Wine, mead, and spirits
Before launching The Hive Winery & Spirits Company, the husband-and-wife team of Jay and Lori Yahne were civil engineers doing business as Y Squared Geotechnical in Layton when the 2008 financial crisis struck. The firm's sales cratered and it soon dropped from 15 employees to three.
Disenchanted with the industry, Lori says she threw out "a harebrained idea" of starting a winery and Jay responded by writing a business plan.
The couple maintained Y Squared and started making wine in the old breakroom. By early 2016, they shuttered the engineering business as winemaking took over the entire facility.
The Yahnes have gravitated towards fruit wines and meads since the beginning, and had a good foundation when they founded the business. "We were home wine-brewers for about 10 years before we started," says Lori.
The Hive Winery's first sales came in 2011, and the offerings diversified into spirits -- primarily brandies and liqueurs -- via a licensed in-house "nano-distillery" circa 2015. "One thing we always wanted to do is make fruit ports, but we didn't want to use grain neutral spirits to fortify with, we wanted to use brandy, and we couldn't find anywhere to buy bulk brandy," says Lori.
For the Yahnes, it's all about experimentation. They've bottled more than 130 different wines, meads, ciders, and spirits in the first 11 years of distribution. "We just love the creative process," says Lori. "My husband, Jay, is the winemaker, and as he said, if he wasn't creating, he'd get bored -- and then he'd go and do something else."
Lori likens the "shelf of R&D products" to a mad scientist's laboratory. "Most of them aren't ready for launch, but I've got more ideas than I can bottle," she laughs.
"We just released a wine last week that we call Missionary Blood, which is a cherry honey wine," says Lori. "For our first batch, we did a 30-gallon batch of it to see: Is it going to work? Is the public going to like it?"
The immediate response was a definitive affirmative, she adds. "So we've got to make a bigger batch next time."
She highlights a few of her favorites: the melomels (fruited meads), Elder Jack (semi-sweet wine made with black currants and red raspberries), and Cherry Decadence, sweet cherry wine fortified with The Hive's cherry brandy and aged on cinnamon sticks.
The supply chain includes Utah growers near Logan and Santaquin, Yack Bros. Honey in Roosevelt on the northeast side of the state, and large commercial distributors. "As much as we can, we like to go local," says Lori. "Things like peaches, cherries, black currants, blackberries, apricots, pears we get from local farmers."
But when it comes to other fruit, there isn't a local option. "There's just not that many pineapple farms or cranberry bogs in Utah," laughs Lori.
The Hive still operates out of Y Squared's former office. About 1,700 square feet of the facility is now dedicated to winemaking, with 1,300 square feet of retail, a 300-square-foot tasting room, and 200 square feet for distilling.
The company has averaged 15 percent growth from 2019 to 2021 as total revenue has increased from about $200,000 in the first full year to a projection of about $1 million for 2022.
"We've been really lucky with our personnel," says Lori. "We've got a good core of people, and we've also been fortunate that we've been able to self-fund. Since my husband and I are the sole investors, we get to be as creative as we want."
Challenges: "Growth," says Lori. "Just keeping up with demand. Especially on the wine side, we are scrambling. And like everybody, we've got supply chain challenges. Getting bottles is a nightmare."
The challenge of managing growth is tempered by a regulatory challenge: Utah has a cap of 20,000 gallons for small wine producers, and The Hive will be around 12,000 in 2022. "The small producer credit saves us a huge amount on taxes," says Lori. "Our tax rate would double instantly from gallon one for the year the minute we cross 20,000 gallons."
Opportunities: The Hive sells directly to customers from the winery, as well as distributing 11 products through Utah's state system.
Lori says wine and mead lead the sales. "We're seeing a real surge right now in the session meads," says Lori. "Those are the lower-alcohol meads -- I describe them as honey ciders."
She also sees an opportunity to grow sales of the company's spirits: "We're probably going to start working on some whiskeys. My passion is the brandies, because I love the pureness of the spirits. And it's not a common one, so it's a niche market."
Needs: More distilling and warehouse space, which is coming in the form of a remodel slated to be complete in 2023. The distilling expansion -- about 1,000 square feet -- will allow for The Bive to graduate from "nano-distillery" status, says Lori. "We might actually get up to being a full-on micro!"