By Michael Rovner 

One of the biggest liquor companies in the world plans to begin distilling vodka in Manhattan in October.

OUR/Vodka, a unit of Pernod Ricard, will open a Chelsea distillery to sell a wheat-based vodka.

There are 21 distilleries currently operating in New York City, with 18 in Brooklyn, two in the Bronx, and one in Queens, according to data gathered on July 13 from the New York State Liquor Authority. OUR/Vodka would be the only one in Manhattan.

The majority of ingredients will be sourced from New York state farms. That will allow the business to qualify for a farm distillery license, which requires 75% of ingredients to be sourced from the state. License holders are allowed to distill up to 75,000 gallons of spirits a year, host on-site tastings, sell at farmers markets, and open off-site locations.

OUR/Vodka has spent years arranging everything, including signing up a couple of New York entrepreneurs to run the distillery. The saga began in October 2013, when the phone rang at Dave's Wear House, a skate shop on Baxter Street. The caller identified himself as a talent scout for a spirits company. "We thought the guy wanted us to design a T-shirt. Maybe we'd get a few free bottles," said Kevin Carney, 47 years old, co-owner of the business along with Dave Ortiz, 47, a former graffiti artist.

The scout visited their shop the following day and introduced himself as Thurman Wise, but he didn't reveal that he was working on behalf of OUR/Vodka. Mr. Carney suggested he hire them to throw a party. Mr. Wise, 32, agreed to consider it and offered that maybe they could also run the distillery.

"Our friends are really into elaborate practical jokes and this guy had hair down to his shoulders. His arms, hands and neck are covered in tattoos. He wore patent leather loafers with no socks. We thought we were getting punked, but we went with it," said Mr. Ortiz.

Mr. Wise said his employers were visiting from Sweden the following day and told Messrs. Carney and Ortiz they would meet Asa Caap, chief executive of OUR/Vodka. At the time, the company's vodka was being distilled and sold locally in Berlin. It has since rolled out to London, Amsterdam, Los Angeles and Detroit.

"I was told to recruit guys to open and run a distillery in New York City and they'd get a piece of the business, but they needed to be authentic New Yorkers and creative problem solvers who were literally willing to carry 36 cases of vodka," said Mr. Wise.

Mr. Wise had a tough time locating operators for the new distillery. At the outset, the project was so scrappy that Mr. Wise was using a Gmail account, and his emails were being ignored. In New York alone, 10 to 12 people failed to reply to him before he found Messrs. Ortiz and Carney.

When the two entrepreneurs met with Mrs. Caap in 2013, there was one final hurdle to be overcome. "I was nervous to tell them I don't drink," said Mr. Ortiz, who adds, "They came right back with 'We love your honesty. That's so New York!'"

The pair went to work scouting locations with Mr. Wise in January 2014, and closed the skate shop the following year. Pernod-Ricard invested well over $2 million to open the 2,386-square-feet distillery/bar with a 2,697-square-foot basement on 26th Street in Chelsea, according to Mr. Ortiz.

Pernod-Ricard has committed to covering operating expenses over the next three years when the distillery is expected to begin turning a profit. It expects to sell 3,000 9-liter cases in the first year.

OUR/New York's 375-millileter bottles will be sold across New York state in liquor stores, bars, and duty-free shops.

"It's going to be a challenge and we don't get any profits until it's profitable, but it doesn't top out. As long as the distillery makes money, we get a piece of net profit," says Mr. Carney, who said he and Mr. Ortiz will also be paid a nominal salary.

 

(END) Dow Jones Newswires

July 20, 2017 19:00 ET (23:00 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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