InterviewInterview with Appleflats

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Brendan: So I guess, obviously people can find out a little bit about your story by going onto the website, but I thought it’d be great to be able to summarize a little bit about it. What was your catalyst, what got Appleflats going, and your interest into the spirits industry and kind of the sundry product itself?

Glen: So the answer to that question was actually nothing. It was a crabapple problem.

So what we really ended up realizing was that our variety of crabapples was going extinct, I think I mentioned this a little bit before, and so that’s really what brought us into crabapples. And then from that point, in looking at what does crabapples offer that is unique? That’s really how we ended up in the ancillary crabapple space.

Because it turns out that A, we do have high tannin count, which is pretty unusual for alcohol. And on top of that, the big difference is it’s got a ridiculously strong flavor to sugar profile. And that’s really what makes it very, very, very unique, just simply because you can’t… A lot of other mix companies are going to use high sugar to mask the harshness of an alcoholic, especially a poorly made alcohol. And because we have such a strong flavor profile to compare to the sugar content, we don’t need to do that. It means that it gives somebody a low sugar, all natural option that they’re looking for and that’s kind of really the positive there.

Brendan: Okay. Very cool. Yes, I guess it literally emerged sort of a need then, right?

Glen: Yeah, absolutely. That’s kind of what we’ve gotten to and that’s kind of what we’re looking for and looking forward to.

Brendan: As you kind of got going, was there anybody who kind of mentored you along the way?

Glen: From a spirits category or a spirits standpoint? No. Really, the mentorship that we got was official things. So stuff like, we were part of Innovation Guelph, which really helped us try and formalize stuff. We found in general that people have been really, really helpful or really, really positive in their interactions with us. We didn’t have any type of assistance on navigating the industry.

Glen: So no, that one unfortunately didn’t happen, but I would say Innovation Guelph has been known as really effective. And then I think most importantly is that everyone really kind and you mentioned this before, but that really gave us the confidence to consistently ask questions, and that has led to us having a relationship with distilleries. So it’s not that anyone was really, no one took us aside and said, “Here’s how the industry works or this is what people are looking for.” But no one was ever closed off in the way that they did, say answer conversations.

And so that meant they were able to not only put together some interesting different opinions, but most importantly on top of all of that, what came through was these distilleries often specialize in different types of alcohols to distinguish themselves. And that means that trying to promote those unique parts of, why is this gin unusual? Why is this vodka unusual? Learning the stories of those craft distilleries has meant that we’re just so much more efficient and effective in promoting those relationships and that’s been hugely beneficial. I would say we’ve converted a lot of would-be customers for these distilleries into actual purchasing customers.

Brendan: Yeah, I found the industry kind of similar. I mean, people can say all they want, good and bad about the LCBO, but when I started going down this route, I mean the AGCO was very friendly. One of the reps too there, was very helpful and accommodating and people might not always agree with the pricing model that the LCBO has set out.

But I must admit, everybody that I talked to within that organization, for the year and a bit of trying to navigate how I could actually do what I want to do, they were incredibly helpful. And nobody just kind of said, “Well, best of luck.” And peaced out on me. They kind of said, “Well, it doesn’t sound quite like what you’re able to do, but I can put you in touch with this person or that person in one department or another.” And then obviously having the conversations with the distilleries and booking events, everybody’s been just kind of excited and wanting to figure out how to do more and do it better and I think it’s been great, from my side as well.

Glen: I think one of the other things that has actually, and you kind of alluded to this, that I have promoted and I will consistently promote, because the LCBO pricing is often prohibitive. It means that the distilleries that exist here are really good quality products.

Brendan: Right, they have to be.

Glen: But that’s exactly the point, is when I go south of the border, you can get crappy quality, local alcohol in a way that you just really cannot get here and I think that that’s kind of important to remember. It’s a huge testimony to the people that we deal with and I feel like they often don’t get enough credit. Why is a bottle of local spirits $40? Well, it’s not really because those guys are trying to gouge anybody, it’s just the fact that that’s what it costs to make alcohol here and they do a really good job.

Brendan: Well and ultimately, let’s be honest, that’s not even an unfair price when you think about what the average bottle is for something that’s imported, even from the United States, $70, $80, $90 is pretty common. So $40 for a spirit, for a manufacturer that’s just down the road is more than reasonable. I think one of the things I’ve noticed is Canadians kind of overlook spirits in their own backyard.

Glen: Yeah, I think they overlook spirits in general.

And I mean, here’s why: They’re typically a little bit more tricky to work with and bars and restaurants in the high volume world of spirits and the prohibitive side of that, as in you can’t sell a $2 cocktail really here. And it means that when people go to bars and restaurants, they’re most likely to order a beer or a cider and they leave the spirits as being a little bit more challenging. And so what ends up happening is what are the people most familiar with drinking, is beer and wine and even though they might serve cocktails, they’re not picking those up.

There is some research to support that, but on top of that, when we go to a trade show, there are people that love to try new interesting cocktails and you ask them, “Hey, do you drink cocktails at home or do you drink these spirits at home?” The answer is, “No, I typically drink beer and ciders, because I don’t know how to make them.” There’s a real knowledge gap that is a really big challenge there and I think that that’s something, not only as an issue that every craft distillery is trying to tackle, but Appleflats and a couple of other unique cocktail mixers are in a unique position to try and tackle.

Brendan: Fair. That’s a good point. So next, obviously you talked a little bit about the idea of how you got into it and the struggles that the craft distilleries have gotten into since they all are doing it. Is there any advice that you would have to somebody who’s trying to get into this in some capacity?

Glen: I mean, spirits in general or specifically mixes, because those are kind of two different answers?

Brendan: I would say, let’s keep it to spirits. That way we’re not boring new competitors.

Glen: For spirits in general, one of the things that I would say are really important or interesting would be, distinguish your alcohol off the get-go. I think a lot of people, they make a gin or they make a vodka and they think, “Oh, this is the best thing or everyone should just buy my X.” And the answer is, most craft distilleries that are really successful here, they have a unique thing.

So whether they make moonshine like Murphy’s Law or they make more liqueurs or flavored alcohol as the White Wolfhead does or they use unusual base ingredients, the same way that, let’s say Nickel 9 does by using apples as a base, whatever it is.

Having that to really promote is, I would say something really important, because the answer’s, if I go and ask, “What’s your most interesting or what spirits do you make?” And the answer is, “Well, it’s just another gin and it’s just another vodka.” It’s not as easy to promote when you’re asking for an extra $15 over somebody else’s stuff.

So, if you can say something like, “Hey, this is a rum that…” I mean, there’s almost no rums being made in Ontario, so just do that. But if you can find something like different flavors and you can do a niche, there’s a lot more room for more distilleries here.

Brendan: I mean, truthfully, that was one of the reasons that I headed in the craft spirit [for our membership] direction myself, is literally out to your point, they’re all doing such unique things. And I find that uniqueness that the distiller have often set the course of distillery off on, is really what makes you want to pick up one of their bottles to begin with.

There’s always this incredible story behind how they got going. I mean, it usually always starts with, “A buddy of mine and we’re drinking scotch across from each other and we said we should start a distillery.” But then it emerges into something else so passionate and so driven by an idea that they’ve had in her head and they just want to see it created. I think it’s a testament to anybody who takes the risk at going into spirit creations.

Glen: Yes. No, I would completely agree with that.

Brendan: We’ll go into something maybe a little more negative. Is there anything in particular that you have found that you don’t really appreciate about the sector or has seemingly been overtly challenging to do what you do?

Glen: That’s a really good question. I would say the only overt challenges don’t actually come from craft distilleries themselves. I think they really come from regulatory challenges, which really come… Every craft distiller that we had talked to is really friendly, whether they want to collaborate with us in some type of larger picture or not. That is absolutely TBD, but one of the most interesting things that we do see almost across the board is, “Hey, would you be interested in trying to do some type of crabapple gin or crabapple vodka or crabapple whatever?” And almost all of them are really, really interested in doing it, but the regulatory framework means that the amount of… They just can’t produce a seasonal beverage without trying to make 9,000 bottles of it and it means that we’re really challenged to try and actually move into a ready to drink space, which we really would love to do.

So that’s really what I’m more disappointed in, is that there isn’t enough support for these tiny guys to get up and that makes me sad. The distillers themselves I’ve never really had any problems with. So no, I don’t have anything to say negative on the actual distillers themselves, it’s absolutely just the framework doesn’t really promote these guys and that’s disappointing.

Brendan: Would you say that’s kind of harming innovation? Because they’ve said they can’t do the small batches, because of regulatory responsibility, whatever you want to call it. They require a certain volume in order for it to be both, I assume practical from their standpoint, but then also just within the guidelines of the systems that are in place.

Glen: Yeah, that’s exactly it. That is 100% exactly it. The fact that, because the tax rate is so high, in order to make any money, you have to operate on volume, and if you have to operate on volume and you’re limited to selling in the LCBO, it becomes very, very challenging. And again, kind of to go back to my point about how the bars and restaurants, they’re often looking to try and make a drink that is comparable to beer and wine in its price point. And that tax rate makes that so prohibitive that these craft distilleries often really struggle with licensing and sales.

Just because their pricing has to come in a little bit more and restaurants are not going through two, three, four or five cases of product in a day. They’re going through one or two or three bottles and it’s just more challenging to consistently build a menu around something that isn’t one ordered. Right? If you’re picking up Smirnoff, the guy that you’re buying Smirnoff from is also selling you two dozen other things behind that bar and so it’s easy to put in an order with them. And it just becomes very challenging when you don’t have that, when you don’t have that option for smaller distilleries. So yeah, let’s say it’s more of a slightly unbalanced regulatory framework than anything else?

Brendan: Okay. So everything somehow changes dramatically. What would you like the industry to look like in five to 10 years? What would be your pie in the sky kind of spirits and the kind of industry?

Glen: I mean, I think ideally what I would love to see is a rebalancing of taxation on spirits to save our local craft distilleries. So for example, if you lower, I’m not suggesting we lower the overall LCBO pricing for everything, but I’m actually saying, we should lower the pricing on craft spirits, may have three tiers. So spirits made in Ontario, spirits made in Canada and then spirits made internationally, and then have those different tiers allow pretty decent price fluctuation. So that a craft distiller here is paying whatever, let’s say 40%, 50% and 60% respectively.

So even if the pricing on the LCBO shelf is exactly the same and that’s standardized for a 26 ounce bottle the same way. The craft distiller here is able to actually take home an extra 10% or 15% or 20% of their product. And that fundamentally means that not only are they able to experiment more to cut out and meet targets and brand loyalty, but most importantly it means that they don’t have to feel like they’re really under the gun to produce as many bottles or as much volume as possible. Where they’re indicating that they should produce… There’s a strong incentive to cut corners, let’s just put it that way.

Brendan: Right. Yeah, it would definitely be incredible to see. I think one of the things that frustrates so many people with the existing structure, is the fact that it’s still feels very post-prohibition, a level of control. And I mean, I’ve had people within the LCBO that have agreed with that. I remember one fellow I was talking to, he literally said to me, he’s like, “Look, I know this sucks.” He’s like, “I’m sorry there’s so many rules in front of this.” Because I kept bumping into, this is what I want to do. I would get 95% of the way there and then they’d be like, “Nope, you can’t do that. Nope, you can’t do that.” It would be incredible to see somehow, some of the rules and regulations modernized to more of the 21st century, for all of these craft distilleries and craft breweries and craft wineries for that matter that just weren’t even a part of the equation, because of the structure being the way it is. I think everybody within the LCBO as a construct, is built thinking about shelf space and that’s awesome. We’re all accustomed to going to the LCBO to get a wine or a beer or a spirit, but it would be incredible if there was perhaps slightly different variations in the model. To allow new players to enter the market and to be able to kind of, as you said, kind of explore ways that they can innovate without being crippled by rules and regulation and ultimately taxation.

Glen: I mean, the thing is I really fundamentally think the craft beer and wine is way further ahead. Right? They’ve got more realistic solutions to these problems, the craft cider companies can now sell at farmer’s markets, so can wine. That really is what this comes down to, is it gives them more options to do that.

Brendan: Right. Well fingers crossed, it would be great to see more equal treatments in general.

Glen: Yeah.

Brendan: So as far as yourself, obviously I’ve got about a half flat left of the flat craft you gave me last. So thank you as well for that. Do you have any kind of exciting products in the pipeline? Anything that you’re able to discuss about things that you guys are experimenting with?

Glen: In terms of a product, the answer is, not really. We don’t, I mean, especially not during COVID, but no, in general right now we’re not going to be launching a whole bunch of other products. The big thing that we are working to try and do, pretty much what I’m doing right now. So we’re a lot more interested or we’re hoping to try and grow relationships with these distillers and try and get the community involved in how to do some of these cocktails, how to make some of your cocktails, how to have fun doing some of these cocktails. That’s really what we’re looking for. So strengthening relationships with distilleries, but then also trying to do things like our cocktail cup or hosting cocktail workshops or trying to produce some online content, as to really how to get behind making these drinks. So I mean, a really good chunk of that is doing exactly like this stuff, exactly like this with you, which is a lot of fun. So that’s what I would say.

Brendan: And that would definitely help with the kind of the knowledge gap that you kind of alluded to earlier, about people not just carrying spirits at home and enjoying them.

Glen: Yeah, 100%.

Brendan: Is there a specific way that you would say is the best experience for somebody to try an Appleflats product for the first time?

Glen: Definitely with pretty much any local craft spirit, but if I was to recommend one, something from Wolfhead, it would be fantastic. That’s usually who we work with most or one of the things I would promote and I think is important to say, if they’re looking for a drink that’s not alcoholic, Sobrii is a local dealcoholized gin that works really well with our product. So if somebody doesn’t feel like having a drink, but still wants to really partake, I would highly recommend that.

Brendan: Okay and obviously you’ve had your cocktail competition going. Obviously it sounds like it’s going to be a part of your strategy going forward as well.

Glen: Yes.

Brendan: What would you say is the best way for somebody to kind of engage into that competition?

Glen: Send us your drinks. Really the only restrictions are, it has to be Ontario craft distillery as your base alcohol and it has to have one of the Appleflats products in it, but that’s really the only actual requirements.

So send us your drinks, we’d love to feature them! You can use hashtag Appleflats, but we love to see community engagement and we do share those pictures. We do look at all those pictures and the people that do that, we consistently work with them.

Brendan: Great! And finally the nice and simple one to end this off, Glen, is what’s the best way to stay in touch with you? Where can people find you or find you online?

Glen: Facebook and Instagram is going to be the easiest one. I mean, our website has, you can join our newsletter there, but if they ever have questions about finding our products or if they’re in a store and they struggle to find our products or they even just have to talk to us, sending a message to Facebook or Instagram does directly go to my phone. So I would love to hear from somebody.

Brendan: Awesome. Well, I really, really, really appreciate you taking the time out to do this. I know this is a crazy time with everything that we’re going through as a society, but I was really impressed, A, that you reached out and you were being transparent on the fact that you were interested in having somebody who was more of a whiskey drinker, try your product for the first time and then giving us the opportunity to do that kind of blind tasting, was a lot of fun for us. So I really appreciate the collaborative nature that you’ve put forth and yes, I want to keep finding ways to promote you and to find a way to do stuff together.

Glen: Well, thank you very much.

Brendan Waller

A lover of his family, entrpreneurial ventures and ideas – And a great peated scotch.

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