Last week, Christiaan approached me and asked why talking, writing, thinking, and basically occupying myself with the ADI Affair, over the last few weeks, was so important. The question didn’t stem from criticism, but from a genuine wish to understand my preoccupation with the subject, while so many other topics need attention too. “We are successful,” he said, “why spend time and energy on them, if there are other things to do? Why do you dedicate your time to a bunch of dinosaurs?”
Since Christiaan has been with us from the very start – he is the guy that builds our websites and online applications – I found it important to give him an elaborate and to the point answer. And by the time I finished, he proposed that maybe I should share my answer with the craft distilling community. So here is my answer to him, that I now want to share with you.
I told Christiaan, as I tell you now, that there is a deeper issue at play, when we analyse the ADI Affair. It isn’t just that they prioritize sponsors over distillers, and money over service. It isn’t just that they favor some sponsors over others, because these give ‘m more money or revenue opportunities. Oh no, the rabbit hole goes much deeper than that! And that’s why it deserves more attention than some other things.
“Imagine,” I told Christiaan, “a group of craft brewers, coming together to celebrate a beer-related event, having drinks together.” Since he has visited some craft beer festivals, he envisioned a group of bearded guys talking and having fun, while drinking each other’s beers. Laid-back, informal, amicable, with positive vibes all around. You get the picture, right? It takes but one craft beer festival or tradeshow to get what Christiaan got: it is pretty darn good to be a craft brewer, drink some beers, and meet-up with fellow-brewers!
“Now imagine,” I told Christiaan, ” a group of craft distillers, coming together to celebrate a spirits-related event, having drinks together. Since he has visited a specific North American tradeshow with us, he envisioned a group of people, less beards more suits, talking seriously, complaining about the Senate still contemplating to sign-off on new tax breaks for their industry. The vibe isn’t great and everybody is drinking their own drinks, instead of tasting what others made. Where the brewers talk “beer”, the distillers talk “issues”.
“How come?” I asked Christiaan. “How come, that the brewers’ glasses always seem to be half-full, where the distillers’ glasses are so often half-empty?” He didn’t know the answer, but I do. The answer is, and it doesn’t sound very sexy, but it is a very important answer, so hear me out … the answer is “entry barriers”. Or, to be more precise: low vs. high entry barriers.
The reason why so many brewers are happy campers, when they meet and mingle, is because of the low entry barriers the craft brewing industry has. The reason why so many distillers, sharing drinks at a tradeshow event, especially the ones that do not hang around the iStill booth, look like a rather grumpy bunch, is because of the high entry barriers the craft distilling industry has.
There are two entry barriers that we should focus on: information and capital. If you want to enter the craft beer industry, the information on how to make beer is readily available. If you want to start a craft brewery, you usually first take advantage of that low entry barrier on information. In plain English: you make beer in your kitchen. Then, as a next step, with a moderate capital investment, you can set-up your first brewery. You start with a small one and invest in a bigger brewery as you grow. Capital investments are moderate because of competition between suppliers. The markets for information and suppliers are both mature.
Let’s compare the above brewery scenario to a distillery scenario. If you want to learn how to produce spirits, the information is not readily available. You are told that it is difficult, neigh impossible. But luckily there is the ADI tradeshow, their courses, and their associated consultants that are willing to take your money and let you see a glimpse of the secret sauce! Information, in the craft distilling industry, is compartmentalized. It is monopolized by the few and sold to you at a premium.
Having compared the information-rich environment of craft brewing to the information-deprived situation that exists in the craft distilling industry, let’s look at the associated capital investment. Stills are expensive. Setting up a distillery is even more expensive. Where a brewery start-up can take-off with an equipment investment of 50 to 100k, the wannabe distiller quickly learns that, for some weird, fucked-up reason, he needs to invest 5x or 10x that amount. “Weird, fucked-up reason” as in you needing to purchase traditional equipment, that is low-tech, inflexible, unscalable, and over-priced.
Of course there is more. Brewing, with its free, shared, and information-rich environment, as a consequence, is ruled by scientifically based choices. Copper pots are replaced by stainless steel pots. The big guys with long beards and large wooden spoons are replaced by agitators and computers that do the boring, repetitive work. Those big, happy brewers have better things to do, like having fun meeting other brewers, while drinking a beer at one of their great craft beer shows.
Craft distillers are not allowed that courtesy. They need to invest in 1870’s technology. They need to invest in manual labor. They don’t have time for beers or drinks, and the boredom of continuously having to do repetitive tasks wears them down, one distillation run after another. Or so they have you believe!
And how about ownership? The starting brewer makes his first beer in the kitchen at home. If he screws up, he’ll learn something and then he’ll try it again. He has other brewers he can reach out to. If the workload stresses him out, well, there is always another brewer and another reason to just go out and have a few beers.
Instead, the distiller needs to listen to consultants. Highly-paid consultants. They tell him how he can make their spirits, but not how he can make his own. He cannot work in the kitchen. Goodness, no! He might go blind! No, instead, he is sucked dry for each and every penny that he has.
Being left with a low cash position, a huge still, for which he was overcharged and that needs constant supervision, without experience in how to actually make spirits … do you start to see why the distillers’ glasses are half-empty more often? And how problem solving becomes more about hiring the next consultant instead of just whipping up another batch and having another go at it, supported by hundreds of others that share their opinions, chime in, or at least offer you a beer and a laugh somewhere down the road?
Christiaan got the picture and – I am sure – so do you. I then asked him how the students of the iStill University behaved. Did their behavior resemble the brewers or the distillers that I prototyped above?
Since he has seen many classes come and go, here at iStill HQ, he quickly responded, nodding with understanding: “I get exactly what you mean! The distillers that visit us, after about a day, behave like brewers at a beer festival instead of like a bunch of grumpy distillers at a spirits festival!”
“After about a day?” I asked.
“Yes!” Christiaan answered, “When they come in, it is as if with a neck choke. A bit nervous. Afraid even. Unsure and insecure. Out of breath, almost. Typically, well, like distillers are, when they meet at a tradeshow. People that have had a hard time and know there’s more crap waiting for them, just around the next corner.”
“So what do you think changed them?” I asked.
“Easy!” he said. “In one day, our training staff have started to take down the information monopoly and shared with them the real secret sauce. In one day your team has basically empowered them by teaching them they do not need 500 grand to start a craft distillery!”
“So … who or what put on that neck choke?” I asked.
He told me that it must be the high entry barriers that the craft distilling industry has on information and capital investment.
Circling back to the ADI Affair, I then asked him if he started to understand why it is worthy of my energy and your attention that we dive in, get to the bottom of it all, and solve whatever issue we find down there?
He said he did. He totally understood that, from a representative body (or a company posing as one), we might expect efforts to lower the entry barriers, by democratizing knowledge and by telling suppliers that overcharge to fuck-off. “If they were, in any real way, supporting the craft distillers, they should have loosened the neck choke so many experience by lowering our industry’s entry barriers!”
I told him, just like I tell you, that the above, and all of the above, is the reason I am disappointed. I am disappointed in ADI for posing as a representative body, yet acting as a profit-center. I am disappointed in ADI prioritizing sponsors over distillers. I am disappointed in ADI for favoring some sponsors over others.
But I am not just disappointed, I am angry! I think, as ADI doesn’t want to change, that they should go out of business! I think that each and every one of their “members” (customers) and “sponsors” (facilitators) should immediately cut ties with this organization.
Not because they were ineffective at relieving the neck choke, but because they are the neck choke.
Who is riding your horse?