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Sunday
Nov122017

Cottage Industry

Part of the reason Armagnac continues to resonate with me as a booze consumer has to do with the way the industry is run. That's because there is no real Armagnac industry. It's just a bunch of barns, farms, and cottages that have a few vineyards nearby and a few barrels in the shed. They are not distilleries. Ninety percent of them do not even have production centers; they rely on a traveling stillman to do the actual distillation once a year after the harvest is done. Few, if any, use brandy sales as their sole source of income. Prices are reasonable because supply is high and demand is low. It's seen more as a commodity. The cost of a bottle depends on how much it cost them to produce it, plus any appreciation from maturation over the years. It's a very simple formula for a very simple way of living and doing business. It's every bit the romantic ideal you think it is. It's what business used to be. 

While it's nice to imagine the American craft distillation business as a cottage industry because it seems so homey, like a local farmer's market with handmade jams and jellies, it isn't. First off, there's so much overhead involved with starting your own distillery between equipment, permits, licenses, and red tape that you'll be lucky to ever get out of debt with production as small as it is (similar to student loans today: $150,000 for a BA? To do what?). It's for that very reason that craft spirits cost more money even though the flavor doesn't always warrant it. Then there's the distribution side. You can't sell directly to the public as a distillery (although distillery gift shop laws have loosened), so you have to pay a middleman and a retailer. That makes the bottle price even higher, even though the actual profits to the distiller are lower. 

So how do you become profitable as a craft distiller? When do you get out of the red and into the black? When you sell the company. Business today is speculative, especially in the booze game. Equity is no longer about actual profit, but rather market share or perceived value. Silicon Valley investments can go nowhere so long as they hit the jackpot every once and a while. That one home run pays for all the strike outs. Starting a small distillery today is like buying a house in the Bay Area. It might have been worth it 15-20 years ago as an actual lifestyle decision, but today the amount you'll pay will never justify itself as a practical purchase. Therefore, it's almost purely speculative at this point. Who plans to actually LIVE in a $1.4 million studio?

That's why I'm back here at my desk asking myself: who is actually starting a business today to actually run it? To find a way to be profitable as an actual operation, not as an investment with profit payouts to shareholders when the sale happens five to ten years down the line? The only people I know who can afford to start a distillery today made their money elsewhere previously (same with those buying a house in the Bay to actually live). Is there hope for anyone else?

Time to pour myself some Armagnac. 

-David Driscoll

Sunday
Nov122017

A Good Deal

Getting to spend the whole evening with the Deal sisters is pretty much a dream come true, especially when Kim picks up the bass and whips out "Gigantic" with her twin sister Kelley taking care of the Frank Black falsetto for harmony. 

I bring up Kim Deal to contrast some of the unpleasant encounters I've had over the last few months in the booze business. Kim is the anti-big league of rock stars. This woman is one of the most iconic and influential musicians of the last thirty years. She's headlined Coachella in front of tens of thousands of people, for God's sake! She could be totally full of herself or snooty, but the woman could not be nicer. She's so smiley and down to earth, talking with everyone at the show and shaking hands with the entire front audience before leaving. I love it when my heroes live up to the hype as actual human beings. It doesn't always go that way. 

-David Driscoll

Saturday
Nov112017

Hair Band Epilogue

Oh me? I was never old enough in the eighties to start my own hair band. But if I had been there, old enough to show my chops on the old Fender as the rhythm, I know exactly who I would have chosen as my bandmates.

Lead Singer: Mark Slaughter - Sure, he can't sing anymore (as I've seen documented on countless YouTube videos), but Mark was born ten years too late. If he would have peaked in the mid-eighties he would have been an even bigger star. A beautiful man with a great voice.

Bass: Kip Winger - This is a total cheat. Kip Winger is a frontman who happens to play bass, but that's to my advantage. I need someone gorgeous with an open silk shirt, a hairy chest, and the ability to sing back up. Easy choice. I think I could have stamped out his prog rock tendencies and guided him back towards the party side.

Lead Guitar: Tom Keifer - Another cheat. Tom Kiefer is yet another frontman with serious virtuoso skills. The Cinderella head honcho has the glam goods with a raspy falsetto to fill in the void. Rarely did a frontman handle the major solos like Tom.

Drums: Tommy Lee - This was tough. We had Rikki Rocket. Tico Torres. Alex Van Halen. Steven Adler. But in the end I need a heavy pounder who likes to party. I need street cred. I need a guy who brings a fun-oriented atmosphere.

That's my supergroup. Who knows if it would have totally faltered.

-David Driscoll

Friday
Nov102017

Market Cycle Analysis

I knew this was going to be like opening a can of worms with music fans, so let's break down the last post:

- I chose Kiss as the original not because they were first, but because they so perfectly epitomized the original philosophy of all great hair bands: get drunk, get laid, look good, do it again.

- I don't think anyone's going to argue with me about Van Halen, but if you want to see what happens when you dismantle Van Halen, keep Roth, and replace the rest of the band with the best musicians money can buy, it sounds like this...

This is so fucking prog it makes Rush sound like the Sex Pistols. However un-David Lee it is, I still get a certain amount of nostalgic pleasure from listening to it. However, to all you whiskey fans, this is what happens when you obsess over the specs and forget about why you're drinking in the first place. You get guys talking about technical prowess, but the soul is gone. 

- Motley Crue "Wildside" is the apex of eighties metal for me. Tommy Lee plays in a revolving drum kit, Vince runs around the stage, everyone's wearing black leather, and Nikki Sixx still looks the same then as he does now. Leave a good looking corpse, right? It was everything I wanted to be about when I was seven years old. I had a tennis racket that I would use as my guitar and I would ROCK in front of that TV.

- I'm using White Lion to show a decline in quality, but no disrespect to Mike Tramp and the gang. I loved that song then. I love it now. Purists will castrate me for saying that, however. Plus, Vitto Bratta's solo is one of the best of the decade. He was a gunslinger on the loose, out to dethrone Eddie.

- Then there's Steelheart. If you've never actually heard Miljenko Matijevic hit the high in "Lady," then you need to watch that video...ALL THE WAY TO THE END. No singer in rock history has that range or that much power with the high note. Again, he was a beast. But at the end no one cared anymore. 

To answer the question I always get when I write posts like this: I was born in 1979. So how do I remember all this? Because I was such a ball of energy and non-stop need that my parents needed constant breaks. MTV was the only thing that mattered to me starting at age five. I spent more time watching MTV in the eighties than Martha Stewart and Adam Curry combined. 

And it all paid off!

-David Driscoll

Friday
Nov102017

The Evolution of a Market Cycle in Six Videos

BOOM! There's an excitement of a bold new energy. People are out there pioneering an idea or an art. You feel something radical and you can't help yourself. Whatever this is, you want to be a part of it. A trend begins.

People from all over the world get wrapped up in the energy. They begin obsessing over this hot new fashion, adding in their own unique accents. New visionaries come into the market and they have ideas and strategies about how to do things even better than the original pioneers. They take the founding ideas of the movement and improve on the quality and the message.

The movement hits its peak. The world is enraptured. The quality is still top notch, but there are signs of fatigue and decadence everywhere. The message has gone as far it can go, but can you really stop the marketing momentum with everything in full swing? 

The movement becomes pure money-oriented. The fun and frivolity that inspired greatness has been replaced with a strategic system for success. The craftsmanship is still top notch; in fact it's better than ever! However, it feels almost forced or formulaic because technical details have begun to overtake the conversation, overriding the original intent. Despite the incredible quality, talent, and ability on display, there's something missing. 

The market is now absolutely flooded beyond capacity. Everyone is capable. In some cases, the quality and craftsmanship are better than anything we've ever seen. Producers are able to do things no one has ever done previously, but at this point it's old hat. That level of mastery now carries with it a stigma. The new arrivals have completely forgotten the original intent of the art. The original founders have all sobered up and moved on to something else.

Finally, something completely new comes along and destroys everything. This new energy is the anti-thesis of the previous movement, embracing the complete opposite set of principles and rebelling entirely against the status quo. Everything changes. The old market is dead. A new one based on entirely different values and styles begins.

-David Driscoll