Distilling is work. Hard, hands-on, all-in work. The slow drip of spirit from copper, the grain crushed under the weight of tradition and ambition, the fire burning under the still. It’s patience and persistence, trial and error, failure and success. It’s in your hands, in the air, in every bottle that bears your name. The…
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Are you a distillery, brewery or winery/cidery in New York State? If so, there is a substantial NY spirits tax credit available to you based on the quantity of product that you bottle each year. Commodity Rebate Cap, gal Max Rebate Amt Effective Bottle COGS Discount Beer, Cider $0.14/gal 500,000 $70,000 355ml: 1.3 cents Wine …
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The art and science of distilling have undergone profound transformations over the last century. From the challenges of Prohibition to the rise of craft distilleries, the distilling industry has continuously adapted, innovated, and thrived. Let’s take a journey through the decades, exploring the milestones that have shaped the industry into what it is today. 1920s:…
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TTB has made a significant change to fill height regulations – one that most distilleries will find positive. They eliminated the distinction between bottles and cans, and added thirteen new authorized fill sizes! Allowable Fill Heights, Prior to January 10th, 2025: 1.8 Liters Bottles Only 1.75 Liters Bottles Only 1 Liter Bottles Only 900 mL…
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Data and analytics are revolutionizing the way distilleries operate, quickly becoming the driving force behind smarter, more efficient decision-making and workflows. Imagine using predictive analytics to optimize your aging barrels, streamline inventory management, and deliver insights that transform how you run your business. At FIVE x 5, we’re committed to keeping you ahead of the…
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This is an advanced-level article that presumes working knowledge of gauging and proofing terms and methodologies. It includes excerpts from an article entitled Proofing and Gauging that I wrote for Craft Spirits Magazine, as well as presentations I’ve given over the years. If you have product on hand that has 6g/Liter or more of dissolved…
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As we wrap up a dynamic 2024, it’s wise to take a moment to reflect on some common TTB audit findings. Avoiding these pitfalls can save you significant time and expense – and you’re required to follow all the regulations, anyway! 1. Incomplete Gauge Records TTB regulations require you to gauge your spirit at various…
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Running a distillery is a labor of love, but it’s also a business with tight margins and complex operations. While many distillers account for obvious expenses like raw ingredients, barrels, and equipment, hidden costs can quietly chip away at profits if left unchecked. These costs often lurk in inefficiencies, overlooked compliance requirements, and production losses….
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Are you considering starting up a distillery? One of the most daunting tasks is figuring out the equipment that you need. It’s especially challenging if you’re not yet sure what you’re going to produce and how you’re going to produce it. This guide breaks down the different types of equipment according to production operations, so…
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Recordkeeping As a consultant for distilled spirits, I like to use an Iceberg metaphor to describe your compliance requirements. The tip of the iceberg represents monthly Reports of Operations – these require you to transmit a summary of your operations each month. The bulk of the iceberg lies below the surface, less visible: it represents…
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In the distilling world, efficiency is the secret ingredient to success. When margins are tight and demand is climbing, streamlining operations isn’t just about staying afloat—it’s about thriving. Whether you’re running a small craft shop or managing a larger distillery, DISTILL x 5 is here to help optimize every step of the process without compromising…
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When you think of whiskey, bourbon, or rum, your mind probably jumps to the rich, smoky flavors or that smooth, caramel finish. But behind every great spirit is a barrel that does a lot of the heavy lifting. Sure, distillers craft the liquid, but it’s the wood that transforms it into something magical. Let’s dig…
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The distillery industry continues to evolve rapidly here in 2024 and with that comes new challenges and opportunities for marketing your brand effectively. Whether you’re a small craft distillery or a larger operation, staying ahead of the curve is essential to stand out in this crowded market. Here are ten marketing tips to help your distillery…
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This post is intended to be a quick Public Service Announcement since we’ve observed an increase in this type of transaction. Both copackers and distillers are routinely running afoul of regulations surrounding Transfer in Bond of bottled/canned product, by sending and receiving canned product via Transfer in Bond. Unless the copacker and their distillery client…
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As a Consultant, I’m often asked what exactly I have to offer. My gut feeling is to say: “everything!”, but my therapist would probably push back on that. Joking aside, I love this question because it has many different answers – I’m fortunate enough to work with nano-distilleries that produce 10 proof gallons per year…
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The bottling department of your distillery is a paradox: your biggest value-add is putting corks in glass, but bottling carries a lot of technical and regulatory challenges. Let’s go through these challenges and examine some solutions. When I refer to a bottle, I’m speaking of a standard 750mL filled with 80 proof spirit. Technical Bottling…
Distilleries in the US are often approached by businesses and individuals who are interested in having the distillery produce and/or bottle product on their behalf. These arrangements are simple to describe in plain English, but they are deceptively complicated “under the hood”. In addition to Federal Trade Practice regulations, these arrangements are typically governed by…
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TTB regulations are stiff for the most part, but if you are a careful student, you can find some regulatory “freebies” that can save you significant amounts of time and money. Here, we’ll cover three of the most important ones. 1) You Don’t Have to Take Physical Inventory of Barrels This one’s a bit tricky because…
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At first glance, you might wonder why regulations distinguish between Voluntary Destruction and Losses. The key differences: In either case, you’re typically not taxed on the quantity lost/destroyed – but let’s dive in deeper. Voluntary Destruction Voluntary Destruction is covered in 27 CFR 19.459, which states: A proprietor may voluntarily destroy spirits […] or wines…
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Regulations require you to track and report your bulk Imported Spirit separately from your domestic spirit. This applies to spirit held in the Storage liquid account as well as the Processing account. We’ll cover the scenarios and ‘gotchas’ so that you can stay on TTB’s good side. And, be aware that we’re not going to…
Flow meters are used to measure the amount of liquid flowing through a pipe. It’s not hard to see why this is an appealing proposition for a distillery, which is full of moving liquid that must be tracked and measured constantly. Unfortunately, most flow meters are unsuitable for spirits. Typical magnetic flow meters will not…
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Since the US Census Bureau publishes population data, and the TTB publishes DSP permit data, I thought it would be instructive to join the two datasets and examine “Distillery Permits per Capita by State” in the US. For this exercise, I took Census Population data from the 2020 Census (last available) and mashed it up…
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A long-time client and friend called me one day and said: “Listen, our production guys messed up a batch of Rye and the mash bill is all wrong. We know exactly what went into the mash/ferment, and we’ve calculated how to adjust our Bourbon mashbill so that we can blend-in this mistaken Rye distillate in…
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Both DISTILL x 5 and Whiskey Systems offer you the ability to generate Case Labels for your bottled, finished goods, which helps you to meet your CFR requirements for case marking: But this is just the beginning of regulations around cased goods. You are also required to fill cases with properly filled & closed bottles….
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It is common for distilleries to make products like mixers, soda, syrups, shrubs and more. Folks that are in Maple Syrup country naturally want to use an empty bourbon barrel to finish some maple syrup; same goes for distillers in bee country with honey. All of these ideas are wonderful, but come with a giant…
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“From Bond”, “In Bond”, “Bonded” … it can seem like the regulations are fixated on the concept. But what does it all mean? First off, some background. In the US, the Federal Government’s Excise Tax attaches to spirits the instant they come into existence (when vapor condenses to liquid). However, to allow proprietors flexibility in…
What is AlcoDens LQ? AlcoDens LQ is a blending & gauging calculator made by Katmar Software. It has all the functionality of the calculators built into DISTILL x 5 and Whiskey Systems, plus additional functionality and support for spirits blends containing sugar. There is no business relationship between FIVE x 5 and Katmar Software; we just think…
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A bond is a special kind of insurance policy which has three parties, instead of two. If you think about home or car insurance, you (the policyholder) pay the insurance company a premium, and in the event of a financial loss, the insurance company makes you whole. A bond (or surety bond) is also an…
Many distilleries are involved in sending or receiving Bottled Spirit via Transfer in Bond. What they may not realize is that they’re running afoul of TTB regulations which have changed multiple times in recent years. This post will summarize the past and current regulations. The Past Prior to 2018, bottled spirits could not be transferred…
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Most distillers are aware of the Craft Producer tax break on the first 100,000 PGs/yr of product removed in a calendar year. When the tax break was first announced in 2018, there were some loopholes that allowed producers to sometimes take advantage of multiple 100,000 PGs/yr allotments. Those loopholes have largely been closed through subsequent…
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For some important background, make sure you’ve read the first blog post in this series, COGS – Why You Should Care and How to Track It. This post’s intended audience is distillery management and accountants/CFOs/controllers. First and foremost, we should define the goal of this exercise. What we’re aiming for is GAAP-compliant books that can…
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A frequent question from DSPs is how do I record the production and sale/shipment of ready-to-drink (RTD) cocktails in Keg format (e.g. sixtel, corny keg, beer kegs, etc)? The short answer: in the United States, you cannot. The background is usually the same: a cocktail in the Tasting Room becomes popular and turns into a…
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“Container Deposit” schemes are State regulations aimed at reducing waste and/or increasing return rates of used beverage containers. The legislation that creates these programs is often called a “Bottle Bill”. While Bottle Bills are commonplace for soda cans and other beverage containers, distilled spirits have long enjoyed an exception to those regulations in most states….
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There are two things we all can use more of: time & money. So when you come across an idea that: Well, that’s worth something. Here’s just such an idea: While at the American Distilling Institute trade show in Las Vegas I met Tyler Derheim from FIVE x 5 Solutions. In addition to working with…
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Cost of Goods Sold (COGS) is an accounting metric used by manufacturers and other businesses to weigh the direct cost of making a product. COGS is broadly split into three categories: materials/supplies, overhead and labor. DISTILL x 5 and Whiskey Systems have built-in functionality to track Material COGS from grain receipt through to production, storage…
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Congress is not expected to pass appropriations bills this month, and a failure to do this will trigger a government shutdown effective on October 1st. Historically, government shutdowns have resulted in TTB pausing their processing of COLA / Label Approvals/Exemptions, Formulas, and Permit Amendments/Applications. Due to this pause, a backlog of submissions is likely to…
As a rule, the Alcohol & Tobacco Tax & Trade Bureau (TTB) would prefer to work with industry members to guide them into compliance, rather than levying large fines or shutting businesses down. In fact, TTB even has a Voluntary Disclosure program that can help you minimize business disruption and cost, should you find yourself…
A conversation with Chris Farmand, CEO of Small Batch Standard Running a distillery is no easy feat, it requires detailed planning, hard work, and dedication to make it successful. While there are certain goals that you may be focused on, such as building up inventory, aging your product, and developing a brand, profitability is a…
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We have a new position open on our team! We are looking for a Training & Education Content Specialist with the below skill set requirements. 4+ years in software sales, customer service, success, or support, preferably for SaaS OR, a bachelor degree in Marketing or Education and 2 years of same experience. AND; 1+ year…
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A good buyer will provide capital for growth — a great one will work with you to ensure that both the business and its unique culture thrive.
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Here’s a quick recap of 2022! We are looking forward to some really exciting things coming in 2023, keep an eye out for those announcements here or in our monthly newsletter!
In the age of fast-paced marketing, where today’s tactics are already yesterday’s news by the time you’ve implemented them, there is still one truth that remains; brand storytelling is the most compelling way for you to build your distillery’s brand and connect with your audience. There is a reason the most successful companies continue to…
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Are you working on a new formulation? Here’s a few common ‘gotchas’ to watch out for: Does your product really need a formula? – There are several “general use” formulas for Vodka, Brandy & Whiskey – Products adhering to a recognized Class & Type (e.g. Aquavit) do not require a formula submission – Check the…
All Distilled Spirits proprietors need to know about two substantial changes in in TTB Enforcement standing policy. 1. Change in Ownership Reporting If you have a change in ownership of your business, you must report that change to TTB via a Permit Amendment within 30 days. Reportable changes include: change of controlling interest, change of 10%+…
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Expertise. FIVE x 5 Consulting Services has years of experience helping our customers solve their business needs while remaining compliant in a highly-regulated industry. Since we’re the #1 provider of Distillery Management software, we’re well-positioned to deliver the right solutions at the right price, and without wasting your time. Objectivity. Hiring an outsider gives you…
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One of the many advantages of working with FIVE x 5 Solutions is that we’re tapped in to what’s happening in the world of distilling. During our usual monitoring, we’ve noticed an uptick in enforcement actions by the TTB as more distilleries are experiencing a TTB audit. With pandemic restrictions easing, it makes sense that…
Since every Distilled Spirits Plant is unique in some way, the question of when to expand operations ultimately depends on the proprietor and their business model. With that said, there are some clear indicators that you should consider expansion: If you start your day by moving a bunch of tanks and equipment outside, and finish…
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Inventory Management is one of those tasks that isn’t hugely rewarding while you’re doing it, but the benefits from good record-keeping are profound. Managing the cycle of raw materials, dry goods and finished products will allow your business to grow and react to changes. In today’s world of disrupted supply chains, staying on top of…
This article on density meters assumes that you have a good understanding of proofing/gauging and the associated vocabulary. Check out our previous blog post “Proofing & Gauging 101” for that overview if you haven’t already. A density meter is a device that determines the density of a liquid or gas, which you inject or pump…
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The TTB is charged with two primary missions: protect revenue and protect consumer. Because of this focus, they are very concerned with alcohol content measurement in distilled spirits plants – an underproof product shortchanges the consumer, while an overproof product shortchanges the government its excise tax; enter proofing and gauging. Accordingly, 27 CFR has strict…
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Before we dive into the topic of proofing and gauging, it’s useful to establish some background and definitions; while they may be familiar to you as experienced distillers, these will form the vocabulary for this article. These definitions and regulations primarily apply to United States-based producers, though there are comparable terms and guidelines in most…
Selecting the right equipment for your new DSP is a challenge. Even if you have the budget to purchase everything brand new, many of the items you need have long lead-times and require professional installation. Plus, everything you buy must work together. What is a new distillery to do? The best option is to seek…
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If you’ve ever used TTB’s Online Services, like COLAs Online or Formulas Online, you’ve probably found yourself frustrated with the unintuitive interface, unfamiliar (or easily misunderstood) standards, and arcane terminology. But that’s only the beginning of possible frustrations – even after wading through the appropriate service, it can feel like TTB Specialists reject submissions for…
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Does Your Excise Reporting Pass the Quality Test? Excise Tax Returns are deceptively simple if your operations are. While most of a DSP’s reporting requirements are denominated in proof gallons or wine gallons, TTB Form 5000.24sm only asks you for dollars and cents. The form is so simple that other industries such as Tobacco,…
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The FDA has withdrawn all three guidance documents which allowed distilleries to produce and distribute hand sanitizer as an emergency measure during the pandemic. Production should have ceased December 31st, 2021, and distribution by March 31st, 2022*. It is also important to be sure you de-register from the FDA’s OTC monograph system if you registered…
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Looking for some quick and easy ways to improve your DSP operations? Here are some process improvements that you can implement to save time and money, while reducing your risk of noncompliance. Do you know about specialized equipment that can save your DSP operations time and money? Drum & Barrel handling equipment (carts/racks) Barrel bung…
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How do you know when the time has come and your distillery needs distillery management software? You’ve received your license— Many distilleries don’t think they need software early on in their development. However, in the United States the TTB requires reporting as soon as a license is issued, whether you are producing or not. Having…
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FIVE x 5 Solutions has partnered with Whiskey Capital Secured Financing Fund to bring non-traditional distillery funding to our clients. Whiskey Capital specifically provides funding for American Whiskey distilleries who have capital tied up in the whiskey aging in their rack houses. Fx5 Solutions CEO Caroline Calhoun recently sat down with Whiskey Capital Secured Financing…
Time is the most valuable resource any of us has. With a finite amount to use, how we choose to spend our time is the most important decision we make every day. Couple that with the fact that most modern humans deal with time famine – a universal feeling of having too much to do…
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We recently checked in with Jeremy DeWitt, Assistant Distillery Manager at 10th Mountain Whiskey & Spirit Co., about how things have been going with Whiskey Systems since the beginning, and how they have been since they switched back to Whiskey Systems after a brief hiatus. FIVE x 5: Tell us more about your journey into…
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The most critical thing distilleries must track is spirit production, on which tax (duty) must be paid. Consumers enjoy distilled spirits, and so do governments – if only because of the revenue gained from alcohol production! In the United Kingdom, HMRC oversees the license and oversight of distilled spirits producers and requires distilleries report and…
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The Beginning Several years ago, Chris Montana of Du Nord Social Spirits (formerly Du Nord Craft Spirits) walked in the doors of a trade show and realized he was the only person of color in the room. When he became President of the American Craft Spirits Association (ACSA), Montana voiced his concerns over the lack of diversity – due to lack of touch points for…
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Sometimes you don’t know your distillery needs outside help until it’s too late. Here are a few signs it’s time to bring in the experts – and what to look for when hiring a consultant.
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You’ve seen the statistics and the headlines – RTDs are catching a buzz right now with consumers. If you’re contemplating adding a Ready to Drink (RTD) cocktail to your product lineup, now is the time to do so. Keep reading for our compilation of important considerations for distilleries of any size when expanding into RTDs.
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Denver, CO – Today, FIVE x 5 Solutions, the leader in operations management software for distilleries, introduced a new, redesigned website and new branding for its distillery management software, DISTILL x 5.
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The Excise Tax: the bane of all distillers’ existence, and part of the reason FIVE x 5 exists! Thoroughly understanding excise tax is essential for the success of a distillery of any size. With partner distilleries in more than 10 countries around the world, the Fx5 team is constantly working to keep abreast of legislative…
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Navigating change is always going to be difficult. Navigating change while trying to mobilize an entire organization with you? Even more difficult. We have witnessed many of our client distilleries experience change over the years, and the common themes we found among those that did so with grace and ease: they know who they are,…
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Written by Megan Alexander Our meeting with Rohan McGowan, distiller and wearer of many hats at The Pokeno Whisky Company, was exciting in many ways. A quick Google search will yield only scant traces of interviews and other articles written about the distillery, located about an hour south of Auckland, New Zealand. Furthermore, their bottles cannot be bought in stores – or anywhere – yet! We were eager to get an exclusive look…
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FIVE x 5 SOLUTIONS INTRODUCES NEW WHISKEY SYSTEMS A new Whiskey Systems product designed for small and startup distilleries Denver, CO – Today, FIVE x 5 Solutions, the leader in operations management software for distilleries, introduced a new, redesigned Whiskey Systems specifically designed to provide the company’s best-in-class solutions to small and startup distilleries at a…
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March is International Women’s Month – so what better month to recognize and celebrate some of the amazing women who have forged their way into the industry (guns blazing) to create some of the most well-known craft spirit brands around? Scroll (and click) through the profiles to read the inspiring stories of the boss ladies…
The TTB: A letter with their name on it in your mailbox is enough to make any distillery owner’s heart skip a beat. If you have a DSP license, the TTB wants to hear from you – whether you’re in production or not. It’s important to cover your ass(ets) with proper tracking, reporting, and filing from the very beginning – or you…
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Missed our Cost Accounting 101 Webinar? Want to make your distillery more efficient and sustainable by implementing a simple practice? Watch our webinar recording and get up to speed with: a) Why it’s important to implement cost accounting in the early stages of your distillery business b) Why WIP is your most valuable asset c)…
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New year, new business goals? With the recent permanency of the Federal Excise Tax reduction, now is the perfect time to take your DSP license (or craft spirits concept) to a full-blown distillery operation.That said, turning a passion for craft spirits into a successful distillery is a giant leap. Luckily, you have us to serve as your trusted resource in helping you get on your feet – and way, way…
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Thinking outside the still: Why distillery management software is a must-have for every distillery, at any stage of life. Thoroughbred Spirits Group has distilling in their blood – generations of it, in fact. It’s a lineage that lends a solid foundation to Scott Shiller and the Thoroughbred team, giving them the experience and expertise to build an industry-leading consulting…
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Getting Started Steve VanderPol, co-founder and distiller at Eastern Kille Distillery, found his love of craft distilling in the same place FIVE x 5 Solutions found its start – Stranahan’s Colorado Whiskey, in Denver. “I drove past Stranahan’s every day on my way to work and eventually stopped in to take a tour,” Steve recalled…
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Days before the world is turned upside down, FIVE x 5 Solutions’ Global Sales Rep Megan Alexander took a short trip to Long Road Distillers to meet Kyle Van Strien, co-owner and co-founder, and Jordan Muschiana, head distiller, to learn more about their path to distilling, as well as lead a remote tasting with the…
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Before talking to Andrew Rall, founder and distiller at Distillery 031 in Durban, South Africa, we did a quick Google search to figure out the time difference. We caught him at the tail end of his day to get to know the distillery’s journey, the challenges they were faced with starting up, as well as…
Walking into The Whiskey Factory at Detroit City Distillery was completely unlike my last visit two years ago – with more equipment, more barrels, and more people in a beautiful new event space, it was like a completely different distillery. I was excited to hear about what the team had been up to, and what…
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