Business Insider

This Idaho distillery is the biggest in the West. We can thank a failed idea for that.

The Ottley family and other families bought Silver Creek Distillery in the 1980s and converted it to make beverage-quality spirits. From there, they made their Silver Creek Vodka until 1996. Now they make spirits and develop brands for other companies.
The Ottley family and other families bought Silver Creek Distillery in the 1980s and converted it to make beverage-quality spirits. From there, they made their Silver Creek Vodka until 1996. Now they make spirits and develop brands for other companies.

This article first appeared in the Spring/Summer 2017 edition of Good Spirits magazine, published for the Idaho State Liquor Division. It appears in the Nov. 21-Dec. 19, 2018, edition of the Statesman’s Business Insider magazine as part of the edition’s special coverage of the business of alcohol. Reprinted by permission.

The industrial plant that fueled Idaho’s modern craft liquor story initially had nothing to do with liquor. The plant just outside of Rigby in eastern Idaho was built in 1980 on a well-intentioned but failed proposal: to use the state’s potatoes to create environmentally friendly fuel.

Turns out, potatoes are an inefficient source of fuel alcohol. Knowing that potatoes can make great vodka, the founders of Distilled Resources Inc. (Drinc, as in “drink”) purchased the ethanol plant in 1988 and re-engineered the equipment.

Lest you think that making vodka from potatoes is a no-brainer, realize that most vodkas marketed in the U.S. are made instead from grains, including Grey Goose, Stolichnaya, Absolut, Pinnacle, Ketel One, Belvedere and Smirnoff. Though new craft distilleries are using spuds for vodka, Drinc lays claim to being America’s longest-running producer of potato vodka.

The founding families of Distilled Resources, the Ottleys and Kennedys, weren’t inspired by a fondness for vodka but by the business opportunity. “I have a love for Idaho and for manufacturing,” says Gray Ottley, “[but] no one in our business came from the liquor industry.”

Starting with a clean slate, however, brought them into the game “with innovative, fresh minds.”

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Drinc founder Gray Ottley

Drinc’s first vodka flowed from the stills in 1992, making it Idaho’s first legal distillery since Prohibition. (Well, perhaps the second — the company’s federal Distilled Spirits Plant, or DSP, number is 2, indicating that someone else was DSP-ID-1, but that distillery story remains a mystery.)

The leaders of Drinc steered the company toward another paradigm shift. Knowing that building a consumer brand involves branding and marketing in addition to distilling, they decided to go a different direction. As President Gray Ottley describes their thinking, “Let’s focus on making alcohol — what we’ve learned and invested in — and work with others in starting a brand.”

The business model focuses on building long-term relationships with external partners to develop cutting-edge, high-end spirits brands. As a farm-to-bottle distiller, blender and bottler, and recently a carbonated-spirits canner for cocktails, Drinc manages the production entirely. The DRinc team partners with Ignite Beverage Branding to drive each product efficiently through regulatory hurdles and through packaging, labeling and marketing.

So you won’t find the Drinc label on liquor store shelves. But you’ll find plenty of the liquid that was born in its stills, from Idaho and beyond, just with different labels. The oldest and best-selling brand partner is Blue Ice potato vodka. Another, 44° North, represents Idaho’s top-selling flavored potato vodkas, turning out huckleberry, nectarine and cherry.

Souped-Up Spirits

Gray Ottley calls Drinc’s four-column, 110-plate, single-distillation distillery a “Ferrari of the industry.” The company boasts a quality vodka that plays smooth and slightly sweet on the palate, without the tingling, stinging burn of lesser products. The neutral spirit uses pure water from beneath the alluvial Snake River Plain as well as 9½ pounds of locally grown potatoes (Russet Burbank as well as Katahdin, Kennebeck and Norkoda) in each 750 ml bottle of 80-proof vodka.

The distillery’s location also provides easy access to Idaho wheat and certified organic grains. In addition to potato vodka, the stills now crank out wheat, corn and rye spirits. Wheat vodka from American Harvest Organic Wheat Vodka, for example, uses wheat from Idaho.

Blue Ice vodka.jfif
Blue Ice Vodka, which boasts that its potatoes come from Idaho, is Distilled Resources Inc.’s oldest and best-selling brand partner.

The company became a pioneer in producing organic spirits in 1999 as the first distiller in America to be awarded certification.

“It took a year and a half to get certified,” Ottley recalls. “Today, it only takes about a month.”

A Distilled Resources organic brand, Square One, markets organic rye vodkas that complement the spicy, nutty hint of rye with botanicals and fruits. In addition to straight rye vodka, Square One offers flavors such as Bergamot with citrus, herbs, ginger, coriander and juniper. Oprah Winfrey picked Square One for her Oprah’s Favorite Things list in 2015.

Other product accolades include five-star ratings and gold, double gold and triple gold awards from the Beverage Testing Institute, the San Francisco Spirits Competition and the Micro Spirits Awards.

Pit Crew Performance

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Founder Gray Ottley atop the distillery in Rigby. Provided by Gray Ottley

As measured by its growth, Drinc’s business model has worked, perhaps in part by enabling many diverse businesses to build brands that multiply exponentially.

Since its inception, Distilled Resources has increased production, product lines and business partnerships. The company now supplies 52 brands — some small, some big, some having expanded into Canada, Europe and South America.

“We’re the largest beverage alcohol distiller west of the Mississippi and the oldest distiller in Idaho,” says Ottley. “We can go from potato to bottle in six days and produce over 750,000 gallons of alcohol in a year … We consumed and processed over nine million pounds of whole Idaho-grown russet potatoes in the last 12 months.”

First out of the gate, Drinc continues to gain speed, drafting Idaho crops and multiple brands as it goes.

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