Eastside Distilling Is Serious On Going Beyond ‘Local’

Eastside Distilling, Inc. (OTCQB: ESDI) has barely spent a decade in distilling master-crafted spirits but it is already embarking on a bigger, perhaps more demanding, undertaking: national distribution.

The idea of becoming a ‘national brand’ can reverberate as something risky and challenging to an artisanal distillery whose clientele does not go outside its locality’s constraints. But this could only happen if the expansion does not happen overnight—if it is not founded on years of experimentations, series of ups and downs, and even on strict competition. Eastside Distilling is not bereft of such things—it dominated Portland’s craft distilling industry first before it thought of capturing entire America.

Just this week, the master-crafted spirits producer inked a multifaceted deal with Comcast SportsNet Northwest, the Pacific Northwest's premier sports television network and home of the Trail Blazers, in the aim of making its brand continuously recognizable across Portland.

"This partnership kicks off Eastside Distilling's national sales strategy, as we scale and launch our brands across the country. We are dedicated to supporting our sales network, while at the same time, building brand awareness for our portfolio of award winning spirits. Comcast SportsNet's media presence in the region is first class and we couldn't imagine a better partner to enhance the brand recognition of our master crafted spirits," said Eastside Distilling CEO, Steven Earles.

Expansion extraordinaire

There is something in the label ‘craft distillery’ that makes it hard for us to think that, like giant liquor brands, small-batch distilleries could also obtain national presence. Notion has it that since craft distilleries produce products that we don’t typically see across the country, they are just intended for local distribution, for the localities.

Perhaps it’s because giant brands have long been dominating the world liquor market that people tend to forget that they started out as small local distilleries as well. Guinness, Pernod Ricard, Brown-Forman, name it—they were once small-batch distilleries, too.

On the other hand, these reasons could be a good thing. Since it is not every day that we see a small-batch distillery suddenly expands and turn into something capable of producing liquors beyond its area, seeing one can be a bit surprising. With that, we tend to deem such feat as meritorious andextraordinary.

Maybe we can call Eastside Distilling’s current successes as such, as meritorious.

Seven years ago, Eastside Distilling was just a small start-up in Southern Portland’s Distillery Row. Relatively unknown and small, Lenny Gotter and Steven Earles established their start-up brand slowly in their 2,500-square-foot space on S.E. Seventh Avenue. It took them a year of experimentations until they came up with its first line of products, the Below Deck rum line. Little did they know that one product from this newborn concoction would give them the first of their soon-to-be recognitions.

In 2011, their Coffee Rum won Silver at the San Francisco World Spirits Competition. This was a big deal for Gotter and Earles, as this was the first time they proved that their products did not belong to the class where the banal and ordinary belonged. Later that same year, its Portland Potato Vodka got a Gold Medal and a ‘Best Buy’ rating from the Beverage Tasting Institute, which was followed by another Silver Medal from the American Wine Society. Indeed, their knack for creating unique liquors already reached the ears of connoisseurs outside Portland, making them a frontrunner of craft distilling in whole Oregon.

In 2014, after its Cherry Bomb Whiskey won Gold from the MicroLiquor Spirits and the American Wine Society, the company decided to bring its operations to another, perhaps higher, level. The company had to expand.

The expansion is actually the company’s answer to the rising demand for its products and to its growing popularity. After winning coveted awards from revered liquor organizations, who would not become popular among liquor lovers, especially those into local, ‘un-branded/not-mainstream’ spirits? Its social media following has gotten bigger, enough to say that Eastside Distilling isn’t just your run-of-the-mill backyard distillery who has its relatives and second degree friends as loyalists.

The company is now preparing to expand into 41,000 sq. ft. facility on Portland's Distillery Row in the second quarter of this year. This is inevitable since its first distillery now needs a backup to meet the increasing demand. This would also support the Eastside Distilling’s plan of distributing its product all over America, which would come to fruition through BlackHeath Beverage Group, a marketing platform provider for alcohol brands and suppliers.

And there’s no doubt that this won’t succeed. BlackHeath has a laudable portfolio that says it could soon make Eastside Distilling into an important craft distillery brand in the U.S. Its team boasts of industry sales and distribution executives that have long been dealing with the country’s biggest distributors. Its CEO alone, Jay Harkins,says a lot about its capability to make Eastside’s ‘national dream’ happen. Harkins has been in the business for fifteen years, and has held senior leadership positions at Domaine Select Wine Estate, Southern Wine & Spirits, and E&J Gallo.

But what’s great about Eastside Distilling is that it does not forget about its being a local brand. The company knows that it still has to secure its strong position in the Oregon craft distilling industry.