Rumpundit

Amalgamated, Square One boost sales with spirits
St. Louis Business Journal – by Christopher Tritto

Brian Cassidy
Jesse Jones said The Stable, which opened in Benton Park in June 2008, turned its first profitable month in October.

With a new partner and the first small batches of rum heading out the door, Amalgamated Brewing Co. owner-operator Jesse Jones already has his eyes set on 2010.

Like so many small business owners, Jones has weathered a challenging year. Amalgamated’s three restaurants — The Rotten Apple cider house in Grafton, Ill., Jake’s Steaks on Laclede’s Landing, and The Stable microbrewery, microdistillery and eatery in Benton Park — will post about $2.5 million in revenue this year, down 25 percent from 2008, Jones said. Reduced consumer spending and the shutdown of Interstate 64 have put a double squeeze on his businesses.

But Jones remains optimistic. He bought out restaurant partner Paul Pointer, owner of the Lemp Mansion, two weeks ago and brought on a new partner. Brad Wheeling, a former marketing manager for church management software provider Concordia Technology Solutions, invested an undisclosed amount in Amalgamated and became its chief financial and marketing officer.

“I kind of wore all of those hats, and that was not always a good thing,” Jones said. “I need to focus more directly on sales and operations while Brad focuses on our overall goals, budgeting and plans for 2010.”

The Stable, which Jones opened with Pointer in June 2008 with an investment of about $1 million, turned its first profitable month in October, Jones said.

Amalgamated recently began turning out the first small batches of its 85 Lashes Rum to complement its Amalgamated brand craft beer. The rum is sold at The Wine & Cheese Place in Clayton, Randall’s Wine and Spirits in St. Louis and a handful of local bars and restaurants.

Missouri Beverage Co. distributes the rum in Missouri. Callison Distributing, a member of the Wirtz Beverage Group, will distribute 85 Lashes in Illinois beginning Jan. 1.

Jones, 34, has capacity to produce 2,000 bottles of spirits a month, and he hopes to identify 20 to 30 small markets across the country where Amalgamated could ship its rum in small batches.

Nationally, the microdistillery business is small but growing quickly. Just as home brewers and artisan professionals began reinvigorating the craft brewing industry not long ago, a couple hundred microdistillers have emerged in recent years to hand craft small batches of rum, vodka, whiskey, brandy and other spirits.

Square One Brewery and Distillery in Lafayette Square became Missouri’s first licensed microdistillery in August 2008 and now makes about nine different spirits, including whiskey, vodka and rum.

Steve Neukomm, owner of Square One and Augusta Brewing Co., estimates he now sells about $80,000 worth of spirits a year across the bar, and he plans to start bottling and distributing his liquor early next year. Missouri Beverage, which distributes some of Augusta’s beers, will probably handle the spirit sales, he said.

Neukomm, 54, said overall sales at Square One are running about 20 percent ahead of last year and should hit about $1.7 million this year. Augusta Brewing, which conducts most of its business during an eight-month season due to weather, is seeing a 16 percent improvement in sales and should reach about $400,000 this year.

“We offer some unique things, so people come in and want to know what we are doing now,” Neukomm said. “That keeps things fresh.”

Neukomm’s lead bankers are Jefferson Bank and Trust for Square One and Bank of Franklin County for Augusta.

The distilled spirits industry generated $18.7 billion in gross revenue last year, up 2.8 percent. Super-premium brands have driven much of the growth. They accounted for $2.9 billion in gross revenue in 2008, marking a 3.4 percent sales increase, according to Distilled Spirits Council of the United States, an industry trade group.

ctritto@bizjournals.com