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The Whiskey Rebellion: Small Distillers Ferment Over 200 Years Later
July 25, 2017 Elizabeth Thomas, Business Development Specialist, Office of Small Business

The year was 1791. The place was western Pennsylvania.  Wide rivers, high hills, low valleys and the Allegheny Plateau.  A beautiful place for insurrection.

In the years following the American Revolution, the republic was threatened by internal divisions, on-going, simmering hostilities with England, and booze. Alexander Hamilton and Thomas Jefferson battled over a strong central government vs. states’ rights, English ships harassed American merchant vessels, and farmers in western Pennsylvania led an armed uprising over the imposition of an excise tax on whiskey. After three years of protests and escalating violence, President George Washington mustered federal troops for the first time, and the “Whiskey Rebellion” was over.

Today, there are over a thousand distilleries in America. According to a February 2, 2016, statement on its website, the Distilled Spirits Council reports that international demand for American whiskey is booming and that 2015 exports of American whiskey reached $1.56 billion. That’s a lot of grain.

Catoctin Creek Distilling Company in Purcellville, Virginia, is one American small business that is helping fill that international demand. Founded by Becky and Scott Harris in 2009, the company is committed to producing the highest quality products, and uses locally sourced, organic grain and fruit, free of pesticides and chemical additives. As they say on their website, “The results are the finest, cleanest spirits possible …,” and in fact, the company has won more awards for its whiskeys than any other distiller in the Commonwealth of Virginia.

Catoctin Creek began exporting early on, filling small international orders on a cash-in-advance basis. Then came the order every small company owner dreams of – big order, big distributor, big opportunity. Becky and Scott realized that cash-in-advance would not be acceptable to the foreign buyer and they had to find a way to offer credit terms. Scott connected with an EXIM Bank representative and learned that an export credit insurance policy from EXIM was perfect for Catoctin Creek. The company was able to offer open credit terms and fulfill its largest international order to date, without bearing the risk of nonpayment on its foreign receivable.

In addition to winning the big order, Scott and Becky began offering similar terms to their cash-in-advance payers, delighting existing customers and cementing relationships that continue today.  Expanding into new international markets is now an integral part of Catoctin Creek’s growth strategy, and offering credit terms, backed by EXIM’s Express Insurance policy, is standard operating procedure. “It’s not possible to play in international markets in a big way without it,” says Scott.

In addition to leveraging EXIM’s export credit insurance, here is some advice that Scott offers other small business owners:

  • “Sell through” is as important as “sell to.” A distributor who cannot get products into retail locations and move them to end-user customers may cause real damage to your brand and be detrimental to future sales. Be smart and leverage government services that can help you find reputable partners.
  • Be vigilant about who you sell to. Due diligence by EXIM and the Virginia Department of Agriculture and Consumer Services provided valuable information about a potential buyer and helped Catoctin Creek avoid doing business with a potentially problematic customer.
  • Be friends with your broker. When Catoctin Creek was faced with a nonpayment issue on a foreign transaction, its EXIM registered broker, Trade Credit Insurance Agency, helped craft a demand letter that resulted in payment and avoided the claims process.

Now, let’s go back to the year 1796. Two years after the Whiskey Rebellion was put down, George Washington retired to Mount Vernon … to make whiskey. His distillery eventually produced 11,000 gallons a year, making the former President the largest whiskey producer in America. Recently restored, Mount Vernon has joined the ranks of small distilleries that are fermenting over 200 years later. Catoctin Creek is part of this country’s proud heritage of distilling and is helping create a new legacy for American whiskey and American distilleries worldwide.

Are you ready to export or expand into new international markets? Request a free consultation with your local EXIM representative and get ready to go global!

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