Starting and growing a microbrewery: an interview with Michael Skubic

Old Harbor Distilling is a small brewery producing gins, rum, vodka, and liqueur (oldharbordistilling.com). Michael Skubic, the founder of Old Harbor Distilling, learned to produce several kinds of spirits during his career.

MakeBeCool Shopify experts team (makebecool.com) is conducting a series of interviews to study the needs of food & beverages producers and distributors. Michael Skubic has allowed the publishing of this interview with him.

What are the benefits of purchasing products from Old Harbor?

At Old Harbor Distilling we make all our spirits with the goal of crafting the highest quality products possible on the shelf. We make four unique gins: San Miguel Southwestern Gin, 1542 California Native Botanical Gin, Voyager Series Mezcal Rested Gin & Adventure Series Gin. All with dramatically different flavor profiles. We also create three rums, a vodka & in my opinion the best tasting Coffee Liqueur on the market: Ampersand Cold Pressed Coffee Liqueur, which is a collaboration with our good friends at Coffee & Tea Collective, one of the O.G. third-wave coffee roasters in California (and good friends from college!)??

We are a small family-owned operation based in San Diego, California with only 5 employees. You really are “shopping small” when you decide to purchase from us.

How would you describe your personal expertise?

I got my start in the alcohol industry in 2009, right after I graduated college and the job market was pretty dismal. I opened up Mike Hess Brewing as the first “nanobrewery” in San Diego. At that time there were only 28 breweries in the area. Today that number is over 185. I gained a lot of experience in the industry with my years at Hess. However, whiskey & gin were always been my true passions.?

In 2013 I left to pursue starting a craft distillery in San Diego. At that time there was only 1 other distillery, Ballast Point (they became Cutwater Spirits after the constellation purchase of BP.) Luckily making liquor requires the same starting ingredients as beer, so I knew how to do that. Just had to learn how to distill.

I always say: “Whiskey is what beer wants to be when it grows up.” I felt like I had to take that direction too.

Do you sell D2C, B2B?

The majority of our business is selling B2B via our distribution partners. Liquor stores, bars, groceries stores, restaurants make up 99% of our sales currently. We also launched a website: www.shop.oldharbordistilling.com with the help of Speakeasy Co. That has started to take off a bit.?

Has your target audience changed in any way after the 2020 pandemic?

Pre-pandemic about 75% of our sales were to on-premise, i.g. bars, restaurants, hotels. Post-pandemic the trend has gone full reverse to mainly off-premise: liquor stores and grocery stores.?

What are the top 3 business challenges that you are facing now?

Production: We have expanded nationally and kept up with demand has become a bit of a challenge. We’ve hired a new assistant distiller, but we need to buy some capital equipment such as fermenters and bright tanks as well. Ideally, we will purchase a fully automated bottling line, but they cost around $250,000 - $1,000,000. So not a small investment.

Marketing: We don’t have the budget that the big guys have, so we have to bootstrap our marketing.?

Sales: At the end of the day getting in front of buyers can be a huge challenge. Similar to marketing, we do not have the budget to pay for placements at bars, so we rely on our high-quality product and the growing appreciation of craft spirits.?

What are your plans for the next 2 years?

We just signed a lease in Seaport Village on San Diego’s downtown waterfront. Our plan is to open up a flagship distillery tasting room and restaurant there. Excited about that!

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