Nate Karnitz spent his undergraduate years at the University of Wisconsin-Stout and his graduate years at the University of Minnesota brewing beer in his home. That hobby eventually grew into Lawless Distilling Company, one of several distilleries popping up across the Twin Cities.
After months of working nights and weekends to build their vodka distillery, the owners will release their first product, Tippling House vodka, on Aug. 14throughout the area.
While some industry members think it’s a good time to enter the market, others worry the distilling scene is becoming oversaturated.
The idea to start a business came from Nate Karnitz’s experience in a Carlson School of Management three-semester MBA program, during which he worked for several
start-up companies, he said.
“We thought a distillery could be the next trend for what millennials want to do to entertain themselves,” Lawless co-owner and sales and marketing lead, Kirsten Karnitz, said.
The company’s vodka is made entirely from wheat that co-owner Chris Kulzer’s uncle produces in Cold Spring, Minn., and is manufactured in the distillery, located in the Seward neighborhood, Nate Karnitz said. The owners named their first product after the pre-Prohibition blue-collar speakeasies that were once prominent in the area.
“We’re making a type of beer that will distill to our vodka,” Nate Karnitz said, adding that he uses his years of brewing experience to understand distilling and teach his co-owners.
He said distilling vodka is easier than distilling other liquors, like whiskey, which require aging, making vodka a popular first product in the distillery scene.
Still, the distillery plans to sell additional products in the future, including rum and gin, Nate Karnitz said.
He said they also hope to launch a cocktail room for serving their products next year.
A growing industry
Because the distillery industry in Minnesota is relatively new, Nate Karnitz said he feels there’s enough room for his business to sell their product without facing an oversaturated market.
“There’s going to be a tipping point, where there’s going to be 10 craft vodkas on one shelf and one will displace another to get into the market,” he said. “But Minnesota’s not even close to the tipping point.”
Carlson’s Ventures Enterprise MBA Professional Director Toby Nord said creating a fuller market will mean changing state alcohol regulations to catch up to neighboring states, like Wisconsin and Iowa.
But some veterans in the industry, like Norseman Distillery owner Scott Ervin, feel the Minneapolis distillery scene is already facing
competition.
Though Ervin started the city’s first micro-distillery in 2013, he said starting a company
selling gin would better reach customers looking for new products.
“We’re pretty far behind relative to the rest of the country on [the industry],” he said, adding that Minneapolis distilleries still make most of their revenue from selling to distributors over cocktail room sales.
And despite gaining attention from weekend group events, like bachelorette parties and tours, Ervin said distilleries need to reach a broader public if they’re going to grab attention.
“You show up on a Tuesday, and you got four people working, and six people show up,” he said. “You’re losing money.”
Ervin said he thinks the increasing popularity of craft sodas are driving away potential customers, along with liquor names too confusing to understand.
“I think most of the stuff is silly. They look up on Wikipedia and come up with something,” he said. “Nobody in their right mind knows what a tippling house is.”
