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Minnesota grains help fuel U.S. vodka movement

CVEC General Manager Mike Jerke

MinnPost photo by John Fitzgerald

CVEC General Manager Mike Jerke says providing beverage-grade alcohol is a “fairly unique niche for a company making fuel, but it’s not unique.”

BENSON – The truck traffic near the Chippewa Valley Ethanol Company is constant. Trucks loaded with grain drive into the facility, in west central Minnesota just west of Benson, and tankers loaded with ethanol drive out. Surrounded by a security fence and fields waiting for spring planting, the ethanol plant looks like a Hollywood version of the typical Midwestern rural factory.

But ethanol isn’t the only liquid being produced by the 49 employees in this plant. CVEC and its 930 farmers are also one of the nation’s premier providers of beverage-grade alcohol, especially organic wheat, rye and corn alcohol used to make vodka. Its work with organic farms has been cited as a factor in its success.

“I don’t know much about the ethanol business, but I can tell you they distill a very good vodka,” said Joe Magliocco, president of Chatham Imports in New York City. Chatham produces Crop Vodka, one of five that come from CVEC.

Shakers Vodka — whose Blaine-based owner, Infinite Spirits, declared Chapter 7 bankruptcy last month — was the first. Formed by five owners of Pete’s Wicked Ale in 2001, they came to CVEC and asked it to produce a small batch of distilled, beverage-grade alcohol.

“We distill it down for them to a specified proof, and then they distill it further to their proprietary level,” said CVEC General Manager Mike Jerke. CVEC created an offshoot, Glacial Grain Spirits, to market its product.

Shakers vodka products did well for a while — selling their wheat- and rye-based vodkas and rose, violet and summer vodkas in 19 states — but, according to a 2011 article in the TC Daily Planet, distribution dropped off and sales at $30 per bottle were spotty after the economy fell in 2008.

Loyal following

Calls to Shakers' management weren’t returned for this article, but its distributor, Susanne Heun of Heun Enterprises in Hillsboro, Wis., said the vodka is still available and has a loyal following, especially in Minnesota and Wisconsin.

“Unfortunately, we didn’t do enough volume to keep going,” she said. “We just didn’t sell as much as the foreign brands. But I think someone is going to pick up this company for a great value and run with it. They’ll keep it all American and have a heck of a brand.”

Shakers trustee R. Richard Stermer of Montevideo said Shakers hasn’t produced vodka since last March and that there will be an auction for the brand; a date has not yet been set.

In the meantime, CVEC isn’t sweating vodka bullets. Jerke said industrial-grade ethanol amounts to about 10 percent of his business. Of that 10 percent, about 5 percent is beverage-grade alcohol. The industrial-grade product is used in items such as cosmetics and hand sanitizers, while lower grades are used in such things as pesticides and herbicides. CVEC also sells protein and fat byproducts for use in feeds and biodiesel.

“We want to be diversified across the product stream,” Jerke said. “While the industrial ethanol uses might not support the whole operation, it will give us profitability during peaks and valleys that other ethanol companies might not see.”

A nice niche

In fact, producing beverage-grade alcohol has proven to be a nice niche for CVEC. Jerke isn’t giving away any numbers, but he will say that last year the plant produced 48 million gallons of ethanol. When pressed, Jerke said, “Think of it this way: If you’re making vodka, a tanker loaded with 7,000 gallons would go a long way.”

He said providing beverage-grade alcohol is a “fairly unique niche for a company making fuel, but it’s not unique.” Factories in Kansas and Iowa are producing the alcohol, and Archer-Daniels-Midland has its hands in the pie as well, he said.

But few of them are offering organically grown products like CVEC. That’s why other vodkas, like Crop Harvest Earth vodka, uses Minnesota corn and touts its organic qualities in Crop Organic Artisanal, Crop Organic Cucumber and Crop Organic Tomato vodkas.

“CVEC is a very good distiller,” Magliocco of Chatham Imports said. “Geographically, it’s very advantageous for us to use CVEC because they work with nearby organic farms, and we batch and bottle at United States Distilled Products in Princeton.” Crop vodka sells throughout the United States and is now marketing in China, Magliocco said.

Other organic brands

Minneapolis-based Phillips Distilling Company’s Prairie Organic Vodka buys its alcohol from CVEC, as does Green Mountain Distillers in Vermont for its Original Organic Sunshine, Organic Lemon and Organic Orange vodkas.

While Crop, Green Mountain and Phillips are relatively small companies, no one can make that claim about alcohol giant Diageo. It buys alcohol for its Moon Mountain Vodka from CVEC and produces artisanal, coastal citrus and wild raspberry flavors of vodka. Some of Diageo’s other brands include Crown Royal, Johnnie Walker, J&B, Windsor, Smirnoff, Baileys, Captain Morgan, Jose Cuervo, Tanqueray and Guinness.

No less an expert than Steve Wilk, general manager at Surdyk’s in Minneapolis, says that CVEC products do well. Although you can’t find Crop, Green Mountain or Moon Mountain there, he said both Shakers and Prairie Organic are on the shelves. He lamented the downfall of Shakers, but said Prairie Organic is “a real consistent seller for us. Because it’s organic, it does exceedingly well.”

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