Award-winning SD distillery remains Pierre secret

PIERRE, S.D. — From the outside, it’s an unassuming building off Airport Road, with a large green water tank out front and small sign above the door.
But inside, a brass still dominates half a room, oak barrels line the walls and the strong sour smell of alcohol permeates.
This is Dakota Spirits Distillery, a Pierre secret and the award-winning producer of craft liquor. The first operation of its kind to appear in South Dakota, it has taken six years to establish a reputation for its vodkas, whiskies and brandies.
The business has developed slowly but surely since Jamison Rounds first persuaded his brother, Tom, to buy a still with him and enter the liquor business. South Dakota was a promising place for a distillery, with local farms and vineyards that could provide the necessary ingredients.
But there were several roadblocks. First was getting a still; it had to be shipped from Europe and the only assembly instructions were in German.
The brothers then had to petition the Legislature to create an artisan distillery license, as there was no chance for profit with the more costly full distiller license. For their efforts they were dubbed by one newspaper as then-Gov. Mike Rounds’ “booze brothers.”
And though the sign over the front door proclaims “since 2006,” only in the last couple years has Dakota Spirits been able to sell products in its home state. Until it found local distributors, the company was forced to sell in Iowa because South Dakota law prohibits producers from either selling or distributing alcohol.
Today Tom’s son, A.J. Rounds, runs the business full time, having stepped in to turn what had been a weekend hobby and money pit into an actual revenue producing business, he said.
Disputes about what to produce and where to base the company had led Tom to buy out his brother, but A.J. immortalized their disagreements as the distillery’s brand: Bickering Brothers.
The distillery now produces four products: Bickering Brothers brandy and blended whiskey, Ringnecked vodka and Coyote 100 un-aged whiskey. Rounds said the latter is what they decided to call old-fashioned moonshine.
“There are some products around the state that sell as moonshine, but they’re selling it legally so I don’t think they should call it moonshine,” he said.
But he’s most proud of the distillery’s brandy, which has already won awards. His family originally attempted to distill vodka from wine, but that only created a less-flavorful brandy. So, on a whim, they let it age a year in an oak barrel. Rounds describes the result as amazing and unique; a spirit made from wine but tasting like a whiskey which he calls ‘neutral brandy.’
“We did some looking and we couldn’t find — we still can’t find — anyone that makes it,” he said.
Rounds is also trying his hand with rum and continues to tinker with different brandy flavors such as honey or strawberry. He’s also making a brandy exclusively for Schade Vineyards in Volga, which provides all of the distillery’s wine. The experimentation and aging processes are both the most fun and most difficult aspects of the job, he said.
“It’s so difficult to try. Today it could be, ‘Eh, it’s not very good,’ and a year from now it could be excellent,” Rounds said.
For now, the business remains small. Under its license, Dakota Spirits can only produce up to 50,000 gallons of product a year. And it only has the single, 80-gallon still, which Rounds described as one-tenth the size of one of the ten stills large distilleries run. He is still the only employee, although friends and family help when it comes time to bottle the spirits.
Rounds wants to expand eventually, produce a few more products and buy a few more distilleries. Distributors in Chicago, Arizona and Omaha have expressed interest in his drinks, but Rounds has, for the moment, turned them down. It’s not time to think about that when he still meets people in Pierre who have no idea the distillery exists, he said.
“We really want to focus on here and everybody around here understanding what we want to do,” Rounds said. “Once we have a following here we’ll go out of state and see what we can do.”
In the past three weeks Dakota Spirits has found another distributor in the John A. Conkling Distributing Company, based in Yankton.
“Our main reason (for carrying them) is they’re local, they’re from South Dakota,” said owner Dan Conkling.
Conkling said a few retailers expressed interest in selling Dakota Spirits for the beginning of pheasant season to introduce out-of-state hunters to a locally made product. So far it’s selling well, but it’s only been a few weeks and it’s hard to gauge the brand’s long-term success, he said.
Conkling, whose company is mainly a beer distributor, says local microbreweries are doing well; they find their niche and have their following. Dakota Spirits could find a similar niche, he said, and he has heard favorable things about the quality of their liquor.
Retailers are also willing to stock Dakota Spirits’ products because they are local, he said.
“South Dakotans have always been pretty good at supporting each other,” Conkling said.
Bill Owens, president of the American Distilling Institute, visited Dakota Spirits last month as part of a nationwide tour. He saw he was shocked to walk in and see Bickering Brothers brandy had already won a bronze award from his organization.
“They are doing something right if they have a medal their first year out the door,” he said.
He also commented on Dakota Spirits’ tasting room, saying the future of distilleries are tasting rooms and tours, because there are many people, himself included, who will drive 200 to 300 miles to see a still. And that draw is also a boon to the local tourism industry, Owens said.
He said there is still plenty of room in the industry for more craft distillers, but warned that Dakota Spirits’ long road to profitability wasn’t uncommon. For most it takes two years just to start a distillery, and another year before they turn a profit.
“This isn’t a hedge fund where you make money off of money. You have to do it the old-fashioned way by working,” he said.
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Information from: Pierre Capital Journal, http://www.capjournal.com