By Matthew Korfhage | Featured on WWeek
Portland distiller House Spirits has sold Aviation Gin to a New York marketing firm called Davos Brands. House Spirits will still make Aviation Gin, but now it will be as a contracted distiller, not as its owner.
“The main event is they acquired all the intellectual property including trademarks,” says House Spirits co-owner Tom Mooney. “Now we’re producing it at much closer to production cost.”
Aviation—the lavender-forward gin hailed nationwide as the original American dry and one of the hallmarks of the craft-distilling movement in this country—was up to now the flagship brand for the Portland distillery, which last year became the largest craft distillery in the Pacific Northwest. Aviation has risen to become the top-selling craft gin in the country.
The official line—the one in the press release—is that the sale will help the Aviation brand grow much bigger than it has already.
“We did quite a feat getting it from zero to 20,000 cases,” says Mooney. “Getting from 20,000 to 100 [thousand] is another feat. They’ve got the sales team, they’ve got the clout with distributors. Aviation will be a much bigger brand than it would have been if we hadn’t sold.”
But saying the brand will grow more under Davos’ ownership is only part of the story behind the sale. Davos has been Aviation’s sales team and marketer since December 2014, meaning Aviation already had access to Davos’ connections and resources while owning the brand.
The other side of the story is that the money from the sale will go toward making whiskey—lots and lots of whiskey. This will effectively transform House Spirits into a single-malt whiskey distillery, alongside more niche brands like Krogstad aquavit and a forthcoming Guatamalan rum.
House Spirits already sells whiskey, but only in small batches. They plan to sell whiskey in such large quantities it will overtake Aviation as their largest production brand.
Westward, their single-malt whiskey, is currently a five-year-old whiskey distilled from wash made by local brewers such as Breakside Brewing. But for the past year in their new $6 million distillery on Southeast Washington Avenue, House Spirits has also been brewing the mash they use for their whiskey using a 30-barrel brew system—ranking them among the larger brewers in Portland.
“[Aviation] definitely was our flagship brand, and the thing people knew us most for—equal parts because it’s a fantastic product, but also because that’s how we behaved,” Mooney says. “We needed to make sure most of our resources went into growing that brand.”
But currently, Mooney says, they’re producing more whiskey than gin.
But because whiskey needs to be aged before it can be sold—a minimum of three years in House Spirits’ case—the sale of the Aviation brand is essentially funding House Spirits’ ability to make a vast quantity of whiskey that can’t turn a profit for years.
“We’re producing whiskey in greater quantities than we’ve ever sold Aviation,” says Mooney. “But not by a lot. It’s pretty close. This year our production of Westward is pretty similar. Westward is around 50 percent, Aviation is 40 percent, and the other 10 percent belongs to our other brands.”
House Spirits still has a long-term contract to still distill Aviation for Davos, Mooney says, although he didn’t disclose the exact terms of the agreement, nor the amount Davos paid for the trademark and recipe.
“In the past we’d been approached by potential buyers who didn’t want us to continue producing it, and we turned them down,” says Mooney. “I would say for many years it will be there—whether many is 5 or 10 or 50 years, time will tell.”
But Aviation gin will no longer be offered at House Spirits’ tasting room—including the new tasting room they plan to open at the Portland Airport this Monday, November 21.
“In the near term it’s about focusing on building our American single malt program,” says spokesperson Alexandra Sklansky, “and working behind the scenes on a rum program.”
House Sprits will also be introducing a Guatemala-made rum called Magdalena in spring of 2017—distilled as cane liquor in Guatemala, and aged at House Spirits. Magdalena is the name of the sugar mill that makes the liquor, and also minority investor in House Spirits.
Between the whiskey and rum, House Spirits will essentially become a different company, without Aviation as their best known product..
“It’ll feel very weird,” Mooney says.
