At O’Neill Vintners & Distillers in Parlier, Calif., a team of master distillers transforms bulk wine and grain into immature brandy (neutral spirits) and gin at the rate of 5 to 5.5 million proof gallons annually (approximately 4 to 4.5 million gallons). That’s enough spirits to fill 80,000 bathtubs—but it’s not bathtub gin that’s being produced here.
“Ninety-five percent of our clients are the industry’s largest domestic brandy labels, but the artisanal and craft private label brands are growing,” says Mike Drobnick, O’Neill’s senior vice president of bulk wines sales.
With the craft spirits movement gaining momentum—according to the American Distilling Institute, current growth is around 30 percent annually and market share has doubled in the past two years—smaller producers often rely on bulk spirits to meet demand. “We sell spirits to well-known brands and some craft producers who typically blend our products with theirs.” That means consumers who purchase artisan spirits may, in fact, be paying a premium for a brand that contains high-quality bulk spirits.
Be it artisan or volume, distillation is a highly technical process. “Most of our master distillers are former winemakers who’ve fallen in love with distilling,” says Drobnick. “They’re very technical and passionate.”
He points to record sales for Cognac as the beginning of a renaissance for the grape-based, wood-aged spirit that, by U.S. standards, must spend a minimum two years in oak to be labeled brandy. “The domestic brandy category is primed for a renaissance,” he says. “We’ve seen several cycles of demand for different brown spirits, and consumers are looking for a smoother drink than most scotches and bourbons.”
In an effort to add value and tap the premiumization trend, O’Neill has formed a partnership with a marketing company and will launch a portfolio of older brandies ranging from $50 to $75 per bottle. According to Drobnick, demand for aged brandy seems to be running ahead of supply. “We’re already selling futures of our two-year-old brandy—not scheduled for release until June 2018—to artisan producers across the United States.”