By Eric Peterson | Nov 17, 2014
After opening a brewpub of the same name in Ann Arbor, Mich., in 1999, the Leopold brothers had to follow the letter of state law and only serve what they made onsite. That meant Todd, schooled in both distilling and brewing, made an entire bar's worth of spirits, from vodka to triple sec.
He liked the distilling side of the business so much that the brothers decided to shut the place down and return home to Colorado and open a distillery. Making everything from absinthe and blackberry liqueur and gin to rye whiskey, Leopold Bros. boomed along with the national rise of cocktail culture.
Now they've built a world-class distillery from the ground up that focuses on time-tested distilling techniques. As before, Scott runs the business side of things, while Todd helms distilling, but now the brothers' workloads are in sync.
"Our demand has increased at a pace our old facility couldn't keep up with," says Scott. Annual growth has averaged about 40 percent but they had a hard time meeting demand. Until now.
At the new distillery, there are seven stills -- up from two at their previous location a few blocks away -- and a threefold uptick in capacity. They separated in production and storage by building a traditional Scottish dunnage: a storeroom with dirt floors where barrels age until the liquor within is ready for bottling.
"We've got a lot of possibilities here," says Todd. "It's been difficult for Scott that production has been lagging. We already feel like we're cheating -- instead of one barrel coming off the still, we've got 10."
Regardless, Colorado will remain the target market. The state represents more than half of the company's sales, and California is second in its eight-state distribution footprint.
The goal is to always remain a small-batch operation. Says Scott: "We'll never grow larger than being able to handwrite the batch number on every bottle."
Also at the new digs: a unique floor-malting operation featuring an open room that's a steady 55 degrees Fahrenheit with 50 percent humidity. With an assist from an agricultural vacuum that can suck 50,000 pounds of grain from a truck into the distillery's two-story silo in about an hour. The silo in turn feeds two bins at one end of the malting room, then bootie-clad workers spread it on the floor using shovels made of Douglas fir.
"You're basically tricking the grain into thinking it's springtime in Colorado," says Scott. "You can't turn malt with metal shovels -- it breaks up the grain too much."
A malting floor, which Scott describes as "like a clean room," is an industry rarity -- to say the least. The floor-malting process involving spreading the grain out on the floor is employed today by only six whiskey distilleries in Scotland -- and Leopold Bros. That's it.
"We'll actually be the first distillery to malt all of its own barley onsite for vodka, gin, whiskey, and liqueurs," says Scott. "A floor like this hasn't been built in 100 years."
The malting operation also means the Leopolds are diving into the supply chain for local breweries. "We won't be able to use all of the malted barley we produce here, so we will sell malted barley to breweries," explains Scott, "We'll reduce the environmental footprint for the alcohol industry right here in Colorado."
The grain is sourced from Colorado producers. That's a departure for Colorado's craft brewers, who typically get their barley from large-scale, industrial malters in Canada and Europe.
"We'll be able to do 750,000 pounds of of finished malted barley annually," says Scott. "We'll be able to use about half of that."
He sees the remainder as a good match for seasonal beers that emphasize local ingredients. "We'll be able to do a specialty beer for Odell but not be able to handle their entire facility."
For his part, Todd loves the quality control the malting floor brings to the distillery. "Let me tell you how much easier my life is now," he says.
Todd brings a inventor's eye to distilling and even Leopold's suppliers have take notice. Case in point: Christian Carl stills from Germany feature a manifold that allows for easier cleaning. "That manifold was my invention and it's standard now," he says.
Two other prime innovations at the new distillery involve air and water.
"The way this building works is the opposite of everyone else," says Todd of the former element. Most distilleries pump filtered air in and push air out. At Leopold Bros., the wooden fermenters are right next to windows that allows air from the adjacent garden -- featuring lavender bushes and cherry trees -- inside. "We're basically creating a little ecosystem," he notes.
The goal is to bring in the wild microorganisms that give spirits all sorts of interesting flavors -- strawberry notes in the Maryland rye whiskey, for example. "It's what makes the Maryland rye the Maryland rye," Todd says.
The end goal is that lactobacilli and other bacteria wind up impregnated in his wooden fermenters over time, making for even more depth in his flavors. It won't happen overnight -- this is something, like whiskey, that gets better with age. "This is a long-term thing that will take five, 10, 15 years," Todd explains. "Over time, we might get peppery notes and smoky notes."
The water system is roughly ten times more efficient than the industry norm, thanks to water that's 55 degrees Fahrenheit circulating throughout the facility. A typical liter of spirits requires 15 liters of water or more; at Leopold Bros., the latter number drops below two. "There's almost no wastage," says Todd.
The new distillery also gives Leopold Bros. a public face. Educational tours with tastings are available on Saturdays, starting at $8 for a 90-minute tour with six tastes all the way up to $50 for a five-hour tour with Todd. Proceeds go to charity. "What we're hoping to do is what we did before: not market and just educate," says Todd.
The tasting room is a work of art, featuring hardwood floors that were reclaimed from a 19th-century mill in Ohio, lighting that originally shined on old naval ships, and a back bar made from one of the last known mahogany boxcars.
How'd the Leopolds find all of this stuff? "A lot of looking," laughs Scott.
Challenges: High industry demand for stills. The new Leopold Bros. distillery involved a serious investment of both time and money. Their stills cost more than $100,000 apiece. "They're very expensive and the wait list is ridiculous," says Todd. Vendome in Kentucky has a two-year backlog, Germany-based Christian Karl's is 18 months, and Forsyths in Scotland isn't even taking orders right now. Rather than order more readily available stills from China, the Leopolds wanted stills from an established manufacturer and waited out the backlogs.
Opportunities: More states. While the company has kept up a torrid growth rate since opening its doors, it's still available in only eight states. There's no rush, however. "We won't add any additional states until we are completely confident we can handle our existing customer base," says Scott.
Needs: More fermenting capacity. This could be rectified in the near term. "If I have my way, we'll double our fermenters in the spring," says Todd.