New license class opens doors for distillery

It’s called the Private Manufacturer Club permit. Have you ever heard of it? From what I saw recently, it could be the future for boosting sales at West Virginia’s distilleries.

To see the success of the Private Manufacturer Club in action, I got off I-81 and headed out Dry Run Road at the northern edge of Martinsburg, WV. My destination: Black Draft Distillery. It was around 2:00 P.M. on a cool and damp, early spring afternoon.

As we turned off Dry Run Road and entered the distillery’s parking lot — Holy Cow — it was packed with probably 50 or more vehicles. I first thought they must be holding some kind of special event or something. But no, I discover that’s not the case.

Once inside, I see a crowd that’s jammin’. A live band is playing; most all tables and seats are full. There’s a line at the bar. People and drinks are mixing. What a lively, delicious scene for a Saturday afternoon in early spring.

Brainchild of distiller Glen Price

I locate Glen Price, Black Draft’s proprietor and head distiller, and I discover that this is just their normal Saturday crowd. He adds that if I’d stay around until evening, I’d hardly be able to find a place to stand, let alone sit.

“We’ll sell 1,300 cocktails on a Saturday night,” Price tells me.

Attracting these kinds of crowds has 100 percent changed his idea of what a little local distillery can be, he says. And it is all due to the state’s Private Manufacturer Club permit.

Crowded bar, years in the making

If you just walked into Black Draft’s sparkling new place for the first time today, you may think, “Wow! This new place is an overnight sensation.” But that would not be true. In fact. it’s taken Price a decade of hard work to get where he is today.

Back in 2014, Black Draft Distillery began operation under the state’s Mini-Distillery classification on a rural property a few miles away from its current site. As a very modest operation led by upstart distiller Price and his then wife Tara, it originally made and sold small batches of un-aged corn whiskeys (legal moonshine).

Price actually began his distilling on a tiny 10-gallon still, but quickly moved up to a 30-gallon capacity, electric-fired pot still and a 50-gallon distillation column. I visited there twice in its early days and noticed that Price’s spirits were clean, well-made, and I’d have to say, above the grade you often find at tiny start-up distilleries run by folks moving up from the amateur ranks.

His original product, First Harvest Moonshine, developed a steady following in the region, and over time he began selling it at a number of retail liquor stores in West Virginia, Maryland, and D.C. Things went well for Price in the moonshine market, and he earned a reputation for making good stuff. Soon, he was producing and laying down spirits in barrels that would become his bourbon and rye lines — product categories he still bases his whiskey business on today.

Business, equipment grow

In 2016, Price moved up to operate two 150-gallon stills and built a larger rick house to age his bourbon and rye in. The operation included a tiny sampling/tasting area and sales counter that was normally only open during special events.

In those days, the distillery did not operate a regular, in-house store and was not normally open to the public. Practically all Black Draft’s sales were through regional liquor stores. Four or five times year, Black Draft would hold special event days at the distillery. People seemed to enjoy that experience and would often leave with a couple bottles of Black Draft spirits.

“We noticed that when we did open up for these open houses, we were inundated with customers,” Price says. The 50 to 100 folks attending those Saturday events seemed like a huge crowd at the time. And more interestingly, he noticed that most of the attendees were women — often folks who made his distillery an added stop on a day of area winery visits. That female tilt got Price to thinking that whatever his next business steps were, he needed to find a way to focus on being female-friendly.

Planning for next step

As his whiskey business grew, and Price learned more about the market opportunities, he saw the need for a larger facility — one that could offer more things and accommodate more customers. Price had a vision of the opportunities — a space that would encourage conversation and social interaction. A place where he could also offer agribusiness tours and give people more entertainment. But he also saw his ideas for distillery growth were hamstrung by the then current West Virginia liquor and distillery laws.

During the year 2020, two unexpected COVID-era occurrences gave Black Draft’s sales a big boost and gave Price the confidence and financial ability to consider his next step. First, during the pandemic, Price received a federal contract to make alcohol-based hand sanitizer for government facilities, and second, liquor store sales of his products got a boost from the period’s stay-at-home workers’ day-drinking habits.

“We pumped over 1,200 gallons of hand sanitizer a week into the U.S. Capitol.Building,” he explained. “We had tankers coming in.” The two business boosts put a good bit of extra cash in Black Draft’s bank account.

New location secured

Then in late 2020, Price learned of an opportunity to purchase a 60-acre farm located several miles away from his original location. He jumped on it. In November 2021, Black Draft Distillery moved its operations to the new property. It was a big move for the little distillery, which had, after seven and a half years in business, outgrown its former space.

Price figured he could make hay at the new location by having the acreage to grow his own grain rather than renting farm space from others.

To gain more sales, he thought he could expand his open house schedule from four times a year to every weekend. He figured he could maybe attract 50 or 60 folks a day on weekends and build his bottle sales. But Price’s mind didn’t stop there. He had a grand vision of more business possibilities, but he would need some help.

Law change produces opportunity

Price had been a keen observer of the rapid growth of brewery and winery taprooms, especially in neighboring Virginia and Maryland with their more favorable on-premise laws. Price was sure that this could happen at his distillery too, if only the state law would allow it.

He began working with his representatives at the West Virginia Legislature seeking adoption of measures that would allow West Virginia distillers to be on more of a level playing field with those popular alcohol producing businesses in surrounding states.

“The state of Virginia is killing it with wineries and breweries,” Price says — and those competitors are just a short hop away from Black Draft. Price told the legislators he needed law changes that would allow him to be competitive. Fortunately, the legislature responded.

New legislation adopted

In early 2022, just a few months after Price moved his operation to its new location, the WV Legislature added a new category of license called the Private Manufacturers Club permit. This permit would, in essence, allow a small distillery to add an on-premise bar operation to its tasting room. Previously, distilleries could only offer small, free samples and only sell bottles to-go. They could allow no other alcohol drinking on their premises.

Now, with the new permit, a distillery meeting the qualifications in the law could also operate a full-service bar or social club, and allow on-premise drinking. They could not only sell their own products as mixed drinks, but could also offer wines and beers from other producers.

Price was excited about the new opportunity and for how simple it was for him to get involved with it. “If we added an on-site food kitchen, we can serve cocktails,” Price explains.

Price was the first WV distillery to take advantage of this new category of permit, and he’s never looked back. At the new Black Draft property, he would build a large, comfortable tasting room that could handle over 100 customers indoors and many more on an outdoor patio. It also had a spacious retail store and a small food service operation. A second building would house the actual distillery and a third building, the rick house. A spacious graveled parking lot had room for 50 or more vehicles.

A counterintuitive business model

To build business for the new location of Black Draft Distillery, Price realized he needed to do something different. It’s a big investment and he needed a smart marketing strategy. He saw all the beautiful houses being built in the neighborhoods around his booming area, and he thought of all the HGTV-type shows that were inspiring them.

Drawing on those observations and on his remembrances of the customer gender make-up at open house days from Black Draft’s earlier years, he decided, “I want to market this place totally to women.”

Okay, some of you might be thinking, isn’t this a bit counter intuitive for a bourbon distillery to focus on women? Aren’t bourbon and rye primarily drunk by men? Well, you may be right to a point, but that’s not what I saw when I visited Black Draft recently. And, it’s important to note that this distillery now also produces and sells a lot of vodka.

When designing the look and feel of the new Black Draft Distillery public areas, much of the concept came straight from the HGTV school.

To quote proprietor Glen Price on his strategy to break the gender barrier found at the typical male-dominated distillery: “We can drink beer all day long in a hunting cabin, but it doesn’t mean the women will join us. But If I build something straight out of HGTV, guess what — we’ll find our market.”

With its new location, Black Draft changed from being primarily a tiny retail liquor store, with only a few items to sell, to being primarily a lovely, spacious, comfortable bar and lounge serving $10 premium drinks and offering entertainment and food service. This dramatically changed the business model.

Who would have dreamed that a distillery tasting room could become the center of social engagement in Martinsburg, WV? Glen Price, that’s who. And he wasn’t wrong.

Observing the packed lounge area midday on a Saturday, one notices that a majority of the customers do appear female. Oh yeah, there’s plenty of men there too — often brought in tow by their spouses or girlfriends. It appears that Price’s marketing strategy is on point.

Now, Price says every weekend — both day and night — the place is packed, mostly with customers between the ages of 35 and 55. Throughout the day on a typical Saturday, he estimates that somewhere around 450 different people walk through the doors. Each month Black Draft’s bar features a different cocktail menu and different food trucks.

“We went from doing an open house every three months [at the former location] to selling over 25 cases of vodka every weekend here,” Price observes.

And don’t forget Black Draft’s take-out store too, where bottles of whiskey and vodka are moving off the shelves to a steady stream of purchasers. They sell lots of nice branded merch too. When you consider that the place gets the kind of business I observed, and is open Thursdays through Sundays, you can envision the cash flow boost it must provide this farm distillery operation.

Getting help through the growth phase

Black Draft’s new and thriving on-premise business dramatically boosted the demand for its products, initially beyond what the in-house distillery could provide. So Price contracted with a distiller in southern Virginia to produce product for him. Much of that product was produced with grain Price shipped to the distiller from his farm, so it still had a local signature.

By late this summer, however, Price expects his in-house production will be sufficiently ramped up to produce all the product he needs for both his on-premise sales and his case/bottle sales to liquor stores. Bringing all production in-house should help his bottom line as compared to sourcing spirits from another distiller.

Black Draft now grows 25-30 acres of corn on-site and also grew 10 acres of rye this past winter. “I always wanted to get back to farming,” Price says, as he thinks back to days of his youth spent on a farm near Philippi, WV. Now, he looks forward to producing for himself most of the input grains he needs.

Old dog learns new tricks

The growth to a much larger facility has not been without its challenges. From the old days when the distillery was run by two employees to today’s venture with a need for over 25 workers and growing, it’s not all been easy.

“We’ve had to learn real quick — staffing, how to make things work,” says Price. “It’s one thing when you only have 3 or 4 people standing at the bar; it’s another when you have 20 people in a line that’s going out the door. And, oh my, then there’s literally a tour bus with 50 people that just pulled up. So, I’ve had to learn.”

Opening his new barroom has opened Price’s eyes to the changing nature of his business.

“I’ve had to learn that what we do here is not only talk about spirits, it’s entertainment. Of all the things people could have done on a Saturday afternoon, they decided to come here.”

He’s learned that he needs a bit of “show business” to be successful in his liquor business. To meet that need, he is developing concepts to include more show and tell about the distillery and about the farm that supports it.

What’s upcoming at Black Draft

If you’re used to seeing the more sedate, typical West Virginia distillery sampling business, a visit to Black Draft is an eye-opening experience. Realizing that they are just one year into operating with their new business model, you wonder how much more opportunity they might find and develop down the road. We can’t wait to find out.

To continue his vision for growing the business, Price is constructing two more buildings: one a second rick house, and the other, an adults-only tasting room and bar. The new tasting room building will feature decor based on an old-time service station theme. It will have roll-up garage doors, gas pumps, and a vintage vehicle or two on display.

Product-wise, the distillery plans to move a bit more into offering special-edition products, such as its Double Oaked Bourbon. They’ll be looking for special barrels to set aside and bottle as barrel-select style products. For example they plan a 120 Proof Cask Strength Rye release on this year’s West Virginia Day (06/20/2023).

Price will also be seeking to expand liquor store distribution. “I believe we’ll start looking to expand to a more regional market,” he says. “Pennsylvania, Virginia, and Ohio. Those are big on our radar right now.”

No, not every little distillery is positioned to replicate Black Draft’s success. You have to have the right facility, location, and property. You also need the right vision, skills, and financing. But for those who do, the future should be very bright.

Black Draft products

Vodka, Bourbon, Rye, and Moonshine are produced and marketed under the Black Draft Distillery brand name. Black Draft’s bottled products are typically available in about 30 liquor stores in West Virginia, primarily those located in the eastern side of the state. They also sell in neighboring Maryland and in the District of Columbia and Delaware. Overall sales for the distillery now runs about 500 cases a month.

BLACK DRAFT DISTILLERY Website

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Private manufacturer club definition

According to the West Virginia Alcohol Beverage Control Administration:

“Private manufacturer club” means an applicant or licensee which is also licensed as a distillery, mini-distillery, micro-distillery, winery, farm winery, brewery, or resident brewery that manufacturers liquor, wine, nonintoxicating beer, or nonintoxicating craft beer, which may be sold, served, and furnished to members and guests for on-premises consumption at the licensee’s licensed premises and in the area or areas denoted on the licensee’s floorplan, and which meets the criteria set forth in this subsection and which:

• Offers tours, may offer complimentary samples, and may offer space as a conference center or for meetings;
• Operates a restaurant and full kitchen with ovens, four-burner ranges, a refrigerator, or freezer, or some combination of a refrigerator and freezer, and other kitchen utensils and apparatus as determined by the commissioner on the licensed premises and serves freshly prepared food at least 15 hours per week;
• Maintains $500 of fresh food inventory capable of being prepared in the private manufacturer club’s full kitchen. Food inventory may not include television dinners, bags of chips, or similar products, microwavable meals, frozen meals, prepackaged foods, or canned prepared foods;
• Owns or leases, controls, operates, and uses acreage amounting to at least 1 acre which is contiguous bounded or fenced real property that would be listed on the licensee’s floorplan and may be used for large events such as weddings, reunions, conferences, meetings, and sporting or recreational events;
• Lists the entire property and all adjoining buildings and structures on the private manufacturer club’s floorplan that would comprise the licensed premises, which would be authorized for the lawful sale, service, and consumption of alcoholic liquors, nonintoxicating beer or nonintoxicating craft beer, and wine throughout the licensed premises, whether these activities were conducted in a building or structure or outdoors while on the private manufacturer club’s licensed premises.
• 100+ members;
• Uses an age verification system approved by the commissioner; and
• Meets and is subject to all other private club requirements.