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Profiles

Sugar House Distillery

By Chris Meehan | Aug 03, 2015

Brewing & Distilling Utah

Company Details

Location

Salt Lake City, Utah

Founded

2013

Ownership Type

Private

Employees

6

Products

Spirits

Founder James Fowler launched just the third distillery to open in Utah since Prohibition. It's already introduced a wide range of spirits, using lots of local ingredients.

"We started right off the bat making vodka," explains Fowler. "Then we started making malt whiskey in 10 to 15 gallon barrels. With those smaller barrels the surface area is so much greater. So we can get a lot better flavor out of those small barrels." The distiller released the first batch of its malt whiskey in December 2014.

The company also has produced a rum using Grade A molasses, according to Fowler. "It's important to us to use premium ingredients." The company initially released a silver rum but aged some of it in its malt whiskey barrels to create a gold rum.

The small batch distiller also has a bourbon in the works. "It won't be ready until December this year," Fowler says. "Our bourbon is 100 percent sourced within 100 to 150 miles of our shop which I'm pretty proud of."

Not bad for a company that's only been producing salable products for a little over a year. "We founded the company in 2013," Fowler says. "It took us well over a year and a half to get up and licensed. For most people the hard part of opening a distillery is getting the federal permit. But as some might guess, in Utah getting the state permit might be tougher." State permits took an additional seven months to get after securing the federal permits.

Sugar House currently has a 400-gallon mash tun but as of July 2015 it's only making 275-gallon batches because they it only has a 100-gallon still, Fowler says. "We're starting to run at full capacity. We're really hoping to put a 400-gallon still on order in the next 30 days or so," he adds.

The company plans to expand into Montana next. "It's a smaller state and we can handle the quantities," Fowler says. We're checking out how it will work." After that he anticipates moving in to Colorado. "Want be in a state that has started some excitement and I think Colorado is a great state for us."

Launching a distillery in Utah has its unique set of challenges. "I don't think the state understands anything that's going on yet which is a little frustrating," Fowler says of the craft distilling movement. "The state's being good allow us to open up but not being good in selling products."

The state also has wide control over liquors. The state can dictate how much the company can charge, according to Fowler. In addition, "We pay a 68 percent markup to the state. A bottle of our whiskey has about $26 in taxes." That's $26 on a $44 bottle of whiskey.

Under current state rules, Sugar House can't even offer customers tastes of its products at its distillery. It's up to state liquor stores and bars and restaurants to distribute Sugar House Distillery. Fowler says that bars and restaurants are starting to get it.

"I think we're going to see quite a few distilleries coming up in Utah. I think there are four to five good strong people working on distilleries in Utah," Fowler says. As more distilleries come online, he anticipates things will change. As such the distillers are working with agencies like Visit Utah and Visit Salt Lake City.

"It's going to be interesting to see what happens in the next year or two," Fowler says. He and fellow distillers are working with legislature in an attempt to change some of the more draconian laws that particularly affect the distribution side of things.

Challenges: Cash flow, says Fowler. "It is tough to keep the financials and money coming in to buy the materials to age. It can take up to six years to age liquors."

Opportunities: An untapped market. "High West Whiskey is so well-known. We're kind of coming in and creating the industry in Salt Lake City all over again," Fowler asserts.

Needs: Legislative reform. "Working with the state of Utah and having some of these laws changed," Fowler says.

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