With rye from local farms, Philadelphia Distilling Co. is raking in the accolades.

Robert John Cassell’s roots in this region run remarkably deep. His forefathers purchased land from William Penn near Skippack around 1710, and the acreage went on to nurture generations of farmers and merchants.

Andrew Auwerda, president of Philadelphia Distilling Co., shows off the hardware.A master distiller for Philadelphia Distilling Co., Cassell selects unmalted, organic field ryes from farms in Chester County and other nearby locales to form the base for his products. Exhibiting superb artisan skills, Cassell is riding the crest of a wave of American micro-distillers, who are following in the footsteps of boutique winemakers and microbrewers.

Distilling spirits stands as one of Pennsylvania’s earliest enterprises. By 1791, a light plume of wood smoke rose from the chimneys of an estimated 5,000 log stills. Grain was the most abundant commodity, with rye as one of the leading crops. Artfully mixed grains produced a farmer’s “best bolt.” And a gallon of good, sound rye whiskey was a stable currency for transactions of the day.

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Centuries later, Philadelphia Distilling is producing Penn 1681 Vodka, Bluecoat American Gin and Vieux Carré Absinthe. All have earned myriad awards and high marks from critics. Created in small batches, it’s all pretty tasty stuff.

In 2005, when Philadelphia Distilling applied for its license, there were fewer than 50 micro-distilleries nationwide. Today, there are more than 225, up from 200 in 2009.

“It’s exploding, growing 20 percent a year,” says Bill Owens, a vice president at the American Distilling Institute in Hayward, Calif. “It’s comparable to the microbrewing trend of the 1980s and 1990s that sparked the domestic beer market with its entrepreneurial spirit. You’ll also find that micro-distilling goes hand-in-hand with the current locally grown food movement.”

A self-described “science geek,” Cassell was earning a degree in nuclear medicine when he bailed out, taking a summer job brewing beer at the former Valley Forge Brewing Company in Wayne. In 2001, he left to apprentice at the craft brewery River City Ale Works in West Virginia, then Harpoon in Vermont before heading to Victory Brewing Co. in Downingtown, where he implemented an aggressive quality-assurance department in 2003.

“It was like a great big experimental lab where I could take a whole bunch of things and twist them all together in a really cool way,” recalls the 30-year-old East Falls resident of his microbrewery stints. “At the end of the day, I’d produced this substance that said, ‘Here’s what I did today.’ After a while, I had this recurring idea: ‘How about doing what people did with microbrewing and applying it to distilling?’”

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Back then, Cassell devoured all the research he could get into his hands. Then he spent nearly a year in a distance-learning distilling program at Heriot-Watt University in Scotland, before traveling to the university’s Edinburgh campus for practical studies in 2005.

Shortly afterward, he pitched the idea to his uncle, Andrew Auwerda, and Timothy Yarnall, who had a strong sales and distribution background. The three partners developed a business plan and raised the capital. They launched the distillery in an 8,000-square-foot warehouse off Roosevelt Boulevard in Northeast Philadelphia in the fall of 2005. It became Pennsylvania’s first craft distillery since Al Capone was a pup.

Chuck Epstein, owner of Cherry Hill Health & Racquet Club in New Jersey, signed on as an investor a couple of years ago. “I did a blind taste test with Bombay and Tanqueray No. 10,” says Epstein, who lives in Malvern. “Bluecoat blew them away. They’ve hit on a very nice product, and I like that it’s Philadelphia-based. They’ve got a good head start in this micro-distilling niche. The company is set for big growth.”

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Distilling spirits is a very complex and mysterious process. But it has everything to do with the manufacture and construction of a pot still, around which the select raw ingredients and all the other elements of production radiate.

Cassell hired A. Forsyth & Son to design and build his stills. Located in Rothes, Scotland—the heart of whiskey country—the copperworks has been around since the late 1800s. For its part, Philadelphia Distilling has invested more than $500,000 in equipment.

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“Each still is made differently,” Cassell says. “They build the stills the old-fashioned way—by hand-hammering the copper. The full flavor profiles we achieve would be impossible without that hand-hammered copper still.”

Cassell began experimenting with Bluecoat Gin in 2006. After 17 trial batches, he created just the right mix of botanicals, including a variety of juniper berries embellished with the scent of citrus and spice. Bluecoat is produced through a 14-hour batch-style distillation that makes 1,300 bottles at a time. “The idea behind the company and our products is everything having a local or American concept to it,” Cassell says. “We want to be known for our distinctive flavors. When people have a gin and tonic, before they ever taste it, they automatically squeeze the garnish. It always struck me that they were trying to make something softer, more citrusy.”

Citrus is a big part of the Bluecoat recipe. “So I recommend using a slice of orange or lemon to complement the actual orange and lemon built into our gin,” says Cassell.

On the business side, Cassell couldn’t help but wonder about timing and risk. “But there was this wonderful coincidence of something I want to do—and a hole in the market,” he says.

Andrew Auwerda’s mission: Plug that hole by wrestling a slice of the market share from mammoth corporate distillers. “In Pennsylvania, about 85 percent of gin sales involve only three brands: Tanqueray, Bombay and Beefeater,” explains Auwerda. “That’s pretty concentrated—and it seemed ripe for innovation.”

As Philadelphia Distilling’s president, Auwerda directs the business and brand-building strategies. He’s worked in the consumer business arena for more than two decades. In the late 1990s, he teamed up with a couple of partners to start Tony & Tina cosmetics in New York, an indie line of makeup and skin products that was eventually sold to the Wella brand. For him, the timing was perfect to jump into the emerging micro-distilling industry.

As for the Bluecoat name, Auwerda zeroed in on it while reading David McCullough’s best-selling biography, John Adams. “Then I traveled to the Brandywine Battlefield, where you can envision the Revolutionary forces in bluecoats, battling the detested redcoats,” he says.

Trusting in his expertise in fragrance and cosmetics presentation, Auwerda designed the bottle himself. He smacked a home run. With its vivid blue hue, the bottle personifies the historic blue jacket and gold buttons of the Revolutionary foot soldiers. A pair of rearing horses (from the state flag) is etched into the distinctive glass, accentuating the historical element. The neck stands tall for easy pouring, and a classic closure mimics a cork.

Boutique booze is a popular trend in the bar business, with a growing cadre of bartenders—“mixologists’’—crafting trendy drinks with specialty alcohol. “Their gin and vodka has been very well received,” says Andy Dickerson, manager at Teresa’s Next Door in Wayne. “They’ve taken the time to instruct the staff about the product. We’re a good match for them since we certainly have a lot of people interested in that craft niche.”

Even so, the $63 billion distilled liquor market remains almost entirely in the hands of major producers. Small-scale distilleries generate less than 1 percent of sales. The American Distilling Institute predicts that micro-distilleries’ high-quality products will climb to a 3-percent share in the near future.

Philadelphia Distilling products are distributed in 28 states, France, Bermuda, Spain and Italy. With only a handful of employees, the company relies on grassroots marketing, with no paid advertising. It’s not yet profitable, but they sold 6,000 (9-liter) cases in 2009 and projected 7,000 cases sold in 2010. But, unlike with microbreweries and boutique wineries, state law prohibits selling at distilleries.

On a recent visit to the distillery, Cassell manned an innovative four-column still that delivers better separation of alcohol to create ultra-smooth vodka.

“It’s distilled from locally grown organic rye that gives a warm feel. That contrasts with potato vodkas, which can be oily,” Cassell says, concocting a fresh batch. “Rye is widely used as a cover crop in Pennsylvania, so distilling it into spirits is both inexpensive and energy efficient.”

Vieux Carré Absinthe took 27 developmental batches to nail the 130-proof spirit. Until recently, absinthe was illegal to produce in the United States because it was (falsely) believed to contain hallucinogenic ingredients. Its deep-green color is showcased in a decanter design that portrays the ironwork prevalent in New Orleans’ “Old Square.”

The newest spirit being whipped up in laboratory trials is a corn-based white whiskey. Its unique mix of specialty woods delivers an array of distinctive flavors and notes. Also coming in Cassell’s portfolio of products: specialty single batches of herbal liquors created with local, seasonal ingredients and sold in limited release. A brown liquor release is projected for 2012.

The company is actively pursuing a downtown location that will provide stronger ties to Center City. It will also enable the company to market itself as a tourist destination.

With savvy business sense and products that can outshine the bigger name-brand producers, Cassell believes the business is positioned to compete for the long run in this renaissance of American spirit distilling. “It’s all about moving the ball forward,” he says.

For more on Philadelphia Distilling Co., visit philadelphiadistilling.com.

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