Brewing, Cideries & Spirits  August 1, 2018

Spirit Hound shows dogged determination

Craig Engelhorn, co-founder and partner, Spirit Hound Distillers. Courtesy Darby Keeney

LYONS — “Hound dogs are relentless,” said Craig Engelhorn. “When you put a hound dog on the trail, it doesn’t give up.

“So we’re relentless, too. We’re spirit hounds.”

They are indeed. Engelhorn, along with partners Wayne Anderson, Matt Rooney and Neil Sullivan, steered their fledgling Spirit Hound Distillers through one of the worst floods in Colorado history. And this summer, they toasted the fact that their business has not only survived but thrived.

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Perhaps the worst day of the September 2013 deluge that sent the St. Vrain River roaring through Lyons was Friday the 13th. But nearly five years later, on Friday the 13th of July, at 1:13 p.m. — that’s 13:13 in military time — Spirit Hound released its first four-year-old whisky. Of course, it came out of Barrel 13.

Still, Engelhorn doesn’t attribute Spirit Hound’s success to luck.

“I’d like us to be known as some of the finest whisky coming out of Colorado,” he said, spelling “whisky” without the “e” to honor the Scottish tradition. “We’re not goofing around here. We knew what we were doing in craft beer and we’re carrying that to craft whisky.”

Engelhorn and Anderson knew each other from the original Oskar Blues in Lyons. “I was the original brewer,” Engelhorn said, “and Wayne worked on the floor as manager, and then as sales director when they became famous for their canned-beer revolution.

“I told Wayne I think distilleries are a new thing, and he took me up on it. The other two guys were also thinking about a whisky distillery, but we said the town’s too small for two, so let’s pool our efforts.”

The name Spirit Hound was chosen because one partner, Rooney, is a veterinary surgeon at Aspen Meadow Veterinary Specialists in Longmont, and “Wayne just had a hound dog that had passed away, so we took a picture of it to a local artist and told her to make a logo. Some of us wanted the word ‘spirit’ in there, so Spirit Hound came together.

“We originally were planning to build our distillery in the back of Matt’s vet clinic because that was the only place we had,” Engelhorn said, “but we all lived in Lyons. We wanted to be in Lyons. The Red Hill Motorcycle Werx property was for sale, and for a year and a half we negotiated with him and finally got it.

“It’s the perfect location, on the way up to Estes Park and Rocky Mountain National Park, so there’s a huge amount of traffic.”

Spirit Hound partner and co-founder Wayne Anderson mills grain for brew day. Grain for the Lyons distillery is grown and malted by Colorado Malting Co. in Alamosa, owned by the Cody family. Courtesy Darby Keeney

Spirit Hound held its grand opening on Dec. 1, 2012, but just a few months later the businessmen faced what they thought at the time was a major snag. The Federal Emergency Management Agency redrew its flood-hazard maps “and put us in the floodplain,” Engelhorn said. “So in order to keep our mortgage, we were forced to get flood insurance. I was angry. I said, ‘I don’t want to pay $1,600 for flood insurance! It’ll never flood here.’ But we had to do it.

“But what happened? We ended up probably the only business in Lyons that was flooded that actually had flood insurance! It saved us.”

Especially when your brand new business is knee-deep in muddy water.

“The mighty St. Vrain pretty much pulled the rug out from under us,” Engelhorn said. “The last thing you need is a natural disaster to hand you your ass, but we got it anyway.”

Even with insurance, he said, “we spent a tremendous amount putting the business back together. We only had six barrels of whisky and one barrel of rum. The barrel of rum was sitting on the floor and more than half submerged in flood water. I thought it was a total loss, but it was a tight barrel to begin with. We packaged it up because we needed cash flow.

“I had the fire department come down and sign the first two cases. They saved a lot of lives in Lyons. We gave the chief Flood Rum Bottle No. 1. The rest of those cases, we auctioned as a fundraiser for the Lyons Volunteer Fire Department because they lost a building and an engine in the flood.

“I never in my life thought I’d be the beneficiary of Red Cross meals. Those people and the Salvation Army kept us alive.”

Spirit Hound began its cleanup and held a Halloween party for the town. They took cash donations, Engelhorn said, “and later, when people would come in the door that I knew had lost their car or house, I’d pull out some money and say, ‘Here.’

“We actually got open in December 2013 but it took us until spring before things were back to normal.”

While they waited for their whisky to age, he said, “we sold gin and infusions in our tasting room, and we sold our moonshine that didn’t require any aging. Our clear spirits carried us when we didn’t have any brown spirits to sell.”

Their moonshine is “the raw spirit for our barley-malted whisky,” he said. “It has not touched any oak. It becomes a baseline for people tasting our whisky – to give people an idea of where we’re coming from. It’s exactly the same spirit, but it doesn’t go into a barrel.

Copper mugs for Spirit Hound’s Gin Mule mug club all have owners. Each is engraved with the owner’s name choice or graphic. Gin mules are the tasting room’s best-selling item. Courtesy Darby Keeney

“The gin comes from the berries of the Rocky Mountain juniper that grows right here in our backyard,” he said. “I’ve also enlisted my customers as gin purveyors. You bring me a bag of juniper berries and I will give you a gin drink in return.”

But the whisky is Spirit Hound’s passion, Engelhorn said.

“I understand how to ferment malted barley, so I told my partners, ‘Let’s make a malt whisky.’ I had a source of Colorado malt” — Colorado Malting Co. in Alamosa — “and we convinced them to build a smoker to peat-smoke the malt. Typically Scottish malts are dried over peat fires, so we decided to put a little peat into our whisky. That’s a bit unusual for Colorado whisky.”

Spirit Hound also is in its second year of aging four-year rye; look for it in 2020.

Its spirits are sold in about 700 locations around Colorado, as well as in Nebraska and Kansas. “We just started in Texas, too,” Engelhorn said. “We like to grow in a smart fashion. We don’t like to get ahead of ourselves. The goal for us is to be a regional distiller. I don’t see us being gigantic. We just want to sell enough product to be a successful employer. We have about 12 to 14 employees, and we want them to make a good wage and have benefits. Especially in a small town it’s tough to do that.”

The partners could have followed the path of some distilleries and put their own label on an out-of-state wholesale distributor’s product while they waited for their own whisky to age, but they didn’t want to.

“Oh, sure, I could buy in Indiana, bring it back here and slap a label on it. It saves a lot of time,” Engelhorn said. “But can we call it ‘craft’ if it’s coming from a big guy? When the consumer finds out they’ve had the wool pulled over their eyes, it’s bad for me.

“We were in business for three years before our first drop of whisky came out.”

How to tell the difference? “There are visible clues,” he said. “Assuming people are following labeling rules, it’s pretty simple. Look for the words ‘Distilled by’ on the bottle. If it says that, they more than likely distilled it. If it says ‘Produced by’ or ‘bottled by,’ then buyer beware.”

Spirit Hound employs 12 to 14 people. Its 3,700-square-foot building, including the distillery and tasting room, also has an outdoor patio with a lawn. “I call it the mini-Mishawaka,” Engelhorn said. “It’s right next to the water, with a Lyons sandstone stage. We have a lot of good local music. Saturdays in summer, we always play a band out back. In winter, we have live music indoors on our loft; we call it the Treehouse.”

Engelhorn has noticed that some craft breweries have closed recently as the market in Northern Colorado and the Boulder Valley became saturated. Could that happen to craft distilleries as well?

“We’re like the beer curve in the ‘90s, but we’re hitting it a lot faster,” Engelhorn said. “We’re going to see some distilleries start to drop out in the next couple years, because a lot of people are jumping in right now.

“But it’s up to us to help support the industry by keeping our quality up,” he said. “If I put out a bad barrel, it sours people’s desire for craft whisky.”

Craig Engelhorn, co-founder and partner, Spirit Hound Distillers. Courtesy Darby Keeney

LYONS — “Hound dogs are relentless,” said Craig Engelhorn. “When you put a hound dog on the trail, it doesn’t give up.

“So we’re relentless, too. We’re spirit hounds.”

They are indeed. Engelhorn, along with partners Wayne Anderson, Matt Rooney and Neil Sullivan, steered their fledgling Spirit Hound Distillers through one of the worst floods in Colorado history. And this summer, they toasted the fact that their business has not only survived but thrived.

Dallas Heltzell
With BizWest since 2012 and in Colorado since 1979, Dallas worked at the Longmont Times-Call, Colorado Springs Gazette, Denver Post and Public News Service. A Missouri native and Mizzou School of Journalism grad, Dallas started as a sports writer and outdoor columnist at the St. Charles (Mo.) Banner-News, then went to the St. Louis Post-Dispatch before fleeing the heat and humidity for the Rockies. He especially loves covering our mountain communities.
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