While the NC Bourbon & Spirits Festival enters its second year Saturday, Weldon Mills Distillery is now in what is considered to be its third year of producing award-winning whiskeys and other spirits after the COVID-19 pandemic struck a blow to area businesses.

Now, the distillery overlooking the Roanoke River continues its production and is eyeing moving toward mass production with a possible second location on the grounds of the music and entertainment venue that bears its name — Weldon Mills Theatre.

The distillery received its federal permit to distill in November of 2019, owner Bruce Tyler said Monday. 

Because of COVID, 2021 essentially became the first year of operation, he said. “I look at that short period of time and how difficult operating in North Carolina’s controlled state system is. I look at what we’ve done so far as a success.”

The first year and awards

Several things happened in the first year — 2020 going into 2021. “Since we didn’t have products going into the markets and still had COVID restrictions, we stopped production for a while and focused on creating sanitizer for the five counties and donating that because it was too expensive — $300 a gallon at some point. We needed it locally so we started making it — what we called bourbon hand sanitizer.”

During the time the distillery didn’t have products on the market and people couldn’t come to the facility, “We decided why not send our product in for awards, maybe we’ll get an honorable mention or something like that.”

With that decision, the distillery “started winning really big medals,” Tyler said, and that’s when the staff figured “maybe we have something here. Each product that we started making started winning top awards.”

The competitions were blind tasting. “We’re talking about master sommeliers. You’ve got professional tasters out there. They get a vial and it doesn’t have a name on it. They don’t know what they’re tasting and you’ve got a scoresheet. They look at it — check out the color and appearance — they smell it — grade it based on the nose — then they taste it and grade it based on taste. This is where David can go against Goliath. All the marketing that goes into alcohol goes away and we started winning these major awards — winning best bourbon, best tequila, best vodka.”

In fact, he said, “Every single category that we have of liquor, we’ve won the best of with our products. It’s crazy. It’s nothing we would have ever had expected. We’re surprised by it, but we’re definitely happy. Even our master distiller who is the brains behind the operation, he’s even surprised.”

It is the team that gets the credit. “We’ve got a team that works with him that does a great job. He’s the captain of the ship there,” Tyler said of master distiller Mike Norman. 

Getting into ABC stores

Despite the success of the product gaining awards, the difficult part is getting it into state ABC stores. “It’s a new industry in North Carolina. Prior to Prohibition North Carolina was the spirit capital of the world. The whole thing about Kentucky and making bourbon, North Carolina was making bourbon while it was still a colony.”

It wasn’t until five years ago that the distillers association was starting to get laws changed that made it friendlier for distilleries to open up. “About 12, 14 years ago we had about four distilleries. Some of them were trying to sell some in the ABCs but it was tough but nobody really knew anything about these places. You couldn’t have tours, you couldn’t have tastings so how are you going to compete with the big boys when nobody knows nothing about your product?”

Even now, with 104 distilleries in the state, it’s still a new market, Tyler said. “The reality is that in North Carolina for a distillery to come on to the scene and compete in the ABC system, they have to go to each board and get permission from the board for them to carry your products.”

Then they have to go to each manager and some boards have 21 stores. “Basically you have to beg to get each one in.”

Weldon Mills products are now in all but about 15 stores in the state, Tyler said. “We worked really hard and we pushed really hard through this system that’s very difficult. You have to spend a lot of money to try and compete with the big boys.”

Some ABC store customers shop around, he said, but most go in knowing what they’re getting. “That brand loyalty comes from the big boys, big companies spending a lot of money to tell them to pick their brand. North Carolina distilleries just can’t compete with that.”

Success not by accident

Despite this, Tyler said Weldon Mills has grown to be one of the top distilleries in North Carolina. “The success we’ve had is not by accident. It’s through hard work and spending a lot of money. We’ve had a team that continues to grow. We’ve got over 40 employees. We’ve got a team that continues to grow and all of them are working hard to try and make this brand competitive and snatch up a share of the market.”

There is a sad reality to buying brands not produced in the state, he said. “The spirits industry in the ABC stores last year was $1.9 billion in sales. North Carolina, all 104 distilleries combined, was less than 2 percent of this.”

He said the message from those numbers is “if you look at North Carolina ABC sales, most of those are from people who live in North Carolina. Those are North Carolina dollars coming in. So when you take North Carolina being less than 2 percent of that market now we’re talking about over a billion North Carolina dollars leaving the state never to return because they’re purchasing an out-of-state product so over a billion dollars of those out-of-state purchases they go back and they leave the state. That doesn’t stay in the local economy.”

In turn, this aids in draining the state’s economy, Tyler said. “Just imagine if that were a billion dollars that were purchasing North Carolina products. Those funds go to pay for our salaries. We pay for our employee wages and our employees go out on the local market and they spend those wages with North Carolina businesses. Those businesses spend those dollars. That’s a multiplier effect on the economy.”

For instance, the farmer for the corn that is used in the Weldon Mills recipe is 15 minutes away from the facility. “His farm used to put corn through our building when it was a grist mill. That farmer is taking those dollars and he is spending those for things he needs to farm.”

Then there are taxes that are paid in the state which means more emergency services, more social services, and more education funds. “All of these things that we enjoy as a society in North Carolina, we could have more funding for if we thought about buying local.”

The brand recognition problem

The problem small distilleries face is brand recognition, Tyler said, and association of quality with that brand recognition. “These big boys that people pay thousands of dollars for bottles in the after market, we beat them in blind competition. The quality is proven in blind tastings, in international blind competitions. It’s difficult to combat hundreds of millions of dollars worth of programming and marketing giving this perception of quality when we know we’re beating these guys hands down each time. I guess it’s an educational campaign where you can say, ‘hey look, the quality’s here, it’s proven in blind competition and if you buy local your money stays local. When you buy a product that’s made outside of North Carolina that money leaves and that matters — tax revenue, local economy, multiplier effect of the dollar is probably 10 to one.”

Despite the competition from the large brands and what Tyler terms some unscrupulous marketing practices from them, things are going well for the local distillery. “I’m not saying this is a business that’s making us crazy rich. We’re not getting rich off of this. We’re reinvesting every dollar that comes back into this thing. My partner and I haven’t taken a penny from this company. We are reinvesting every dollar and we’re putting money on top of it to grow, grow, grow and to try and create a large company that can compete with the other companies that can bring that tradition back to North Carolina of being the spirit capital of the world. I don’t know that we’ll ever be the spirit capital of the world again, but we can certainly get back in the game.”

Eyeing the future

As Weldon Mills Distillery eyes its future, Tyler said it plans one more upgrade to its small batch equipment. “What separates us from the big boys is we do small batch production. It is way more expensive to do but it’s the way bourbon was originally made back in the colonies.”

Eventually, he said, the company will have to bring in a mass production system. “Right now we’re getting ready to do the last small batch upgrade we’re going to do. This will give us enough small batch bourbon whiskey to sprinkle throughout the states and keep a supply in North Carolina.”

Then there will be a large-scale production facility. “That large-scale production facility will be something along our national product lines.”

There will be some deterioration in the product when large-scale production commences, Tyler said. “It’s Ford versus Ferrari. Ferraris are hand-built. Fords are built on an assembly line. That’s why we beat these other bourbons in all these competitions because we’re small batch.”

When the company looks toward a national launch, he said, “We have to do the same thing they’re doing. We’re going to do it a little differently to preserve the quality that we’re used to. I won’t say how we’re going to do it, but our mass production will be of high quality — as high quality as you can get with mass production.”

Currently the company is in the process of considering all these things, Tyler said. “Our site in Weldon can’t handle the next steps so we’re looking at a secondary site.”

It is possible that the secondary site could be located on land where the namesake theater is located, he said. “We’re looking at options for the larger scale production facility and among those options is our site by the theater.”

Over 36 products

Since the launch of the company, it now has over 36 products. “All of them are award winners. All of them are top award winners.”

Its second location in downtown Durham is doing very well, he said. “It’s got both the distillery that has a speakeasy vibe that is two blocks from DPAC, three blocks from the Bulls.”

There is also an events space there which is booked for the rest of the year. “We’re expanding our small batch production to go regionally and nationally and we’re looking at expanding our large-scale facility and one of the locations we’re considering is property out by the theater.”

Then there are the partnerships where the Weldon Mills brands are featured — The Durham Bulls, the Charlotte Knights, Charlotte Checkers, the Carolina Hurricanes. “We’re the official spirit of these organizations, the North Carolina Football Club, the Courage, ECU, the Holly Springs Salamanders. All those partnerships, they help with brand recognition.”