How New York Legislation Helped Put Local Liquor in Your Cabinet

How innovative state legislation spawned New York’s craft spirits boom.

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Stop at your favorite watering hole for a drink and it can be difficult to choose among all the New York bottles suddenly crowding the bar. Long Island potato vodka. Grappa from the Finger Lakes. Catskills bourbon. Gin made in Brooklyn. Or the Hudson Valley whiskey that started it all less than a decade ago.

But while the upstart craft distilling boom may seem like a natural outgrowth of New York’s agricultural bounty and the locavore DIY movement, in fact the recent spirited gold rush is the direct result of forces that few drinkers are even aware of: innovative changes to state liquor laws.

Government’s role in alcoholic beverages has long been about regulation and restriction. But less than a century after Prohibition’s repeal, New York’s lawmakers have taken a very different approach to hooch. Recognizing that small-batch booze (and beer and cider and wine) can create jobs, foster tourism and, if made from the right ingredients, put money in farmers’ pockets, Albany is turning a once-benched player into the star of the court.

Part and parcel to that has been detangling a messy nest of State Liquor Authority laws and regulations that once made the life of anyone producing alcoholic beverages as arduous as pushing barrels up a hill. Instead, the current administration is writing bills that encourage local liquor production, like making it less expensive to nab a license to distill for producers working with local product, recent steps toward creating a New York malting facility to process our own state-grown grain, and allowing for the sale of locally made wine at farm stands, as well as the launch of TasteNY stores in major airports across the state.

And boy has it worked.

New York State was once home to hundreds and hundreds of distilleries. After Prohibition, there were none — until 2006, when an entrepreneurial man named Ralph Erenzo, who had moved from Manhattan to the Hudson Valley, was researching the possibility of booze-making and discovered a little-known 2000 law on the books that allowed locavore micro-distilling at a greatly reduced licensing rate. The state had slashed the $65,000 distilling permit to just $1,500 — so long as the producer was a little guy, making less than 35,000 gallons a year.

This became the precursor for Erenzo’s grand opus: helping to create a new law that would become the 2007 Farm Distillery Act, which would let farms become full-on distilleries with doors flung open to tourist-friendly tasting rooms. When Erenzo founded Tuthilltown Spirits in 2003, he was the only farm-based distiller in the state. Thanks to the changes in those laws and a new attitude in Albany, just a few years later New York boasts over 40, with many more fermenting.

It’s been a successful plan: foster booze’s agricultural economics, just as the state does for industries from dairy (see: Greek yogurt) to cabbages and cauliflower.

“There’s a movement toward sourcing local ingredients,” says Allen Katz, distiller and part owner with father-son team Tom and Bill Potter of Williamsburg’s New York Distilling. “From a business philosophy, that certainly helps advance the support of regional agriculture.”

Katz also says he believes it creates the impetus for a mutually beneficial industry. “Before, you’d simply go to a broker and say, ‘I need grain, I need botanicals — whatcha got?’ There’s an obviously mutual benefit in establishing a significant relation between the manufacturer and the farmer-grower.”

In 2013, Katz and the Potters sourced 70,000 pounds of rye from Seneca Lake farmer Rick Peterson, with whom they are also currently working on an heirloom varietal of rye. In 2012, it was 30,000 pounds.

“It’s an intimate business relationship. It’s fun and exciting, but also serves a practical purpose to keep as much industry as possible in the state,” Katz says.

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But the law wasn’t distilled from thin air. Rather it was built upon the success of the 1976 Farm Winery Act passed under Hugh Carey, and then taken even further in the successive years of Mario Cuomo, the progressive father of current governor Andrew, with items like the formation of the New York Wine and Grape Foundation and pragmatic peeling away of old red tape so that wineries could, say, actually pour their wine at tastings in liquor stores (yup, there was a time when they couldn’t do that).

And the son has taken that bicentennial legislation and kicked it up by, for instance, allowing farmers to sell wine from their farm-stand windows. “It was a sleeper bit of legislation, but some of these legal tweaks have a way of spurring investment,” says Pat Hooker, adviser on agriculture and markets for New York State. “That’s going to be quite a remarkable opportunity that may take their own retail to another level.”

But more than tweaks, the current administration’s clear-eyed view that cultivating home-grown agriculture — from dairy to wine grapes to grains for bread, brews and spirits — instead of letting it die on the vine is vital to the industry (and, in part, the state’s) very economic survival.

“The very first thing we did when this administration started was ask: ‘How do you make this all one state?’” says Hooker.

In a 2010 document entitled the New NY Agenda, Cuomo acknowledged — if not warned—  that in this post-fiscal-crisis world, the Empire State’s farming industry was in Code Red.

“Coupled with lack of access to capital for improvements, the industry cannot grow or, for some sectors, even survive,” said the report. “Farmers and other agri-businesses are at a pivotal crossroads.” But instead of hand-wringing, the eight-page document laid out a multi-idea manifesto on how to go from flat-lining to lined-up-around-the-block via creative solutions like revitalizing the Bronx’s wholesale Hunts Point Market; upping access to local produce (not to mention making it affordable for seniors and low-income communities through CSA programs that accept SNAP food stamps); addressing renewable energy sources for farmers and expanding tax incentives for biofuel production; and committing to partnering with universities like Cornell to help farmers grow better — like, for instance, barley for the beer and spirits industries.

If it’s difficult to remember New York before the current craft booze boom, it’s almost impossible to imagine that just a generation ago, the state was home to only a few wineries. The bicentennial year’s Farm Winery Act was designed to entice grape growing for vino in the Empire State by making it inexpensive to get a winery license here — so long as they began with New York grapes. Today the impacts of these laws can practically be seen from space — from a mere handful of wineries in the ’70s, now there are 350 and growing, with grapes for both wine and non-alcoholic purposes ca-chinging in over $52 million a year.

“The easier it is to do business, the more who will do business,” reasons Jim Tresize, president of the New York Wine and Grape Foundation, who helped bring that 1976 Act into existence and remains the man behind the scenes of much of the wine-policy wrangling in our state today.

And now when you dine in restaurants like Eleven Madison Park, which has an entire section on the wine list devoted to New York wines, bottles ranging from riesling fermented at Keuka Lake Vineyards to merlot from Macari are poured alongside the same grapes from Germany and Bordeaux. Still, wine lists like this remain more the exception than the rule. To make New York an example for other states, there have to be more than a few passionate sommeliers or restaurateurs: The government’s got to get behind and push the wagon, too.

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Rye on the money. The new laws helped start-ups like Finger Lakes Distilling, whose McKenzie Rye Whiskey, made from NY-grown grain, is now shaken into Manhattan cocktails at ABC Kitchen.

To that end, in October, Cuomo asked that restaurants and chefs be part of his Pride of New York campaign, the crux of which is a pledge to up their New York-centric products by a minimum of 10 percent. Sounds reasonable, right? Yes, but for years a frustratingly slow connection between restaurants touting farm-to-table chops but serving bottles of wine, beer and spirits from thousands of miles away has been an odd elephant at the dining table. Dozens of high-profile spots signed on. So far, so good.

Cuomo has indeed set out to do for distillation what Carey’s and his father’s legislation did for fermentation. But while the 1976 Farm Winery Act was the model for the 2007 Farm Distillery Act, the latter is the iPhone 5S to the former’s cordless with an antenna.

Admittedly, reading the legislative details is not as much fun as drinking the results. (For example, in addition to slashing the license fee, the law grants producers using 75 percent New York-grown ingredients in their distillate — be it grain or fruit, seed or tuber — the right to offer tastings and sell on premises, be that an actual on-farm distillery, like Finger Lakes Distilling, which has hybrid grape vines growing right outside the windows of their pretty tasting room, or New York Distilling, who source their rye upstate but distill in Brooklyn.)

The results are staggering. In less than a decade, New York State has issued 71 farm distilling licenses. The 40-plus distillers up and running have already created nearly 200 jobs and buy 1,000 tons of grain from New York farms and lure in a half million visitors clambering through their tasting rooms annually. About half of New York’s 63 counties are home to at least one distillery. Five million bottles of Empire State spirits have been made to date.

“People still believe we’re just these young little upstarts,” says Nicole Austin, head distiller of Kings County and president of the newly minted New York Distillers Guild, a true industry collective to lobby for craft spirits producers and the issues that affect them. “It’s bigger than you think.”

So big that Governor Cuomo held the first New York Wine, Beer and Spirits Summit in Albany in October 2012, convening distillers, vintners, brewers and farmers to craft better ways to grow, make and sell. I attended and, to be perfectly honest, cynically assumed it would be a dog and pony show to quiet a din of complaints, or perhaps add some distracting smoke to hot yet unresolved topics like whether to allow the sale of wine in grocery stores. Or, more pointedly, hydrofracking — the highly controversial method of deep drilling for shale gas deposits that critics warn threatens the water for everything from dairy cows to beer brewers (and anyone else who needs water — so, you know, everybody), and that has made Brewery Ommegang say they’ll up and leave the state if it happens.

Something interesting happened, though: Stuff did change. Some of it right after lunch. Like ditching laws that once prohibited producers with more than one kind of license from making more than one kind of alcoholic beverage in a single building.

And after the summit, Cuomo earmarked from his $60 million “I Love New York” tourism campaign a cool million for the promotion of New York–made hooch, culminating in big metropolitan hits like the jam-packed New York Spirits room at last spring’s Manhattan Cocktail Classic, where producers like Tuthilltown Spirits, New York Distilling, Hillrock, Brooklyn Gin, Industry City, Atsby Vermouth and so many others got to strut their stuff, and the launch of a very visible wine-and-dine tourism television ad campaign. It’s been so successful, the budget for the latter doubled to $2 million for 2014.

“It’s not that there’s more money,” says Hooker. “It could have been that the money was going to auto plants 20 years ago, but now it’s food and agriculture.”

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And with good reason: According to the 2012 report from the Economic Development Corporation of New York State, food, drink and tobacco production has jumped more than a half million dollars in the last decade. Slow growth? Maybe. But noticeable growth? Yes. To the tune of $22 million a year from our drinkables alone.

It goes far and beyond home-style New York spirits, too. Cuomo’s approach to fostering agriculture is an interwoven, innovative full-on embrace of industries beyond the barroom, like the 2012 Yogurt Summit (dairy is a near-$9 billion industry in New York State), a $500,000 state grant awarded for Calverton, Long Island’s 108,000 square foot “agri-park” storage facility, aptly named Grapes & Greens, and the recent “why didn’t I think of that?”

Curated by Brooklyn Oenology’s Allie Shaper, TasteNY store openings in LaGuardia and JFK Airports, where travelers can go home with a hunk of New York cheddar or a bottle of Tuthilltown baby bourbon instead of a forgettable T-shirt made in China. Which, by the way, is only even able to happen since Cuomo’s 2011 Fine Winery Bill granted a farm winery like Brooklyn Oenology the ability to operate up to five shops beyond an on-site tasting room.

Of course, none of this is without its bureaucratic tangle of red tape. Erenzo and allies rallied for the New York Spirits room, and state funding was only officially approved at the eleventh hour.

“The problem is getting the next thing dedicated,” says Erenzo. “There really is no system in place for getting the next thing signed off on quickly. But we’re now developing that system.”

Still, the national thirst for farm-to-shaker sipping has not been lost in the cogs of Albany. “There’s a huge interest in farm-based beverages,” says Hooker, a Cornell grad and farmer himself. “Well, good, if this is going to happen, we’d rather have it happen here.” It’s an attitude that’s positioning New York as one of the most innovative ag states in the union, spinning straw and seed and fruit into gold.

And hops, too. Last summer, Cuomo took the next logical step in farm-based alcohol, the Farm Brewery license, encouraging craft beer made from New York–grown hops and grains, culminating in what may be the world’s first farmers’ market beer: Brooklyn Brewery’s Greenmarket Wheat, which began life as local malt and upstate grain.

“I’m very happy that the government recognized that this is not just about brewing beer or making wine,” says Brooklyn Brewery president and founder Steve Hindy. “It’s also about bringing back a whole agricultural economy that was really hurting in New York State. It’s not just about the producers, it’s about the growers. It makes a lot of sense and I think it’s a very good thing for the state’s economy and culture.”

Some brewers and distillers are understandably skeptical about the viability of the Farm Brewery Bill: Will it truly be possible to produce enough grain and hops to support both industries entirely? The legislation is certainly ambitious: Until 2018, 20 percent of a brewer’s hops and other grains and ingredients must be grown in New York. That number increases to 60 percent in 2023 and a righteous 90 percent the following year.

“We’re growing a little more than 400 acres now,” says Hooker. “That’s 10 to 15 percent of what we need. We need to grow that area [of grain] a lot more.” So far, though, the attitude appears to be more seize-the-day than seize up with fear of failure, with Empire Brewing Co. in Syracuse developing a farm brewery as we speak, and Ithaca Beer Co.’s commitment to using New York–grown hops in some of their specialty beers.

“The fact is, you gotta start somewhere. That’s what we’re seeing here — the green shoots of a possible ag renaissance in NY. That’s not going to happen in one or two years,” offers Hindy. “In the same way that the decline of NY ag did not happen overnight, the renaissance will not happen overnight. We’re definitely talking about millions [of dollars].”

Brooklyn Brewery alone will produce and sell 220,000 barrels of beer this year, placing the once little-brewery-that-could at the top 10 of craft beer producers in the country. “We buy a lot of grain to make that beer — and we want to be able to use New York State grain.”

Expand the idea of this notion of a home-grown grain source across the 120 breweries and 40 or so distilleries across the state (at the time of this writing), and you’ve got a bump in agricultural demand. “It’s got to be a world-class product, presented in a world-class way. It’s going to take some time before New York State is producing the kind of grains and hops that can compete internationally,” Hindy says, “but with support of the government and the brewing and distilling industries in the state, we can make that happen.”

That support from Cuomo is indeed taking firm root. One outcome is the recent partnering of the state with Cornell University to encourage local farmers to go with the grain. While New York long ago lost its status as America’s bread basket, today Cornell is studying what grains grow well here, and helping farmers to plant and process them.

There are even plans for a central grain depot. “Right now when I want grain,” says Tuthilltown’s Erenzo, “I have to go to three different farms.”

And while some distillers, like New York Distilling and Breuckelen, have exported to Europe, the governor is eyeing ways of getting more New York spirits and wine across state lines and oceans. First New York — next the world.

Young distillers like Kings County’s Austin believe reaching beyond our own borders isn’t so far-fetched. “Wine, spirits, cheese, all of it, that picture is hugely exciting. We could be a quality agricultural and agritourism state — producing world-renowned everything. Not every state can do that. Ask France how important that is!”

“The Farm Distillery Act really ushered in a distilling renaissance here,” says Austin. “And when I think about what we can be? It’s just so exciting.”

Thirsty for more? Find 12 New York spirits to know here

Photo credit: Justin Walker

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As Deputy Editor of Edible Brooklyn and Edible Manhattan, Amy gets to scour the city for all that is quenching and satiating in NYC. The daughter of an old school Italian butcher, she holds her Level III Certification in Wine and Spirits from the WSET, and contributes to Imbibe, Details, More, Foxnews.com, Wynn, and is the author of The Architecture of the Cocktail, The Complete Idiot’s Guide to Bartending, The Hedonist Guide to Eat NY, and co-author of The Renaissance Guide to Wine & Food Pairing with Tony DiDio. She's stomped around vineyards from the Finger Lakes to the Loire Valley and toured distilleries everywhere from Kentucky to Jalisco to the Highlands of Scotland.