Co-founder Jason Senior is expanding his fast-growing California distillery-brewery to Colorado’s Western Slope with an eye on wider distribution.
Senior started Shelter Distilling with three partners after working as head brewer at Mammoth Brewing Company. “I was there for 17 years before starting this,” he says.
Shelter co-founder Karl Anderson worked with him at the brewery, and Senior also met co-founder Matt Hammer through a collaboration on a beer with his Black Velvet Coffee in Mammoth Lakes. “We hit it off, like-minded people, and decided we wanted to start a distillery and brewery,” says Senior.
The operation encompasses a restaurant in the same 3,500-square-foot building as the brewery and distillery, bolstered by a warehouse that’s the same size.
“Our business model is whatever we serve behind the bar, we make: all the beer, cider, all the spirits, all the mixers,” says Senior. “We make vermouth, absinthe, all the bitters, everything we need for the cocktails.”
The strategy is not required by law; it’s a business decision. “We like making everything. Why buy that if we can make it?”
Shelter Distilling’s notably broad catalog includes three gins, rum, vodka, a blue agave spirit, and an ever-changing lineup of brown spirits. “We usually have two whiskeys on hand,” says Senior.
There’s always a speed-to-market hurdle to clear with a startup distillery, and Shelter cleared it with a boost from innovative fermentation practices. “We’ve modeled our process after trying to make a good, clean spirit in a short amount of time,” says Senior.
Shelter’s bourbon is aged for at least a year, and a peated whiskey that’s usually in the barrel for 18 months. “Our High Sierra Whiskey is our biggest seller, and that’s something we age six months usually,” says
High Sierra’s limited time in the barrel is bolstered by tightly-controlled, off-grain fermentations and aging techniques. “We can really control what’s produced in these fermentations,” says Senior. “It’s a cleaner spirit coming out. Then we use Hungarian oak chips right away to get a lot of flavor and color into it, and then we put it into American oak barrels for six months.”
He adds, “We really like the flavor of those oak chips. It’s unique.”
The same tanks are used in distilling and brewing. “We use the same equipment to make beer on as we do all our washes for distilling,” says Senior. “The only difference is the washes transfer over into the distilling plant area.”
Year-over-year growth has averaged 30 percent, “with 2021 being the biggest jump,” says Senior. “I think we’re up 100 percent, and still going through that in 2022 so far.”
About 90 percent of production goes directly to on premise customers; beer represents about a third of sales. “We’re pretty small, so we can’t supply much more than a small footprint of distribution,” says Senior. “The cocktails across the bar, that’s where most of the spirits go.”
To this end, Shelter Distilling is embarking on an expansion into Colorado with a 20,000-square-foot facility at the Colorado Outdoors development in Montrose. “We want to grow,” says Senior. “We want to get bigger and do more things and build, build, build. Our location here is totally maxed out.”
Groundbreaking is slated for early summer 2022. Construction will be financed by Shelter and a group of investors. Shaw Construction is the general contractor, with a target opening in 2023.
Senior says Shelter’s expansion is coming on the heels of an involved site selection process. “One of the places we really focused on was Reno, because it’s close by and had big warehouses,” says Senior “We always came back disappointed because none of us want to be in the city. It felt like that wasn’t our brand.”
Colorado Outdoors and Montrose later came across the company’s radar. “We visited and felt like: ‘This could stand up to our brand. This could help our brand,'” says Senior.
The new facility will have 12 times the distilling capacity of the Mammoth Lakes operation. “The whole point of the 20,000 square feet is to push distribution,” says Senior, citing a target in Colorado and adjoining states in the Mountain West.
“The location on the river sealed the deal, where we could have a nice outdoor space on the Uncompahgre River there,” he adds.
Senior is relocating to Colorado to oversee the new facility. “I’ll be moving to Montrose with my family,” he says. “Once construction begins, I’ll be moving there.”
Challenges: “You’ve got to fix things and make it better here [in Mammoth Lakes], but all of the rest of the focus is on Montrose,” says Senior. “There are a lot of unknowns with the construction. We’re still trying to figure out what it’s actually going to cost us to build the building, and if those materials will be available to us in the time frame we need them.”
There are also inherent industry challenges: “It’s challenging being a startup distillery, because you don’t have time to age everything as long as you’d like,” says Senior. “You’ve got to have spirits to sell, and everybody loves the brown spirits — whiskey and bourbon.”
Opportunities: “Just being able to have the production capabilities to tap into the spirits market — which is growing like crazy — and canned cocktails,” says Senior.
Needs: Employees to stand up the Colorado facility. “That’s another reason we picked Montrose — there’s a good workforce there,” says Senior.
There’s another big need, he laughs. “Time. Time to sell spirits, time to start making them. Aging is a big thing for us. We want to be laying down barrels so we have a good stock to sell in a few years.”
