July 2016 Feature Story: Craft Beverage

Tapping into agri-tourism

From left, Kaneb Orchards owners Edward Kaneb Jr.  and Elizabeth  Kaneb  with Kaneb Orchards marketing/sales manager Nancy Badlam at their Massena cider operation. Photo by Jason Hunter, NNY Business.

From left, Kaneb Orchards owners Edward Kaneb Jr.and Elizabeth
Kaneb with Kaneb Orchards marketing/sales manager Nancy Badlam at their Massena cider operation. Photo by Jason Hunter, NNY Business.

Region’s craft beverage industry diversifies as it grows

By Karee Magee, NNY Business

Twenty-one years after the north country’s first craft brewery, Sackets Harbor Brewing Company, opened in 1995, the craft beverage industry in the region has hit its stride as a major contributor to agri-tourism.
The tri-county area has seen an increased number of wineries — about a dozen since the early 2000s — but in the past five years the craft beverage industry has welcomed the emergence of a variety of different businesses from breweries to distilleries, and even a hard cidery in St. Lawrence County.

“We were untapped prior to 2000, but we had the tourism here,” said Jay Matteson. “We have the tourism destination of the St. Lawrence Seaway and the Thousand Islands Region.”

Mr. Matteson said having a location that is already established as a tourism destination, as well as the award-winning quality products produced by craft business in the region has the potential to create a successful industry similar to the Finger Lakes in the north country.

As an industry that’s only existed for about a decade in the north country, though, there are challenges to its success.

“The market is starting to get pretty saturated,” said Michael Aubertine, owner and operator of Clayton Distillery, the tri-county area’s first distillery. “There are so few people around here that it’s so tough in this area.”

Despite having an established tourist destination like the Thousand Islands region, he said, the area can only sustain a certain number of businesses based on the number of tourists and locals that are available.

“As far as Upstate New York, there are only so many people or businesses willing to take your product and only so much shelf space,” Mr. Aubertine said. “I don’t think more would be able to survive with the number of tourists right now.”

Another issue craft businesses in the north country face is the reliance on Canadian tourists. There is presently a high tariff on U.S. alcoholic beverages entering Canada, meaning Canadians can’t bring much of the north country’s craft beverages home with them.

Mr. Aubertine chose a location on the Canadian border because he was expecting a large customer base from Canada. About 50 percent of Clayton Distillery’s sales radius is on that border.

“We were counting on the sales, but we can now guarantee that will never happen,” he said.

Mr. Aubertine said he had to change his game plan. His retail store will now only be open from mid-May to September and he has switched from advertising locally to promoting his products in other markets.

His products are in 75 stores across Upstate New York, including Buffalo, Syracuse, Rochester and Ithaca. The distillery’s presence in New York City and southwestern New York are still light, but Mr. Aubertine is working on expanding in those areas, as well as New Jersey, Pennsylvania and Massachusetts.

Kaneb Orchards Farm Cidery in Massena is looking to go in a similar direction.

Kaneb Orchards became the north country’s only producer of hard cider in 2014. The products are sold mainly in St. Lawrence County on site during the summer at the orchard’s bakery/cidery, at local retailers and at Between the Buns in Potsdam and the St. Lawrence Brewery.

Edward Kaneb, though, said that availability has expanded to liquor stores in Albany, Manhattan, Malone and Plattsburgh, as well as at Mullers Cider House in Rochester.

“Our goal is to expand more into southern New York and to the Northeast,” Mr. Kaneb said. “You have to be careful in our situation though. We could get bigger, but we don’t want to go too heavily into debt.”

Mr. Kaneb is seeing similar issues as businesses in the Thousand Islands region, but being located in Massena, his business is farther from traditional tourist destinations in Jefferson County or in the Adirondacks.

To offset that challenge, Mr. Kaneb said the most important focus for a craft beverage business in the north country is quality.

“You have to make a good product,” he said. “Word of mouth will hurt you if you don’t have a good product. In a small community you have to make a good product that people will come for.”

Mr. Kaneb said he and his sister started thinking about the business in 2008, but didn’t start selling until 2014, giving them time to refine the recipes for the four hard ciders they currently have available, which is particularly important for cider because it’s a more delicate procedure than beer or spirits.

“You can get some real off flavors,” he said. “Cider can be a difficult beverage because there is not one fermentation that comes out like the other fermentations.”

Dean Richards, owner of BarkEater Brewery in Lowville, agreed that quality is a very important factor in establishing a successful craft beverage business, but his brewery’s success was due to a variety of factors.

Despite being one of the smallest farm breweries in the state, BarkEater Craft Brewery is falling short of the demand in Lewis County, Mr. Richards said. The distribution is currently limited to the taproom, a neighboring restaurant, and Tug Hill Vineyards.

“The demand is constantly increasing for us,” he said.

The brewery’s success is based on a combination of being hyper local and the only brewery in Lewis County, being located between Tug Hill, the Adirondacks and the Thousand Islands region, and providing an experience.

“The tourists want to go there and they want to stay,” Mr. Richards said. “You make more money selling your beverage over the bar.”

And over the bar is where BarkEater will stay. Mr. Richards said he has no intention of bottling his beer because he would have to produce and sell a huge amount of product to make it profitable.

Instead he plans on giving his customers what they want, the hyper local fresh beer with the experience of a taproom. Mr. Richards is looking to set up a five barrel brewing system at a separate location in Lowville to increase production and future plans include potential taprooms in Old Forge and Watertown.

Mr. Richards said the challenges facing similar businesses in the Thousand Islands region stems from too much product diluting the area without enough people to support all of the businesses.

The solution, Mr. Matteson said, is for more craft beverage businesses to open in the region to establish critical mass.

“We still haven’t reached that point where there is enough craft brewing companies to attract enough tourists,” he said.

Looking at the Finger Lakes, Mr. Matteson said, the numbers of craft brewing and wineries available seems unfeasible, but the variety attracts enough tourists to sustain those businesses.

“The challenge is for those existing businesses to stay profitable while we divide up the existing pie,” he said. “We will eventually overcome it, but it’s on the backs, blood, sweat and tears of the existing businesses.”

Mr. Richards said the creation of farm breweries, which were established by the New York State Legislature to generate jobs and businesses while promoting locally grown products, has taken the barriers away from nano brewing and they are a feasible business for any small community.

“We are like a small restaurant in a small village,” he said. “There’s room in every village for a little brewery.”

Nano or farm breweries could also take away the current geographical barriers to the north country’s craft beverage industry which is spread out over a large area, making it unfeasible for tourists to go from the Thousand Islands to Canton or up to Massena without stops in between.

The largest concern, though, is solving the issue posed by Canadian tariffs.

“It’s a huge barrier,” Mr. Matteson said. “That resource, the St. Lawrence River, has become a barrier.”

Despite previous failed attempts to negotiate with Canadian lawmakers, Sens. Elise M. Stefanik, R-Willsboro, and Kristen E. Gillibrand, D-NY, are still working on solutions and urging negotiations.

The American Farm Bureau Federation and the New York State Farm Bureau met with area farmers and winemakers in June to discuss solutions. At that meeting, Philip J. Randazzo, owner of Coyote Moon, proposed the creation of an International Farm Winery Trail in the Thousand Islands region where wineries would be able to sell wine duty-free as long as the bottles has stickers and receipts issues by the state or Ontario, according to Times article.

“That would be a cooperative solution between the two countries,” Mr. Matteson said.

Craft beverage producers

Clayton Distillery

Where: Clayton
Launched: 2013
Owner: Mike Aubertine
Annual Volume: 6,000 gallons
Top Sellers: Bourbon, Lemonade
Moonshine
Web:claytondistillery.com

Kaneb Orchards

Where: Massena
Launched: 2014
Owner: Edward Kaneb Jr. and
Elizabeth Kaneb
Annual Volume: 5,300 gallons
Top Sellers: Cranberry Crisp Cider,
St. Lawrence Cider
Web:kaneborchards.com

BarkEater Craft Brewery

Where: Lowville
Launched: 2014
Owner: Dean Richards
Annual Volume: 7,750 gallons
Top Sellers: Montague Mild,
Oswegatchie ales, and DAX IPAs
Web:barkeaterbrew.com

 

Karee Magee is a magazine associate for NNY Magazines. Contact her at kmagee@wdt.net or 661-2381.