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Episode 11: Chris Fredrickson, Traverse City Whiskey Company

LISTEN TO THE OFFICIAL EPISODE:
BONUS MATERIAL:

We had so much packed into our chat with Chris Fredrickson of TC Whiskey Co. in Traverse City that we had to make a bonus episode! Listen in as Chris describes a little more about what it really means to be a “craft” whiskey company in today’s spirits marketplace. Chris also shares a little more details about their new production and tasting room facility, located out in Leelanau County.

This week, we’re hanging out for a bit with Chris Fredrickson, one of the owners of the award-winning, hugely popular Traverse City Whiskey Company. Chris spoke about how he and his team come together collaboratively to solve problems that pop up, how they lean on their community for ideas and support, what it was like in the early days of the pandemic when TC Whiskey switched from making spirits to providing hand sanitizer, and how technology helped them supply the massive response they had from that.

Traverse City Whiskey Company Website

Traverse City Whiskey Company on Instagram

Traverse City Whiskey Company on Facebook

Show Transcript

Chris (00:00):

One of the reasons that we bulldoze problems in the business as quickly as we do is because if we don’t know best, then we find the right person to help guide us through the problem at hand. Traverse City just continues to breed a great class of people.

Ruthy (00:57):

Hello, and welcome back again to Terrapin Small Biz Connection with myself, Ruthy Kirwan, and my cohost , Tim Gillen of Terrapin Networks in Traverse City. On our show here, we bring you the stories of the small businesses located in Northern Michigan. All entrepreneurs have something special about them, a certain drive, and a certain focus that helps make them and the business tick. But as we like to say on our show, it takes another level of grit and resilience to run your small business here in the “Up North”, where weather fluctuations can mean a sunny day or a snow storm could drive your business to a halt, a tourist driven economy that makes it really hard to find regular staff, and just life off the beaten path that makes it tough to do business in the big cities. This week’s guest is Chris Frederickson of Traverse City Whiskey Company, and we are so excited to share with you the conversation that we had with Chris recently. His company is well known for producing an internationally available spirit that has won awards and delighted customers. But this is also a spirits company that’s focused on using local talent, local agriculture, and promoting a real pride in the Traverse City area. Chris shares with us today, how Traverse City Whiskey Company really stepped up in the early days of the pandemic to produce hand sanitizer as quickly as possible, even when their website was not up to the task of taking thousands of orders that came pouring in. He talks about the expansion of his business into not only new markets, but also a new production facility out in Leelanau County., the regulations that he deals with as a spirits manufacturer, and how he and his business partners use collaboration and communication between themselves, their employees, and their greater community in order to level up their business. So with that, I will turn this over to Tim to welcome Chris to the Terrapin Small Biz Connection.

Chris (02:40):

Well, thank you, Ruthy. Tim Gillen here at Terrapin Networks, Traverse City, Michigan. Thanks for joining us for this week’s episode of theTerrapin Small Biz Connection. We have this week with us a show we’ve been looking forward to doing Chris Frederickson of Traverse City Whiskey Company. They’re a real up and comer in the craft whiskey world, and we’re thrilled to have Chris, who’s from a Leelanau Peninsula family, on the show. Chris, welcome. Thanks for being with us today.

Chris (03:13):

Tim and Ruthy. Thank you for having me.

Chris (03:17):

So tell us a bit about Traverse City Whiskey Company.

Chris (03:23):

My business partners and I started the company back in 2011. I was born and raised in Northern Michigan, but the three of us met at Michigan State. At the time, I was in undergrad studying business and my business partners were in law school. W met socially and reconnected several years later. Around that time, my father and I found a set of my great grandfather’s distilling patents that he had coincidentally patented during the U S Prohibition.The patents themselves became a springboard for what birthed the idea of Traverse City Whiskey. Over a few whiskeys, we came up with this concept called Traverse City Whiskey Company and fast forward almost a decade now we’re making a lot of whiskey and continuing to grow.

Ruthy (04:32):

So let me ask you, Chris, what’s your favorite thing about running your business?

Chris (04:37):

That is a, a great question. And it’s not a question that I get asked often, ctually. My favorite part about running this business is waking up every day and being excited to create. In my past life, my professional career before Traverse City Whiskey wasworking long, arduous hours and traveling five days a week. It was very intriguing work, but I wasn’t waking up excited to go to the office. One of the reasons that opur company has grown as quickly as we have is because when the alarm clock goes off in the morning it’s exciting to like look at the day and think what we’re gonna accomplish together.

Ruthy (05:38):

Is there anything in particular about running your business in Northern Michigan itself that you really love?

Chris (05:44):

Yeah, yeah, definitely. I mean, the one first and foremost, the culture in Rraverse City, I mean, this is why we laid the roots of the company the area that I was born and raised in. But the people up here just have no pretentious attitudes. There’s a willingness and excitement of people to just help. I’ve never been afraid of asking for help. It’s one of the reasons that we bulldoze problems in the business as quickly as we do is because if we don’t know best, thenwe find the right person to help guide us through the problem at hand.

Ruthy (06:24):

So you find that you’ve been able to create like a real collaborative community within your company with the staff that you have up here.

Chris (06:31):

Yeah. A hundred percent. Traverse City just continues to breed a great class of people.

Chris (06:37):

That’s true. Isn’t it? I mean we are really quite fortunate up here where. We’ve had these conversations now so many businesses in Northern Michigan, and that’s a consistent thing we hear: Northern Michigan as a community has a good work ethic, good teamwork, good ideas, good collaboration. We’re used to being outdoors year round up here. And that really breeds a certain hardiness that transfers pretty well to staff needs. It gives you as the business owner hardy bunch who are willing to work.

Chris (07:17):

That’s actually a really good point. You know, a lot of businesses suffered tremendous losses during the early days, and still today, with the pandemic. But for us, during the pandemic, we were hiring. Our staff pivoted to make hand sanitizer instead of whiskey for maybe two or three months. And during that time, our staff was very willing and dedicated to work overtime and pitch in because we were in a position to help. But it just showed that, you know, one: our company culture reflected kind of that behavior. And then two: these people stood behind it. They wanted to do the right thing as opposed to, you know, getting laid off or something like that,

Tim (07:55):

Yeah, or being a hangdog about it. I know we mentioned this off-air, but as you and listeners might know, Ruthy is my daughter, and she and her husband and two kids live in NYC and run a bar in Manhattan. We got a bunch of your hand sanitizer in the early days of the pandemic and shipped it out there because Colm, her husband, couldn’t find any of the stuff anywhere.

Ruthy (08:26):

They weren’t able to source it from anywhere. It felt like all of New York City was out of hand sanitizer. So my mother went down to your shop and bought probably 2 or 3 and shipped them out to us, it was very helpful,

Tim (08:41):

Good stuff. And it was great to see you doing that. It was a nice community thing that you were doing there. Have you segued out of making hand sanitizer and gotten back into your normal flow of things now, or are you still making hand sanitizer?

Chris (08:57):

We pivoted back to whiskey full time. Although we still supply sanitizer through our online eCommerce platform, but for the time being, we haven’t actually made it in about a month. But we have reserves and there are still people that stop in to get some. I was in our tasting room this morning and the first three stops were for sanitizer. So there’s still a demand, but it’s certainly not what it was a couple months ago.

Tim (09:29):

Your whiskey product is referred to as “craft whiskey”. You’re competing in a business area that also hosts some pretty old brand names. Could you tell us a bit about that whole market and community of customers who are looking for your kind of whiskey?

Chris (09:54):

We’re approaching, I would say, the top end of the craft world. I think we’re slowly making our way into more of a middle market area. We are absolutely still a craft brand right now. As I speak, I’m looking down through a window to our production facility and the manufacturing line. Everything here is bottled by hand, everything is made by hand. Every touch point in the process is intentional and not mechanical. But we’re in the process of building a new facility that is extremely robust and puts us kind of in a competitive place with, maybe not the big brands like Jack Daniels and Jim Beam, but, but the middle market brands. We are distributed nationally, but this will help us evolve the business a lot pretty quickly.

Tim (10:56):

Let’s transfer back a little bit here into the running of the business. What do you think that that people don’t “get” about what it is, not just what you do with your craft whiskey, but just in running a company, growing a company, a manufacturing company? When I say “people”, I mean the community, your customers, as well as policymakers local politicians, that kind of thing, zoning permitting. What do people not get about the layers that you’re dealing with or the particular challenges that you come up against?

Chris (11:33):

I think part of a recurring theme that I’ve noticed over the years is that I think a lot of people don’t necessarily see what’s happening, you know, beneath the surface. They see the tip of the iceberg, but the amount of ice that sits underneath it is immense, and the work and strategy and research and business development and the human factor, by which I mean our, our staff, our crew, our team. There a big human factor in all of this. My business partners and I wake up in the morning and we are, as we say, Traverse City Whiskey co from sunup to sundown, and there’s always something. It could be an electrical failure or a pipe that’s breaking or a leak from an ice bin, or, you know, product meant for Washington DC ends up in Washington state, or something fell off the truck and now we have to submit a claim. It’s just nonstop problems. I think the most successful entrepreneurs are the most effective problem solvers. This really goes back to learning to ask for help. We’re working toward stopping the 80 hour, 100 hour weeks that we’ve been doing it now for probably eight years. It’s getting a little old. We’re in the process now of designing an organizational redesign that supports a strong work life balance, which to me is something that’s near and dear to Traverse City. It’s working hard and playing hard and getting outdoors, really enjoying, you know, everything that Traverse City has to offer.

Ruthy (13:21):

Eventually you do need to create that space within your work life balance or in order to keep the creativity flowing so that you can actually find solutions to problems in the best way possible. It keeps your creative mind fluid. If you aren’t able to find that balance, I feel, it eventually starts to hurt your business as opposed to help. In the beginning that 80 to 100 hour work week feels like “this is what we have to do to get this place up and running”, but eventually it becomes a hindrance more than anything.

Chris (13:52):

A hundred percent. I couldn’t agree more.

Tim (13:55):

How do you hire for certain types of roles inside your company? You’re a manufacturing company, but that also includes the science part it with the ingredients and the mixtures, and as well as the the packaging and all that. Have you brought some people into the area from outside the area? Are you working with remote people, or is ity mainly local staff?

Chris (14:39):

So, as my 96 year old grandmother, Daphne always said (and this is a joke) anything worth doing is worth paying somebody else to do.

Ruthy (14:48):

96 year old grandmother was a smart woman.

Chris (14:51):

So followed that philosophy from day one. Like a lot of successful companies, we focus on investing in, and sourcing materials as local as possible. There’s a lot of value in that, in supporting a community in that way. Our philosophy to build the most robust high quality business possible and in order to do that, we start at the local level. And then we really tease it out: what is the best fit for the business, from every standpoint? From a quality, economic standpoint. The support that we’ve reached out for a lot of the time has been local. Our lead consultant on this new project that I mentioned at the new Leelanau facility is a guy we know from Kentucky. He has been a lead consultant on many projects of that magnitude in the past. Our goal is to learn from somebody who’s been through this a dozen times. When we first started the business, we leaned on Dr. Chris Berglund at Michigan State University, who was leading a distillery incubator program.So that’s support from the state level. It’s kinda been all over the place, but really what it boils down to is figuring out who is the best who is, who knows best, and who can guide us through any issue in the most effective way.

Tim (16:33):

So, you go with best of breed, with a preference for local, and then you’ll work out from there as you need to, as needed.

Chris (16:42):

Yep. That’s accurate.

Tim (16:44):

But you’ve obviously got a very strong local focus. How much has technology helped your growth, including how you handle your internal things?

Chris (17:06):

In the beginning, technology didn’t play as big of a role as it could have in our business. We have very intelligent software that helps us manage all of our inventory, all of our inputs and outputs, and manages compliance. And until the pandemic, technology helped us stay organized, which is extremely important with a growing business, because things can get haywire quickly if you don’t stay on top of it. Then when the pandemic hit, there was one day where I was driving around Traverse City trying to source small amounts of ingredients for hand sanitizer, because I’d heard, and I didn’t quite understand the magnitude of the need in the market, but I had heard that it was needed. So I made 10 gallons or something like that. Since we have a spirits production license, it allowed us in the very short term to make this product legally, according to a recipe issued by the World Health Organization. I just casually put the hand sanitizer in our 200 ML bottle on our website. And then went to bed and woke up the next morning and we had processed over 2000 orders.

Ruthy (18:43):

Oh my goodness. Way more than what you actually had on hand.

Chris (18:48):

Yes, and running off a very archaic website. This is before we updated our, our eCommerce platform. We just didn’t have any intelligence behind order thresholds or anything like that. So people were ordering up to 600 units, and it was extremely unexpected and out of left field. So the next morning we contacted a local guy that I actually went to high school with up here in Traverse City who’s a developer and project manager. And in about a week’s time, we developed an intelligent platform for harnessing these orders and created a mini shipping warehouse within our warehouse.We were processing up to a thousand orders a day within about 10 days. We partnered with FedEx and used their integration platform which helped a lot with that. But, our whole team jumped on the ball and we helped a lot of people in that time of need. We were just shipping thousands and thousands of orders out, over the course of 2 and a half months.

Tim (20:12):

That’s actually quite a story. Isn’t it? I mean, that’s an, a great reaction to what was going on. And a great way to just, as we said when we first got started chatting, to not hang your head. I would imagine the improvements that you made for being able to ship out those quantities of the hand sanitizer has made its way back into how you do all the rest of your logistics and shipping and inventory also.

Chris (20:42):

100% yes. I made us evaluate a lot of our flow of production.

Tim (20:45):

Which is a good thing, right? I mean, that’s going to help you as you grow and move into a new location and get even more of your product around the country.

Ruthy (20:53):

Chris, what, what changes do you see coming in craft whiskey? Or actually, I should just say, all craft spirits. What changes do you see in your entire industry coming down since the pandemic and moving forward?

Chris (21:07):

So we learned during the pandemic that people drink. (laughter) I think once we get back to a more normalized moment in life, the demand is going to throttle down just a little bit. It’s been pretty wonky lately. I think that, you know, whiskey as a category is on fire. I think that will continue. I think that people will begin teasing out new and fun things to do with it. I don’t know what that looks like, but I see that as a strong possibility. And then I see a lot of exploration into new types of booming spirits, like gins, or tequila or agave spirits. The spirits category is definitely positioned for real growth.

Ruthy (22:10):

Well, Chris, how can listener get ahold of you?

Chris (22:17):

You can connect with the brand @tcwhiskey on Instagram or facebook.com/tc whiskey on Facebook. Any questions you might have just shoot them over to info@tcwhiskey.com and we’re happy to answer any questions or be a resource for anybody looking to make a foray into the category or into the spirits world.

Tim (22:44):

Well, we wish you all the best it’s been, it’s been a really great chatting with you. We’re really proud of you here, your whole outfit, and how neat it’s been to watch you guys become this brand. It’s been really exciting, frankly. It really has. We sure appreciate you taking some time for us today.

Chris (23:08):

Well, thank you very much for the invitation to chat. We’re happy to help and we love sharing our story. And if there’s anything else we can do, please don’t hesitate. Will do. Thanks, Chris.

Ruthy (23:21):

And now for Tim’s Takeaway.

Ruthy (23:26):

Hello and welcome back again to Terrapin Small Biz Connection with myself, Ruthy Kirwan and my cohost Tim Gillan of Terrapin Networks in Traverse City, Michigan. This is the section of our show that we like to call Tim’s Takeaway, where we break down our interview. Today it was with Chris Frederickson of Traverse City Whiskey Company. Tim, talk to me about how Chris and his company used, at the very start of the pandemic, technology. They had an issue where the e-commerce that they had on their website wasn’t robust enough to help them sell as many hand sanitizers as there was a interest in. Talk me through how they were able to help that and then create a different layer of structure in their business.

Tim (24:08):

Well, that was a very interesting little story he told us there. Trying to process that many orders in a short amount of time gave them the opportunity to ramp up their technology very quickly and very nimbly. As you and I often say, small business owners have to be nimble. Their ability to make that kind of change is significant because that filters back down to how they run their company. They also took a lot of input from that situation and applied it to their other distribution and logistics.

Ruthy (26:06):

They’re a very collaborative company. You can tell between themselves the way they work with their employees and their vendors and everybody in order to come to the best solution once they have everybody’s input. And that’s a very smart way, I think, especially in unprecedented times, to be able to call on your community in that way to help come to a solution, the way that they did.

Speaker 3 (26:44):

The type of people who can say, “okay, we have an issue here, let’s try to get this fixed”- those are the healthiest companies that I’ve seen. We are a business to business firm here at Terrapin Networks. We support other businesses. The ones I’ve seen that have that kind of mindset and culture that says, “okay, what do we got? What can we do to fix it?” And then everybody throws in their particular part of the expertise and their willingness to do whatever it takes; Man, that can really make some stuff happen. That says a lot about their culture, how they work. It really says a lot for what they’ve been able to do and is a good message to all of us who run a small company that collaboration and nimbleness that can keep things moving. And everything else tends to be a speed bump.

Ruthy (27:40):

So what would you say would be the technology takeaway that other small businesses can do?

Tim (27:52):

They immediately brought somebody in to change the e-commerce part of their website. They have the saying “Why do for yourself what you can hire someone to do” and I like to think that way too. That’s what we’re here for, for companies who say, “Why would I do my own technology when I can hire it done?” So I love that mindset. They brought someone in to help right away. They said, “We’ve got a weakness here. Here’s a weak link.”And they brought in somebody to get that fixed.

Speaker 3 (28:30):

They used a combination of people and technology. Because, remember, technology only supports people. The only thing that technology is there for us to is to support staff.

Ruthy (29:24):

Agreed. Well, Tim, I think that’s actually all the time that we have this week

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