Okanagan Spirits Pioneering the Craft Distillery Boom

There's a distilling boom under way smack in the middle of wine country.

Peter von Hahn wears a neckful of gold medals spread across his sternum as he hoists two large, spiralling trophies of glass and copper tubing, one in each hand. His broad grin suggests delight and, perhaps, surprise.

Von Hahn is the senior distiller at Okanagan Spirits, the pioneering B.C. craft distillery in Vernon. He’s just travelled to Køge, Denmark, with eight of his top products to compete against 300-some entries from 64 other distilleries in 25 countries at the World Spirits Awards. In the end, every Okanagan Spirits entry received a medal. Laird of Fintry became Canada’s first single-malt whisky to win gold at this event. Both the Haskap Liqueur and the Danish-style Aquavitus won “double-gold” medals, and the Blackcurrant Liqueur triumphed as Spirit of the Year in the fruit brandy category. Moreover, this family-owned craft distillery was also named Distillery of the Year.

“We had a really good week,” says Tyler Dyck, Okanagan Spirits’ CEO. He and his father, the business’ owner, Tony Dyck, stayed behind in Vernon rather than joining von Hahn in Denmark. They needed to manage logistics and pitch in for the major move to Okanagan Spirits’ new 16,000-square-foot headquarters, craft distillery and tasting facility. At an investment of $3 million that includes a 50-column copper still—the tallest in North America, it has its own skylight in the roof—a whisky lounge, an educational theatre room and a 27-foot tasting bar, it’s a bold show of confidence for craft distilling’s future in the Okanagan from what has been a very niche industry up to this point. The confirmation in Denmark of their products’ excellence is nothing if not reassuring.

Not that they really need it. Okanagan Spirits and a handful of other craft distilleries have pioneered a quality-obsessed spirits scene that’s exploding with new tasting rooms and new distilleries, which pop up as fast as we can swirl, sniff and sip. All of a sudden, there’s buzz around the craft and micro-distillery route that is emerging in a valley heretofore known for its wine.

The watershed moment came when key changes in B.C. liquor laws took effect in March 2014, allowing distillers to build tasting rooms and on-site lounges.

More importantly, direct sales of products distilled in B.C. from 100-percent B.C. fruit, grain or any agricultural raw product are exempt from the crippling 167-percent government markup—before sales taxes—that the industrial giants must bear. Local farmers are ecstatic. And so too are B.C. craft distillers with their small-batch stills, because they can now turn what was previously “an expensive hobby” into a vibrant regional industry, like those found in many places in Europe.

Take, for instance, Jorg and Anette Engel, who have been distilling local fruit into lovely eaux-de-vie, fruit brandies and a grape spirit analogous to Italian grappa in Penticton since 2005, just weeks after Okanagan Spirits launched in Vernon. With its original license, Maple Leaf Spirits had to be located in an industrial area, despite its small-batch pot still having the energy footprint of a home furnace. However, with the new rules in place, the Engels could move to the scenic Naramata Bench, and in July 2014, they began to reach a new crop of customers for their excellent Pear Williams and Canadian Kirsch along the famed wine route.

Mike Urban opened Urban Distilleries in October 2010 and also had to locate in an industrial area—thankfully, just a few blocks from Kelowna’s downtown. He quickly gained a following for his excellent Spirit Bear gin, Spirit Bear vodka, Urban single-malt whisky and Grappa Moscato. Urban now puts his warehouse-sized space to good use with several sold-out five-day distilling workshops per year. Far from being concerned that he’s training up his competition, he instead says, “We’re following the exact path as the craft breweries did, and they’re all doing well.” Urban adds, “We’re actually at the beginning of the explosion. We haven’t even hit the explosion yet.”

“We’re actually at the beginning of the explosion. We haven’t even hit the explosion yet.”

Certainly, it seems explosive. You have Legend Distilling in Naramata, where Dawn and Doug Lennie give their gin a decidedly Okanagan pedigree with lavender, apple, mint and elderberry notes, along with the classic juniper and coriander and citrus botanicals. And in downtown Penticton, Old Order Distilling’s tasting room opened in April. The name is a nod to Graham Marten’s multi-generational Mennonite background, and they make small-batch, triple-distilled vodka and gin based on desert terroir with sumac, sage and apples. His whisky has been put in barrels and will wait until 2018 until it can be sold.

Over in Oliver, the Dubh Glas Distillery opened just this past April. Pronounced Douglas, it’s both owner Grant Stevely’s middle name and the Gaelic phrase for “dark water.” The whisky will age patiently for the next few years, but the Noteworthy gin is already worth the drive, with its distinctive Madagascar vanilla, Norwegian juniper and desert sage profile.

And that’s just to name a few of the notable new distilleries. Not all will be great. Craft distilling will see the same bumps and growing pains as the Okanagan wine industry did during its shaky reboot in the 1990s—and that it continues to see today. “Not all craft distilleries will survive the boom,” says Stevely, open-eyed to the risk and the rewards of this early wave of craft spirits. But he knows that the competition and rising standards will continue to push the quality upward. “The consumer will ultimately win in the end,” he says.

“Not all craft distilleries will survive the boom.”

Indeed, it is reminiscent of when a dozen or so winemakers gathered together to consider the potential of the Okanagan and bring it from bulk wine producer to the legitimate wine region it has become. Many thought Anthony von Mandl was crazy when he sunk a fortune into Mission Hill’s bold statement overlooking the lake in 2002. But he built it, and they came. Tony and Tyler Dyck are making the same wager in Vernon with Okanagan Spirits’ massive new facility. Fortunately, they have some shiny new medals to fill a few shelves, and one smiling senior distiller who has to live up to his own reputation, yet again.