When sixth-generation potato grower Devon Strang had potatoes that were too small for retail sales, he used to ship them to a dehydrator to be turned into potato flakes.
It didn’t exactly pay. “There are a lot of farms in the area growing potatoes,” Strang explains. “There’s an abundance of smalls and the (dehydrators) won’t pay very much for the product… essentially, you’re recovering the freight to get the potatoes off the farm.”
Strang believed there were bigger opportunities for small potatoes. In 2016, his family launched Blue Roof Distillers, a craft distillery that turns undersized spuds grown on the Malden, New Brunswick farm into artisan vodka.
The number of Canadian craft distilleries has exploded. Across Canada, there are 229 distilleries producing small-batch gin, vodka and whisky, according to the latest data from Artisan Distillers Canada. The highest number of craft distilleries are located in British Columbia, Alberta, Ontario and Quebec.
Artisan Distillers Canada doesn’t track the number of farm distilleries using estate-grown crops but anecdotal evidence indicates the model is becoming increasingly popular.
While “farm to bottle” is a growing trend, starting a farm distillery is a complex process that requires farmers to make significant investments and navigate complex provincial and federal regulations.
Before launching Blue Roof Distillers, Strang attended distilling and fermentation classes, visited farm distilleries and secured a government grant to work with researchers at Le Collège Communautaire du Nouveau-Brunswick to perfect the distilling process. He also made countless small batches of vodka using equipment purchased from a home brewing retailer before investing in commercial grade fermentation tanks and stills.
“We learned from the school of hard knocks by making mistakes and getting through it,” Strang recalls.
Cultivating a new plan
It’s illegal to distill small batches of alcohol in Saskatchewan so Barb Stefanyshyn-Cote and her husband, John Cote, had to go all in when they started Black Fox Farm and Distillery.
In 2010, the couple sold their 5,000-acre family grain farm in Leask and purchased an 80-acre farm near Saskatoon; Cote took distilling classes and participated in internships, using their knowledge of growing grains to make vodka, gin and whisky.
“We wanted to do something closer to the customer than be large grain farmers,” Stefanyshyn-Cote says. “A distillery made sense to us because we understood grain; we know how to grow it, we know how to harvest it, we know how to store it… we just didn’t know how to process it.”
Stefanyshyn-Cote selected varieties of wheat, triticale and oats that were well-suited to making artisan spirits, noting, “grain is one of the critical parts of our operation; our ag knowledge lets us choose the best varieties with the best flavour profiles.”
Although the couple were experienced farmers — and named Canada’s Outstanding Young Farmers in 2001 — they opted to contract grain production to another farmer. They still make all of the management decisions but hiring out the labour made better business sense, especially on a smaller piece of land.
By contrast, Jacob Weibe in Campbell River, B.C., hired distillers to oversee the spirits production at Shelter Point Distillery while he maintains control of the farming operation, growing barley for single malt whisky.
The 200-acre farm generates up to 450 tons of grain, which is often enough to supply the distillery, although if the farm has a tough year, Weibe purchases grain from other local farmers to round out his supplies.
“(Grain) never goes as far as you think it will,” he says. “So, there’s planning and backup planning in case the farming season doesn’t go well; you need to be prepared for the worst every year (and) it’s nice to have those connections in place beforehand.”
Navigating regulations and red tape
Distilling requires significant infrastructure, investment and support. It also requires a long-term commitment, according to Cam Formica, co-founder of Willibald Farm Distillery and Brewery in Ayr, Ont.
“It’s tough for small producers to perform well in (liquor stores) and you don’t see a lot of interprovincial trade,” Formica says. “When you’re getting into it and investing a lot of money… be prepared for a very long payback.”
Strang estimates that it takes at least $250,000 to start a farm distillery. It’s not just a capital investment: Navigating the maze of regulations and securing all of the proper permitting also requires a significant investment of time.
Formica quickly learned about the complex (and often contradictory) regulations when he launched Willibald Farm Distillery and Brewery in 2017. In Ontario, he explains, it’s illegal to purchase a still without a spirits manufacturing license, but securing a spirits manufacturing license requires a still — which is just one obstacle that he had to overcome to start producing gin, vodka and whisky.
Up until a few years ago, each municipality in Ontario had its own set of rules pertaining to craft distilleries. The Ontario Ministry of Agriculture, Food and Rural Affairs has since published “Guidelines on Permitted Uses in Ontario’s Prime Agricultural Areas” that outlines criteria distilleries must meet to qualify for “on-farm diversified use,” but not all provinces have followed suit.
In New Brunswick, the construction codes for distilleries are similar to refineries. Shelter Point Distillery spent two years completing all of the necessary paperwork before British Columbia issued a manufacturing license, and the distillery undergoes multiple annual provincial and federal inspections (and files additional paperwork) to remain in compliance.
Each province also has its own process for stocking spirits and retail stores. It’s a time-consuming process with no guarantee of success, according to Strang.
“Each of the (provincial) liquor boards receives thousands and thousands of listing applications within each category each year (and) they get inundated with thousands and thousands of applications from all over the world,” he says. “They have to select a small few (brands) that are going to gain shelf space.”
Blue Roof Distillers sells its craft spirits in New Brunswick and Prince Edward Island, while stores in British Columbia, Alberta, Saskatchewan and Manitoba stock Shelter Point Distillery products. Willibald Farm Distillery and Brewery spirits are sold in Ontario.
In addition to sending bottles of Black Fox Farm and Distillery spirits to retailers in Ontario, Saskatchewan and Alberta, Stefanyshyn-Cote also works with distributors to stock Saskatchewan-made spirits overseas — and that requires learning (and following) an entirely new set of regulations.
Stefanyshyn-Cote learned that 750 ml bottles are not accepted in the United Kingdom; retailers there require spirits bottled in 500 ml bottles but the opposite is true in the United States.
“There are so many outdated and archaic elements to liquor legislation beyond just licensing,” Formica adds.
As the popularity of farm distilleries grows, so do the opportunities for farmers. In fact, Stefanyshyn-Cote credits the agriculture industry for pushing progressive legislation that allowed farm distilleries to open.
“The opportunities (for farm distilleries) arose from the realization that Canadian farms were growing the grain to supply worldwide distilleries and (with the agriculture industry) saying, ‘we can do this here,’” she says. “The laws were relaxed to allow farm distilleries and that was the biggest change.”
Even though Canadian farm distilleries are in their infancy, farmers-turned-distillers are earning national and international accolades for their spirits. Shelter Point Distillery won an Innovation Award at the Canadian Whisky Awards, and Blue Roof Distillers has earned medals in the Canadian Artisan Spirits Competition and San Francisco World Spirits Competition. Black Fox Farm and Distillery has also earned awards for its spirits, including three medals from the 2020 World Whisky Masters competition for their single grain, cask finish and whisky blend.
“The market isn’t massive for craft premium price products but there is a market and you get a good feeling out of working hard and coming up with a quality product and having somebody appreciate it,” Strang says.
Earning accolades from judging panels is important but, for Weibe, the fierce local support has been the biggest indicator of success.
Shelter Point Distillery hosts tours and tastings at the distillery, highlighting the critical relationship between the farm and distillery and explaining the journey from farm to bottle. Consumers love knowing that each sip has a story, he says.
“I was surprised at how many people were so intrigued (by the idea of a farm distillery) and really supported our products, saying things like, “This was grown here? I really want this because it supports a local business and local agriculture,’” Weibe adds.
The demand for small batch, local spirits may also help buffer against pressure from bigger players like Buffalo Trace and Heaven Hill Distillery that are starting to grow some of their own grains. Even smaller distillers are starting to source grain from local farms to make (and promote) grain-to-glass spirits and that demand could provide opportunities for farmers who want to grow grains for the more lucrative spirits market.
Stefanyshyn-Cote admits that she often gets worried about the competition but adds, “A lot of times people are looking for the story behind the product, not just the product. That’s where I think we’ll always outshine the big guys; they can’t sell an authentic story as well as we can, so there is still room in the market for niche players.”