What’s the difference between top-shelf whiskey and well whiskey? Tony Peniche, 29-year-old serial entrepreneur, asked himself this question in 2014 while shopping at a local liquor store. Turns out, the answer is quite simple: time and oak. Oak barrels infuse whiskey with unique flavor and incorporate the liquid with rich natural color. And the time for the oak to do its work.
But that “time” part is tricky. It takes years and there’s never been a convenient way for people to age the spirit at home.
Tony began experimenting with Josh Thorne, a 30-year-old Air Force veteran with a background in film, who enjoys home brewing. Josh cut, burned, and cooked a variety of oaks in the hopes of finding the right temperature, and best way to expose the wood’s capillaries while accelerating the aging process. The answer: reverse engineering — aka bring the wood to the bottle. Three months of tweaking the product and hundreds of blind taste tests resulted in a crowd favorite: the Signature Whiskey Element — A Lincoln Log looking product that promised to age a bottle of whiskey in a matter of hours or days — depending on your palette. Plus it would act as a filter removing many of the chemicals and toxins that cause hangovers.
“Our fans have shown us that when you can do it in days instead of years you can get barrel aged taste to things that would have otherwise spoiled. Whether a batched cocktail or spirits such as Pisco you can keep the fresh taste and still get that nice smooth finish from the wood, we think it is really cool seeing how people use the Elements.” says David Jackson, the 32-year-old CEO of Time and Oak, which was officially incorporated on August 6, 2014, two months after its inception, by co-founders David, CEO, Josh, COO, and Tony.
Garnering crowd support for a unique product
Fast-forward three months and queue the Whiskey Element Kickstarter campaign.
“We gave ourselves a really tight timeline because you can dabble on an idea forever,” says David. The campaign launched on October 1, 2014 and was funded in 18 hours. “Hitting our goal on day one. That was our goal — because there’s a lot of proof of concept and we wanted to prove price point and get people excited about the idea.”
David believes crowdfunding is an excellent way to attain free market research — but don’t expect to get rich in the process.
“When you do a Kickstarter there’s no money. You pre-sold stuff. Your first round of deliveries are always more expensive than you can project because you have no economy of scale. You have no reorder potential. You don’t know what your supply chain really is going to look like long term. There are a lot of things you have to pay a hefty premium on getting delivered on schedule.”
Time and Oak asked for $18K and received $200K over the course of the month with the help of WE ARE PDX, a creative marketing agency. While getting 1000% funded may sound like a dream come true, the reality of this is a nightmare.
“It was really when we breached the $100K mark halfway through the campaign — where logistics started to pile up. You have a goal for a reason — it’s what you can reasonably accomplish with a reasonable amount of money,” says David. By the end of the Kickstarter on October 31st, 35,000 Elements had been ordered between the campaign and website. “We were promising things by Christmas. We wanted to honor all those promises but the reality of delivering on those promises became more and more difficult.”
Around the onset of the campaign Time and Oak had been published in Esquire and Popular Mechanics — and was continually being re-blogged.
“I think based on the publications they were reading, people thought they were buying the product,” says David. When people campaign on Kickstarter they’re asking supporters to back an idea or prototype — not a product already being sold. “At the tail end we had 50/50 of the 5,000 backers — those who knew what Kickstarter was and were praising us on hard work and the other 50% wondering why they hadn’t received the product yet. By mid-November we had 875 unopened emails at the beginning of the week. Everything from support emails to ‘where’s my product,’ to ‘can I carry this’ to ‘can I write about you.’ We were working all through Christmas Eve and all through Christmas — literally finishing all the different packages and getting out as many as we could. There was no stopping.”
Notwithstanding the initial boom and complications fulfilling orders on time, Time and Oak has come out ahead.
“We’ve been able to take and build an actual company underneath that.” The company grew 46% in their first year through good old fashion hard work.
Last year they signed a multi-million dollar trade agreement to manufacture all goods in Portland. Everything is locally sourced except for the wood, and each Whiskey Element is laser cut and goes through four points of hand selection.
“It increases our cost but we want the consumer to have that high quality experience.” As to outsourcing the oak, “Your favorite whiskeys are made with very specific regions of oak. And each region tastes different,” says David. “We wanted to have the most traditional taste — that’s what people expect. You put it in and expect it to taste like a good Bourbon.”
Building a responsible and sustainable business
In the meantime, Project Footprint was born out of the founders’ desire to give back. Their Whiskey Elements make a more efficient use of natural forest resources than most traditional alternatives but they hoped to work on land conservation while allowing people to buy their favorite products. So for every pair of Elements sold a donation is made toward preserving one square foot of land.
Companies often have to sell and explain the value proposition of their product but according to David, the Whiskey Element has sold itself time and time again in taste tests. “I’ve consulted and I’ve grown companies — I’ve never seen something where so many people have an ‘aha’ or get it or love it.” To date they’ve offered around 40,000 blind, Pepsi style taste tests. “You taste it before and after, and the amount of people that are blown away, or say ‘wow’ or love it is huge.”
Celebrities, rappers, and major distillers supported and back the product. John O’Hurley, an actor and TV personality originally from Seinfeld and winner of Dancing with the Stars, fell in love with the product and is now the face of the company. Time and Oak is currently sponsored by Tito’s Handmade Vodka, which is used alongside America’s favorite whiskey, Jim Beam, for before and after taste tests at trade shows, craft fairs, industry events, and Saturday markets. In addition, they reached a deal with Bacardi after their national brand director of whiskey picked David’s $40 bottle over a $250 bottle in a blind taste test.
All that being said, everyone’s palette is different. And Time and Oak is not into telling people how to drink. “I think the hardest thing when you have your own idea is you start building a vision of where you think it should go. With a product like this we have multiple sales channels because of how broadly used a barrel really is. One channel is the consumer — who will chose it, taste it — they’re a great market validation. But if the consumer likes it because they put it in their own bottle why wouldn’t a distillery want to use it and sell it to them direct and get a 10 times rate of return.” Why wouldn’t you want a high end well or house whiskey? Another trend involves barrel-aging cocktails. You can put the Elements in just about anything you would traditionally barrel age. “We just had a restaurant pick us up that’s doing infused balsamic vinegar and olive oil,” says David.
A new use of the product: infusing alcohol with different alcohols. For example, you can put the element in a bottle of scotch for half a day and then move it to a bottle of tequila for half a day — leading to an amazing smoky finish on your tequila.
As for their competition — there is nothing on the market quite like the Whiskey Elements.
“You can get pieces of oak that you put in bottles but they take weeks at a time and leave sediment in the bottle.” Time and Oak recently released the Signature Dark Whiskey Element, which “draws out notes of mellow smoke and charred oak.” They also offer multi-flavor Whiskey Elements and a monthly subscription.
For David there are many perks to being an entrepreneur.
“For me it’s the challenge. There’s something fun about taking something that hasn’t really been done and making it come to life. We failed so many times as part of the process and I wouldn’t look at any of them as failures. You just look at them as learning — the only time you fail is if you stop learning.
The reality — yeah we don’t have a ton of money and we’re not huge and we’re 18 months old. But literally surviving that first year, creating a manufacturing process, developing a supply chain — from my background in consulting I couldn’t be more proud of that. We literally are creating a new industry.” Time and Oak is currently distributing their Whiskey Elements in all 50 states and 23 countries. And they’re projecting 300 percent growth in 2016 through the addition of retail distribution as well as distillery partnerships.
According to David, it’s not about good or bad whiskey — it’s about your whiskey. “Everyone has their own flavor, and if you want to tweak a flavor this is the best product to get that flavor with. And that’s really our core and that’s kinda why I don’t like telling people how to use it other than the power of it. Have you ever seen a piece of wood that goes in a beverage? Taste it regularly. When you fall in love take it out of the bottle. Every time you put one in a bottle you’re truly making a small batch of whiskey — one bottle at a time crafted to your exact flavor.”