Great Lakes Distillery deals with growing competition

Made in Milwaukee

Guy Rehorst at Great Lakes Distillery in Milwaukee.

Last updated on July 3rd, 2019 at 07:23 pm

Great Lakes Distillery LLC

616 W. Virginia St., Milwaukee
Industry: Craft distilling
Employees: 9 full-time, 8 part-time

When BizTimes Milwaukee put Guy Rehorst on the magazine’s cover in 2013, he was seen as a pioneer in the craft distillery market. As the founder of Great Lakes Distillery LLC, Rehorst had navigated a web of barriers to entry and managed to establish its own tasting room, while also shipping to half the country.

Bill Owens, president of the American Distilling Institute, described him at the time as a role model for new entrants to the industry.

Guy Rehorst at Great Lakes Distillery in Milwaukee.

Whether they were following Rehorst’s lead or just the market in general, the level of competition has increased in recent years.

“Pick pretty much any major city in the U.S. and five years ago, they probably didn’t have a distillery,” Rehorst said. “Now, just about every major city in this country has at least one, two, possibly three distilleries, so the market is getting more crowded.”

In Wisconsin alone, since the 2013 story ran there have been 19 permits issued for liquor manufacturers and another six for rectifiers, who blend spirits together.

In 2013, Great Lakes accounted for 8.5 percent of taxable liters produced by Wisconsin manufacturers or rectifiers. By 2016, that figure had fallen to 7.4 percent, even as the company increased its volume of taxable liters by 23 percent.

Rehorst said spirits in general have been on the rise and while craft beers remain strong, the beer market overall has lost out to spirits.

“The converse of the problem of more distilleries is more people are aware of small distilleries,” he said. “We’re seeing a lot more interest from consumers, they’re drinking more things (and) they’re drinking different things.”

Great Lakes continues to grow, increasing production from 60,000 bottles in 2013 to 80,000 bottles last year. As more barrels start the aging process, space is becoming limited. The distillery does rent some space offsite for packaging, but Rehorst said he has had talks with his landlord about using a building directly west of the current location, as well.

The distillery is on pace for a 10 percent increase in volume this year, even as competition increases, Rehorst said.

“It’s tougher competing outside of the state and I think we’re at a point where there’s probably a few markets we’ll pull back from just because maybe the return hasn’t been there,” he said.

The focus will instead shift to local markets and toward building the brand. Rehorst hired Todd Wolff in March to serve as marketing director.

Wolff, who has a graphic design and marketing background, said he hopes to help Great Lakes embrace a “drink with your eyes” mentality that helps its products stand out among the competition. He said the distillery’s Good Land orange liqueur, which comes in a green bottle and has an intensely designed label, is among the initial examples.

“Those types of things kind of catch your eye first; that’s the first thing that has to happen,” Wolff said.

The marketing work will be taking place over the next year or two and Wolff is hoping to develop a consistent brand image and message, while also leaving room for individual products to have their own messaging. Educating consumers will also remain a focal point.

“Our marketing since day one, as limited as it was … has always been about educating the consumer,” Rehorst said. “Our products are not inexpensive, so they’re not a very good impulse buy, so the best marketing we can do is get people to try it.”

The taste many consumers have right now is for whiskeys, which have grown in popularity over the past several years. Rehorst said Great Lakes will be releasing two new whiskeys over the next year that will be available on an ongoing basis. The distillery has had special limited releases of some whiskeys and has made its Kinnickinnic Whiskey from a blend of sourced bourbon and its own rye and malt whiskeys for years. The new releases will be entirely made by Great Lakes.

“I think we’ll keep making (Kinnickinnic) because frankly it sells really well and its sales are still growing,” Rehorst said.

He also plans to continue releasing collaborations with area craft brewers. It started with the Pumpkin Spirit, released annually with Lakefront Brewery. Rehorst said that was one of the first in the country.

“If you look around the country, there’s quite a few distilleries working with breweries now,” he said.

Great Lakes’ latest collaboration was with Milwaukee Brewing Co., using the barrels from the brewery’s “Admiral” Stache porter to finish off Kinnickinnic Whiskey. Rehorst said that won’t be the last offering.

“We’ve still got a few secret surprises back in our storage that we’ll break out over the next couple years,” he said. ν

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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