Every new 21st Century business is trying to distill the magic from media buzz, investor interest and a bit of luck on the way to achieving instant brand traction.
In startup jargon, “the secret sauce.”
Well, here’s how you don’t just start a company, you bottle that secret sauce.
First, you take one of the most accomplished master distillers, a guy who has worked for the biggest brands in the world including ones in Japan, the U.S. and elsewhere. That would be Lincoln Henderson, who worked for Louisville-based global spirits maker Brown-Forman for 39 years.
Then, you and your family concoct a bourbon so compelling down to the sexy angels in the branding that people call you wanting to throw money at you. That would be Angel’s Envy.
Finally, you buy a dilapidated building – technically half a building – in Louisville where the governor, the mayor and all the economic development dignitaries show up on a white-hot Kentucky afternoon to hear you announce that the first bourbon will be made on Main Street since … well, since anyone can remember.
That pretty much sums up Wednesday’s big Angel’s Envy announcement that drew Louisville Metro Mayor Greg Fischer, Gov. Steve Beshear, GLI’s Daryl Snyder, vice president of economic development, along with a serious media carnival.
And no one summed up the day better than Angel’s Envy COO Wes Henderson:
It’s been almost 100 years since anyone has distilled bourbon on Main Street. Our goal is to bring bourbon back to downtown Louisville and make this Bourbon Row. We plan to reclaim that history right here, folks.
Just how ambitious Angel’s Envy plans actually are were revealed Tuesday afternoon after months of hints and “leaked” plans, mostly by Insider Louisville.
“This has to be the worst kept secret in economic development,” Fischer said in his opening remarks.
But all the speculation … okay, mostly our speculation … came up short.
Yes, there will be a tourist center, but no restaurant or other amenities found at larger distilleries out in the state such as at the Jim Beam American Stillhouse in Clermont, Ky.
“This is not the Disneyland version of distiling,” said Marc Bushala, Angel’s Envy CEO. “There will be grain coming in and finished product going out. Everything will be produced on the premises.”
Henderson said he envisions a serious distillery offering a visitors’ experience that’s “up close and personal … very interactive. We may even bring in ‘distillers’ on weekends,” groups of 20 people to try their hand at making mash, and who will fill a barrel with bourbon they can access as it ages.
“We can do that because we’re small.”
The plans to rebuild the former Vermont American factory into a state of the arts distilling facility and tourist destination are ambitious. The projected investment is, depending on who you listen to, $10 million to $12 million, a project scheduled to be complete by the end of the year.
Earlier this year, Angel’s Envy received state economic development incentives worth up to $800,000 over 10 years.
The plan is to essentially rebuild the 100,000-square-foot-plus complex at Jackson and Main streets. Designs by Louisville-based architects Joseph & Joseph show an imposing yet inviting brick exterior and a vast interior space.
In interviews after the obligatory ribbon cutting, Angel’s Envy COO Wes Henderson and CEO Marc Bushala made clear the company will build a major craft distillery including a bottling line first, and a tourist destination second.
Henderson said Angel’s Envy will have two stills – a 2-story column still and a pot still. Without killing you with technical details, a column still is typically for large production runs, a pot for limited runs requiring more versatility.
The planned volume will be nearly industrial, with Angel’s Envy capable of producing 250,000 cases per year with one production shift, 500,000 cases with two shifts, Henderson said.
For some context, that 500k figure would be twice the annual bourbon production at Brown-Forman’s Woodford Reserve distillery near Lexington, Ky.
Woodford Reserve produced about 250,000, 9-liter cases for 2012, according to industry and media reports, with a .750 ml bottle retailing for an average of about $60 per bottle across the United States. So, that’s about $135 million in revenue at the retail level.
Now, double that, and you have what the Henderson, Buschala and their investors are planning.
If they don’t run full out, Angel’s Envy distillers can run small batches with the pot still “if we get some crazy idea we want to try out,” Henderson said.
Of course, the art of the possible is always about money. While the Hendersons and their investors won’t go into detail, it appears the private company has plenty of operating capital including a significant infusion from Blue Equity, the Louisville-base private equity firm.
Yesterday, Jonathan Blue, Blue Equity chairman and CEO, told Insider Louisville he had just closed on a “significant” investment in Angel’s Envy. He declined to give details, referring IL to the Hendersons for comment.
While they too declined to reveal the amount of Blue Equity’s stake, or the total amount of capital raised, Henderson and Bushala described the Blue Equity deal as as the right deal … and far from the first approach from venture capitalists.
“Our phones ring every day” with calls from people hoping to invest, Henderson said. Angel’s Envy debuted three years ago after a first friends and family round of capital formation, then a round with investments by people they know, Henderson said.
The company recruited top marketers, financial executives, production and sales people and other industry veterans, he added.
“We never really shopped ourselves to the big VC firms,” Henderson said. “We didn’t think we had to. As a company, we’re a very close-knit group. I can’t name every single investor by name, but I can come real close.”
A mutual friend in Louisvlle he declined to identify introduced him to Blue, Bushala said.
Henderson and Bushala said Blue and David Roth, Blue Equity vice chariman, had been looking for an opportunity in the spirits industry for years, facinated by the sector.
“Jonathan loves the brand,” Bushala said. “He’s very enthusiastic. He did his homework and we concluded the deal yesterday.
“His timing was perfect.”
“This was something (Blue Equity executives) had thought about for years,” Henderson said. “I think that it enhances the overall company to have local people who are vested in the success of our brand.”
“To have us working together takes us to another level.”