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Graham Griffin
Graham Griffin
Articles (49) 

1,000 Entrepreneurs: Crafting Cocktails Into a Nationally Acclaimed Distillery

Our 11th feature covers the co-founders of Tattersall

March 18, 2020

The co-founders of Tattersall Distilling, Dan Oskey and Jon Kreidler, established their craft distillery in 2015. Since then, they have created almost 30 different spirits that have won numerous awards around the country. Alongside their craft cocktails, the duo created a nationally acclaimed cocktail room to feature signature drinks that has been featured in Eater and Playboy Magazine.

Before the business

Friends since second grade, Tattersall is the first company that Oskey and Kreidler set out to start together. The two had worked together for the first time in the hospitality industry in their teens. Oskey manned the bar, while Kreidler worked the kitchen in a restaurant. From there, the two would find themselves walking different paths.

Kreidler would make his way into the financial sphere doing work for hedge funds. Oskey would remain in the hospitality industry, making a name for himself as a bartender. Alongside this, he would start two of his own companies. One would be focused on creating sodas, while the other was a bitters kit that was intended to be educational in nature. While it may seem like the two would work well with Tattersall, Oskey has sold both at this point in time.

Come 2014, Kreidler could see the tides changing in Minnesota and reached out to Oskey with the idea of starting a distillery:

“It was kind of shortly after laws were changing in Minnesota and kind of across the country allowing for micro distilleries," Kreidler said. "We started looking at the opportunity and visiting distilleries across the country to see if it was a viable business and it made sense here. We had done a lot of research and I had approached Dan in the spring of 2014 kind of throwing the idea out there and when he said he was interested the two of us went to work pretty hard on it” 

By October of 2014, Kreidler had quit his job to pursue the business full time. Oskey would follow suit, and the two would dive in head first in eight months. Within nine months of their initial conversation, the two had gone on to purchase their business space. They immediately set out to renovate the space and had things up and running by the summer of 2015.

A unique idea

A distillery is by no means a new concept. However, the two approached the idea differently. The two would take their past experience in the hospitality industry and apply it to their new business venture. The initial plan was to build a bar at the distillery to go alongside the freshly brewed spirits. At the time, this was an illegal concept.

Luckily for Oskey and Kreidler, the laws would change to allow them to build a cocktail room to serve alcohol on the premises. Regulations were placed upon what could be served and the Tattersall co-founders would be forced to produce all the alcohol that they would serve in their lounge. They would take things one step further and “produce everything in the glass” according to Kreidler. From the booze to the juice and even the bitters, everything that is in a drink in the Tattersall cocktail lounge is made in house with the utmost focus on locally sourced ingredients.

Hand-picking the best bartenders around, the two would create an experience that could be enjoyed by anyone visiting the distillery. In turn, they could further engage customers and gain feedback on their product first hand. While many distilleries have followed suit and built their own experiences, “five years ago the cocktail room was not so obvious,” said Oskey. This would allow them to get the ball rolling quickly, though not without some hurdles to overcome.

Initial hurdles

A business, especially one requiring machinery, base product and a location, needs capital to get off the ground. The co-founders utilized their friends and family for a portion of their initial investment. However, that would not be enough. With a background in funding, Kreidler would use his experience to find local investors that were willing to lend a hand towards the business.

Not being shy of commitment, the two would also leverage banks as much as possible. Their homes are mortgaged and they happily put themselves into bank debt to gain further funding. Kreidler recalls many times where Oskey would question if they could afford to invest in equipment and the answer would always be no, yet the two continuously found a way to make things work.

With the money sorted, the main issue for a distillery is finding a distributor. All alcohol sold in the United States has to go through three tiers of separation, meaning that the distiller must use a distributor to sell to a retailer before the product can reach the hands of consumers.

Lacking funds and a sales team at all, the two hit the streets themselves, working tirelessly to get their product in the hands of distributors. Things progressed slowly as they worked their way through multiple tastings. Luckily, Oskey had established himself in the preceding years as a world-class bartender and there were friendly accounts they could approach initially. Alongside their hard work and the cocktail room, the duo was able to establish a customer base on the first day of operations.

Breakthrough

Tattersall found early success in two forms. The first was earned by the booze they had brewed. Their aquavit and orange liqueur would both win best of class awards in competitions. Alongside this, they had spirits awarded the coveted double gold rating, placing them above many of their big name competitors.

The cocktail room also gained national recognition. Eater magazine call it one of the hottest bars in the country after touring the location. Playboy magazine would also name it one of the top 50 bars in the country. The recognition from both of these media outlets served to draw even more customers and made the cocktail room profitable for the two from day one.

Brewing

Brewing on a day-to-day basis sees crews arriving at the facilities at five in the morning to begin the process. With multiple crews, the company brews throughout the day, knocking out anywhere from 20,000 to 30,000 pounds of grain each week. Once the brew team has done their job, the sampling team takes the reins and begins product control. They make sure each of the brewed spirits lives up to the flavor profiles that Oskey and Kreidler worked so hard to develop. From there, the bottling crew steps in to finalize the product before it is sent to their distributors.

The company first began its operations with lighter spirits, including gin, aquavit and vodka. The gin itself took almost six months of research and development before Oskey and Kreidler were happy with its flavor profiles. In 2016, they tried their hand at whiskey, yet had to wait until 2018 for the barrels to mature enough to be sold. They are continuing to lay down as many barrels of whiskey as possible with the understanding that it takes a great deal of capital to establish.

While any grain that is crucial to the flavoring of the spirits is mashed, fermented and then distilled in house, the company also brings in organic grain neutral spirits from local manufacturers. They utilize this for the flavored liqueurs that do not depend on the grain for its flavor profiles. “The art is in the botanicals,” Kreidler said.

During the brewing process, Kreidler and Oskey work closely with the local farmers they source their grains from. They meet on an almost weekly basis to coordinate what types of grain they utilize and to maintain good relationships. Once the grain is finished in the distilling process, it leaves the distillery and heads back to the farms. There it is used for animal feed to be utilized to its fullest extent.

New to the industry, Tattersall has been working to develop a new way to upcycle the spent grains into flour for human consumption. This allows for there to be almost zero waste product created during the distilling process. Alongside efforts to recycle water, they will be installing a brand new machine that will make this process happen within the distillery, which will be the first of its kind in the world.

Lessons learned

Taking on new machines and creating uniquely flavored spirits displays the innovation that the Tattersall co-founders are known for. However, alongside innovation comes the risk of making errors and mistakes. Oskey and Kreidler believe they have merely learned lessons along the way and would not consider them detrimental to their current success. While some of these lessons come with a comedic note, others can translate to good advice for aspiring entrepreneurs.

One such story came from Kreidler about a spirit they served in their cocktail room early on. It was a white whiskey, or a whiskey that had not been barrel aged. The idea was that you could serve the spirit without having to wait for it to mature over a period of several years and use it to boost profits and offer something unique. “I do not care how good of a bartender Dan is, you just could not hide it,” Kreidler said.

In the end, due to their dissatisfaction with the spirit, they told their team to barrel the unaged whiskey on the premise that it might turn into something good in the future. Recently, they pulled it out and, to their surprise, they tasted a unique high-corn whiskey that “was actually really good,” according to Kreidler.

Alongside their experimentation with spirits, the two have grown their company rapidly over the years. The space the business occupies started out at 9,500 square feet and has since grown to over 40,000 square feet. The rapid expansion in space saw leaps in production numbers that required them to take on new distribution partners. These partners would come with pros and cons clearly visible at the extremes.

“On one side of things, you have your behemoths. The Southern Glazers and so on,” Kreidler said. These massive companies have their hands in business across the country and can put a product into almost any market. They have seemingly endless resources, which would seem necessary to a budding distillery. The problem for Tattersall was that they could care less about their product. “They have all these sales guys, but you get no love,” Kreidler said.

The other side of the coin comes with the small boutique distributors. According to Kreidler, they always say the right things and show they are invested in your product. However, in the end, they do not have enough people to really move the product. The key is to find the perfect balance of a company “that shares your values and can move your product.”

A unique take on revenue

With a sorted product and key distribution partners, Tattersall was able to move their product the minute that the cocktail room opened. Alongside their early planning and hard work, they had partnered with local bars and restaurants to help develop menus for their products to be served. These partnerships and the cocktail room saw Tattersall begin making meaningful revenue from their first official day in operation.

Growing anywhere from 30% to 50% each year, Tattersall has found itself as one of the fastest-growing businesses in the country. Last year, it was named to the Inc 5000 list amongst the other top-growing businesses in the country and landed inside the top 2,000.

The first two years in business saw Tattersall raking in profits and paying taxes like the majority of businesses out there. It was at this point that Kreidler and Oskey decided to take things in another direction. “We got tired of paying taxes to be completely honest,” Kreidler said. Instead, they decided they would rather invest the money in the company itself.

They take any profits they make and reinvest them into the company. This comes in the form of hiring new sales staff or laying down more barrels of whiskey. In an ideal world, Kreidler said they would come as close to zero profits as possible.

Future

Looking toward the future, the two co-founders expect to continue on the same trajectory and plan to maximize their sales team and establish as many barrels of whiskey as possible. They are well aware that the whiskey will take “massive working capital” and plan on sending any new investments in that direction.

The company is expected to continue to grow and expand even faster than it has in previous years. With this expansion, Oskey and Kreidler continue to plan new innovations in sustainability. They have implemented a grain upcycling plan, in which they will use spent grain to create flour for human consumption.

Alongside this, they believe that water is one of the biggest issues present in the industry and plan to mobilize as many companies as possible by setting an example of effective water usage. Their overall goal is to have zero waste water leave their facility.

As a craft distillery, the Craft Beverage Modernization and Tax Reform Act consistently looms over the heads of those at Tattersall. This act gives major tax breaks to craft distilleries, allowing them to compete with the big brands that traditionally dominate the beverage world. While the act was passed again in 2019, if it fails to continue, many craft distilleries will see their taxes rise exponentially and Kreidler believes this will put many of them out of business.

Closing out

While the co-founders of Tattersall understand the cost of doing business may spike in the near future, they believe they have a secure place in the industry. As a leader in innovation, the company continues to seek out new opportunities to create sustainable practices and further interact with their customers. They do not find themselves worried about doing business in the future.

Instead, Oskey and Kreidler enjoy the day to day of working at the business they have created. They love what they do with the added benefit of working for themselves. They have created a company where everyone is headed in the same direction and is working to learn and better the company.

While they may have fierce competition, they plan to “continue moving in their own direction without worrying about what the other guys are doing,” Oskey said.

Question and answer

GuruFocus: Would you ever want to sell the company?

Kreidler: It depends what the offer is. You know? It is tough. We will see. There are arguments beyond just monetary reasons for partnering up with a larger supplier and being able to leverage their logistics and their power to grow the brand even faster. That is also appealing. Staying independent has always been appealing and has been the goal, but if it is the right partnership and time, we are going to take a look. We are going to take a look at it. We are not out there shopping ourselves by any means. I would never say never.

Oskey: I know we both like what we do. Me personally, I do not know what else I would do if I was not doing this and that there alone is pretty scary to think about.

Kreidler: It is our baby. We created this. Both of us believe that we can leave this better than anyone else.

GuruFocus: Are there any places that you look to for inspiration?

Kreidler: We both read a lot. I love the "How I Built This" podcast by Guy Raz. I think it is awesome to hear founder stories. One of my favorite founder books is "Shoe Dog." The Phil Knight story is just awesome. Then a lot of business books. Get into a community of other entrepreneurs and pull ideas from them and lean on them. You have to be constantly learning.

Oskey: I read a lot of sales books and marketing books. I always go back to "Shoe Dog" also by Phil Knight because I know that when I read that I was absolutely exhausted. I was on the road constantly and it was really inspiring and just made me want to work harder.

GuruFocus: What are you most grateful for in your life at this point in time?

Oskey: In terms of the business, I am most grateful for the staff and everyone here who has believed in us. A lot of them have been here since the beginning and believed in us before this even started and have gone through a lot of growth and change. They chose to grow with us and continue to learn. I travel all the time and I hear people always complain about how hard it is to staff. I feel like we have been blessed to always have amazing people around us.

Kreidler: I would echo those sentiments and also the support of my wife and family in allowing us to do this. We went from a pretty stable, steady, normal life to a lot of chaos. She has always been a big supporter of this.

Oskey and Kreidler’s Advice

Research, research, research:

Oskey and Kreidler believe the absolute first step in being an entrepreneur is doing your homework and being prepared. You have to create the best plan possible for your business and try to take into account as many factors as possible. Plan out every single detail of what you want to do and accomplish. Learn everything you can about the business and the people you want to reach. Once you have that plan in place, you will be ready to tackle any problem that arises that you have not previously planned for.

Believe in yourself and find a partner that does too:

The co-founders of Tattersall emphasized that you have to believe you are capable of creating the business that you want. There will likely be a plethora of people who think you are going to fail. They will tell you that your idea is not worth pursuing or that you cannot make money with it. Here is where you will want to find a partner or a group of peers. They will understand your struggle and help you to overcome the people that doubt you.

Be passionate:

You have to be passionate about what you are doing. At times, you will find yourself struggling with different obstacles. You will need more money or you will need more people. If you are passionate, you will find a way to overcome these obstacles and continue to pursue your dream. Oskey has seen plenty of distillers come into the industry to make a quick buck. Every single one of them is no longer in business because they were not passionate about creating a business.

If you are an entrepreneur or know one that would be a good fit for our series, please fill out the questionnaire and our editorial team will reach out as soon as possible.

Make sure to check out the podcast.

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