Chip Tate is wasting no time getting back into the artisan spirits game after a bitter breakup with the whisky company he founded. And this time, he’s determined to play the game his way.
After severing ties with Balcones Distilling Co. under a buyout settlement in December, Tate is preparing this year to build a new distillery that will produce brandy and ultimately whisky.
The name of his new firm, Tate & Co. LLC, reflects his determination to have full control over the company’s direction, though with an emphasis on collaboration with other businesses.
“I will definitely be focused on finding the right partners to work with,” Tate said. “There’s so much demand out there. If you focus on the right things, focus on relationships and integrity, it tends to work itself out in the market.”
Tate has an 11,000-square-foot building under contract on Steinbeck Bend Road near Waco Regional Airport and said he will begin distilling brandy there this year. As he did with Balcones, he will build everything by hand, including six copper pot stills of up to 2,500 gallons a piece.
He even plans to create a small side business in manufacturing stills for other businesses.
Tate is financing the expansion through Community Bank and Trust, but he is the main investor, using the payout for his 27 percent stake in Balcones. Tate said he will never again allow himself to become a minority stakeholder in a business he founded and poured his heart into.
“I will tell people this is what we’re going to do, this is how we’re going to make money,” he said.
Tate won an international reputation for the whisky he produced at Balcones, and he hopes that reputation will create a ready-made market for his new products.
He has lined up a chief of staff, as well as two distillers whom he trained at Balcones.
“I’ve learned a lot about hiring,” he said. “The most important thing is real appreciation of the importance of craftsmanship. You’re more likely to find that in a guy who’s an accomplished cabinetmaker than someone who is a rabid craft whisky fan.”
At Balcones, Tate had brought on other investors to fund a $15 million expansion. This summer, he got crossways with the board of managers, which suspended him and won a restraining order to keep him off the property for 90 days.
The settlement came after a district judge ruled that the board’s actions were invalid, because company bylaws required Tate’s presence to make decisions.
Under the settlement, Tate cannot make the same products as Balcones until March 2016. Tate said he is building a distillery that will accommodate whisky production, but he also is excited about developing “a Texas brandy tradition.”
The distilling process for brandy is similar to that of whisky except that it starts with wine instead of a “wash” or beer of fermented grain.
Tate said he plans to work with Texas vineyards for grapes that are especially suited for brandy.
“There are some very interesting grapes that rarely or never get grown because they don’t necessarily make good table wines, but they make great brandy,” he said.
He said he would like to create relationships with vineyards to grow specialized brandy grapes in the next few years. In the meantime, he said, Texas-hardy varieties such as Black Spanish could be good for brandy.
Tate said Texas vines played a pivotal role in the history of wine, and Texas brandy can build on that tradition. T.V. Munson of Denison is credited with saving the French wine industry in the 1880s by developing methods to graft European vines onto American rootstock that was tolerant of the phylloxera insect pest.
Tate also is interested in partnering with apple and peach producers to create other fruit brandies.
He envisions partnering with other growers and artisans to create new products and cross-market their businesses.
Robert Likarish, co-owner of Ironroot Republic distillery in Denison, also is developing brandies and has been talking with Tate about partnering to develop sources of grapes. He said there’s a strong market opportunity for Texas brandy, and he believes Tate will set the standard.
“Chip brings a lot of excitement into brandy,” he said. “Chip is extremely innovative. We saw what he’s done with whisky, and I can only imagine what he’s going to do with brandy.”
Likarish described Tate as a mentor and “one of the few craft distillers who can really call themselves master distillers.” He said the falling-out with Balcones was “tragic on a lot of levels,” but he’s still friends with the distilling crew there and expects both businesses will succeed.
“I think there’s room for both,” he said. “Both are going to be innovative. . . . It’s great for Waco if it can have two fantastic distilleries. It’s just another reason for people to come visit.”
Balcones is expected to offer tastings and tours at its future home at the old Texas Fireproof Storage building on South 11th Street. Tate also is planning to offer tours, events and bottle sales at his new distillery.
Tate said the demand for craft whisky is such that when he gets back to making it, he won’t really be competing with Balcones for customers.
“I’m not really concerned about it,” he said. “There’s no downside.”
Winston Edwards, brand ambassador for Balcones, said Tate is “an amazing distiller,” adding that he wishes big success for Tate & Co.
“Now, suddenly, Waco is on the cusp of being a major center not just for Texas distilling culture but for distilling in general,” he said. “How could we not benefit?”
Edwards said Balcones has chosen Barsh Construction as the general contractor for its $15 million expansion, which will begin this month.