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Mainers hope to transform potatoes into premium vodka

FREEPORT, Maine (AP) - A farmer looking to add value to his low-priced potato crop has launched a business partnership in hopes of turning humble Maine spuds into high-priced premium vodka.

Maine Distilleries Inc. plans to trade on the state's image of pristine water and traditional New England farms as it creates a niche product to compete with the Grey Gooses and Belvederes of the world.

It'll be produced in small batches, much like microbreweries that produce specialized beers, said Don Thibodeau, who is in now in the midst of his fall harvest of 525 acres of potatoes in Fryeburg.

"This is all going to be hand-crafted by the batch," said Thibodeau, who was encouraged to pursue the idea by his brother.

Maine Distilleries already has cleared its first hurdle with the town's project review board. It anticipates having federal and state regulatory approvals to start production this spring on U.S. 1, four miles south of L.L. Bean.

It would be Maine's first commercial distillery, officials say. White Rock Distilleries in Lewiston makes and markets a full line of spirits, but the alcohol used in White Rock products is imported.

The vodka concept originated with Thibodeau, who was frustrated by market conditions that have led to low potato prices.

His older brother, a neurosurgeon, signed on as an investor. The other partners are Bob Harkin, a former executive at American Skiing Co., and Christopher Dowe, a master brewer and consultant for microbreweries.

The idea is not necessarily new.

Maine farmers have tossed around the idea of distilling vodka to utilize Maine-grown potatoes for years, but the consensus was that it wasn't cost effective to produce large quantities at low prices.

Creating smaller batches of a premium product makes more sense, and potato farmers will be watching the project with interest, said Don Flannery, executive director of the Maine Potato Board in Presque Isle.

There's thought to be only one distillery in the United States that currently makes vodka from potatoes. In Rigby, Idaho, Silver Creek Distillers Inc. produces vodka carrying the Teton Glacier, Blue Ice and Zodiac labels.

Vodka is the most popular of the spirits, accounting for 26.2 percent of U.S. liquor consumption last year, according to the Distilled Spirits Council of the United States. Rum was second at 12.3 percent.

"It's definitely a growing market," said Shawn Kelley, the trade group's director of public relations in New York.

The robust growth is due to the popularity of high-priced super premium brands and flavored vodkas, along with a resurgence in the cocktail culture that has boosted liquor consumption in general, she said.

Maine Distilleries Inc. plans to start small with one or two batches - up to 500 bottles - each week, Harkin said. Each batch will use 4,000 to 5,000 pounds of potatoes grown by Thibodeau's Green Thumb Farms.

The company hopes to win regulatory approval from the federal and state government and purchase the equipment in time to begin production this spring. The goal is to be on the market by summer in Maine and New Hampshire.

From there, company officials plan to press deeper into the northeastern market, Harkin said. If successful, the company could end up buying potatoes from additional farmers in the state, he said.

The name and label for the vodka have been chosen, but they're closely guarded secrets, along with the water source.

Harkins returned last week from a trip to Europe to look at equipment. The company plans to invest several hundred thousand dollars in distillery equipment produced by company in Stuttgart, Germany.

The entrepreneurs view their efforts as similar to those of microbreweries that proliferated in the early 1990s and have taken market share from big brewers like Coors, Budweiser and Miller.

Like those microbreweries, Maine Distilleries sees demand for a premium brand - aiming even higher than Absolut and Stolichnaya to the "super-premium" brands like Grey Goose, Chopin and Belvedere.

The conventional wisdom is that vodka was created in Poland using potatoes. But Harkin says 99 percent of vodka sold today is produced from grains like barley, wheat and corn.

It's harder to produce vodka from potatoes, which produce a superior product, Harkin said.

The Maine product, he said, will target connoisseurs who are willing to pay for the best vodka martini. The brands targeted by Maine Distilleries cost about $25 for a 750 milliliter bottle.

Harkin knows it's a tough road ahead. Entering a crowded marketplace and competing with established brands will be no easy task.

But he remains optimistic. "We've got a good story, we've got a good concept and we're going to make a great product," he said. "I think there's a real opportunity for this."

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By DAVID SHARP
Associated Press Writer

[original article]

Posted by thinkum at September 20, 2004 11:36 AM