New Jersey slowly gets into craft distilling

In an old garage in downtown Camden, James Yoakum stirs a barrel of malted barley and yeast with a wooden paddle as country music hums in the background.

"When the bubbles stop furiously racing to the surface, that's when it's done," he says.

It will be at least three weeks before that happens, but Yoakum is patient; he has learned to be.

For almost a year, the Kentucky-born South Philadelphian has been ready to make whiskey and rum at Cooper River Distillers, Camden's first distillery and the second craft distillery in New Jersey. He just received the final go-ahead to start producing this month after a saga of building updates to meet local zoning requirements, an outdated sprinkler system the most pressing of them.

In his distillery on Fourth Street, around the corner from City Hall, a handmade bronze still shipped from central Spain sits near wooden 15-gallon barrels stacked in a pyramid. Three large blue plastic tubs holding 45 gallons each of molasses are in their infancy in the life of Petty's Island Rum, a nod to the tiny island in the middle of the Delaware River.

Nationally and statewide, craft distilleries are gaining in popularity as liquor regulations have become less stringent, as they did in New Jersey, and as success stories spread.

"In my 10 years of doing this, I've only seen about four failures. They don't fail," said Bill Owens, founder of the American Distilling Institute, a trade organization for craft distillers. Owens has watched the number of distillers grow by about 30 percent each year over the last five years. The U.S. is home to 693 operational distilleries. About 100 more are being built.

"You have got to remember, this number is minuscule when you think there's 4,000 craft brewers and 11,000 wineries. We're the last to go through the renaissance," Owens said. "It's happening in coffee, cheese, bread, wine, beer. Now it's our turn to go back to basics, go back to something that's hand-crafted, locally produced."

State Sen. Donald Norcross' bill, which passed in August, introduced craft distillery licenses costing about $1,000 a year compared to the $12,000 that mass-produced liquor licenses cost. The law also legalizes the sale of liquor in-house. That means Yoakum can sell directly to licensed bars, restaurants, and liquor stores and can give away samples and sell cocktails at the distillery.

"It really is working the way we designed it for because craft distilling is a little subset that has been growing in popularity, and we just took the handcuffs off of the New Jersey laws," Norcross said.

On a Thursday tour of the distillery, Yoakum, 29, looked at the exposed brick and concrete floors and wondered whether he might "have to think about prettying the place up" before opening to the public. When he secured the space, before the law had passed, he thought it would just be the production site. Now he has the opportunity to make it a gathering place.

He has ideas for happy hours and small tours, but first he will need to do some branding and make sure the stuff tastes good.

It's illegal to distill without a license - moonshining carries a federal prison terms of about 10 years - so practicing has not been an option.

"There's definitely going to be some trial and error," said Yoakum, who is also a real estate agent in Philadelphia. "But I've played with other people's [recipes]."

Yoakum, who runs the place solo, keeps the recipe simple: molasses, water, and yeast for the rum. "You can vary the ratio, but I'm not fooling anyone with what's in here," he said.

Yoakum is excited about the opportunity to sell directly, customizing or experimenting with different flavors without having to go through the state with every product. "If I was to make 50 bottles specifically for one bar, I could easily do that," he said. In Pennsylvania, distillers can sell only through State Stores.

Yoakum's $60,000 investment in Cooper River is backed by a few silent investors, one of whom is the namesake of Silver Fox Rye, a white whiskey he will soon begin selling.

A graduate of the Wharton School at the University of Pennsylvania, Yoakum says his goal is for Cooper River Distillers to be known as the New Jersey bourbon distillery.

Up north, the state's first distillery, open since January 2013, is readying its tasting room and almost set to give tours.

Krista Haley, co-owner of Jersey Artisan Distillery in Fairfield, says the law change made the business possible. She would like the state's 20,000-gallon limit on craft distillers raised. The national craft distillery average is 75,000 gallons a year, she said.

Jersey Artisan makes about 30 gallons a day, nowhere near the limit, but three to five years from now, Haley says, she expects to approach the maximum. "It really kind of hamstrings us for the future," she says. "My hope is that as [the state sees] craft distilleries aren't evil, that they are actually something good for the state in terms of revenue and tourism, they'll consider increasing that threshold."

The big brother of distillers, breweries, are still booming in New Jersey since a similar change to licensing regulations in September 2012. At least seven breweries have opened or announced plans to open in the last year, said Gene Muller, founder and general manager of the Flying Fish Brewing Co. and treasurer of the Garden State Craft Brewers Guild.

Flying Fish is the "biggest of the little guys," as Muller says, and it recently relocated, selling its Cherry Hill space to one of the state's newer brewers, Forgotten Boardwalk.

Muller helped lead the fight to get the laws changed. New Jersey is "a tough place to do business," he said. "We've got the demographics, a huge population, but then there's a lot of taxation and regulation. It can be a puzzle sometimes."

But success is simple, he says: "As long as it's good, people will come back. You can be small and just getting started, all that matters is what's in the glass."

Owens, of the American Distilling Institute, said there was also the draw of getting to meet the distillers, something rarely available at large mass-production facilities. "Most companies will have a brand ambassador, but in craft, if you want to meet the maker, he'll be there. You want to meet Yoakum, just go knock on the door."

Finding Cooper River Distillers might be tough, with nothing to identify the place yet save a sheet of 8x11 paper taped to the wall. Yoakum says he will look into some proper signs soon, but first, he has some booze-making to attend to.