The State of Craft Spirits in Colorado 2023
Colorado had an early start with Craft Beer and it's getting another early start in Craft Spirits
The nation’s 2nd largest craft beer market is making a big splash in craft spirits. Here’s everything you need to know to navigate a complex and young industry.
New to Colorado’s distilled spirits? Here’s some background to get you started:
Over the last 40+ years, Colorado has earned a reputation for being one of the world’s foremost Craft Beer destinations. People from all over come to the Centennial State to sample the incredible array of award winning lagers and ales. However, around 20 years ago enthusiasts & professionals alike began to explore beyond beer and started to develop the state’s “Craft Spirit” movement.
Colorado’s first craft distillery opened in 2004, which was the state’s first since Prohibition in the 1920’s. Since then, the Centennial State has rocketed to 6th place for total number of 112 actively operating distilleries, behind only California (225), New York (199), Texas (173), Pennsylvania (156), and Washington (117). With so much progress already under the state’s belt, we wanted to explore what is behind the state’s rapid success story.
Why Craft Spirits do so well in Colorado
Distillers in Colorado site several factors for the state’s growing reputation in craft spirits. Among the most marketable factors include things like “farm-fresh ingredients” and crisp “Rocky Mountain snowmelt.” And while those do sound delicious, there are more REAL contributors to the state’s success. For example; Colorado’s massive tourism industry and the state’s rather lenient liquor codes.
As for Colorado’s reputation for tourism, the Centennial State has been a very popular vacation destination for over a century. In the 1850’s Colorado was marketed to easterners as the “Switzerland of America” and the name has stuck ever since. The steady inflow of tourists to Colorado means an abundance of opportunities for distilleries to interact with new and old customers alike.
As for the liquor codes, one way they became favorable to craft distilling was when the state passed legislation that allowed two tasting rooms per license. These unique licenses allow direct-to-consumer sales for both on-premises and off-premises consumption. Tasting rooms give distillers an immediate cash injection while also the ability to create a brand experience that will leave consumers wanting more. Secondly, recent legislative changes have added the Distillery Pub License which now allows for a tasting room and the ability to sell other alcohols from other producers beyond their own.
Challenges for Colorado Craft Distillers:
Despite these favorable conditions, distilling in Colorado does come with its unique problems to solve for. Colorado’s high overall elevation, semi-arid climate, and wide temperature swings invite challenges for distilling and aging spirits. But many distillers agree that solving for these interesting elements helps create the foundation for the state’s “terroir.”
The Legacy of Colorado’s Craft Beer Culture
In addition to all those challenges, Colorado’s Craft Beer culture, it turns out, is both a distiller’s best friend and greatest competitor. The state’s reputation for beer is known worldwide – with the Mile High City hosting of the nation’s biggest beer festival, the Great American Beer Fest, continuously for the last 40 years. That said, while the Centennial State’s craft-beer fanbase, distillers also have a “whiskey adjacent” audience of potential customers ready for distillers to reach out and connect to them.
All of these factors combined make for some innovative problem solving. With so many breweries, wineries and distilleries vying for attention and dollars, craft spirit makers must work hard to carve out their unique niche. This comes both in terms of the spirit they make as well as the brand identity they create. It also means they must use creative production methods to get established, make enough money to gather a footing, and finally preserve their place in the world once they gain a following.
Understanding the “Craft” behind Colorado’s Craft Spirits
Not all of Colorado’s Craft Distillers are created equal. Some distilleries have boomed in popularity and graduated well beyond “craft” to become respected national brands. According to the American Craft Spirits Assoc., for a distillery to be considered “craft” means that they produce small-batch, craft spirits with no more than 394,317 9-liter cases per year and are not openly controlled by a large supplier. But these are not hard & fast legal regulations, and act more like guidelines agreed upon by participants. These guidelines give distillers some flexibility and interpretive wiggle-room, allowing them to use whatever means they need to produce spirit and creatively remain “craft.”
For example: some craft spirit brands are not distilled in-house by themselves. Rather they may be produced by another distiller, and then creatively altered (by blending, infusing with botanicals, sweetening, filtering, or other flavoring) before bottling & marketing. So even if there’s a vintage looking label on the bottle and the term “craft spirit” highlighted out front; the liquor in the bottle may well have been produced via a bigger distillery elsewhere. Meanwhile, to further confuse things, many big companies have recently created “Craft” divisions that produce small batches of separately marketable products. Case in point: in 2021 Molson Coors Beverage Company created Coors Whiskey Co. which distributes a 95 proof Five Trail Whiskey.
Connecting to Colorado’s Craft Spirits Culture
Ultimately, craft spirit consumers are on the hunt for quality, flavor, reasonable prices, and a way to connect with Colorado’s unique story. The best way to navigate your individual journey of discovery in Colorado’s rapidly evolving Craft Spirits industry is simply by asking. Depending on your time and ability, we recommend visiting the distiller’s original location. If that’s not possible, then ask if they do tastings in your area. When you do talk to a rep, ask them directly where they stand in the industry. Ask if they are individually owned and operated or if they are part of a bigger corporate holding (not that there’s anything wrong with either). Ask if they use any additives like colorings or flavorings, or if they chill-filter their spirits. Ask if they make their spirits in house or if they leverage outside sources for help (not that there’s anything wrong with either). Ask how much volume they produce and where they distribute. Getting to know your distillery better will connect you to their story, their stage in development, and what their known for. If you end up loving their story and spirits, then you know you’ve made a good investment.
What’s ahead for Craft Spirits in Colorado for 2023 and Beyond
Colorado has a solid foothold in the nation’s craft spirit industry, but what lies ahead for the state’s distillers? As more and more people discover the state’s locally made spirits, demand for the small supply will increase. As demand continues to increase, we may also see some prices increase as distillers invest in growing their operations. With an increase in interest we may see more distillery openings, simultaneous to some market consolidations for some of the older more established brands. If this sounds familiar to those who followed the market evolution of Craft Brewing in Colorado during the 90’s, 2000’s and 2010’s… there are some interesting differences. Unlike the craft beer movement where the big national brands were caught off guard by the sudden popularity of microbrewers; now, those same big national brands recognize a familiar trend and are jumping into the fray much earlier.
As “Craft” distilling continues to grow, consumers are also beginning to demand better transparency behind ownership, provenance, quality and authenticity. This demand for brand insight comes at a good time since bigger corporatations will continue to buy smaller brands to retain market shares.
Our favorite Colorado Craft Spirits for 2023
Here’s four of our favorites for 2023 and why they made our list:
- Montanya Distillers in Crested Butte, CO: Woman owned, Montanya pioneered American Rum making from one of the world’s most beautiful locations, the renowned ski-town of Crested Butte. Their sole focus is on making the best possible Rum in a variety of ages and expressions. Their Rums are smooth and not overly sweet thanks to their unwavering commitment to quality. Their craft spirits intentionally leave out additives like coloring agents, additional sugars, and adjunct flavorings.
- Peach Street Distillers in Palisade, Colorado: Peach Street’s crafters made the first legal Bourbon (post 1920’s prohibition) in Colorado. They also make 5 and 10-year Straight Bourbons, rare for Colorado. Their focus is on quality, experimentation, and using local ingredients. If you go, we recommend trying out their D’Agave based cocktails like their Paloma.
- Hogback Distillery from Boulder via Scotland: Made from lead distiller and founder Graeme Wallace’s deep Scottish roots and local Colorado character. They make a variety of whiskies including peated malts, High Wheat, High Rye, Aspen barrel aged, and more. Watch for our upcoming interview with Ardbeg devotee and lead distiller Graeme Wallace at Basin & Range Magazine in the near future.
- Talnua from Arvada, Colorado via Ireland: Another distillery marrying the old world with the new: this time blending Irish roots with Colorado ingredients. Dedicated to making single copper pot still whiskies and gins, Talnua’s whiskeys are made in the traditional Irish way with at least 30% unmalted barley, at least 30% malted barley, and at least 5% other. Talnua also stands as the US’s first Single Pot Still distillery.
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