Spirited ambition: whisky making in the land of soju

(MENAFN- Asia Times) MASAK, GYEONGGI DO – It glistens dark golden to the eye, offers a smoky bouquet to the nose, and delivers a powerful blend of woody, smoky and spicy flavors in the mouth.

It is an all-new single-malt whisky, tapped fresh from the cask courtesy of Three Societies distillery.

If you have not heard of Three Societies, don't be surprised. The artisanal distillery is set in high lands, but not the Scottish Highlands. It sits among low hills outside Seoul, South Korea.

And it is hardly of ancient vintage. It is, in fact, the latest milestone in the alcohol odyssey of Korean-American entrepreneur Brian Do.

As a trailblazer on Korea's booming craft beer scene, Do founded and operated pioneering artisanal brewery Hand & Malt. That was the first (and so far only) craft brewery in the country to be bought up by the world's leading beer conglomerate, AB InBev.

Having exited beer, Do's new mission – as of June 2020 – is whisky.

He has high ambitions. Following the successes of Japanese, and more recently, Taiwanese single malts among the whisky cognoscenti, Do reckons Korea is well-positioned to wade into the sector.

While his primary market is global, his secondary aim is to accelerate a shift already underway among Korean imbibers.

For decades,“whisky” in Korea meant blended Scotches, usually sold to inebriated corporate warriors for ludicrous prices by borderline sex workers. A 2016 legal change killed that scene.

But there was a positive corollary: A rising appreciation for quality whisky among a sophisticated generation of younger Koreans.

Do is no stranger to pioneering premium alcohol production.

After graduating from UCLA, the Californian first traveled to Korea to learn the language in 1996. He fell in love with the country and that attraction, combined with family commitments – a father who had re-emigrated, and an ailing grandfather – kept him there.

An early venture into tech ended when he lost his job at chipmaker Hyundai Electronics, which imploded amid 1997's financial tsunami. (It has since morphed into leading chipmaker SK hynix.)

Deciding to remain in Korea and ride out the storm rather than retreat to the US, Do took an advanced degree at Seoul's Yonsei University, then worked in both media and a tech startup.

More stable employment beckoned in public relations. That led to him being hired by Microsoft, where he worked for nine years in Korea and Singapore.

While working at MS in 2012, Do – a home brewer at the time – opened his own bar, Hopscotch, in Seoul's trendy Gangnam. As well as up-market gastro pub grub, the key lure was a range of taps flowing with a new product.

Korean cuisine is pungent and punchy, but its mainstream beer sector has never expanded beyond bland, US-style lagers. In millennial Gangnam, prosperous young Koreans, many with international travel under their belts, craved better booze.

Artisanal beer was the nascent product Do supplied.

“I would see people's face light up when they drank the crafts,” he recalled.“But the beers were so inconsistent that I thought, 'I could do a better job.'”

That remained just a thought until an anticipated promotion at Microsoft fizzled. That – plus parental advice – gave him the shove.“My dad always said, 'Why do you keep making the world's richest man richer? Make yourself rich.” Do said.

In 2013, he quit MS. Investing everything he had in equipment, he hired American engineer and itinerant brewer Phil Kelm. Hand & Malt was born.

Legal changes in 2014 eased distribution, granting craft beers greater visibility and acceptance. Do produced premium-priced suds, while demanding consistency from his team to win repeat orders.

But he also spotted a key trend at Hopscotch that would help him differentiate his firm from competition in the explosive sector.

“Eighty-five percent of my drinkers were female customers,” he said.“This was unheard of in craft beer. It was the flip side of the US.” Foreign restaurateurs had noticed the same thing: Korean females are more open to new culinary experiences than their conservative male counterparts.

That led Do to aim his beer recipes (“more floral, more citrusy”), and his design and marketing, at females.

After three years satisfying an increasingly thirsty consumer base, Do sought wider uptake.“My vision was for all locals to be able to drink craft beer affordably,” he said. Expansion demanded scaled-up facilities and a wider distribution network. The word went out.

“Craft beer was cool and people were seeing opportunities,” he said.“Everyone knocked on our door.”“Everyone” included food and bev conglomerates, hedge funds and one of Korea's top brewers.

The world's biggest beer company – AB InBev – sealed the deal. It already owned one of Korea's top two breweries, OB, and was fast acquiring crafts in the US.

Do sold Hand & Malt in 2018. Production shifted on an expanded scale to Seoul's vast, high-tech OB Brewery. But for someone passionate about quality, was this a sale or a sell-out?

“I did not see it as a sell-out, I saw it as opportunity to reach the end goal: Affordable craft beer for everyone,” Do said.“The promise was that OB would not touch the recipes.”

Citing confidentiality, Do refuses to state the selling price for“putting his baby up for adoption” – but said the deal was nowhere near a rumored $10 million. As a clause demanded that Do maintain sales figures over the phased term of the deal, he did not receive the final payout, after Covid-19 hammered sales in 2020.

But by then, he was already knee-deep in Three Societies.

The company has secured up to $10 million in investment, all from close contacts, not institutions, Do said. Five staffers work in a series of buildings constructed on a wooded, tiered hillside above a light-industrial complex in Masak, in Gyeonggi, the province surrounding Seoul.

Equipment– stills, tuns and grinders – and ingredients – malt and yeast – have been imported from Scotland. Casks to age and flavor the raw spirit have been sourced from Spain (sherry), the US (virgin wood and bourbon) and Korea (local beers and spirits).

Three wells supply water, and the location, 40-minutes' drive northeast of Seoul, is plugged into road distribution networks.

Do has also imported HR in the person of Scot Andrew Shand, chief operating officer and head distiller. Shand started out as an apprentice at Glenlivet, and has since worked worldwide, including stints at Chivas Regal and Nikka, earning four decades of experience in the trade.

Three Societies refers to the blend of American, Scottish and Korean talent it employs. Korea's extreme climate range – freezing winters and steamy summers – is the secret ingredient in Do's hoped-for success.

“If you look at the swings in temperature here, it is perfect to age whisky,” Do enthused.“In Scotland, the temperature in summer is like 20 degrees, but here, it goes from minus 20 in winter to over 30 in summer.”

That means that whisky matures four times faster than in Scotland. But why would an American make Scottish, not US, whisky?

“Scottish single malts are much more premium than bourbon, and have more room for growth globally,” he said.

But he is not planning to release a whisky commercially for another three years. The original plan was to sell gin – which uses the same base spirit – to generate operational funds, while the whisky quietly adds years.

Gin – a gargle that is undergoing an artisanal renaissance in the UK – can be produced far more quickly than whisky as it does not require barrel aging.

“Gin still takes deep pockets,” said Do, referring to the distilling equipment required.“But you can sell it in a month.”

Three Societies' Jung One premium gin marries“the most expensive base spirit you can use” to multiple botanical flavorants. In addition to the essential juniper, these include such quintessentially Korean tastes as pine needles, sesame and ginseng. The result is a smooth but complex beast.

Jung One is being sold nationwide via alcohol retailers, a handful of high-end cocktail bars and a specialized booze app. It has also been supplied to the British Embassy.

But gin is a stopgap. The main aim is to produce whisky. Given recent trends, that looks like a dire plan.

According to Shand, Korea was customarily a Top 7 or 8 market for Scotch whisky exports. Last year, according to data from the Scotch Whisky Association , it did not even make the Top 10. “Sales have been going down dramatically,” Do admitted.

Mark that up to an anti-corruption law passed in 2016 which drastically reduced the amounts businessmen could spend on corporate cards. The law hammered“room salons” – discreet but dubious establishment where male execs did backroom deals in the company of attractive females, over bottles of overpriced blended Scotch.

“That law was a game-changer,” Do said.“But the coronavirus was the death knell.”

Yet there is an upside.

The same generation of younger Koreans who had been quaffing craft beers had also been developing a taste for premium whisky.“People are more health-conscious now and would rather drink a good quality whisky than copious amounts of cheap Scotch,” he said.

And“quality” means single malts.

“Single malts' market share is rising dramatically,” Do said.“That's where the market is going now.”

What of Korea's traditional tipple? There, the trend is the opposite.

Soju is a mild grain spirit – essentially a low-alcohol vodka – that is sold cheaply in small bottles in every Korean dining establishment worth its salt. Multiple low-end brands are ubiquitous, with weaker offerings winning popularity, while the handful of premium sojus produced in recent years has had minimal impact.

Leading brand Jinro, according to trade body The Spirits Business , was the world's most consumed spirit brand in 2019, even though soju is little drunk beyond Korea. That bespeaks soju's position as mass-volume, low-price.

This removes soju from competition with whisky. But its ubiquity presents a problem for Three Societies: Local regulators base spirit regulation on soju, a very different product to whisky.

“It just does not make sense,” fumes Shand, who has talked to local tax officials in depth on such arcane subjects as“angels' share” – the amount of whisky that evaporates during manufacturing.

While bureaucracy is turning hairs grey at Three Societies, the end result could add to the corporate heritage.“Changing regulations here will be one legacy, as well as making the first single malt,” Do said.

Though the company's first batch of commercial whiskies will not be released until 2023, Three Spirits boasts an“R & D facility” – a warehouse containing young, wild and whacky experimental whiskies.

Among the casks in use are those supplied by producers of bokbunja, a neo-traditional Korean fortified wine made of berries.“It tastes fucking great,” Do enthuses.

Shand – who reckons there is a generational shift underway with”grandfathers', fathers, and young peoples' whiskies” – wonders if a flavored whisky has a future, given that one offering is imbued with red pepper.

“If you ask, 'Can you drink the spiciest whisky in the world?' people will pay for it,” Shand said. In the interests of journalistic inquiry, Asia Times sampled it – but even a quarter tumbler proved too strong to finish.

“We'll have to tone it down,” admitted Shand.“But it's a unique thing.”

Originality sells. These novelties they can be sold – bottled or casked – to collectors or bar owners who want a one-off whisky. Indeed, one barrel is marked“Emma's College Fund.” Do hopes that its sale, in 14 years, will pay his now four-year-old daughter's university fees.

A related monetization scheme is to establish a tasting room at the distillery, where visitors can sample and buy experimental whiskies.

Creative whiskies, due to long-term customs that have been codified into law, cannot be produced by Scots.“In Scotland, you are handcuffed by rules – you can only use water, malt and yeast,” Shand said.“Here, we can try anything!”

Just as German brewers are restricted by regulations while overseas craft brewers are not, Shand warns that Edinburgh is suppressing creativity.“Scotland will be left behind if they can't innovate,” he said.

Conversely, he warns that the basics are essential. He cites a local wannabe competitor who is working on whisky, but without any experience.“He does not know what he is doing,” Shand said.“But he could create something brilliant by mistake.”

An early run of 1,506 bottles (they were bottled on June 15 last year) of Three Societies' infant whiskies will be offered to collectors in Korea and abroad in September. While not aged to an optimal level, the bet is that their combination of quality base spirit and a desire by punters to own a first-ever will lead to a successful sale.

“This is the first whisky distillery in Korea,” Shand said.“So to add a first bottle to your collection is a good investment.”

Three Societies' mainstream product, its Ki-One (The Beginning Hope) single malt whisky, is maturing in 1,030 casks, ahead of sale in 2023. That batch represents both the origin and the future of Korean single malt whisky.

“We have a three year jump on anyone,” said Do, who also notes that the distillery has been future-proofed for expansion: 1030 casks is just a quarter of capacity.

“It's a sleeping giant!” Shand said.

Do anticipates 30% domestic sales, but the real market – due to the Korean taxman, and his heavy duties on non-soju spirits – is overseas, Do says. In the wake of Covid-19, distribution will be via the duty-free net.

One attractant is that things Korean – from Bong Joon-ho films to BTS music to Samsung smartphones – are all a-sizzle globally.

“Korea is the flavor of the month, and I am riding that,” Do said.“People expect Korea to make quality products.”

Another lure is curiosity.

“If you go from Korea to the UK, do you want to take home a rice wine in a dragon celadon bottle, or a bottle of Korean single malt whisky?” Do asked.“The bigger conversation piece will be the whisky.”

A further plus factor is the national rivalry with Japan. Single malts like Hibiki and Yamazaki are winning kudos in international trade media and via global spirits competitions as among the world's finest.

“Nobody had heard of Japanese whisky – but look at it now,” said Shand, who has also worked in Japan.“If you can make anything high quality, you can be successful.”

Given the surging interest in Japanese single malts, Shand says his contacts in the trade are expressing similarly high interest in the Korean product.

“We will end up playing off this great Korea-Japan rivalry,” he said.“But we have a slightly better climate here than Japan.”

More personally, Do hopes to upgrade the local drinking culture for spirits in the way craft ale did for beer.

“I want to change how people drink, as I did not enjoy all the mass drinking I had to do at Microsoft. That was Korean culture and now we see that change,” he said.“People who one-shot a $3 dollar bottle of soju will think twice about one-shotting a $100 bottle of whisky.”

Moreover, quality spirits generate an animated ambiance – and can add a premium product to the national portfolio in a way soju has failed to do.

“Whisky is a sophisticated drink, and over good whisky, you talk politics, art, culture,” Do said.“As well as K-pop, K-drama and K-barbeque, there should be K-whisky.”

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