia County, Grout has started a business to turn apple cider into apple-cider-distilled vodka.

It's not such a unique idea. In Vermont, Maine and the Hudson Valley town of Gardiner, vodka is being made from (respectively) maple syrup, potatoes and apple cider.

Seeking to get a piece of what has become, by far, the most popular spirit in the United States, 34-year-old Grout has started a business with a partner, Harvest Spirits LLC. They've invested $100,000 in a 25-foot-tall copper still that will arrive later this month. The two have already received a state license to make up to 30,000 gallons of thrice-distilled, neutral-tasting vodka.

"The Big Apple is only two hours away," Grout said. "All you need is for just 1 percent of New York City's vodka drinkers to pay attention to upstate products."

For sure, vodka is big. It makes up 28 percent of the nation's liquor market, which in total is worth $53.5 billion in 2005 retail sales, according to Seymour Leikind, a New York City-based liquor consultant.

"It's big and it's formidable," said Leikind of the vodka market. "Because it's so big, everyone's attracted to it, like bees to honey."

About 30 percent of the market comes from imports, he added, with new foreign brands being introduced every day.

Yet there are local vodka success stories. In Maine, Cold River Vodka has been selling its product, made from locally grown potatoes, for 16 months in eight states. Closer to New York, Vermont Spirits of St. Johnsbury sells its maple-sugar-distilled vodka throughout New England. The company also makes vodka from milk sugar.

`'I was trying to figure out what we could do on our land here," said Duncan Holaday, president of Vermont Spirits. "I didn't want to make syrup, so I decided to make vodka."

Ralph Erenzo of Gardiner started selling vodka, whiskey and bourbon in the Hudson Valley a year ago, using locally brewed apple cider. That first year, he had more than $100,000 in sales, he said.

But it wasn't easy.

"It's a very difficult undertaking," he said about setting up the business. "It took us 2( years, and I have a fair amount of experience dealing with bureaucracy."

Grout, who practiced distilling with Erenzo before setting out on his own, said he's up for the challenge. A Cornell University graduate with a bachelor's degree in industrial labor relations, he worked in a number of fields before coming back to the farm to work under Alan Grout, his father, several years ago.

The elder Grout, 66, has agreed to lease part of a storage room to Harvest Spirits. The company will buy the cider directly from the farm, and the cider will then be distilled in a three-week process into vodka. Unlike apple wine, which a few New York orchards have started to make, the vodka will not retain the apple flavor.

Derek Grout and partner Tom Crowell of East Chatham have invested around $50,000 into the firm, with a $50,000 loan from Columbia County Economic Development Corp. To Grout, it was an opportunity to help the farm at a time when apple producers are facing stiffer competition. Big juice makers like Dole and Veryfine are buying frozen concentrate from China instead of from local growers. Golden Harvest sells some of its apples at a loss.

"It's better than dumping them in the field," he said.

Grout took a seminar in distilling several years ago. He'll continue to work on the farm, just as his partner Crowell will keep his day job working for the Columbia Land Conservancy. But the two hope to expand the business into apple brandy and other hard drinks.

"Like any business, it's somewhat of a leap of faith," Crowell said.

Alan Wechsler can be reached at 454-5469 or by e-mail at awechsler@timesunion.com.

GRAPHIC: Photo
PHOTOS BY PHILIP KAMRASS/TIMES UNION DEREK GROUT hopes to take Golden Harvest Farms, the family business for 50 years, in a new direction by producing apple-cider-distilled vodka. In the foreground of the farm's cold storage facility is a prototype vodka bottle. A 25-FOOT-TALL copper still, shown here in a photo on Grout's computer, is on its way from Germany to Golden Harvest Farms in Valatie.