Dad’s Hat Rye founded their craft spirits distillery in 2010, started distilling in 2011 and shipped their first rye whiskey in June of 2012. Fast forward to 2016 and it appears their decision to make their own rye from grain to bottle was the right choice. Not only was it the right choice, their timing could not have been any better. In a report released last year by the Distilled Spirits Council of the United States (DISCUS) rye whiskey revenue has spiked 609% in the past five years.
Riding the Rye Wave
Stay Informed: Sign up here for the Distillery Trail free email newsletter and be the first to get all the latest news, trends, job listings and events in your inbox.
Co-Founder and Distiller Herman Mihalich has grown up with rye in his veins. Not literally of course but, he grew up in an apartment above his family’s bar where he experienced the sights, sounds and stories of what would eventually inspire him to start a Pennsylvania craft spirits distillery. Unlike some startup craft distillers, Dad’s Hat has always made their own spirits from day one. No selling of other people’s juice and no moonshine, it’s all their own rye whiskey from grain to glass.
Three Grain Rye Whiskey
Mihalich uses three grains in his rye recipe. He told us he uses 80% rye (grown in PA), 15% barley malt and 5% rye malt. He said he prefers to use the barley malt over distillers malt because he feels it adds more flavor to the final product. They age their rye for six to nine months in new charred oak barrels from McGinnis Wood Products in Cuba, MO using a mix of 15 and 53 gallon barrels. The 15 gallon barrels get a #4 char while the larger 53 gallon barrels get a #3 char.
The current Dad’s Hat product line includes Dad’s Hat Pennsylvania Rye whiskey, a 90 proof whiskey aged at least six months, Dad’s Hat Pennsylvania Rye Finished in Vermouth Barrels for an additional three months at 94 proof, Dad’s Hat Pennsylvania Rye Whiskey Finished in Port Wine Barrels for an additional three months at 94 proof and a limited edition Dad’s Hat Pennsylvania Straight Rye Whiskey aged at least 2 years at 95 proof.
Awards Generate 25% to 35% Jump in Demand
Business has been steady at the distillery until recently, that’s when they picked up a few awards and since then have seen a whopping 25% to 35% jump in demand. Winning the Whiskey Advocate’s 2015 Craft Whiskey of the Year in December “…was a fundamental game changer,” Co-Founder John Cooper said of the award. “The phones have been ringing off the hook. Demand is a wonderful problem to have, but as the interest level is going up, under no circumstance, will we reduce our quality.” The distillery also had their Vermouth Finish Rye Whiskey recognized by Wine Enthusiast as one of the Top 100 Spirits of 2015.
67% Expansion in Distillery Footprint
Thanks to the boom in Rye, the success of their four rye products and the new brand awareness brought about by the recent awards, Mihalich and Cooper decided to invest more in their craft spirits distillery business. They are expanding the distillery from 6,000 to 10,000 square feet. They picked up the additional square footage on another floor of the Grundy Complex building where their distillery is located. In fact, the day we talked to Mihalich was the day they were loading whiskey barrels on the freight elevator up to the fifth floor of the old worsted (wool) mill.
250% Expansion of Distilling Capacity
To keep up with demand and meet anticipated growth Dad’s Hat Rye is expanding its distilling production capacity by 250%. The current configuration includes two 6,000 liter fermentation tanks and a 500 gallon CARL still from Germany. They are adding three new 6,000 liter fermentation tanks from Raynox for a total of 30,000 liters. Mihalich says that when the new equipment is installed and operational later this summer they will be doubling production from about 5,000 to 10,000 bottles per month.
Travis Scott, who recently received his Masters Degree in Chemical Engineering from Drexel University, will help guide the installation of the new fermenters and chillers, and then support the use of this new production capacity. Cliff Oldfield, an experienced sales and marketing professional in the spirits business, has joined the company and serves as Brand Representative in New Jersey and New York.
“We’re very excited to bring new people on board, and we know that Cliff and Travis have plenty to add to our company,” said Cooper. “Our product has been in good hands since we started, and it will only continue to be that way after our expansion. This is a very exciting time for us.”