Special Elixir: Growing a Private Label

H.

Emperor Norton's Mistress at Elixir in San Francisco.

Offering own-brand beverages allows San Francisco bar to stand out.

In 2007, H. Joseph Ehrmann started thinking in new ways about the whiskey he served at his bar, Elixir, in San Francisco. Although he already had a strong bar program, he wanted to make it very personal to his bar and to offer something guests couldn’t get anywhere else.

So, he decided to offer his own label — private label whiskeys. That year, Sazerac Company approached him and asked if he’d like to purchase a private barrel of whiskey. “As it was new and different, I jumped on the opportunity and from there started asking other companies if they did anything similar,” Ehrmann says. “As the opportunities grew, so did my private barrel program.”

These purchases give him control over that barrel, he says, which really brings distinction to his bar, which is known for whiskeys and offers more than 500.

“I select a barrel and say what flavor profile I’m looking for, how much I want it to cost, how I want to use it — in shots or cocktails — and the characteristics it should exhibit. Then I can communicate to our guests why we chose that barrel and how it fits our lineup. So then they get the sense that this bar is also a little more special because it’s procured this collection. And, because we are experts in whiskey, the barrels we have selected are comparable to a chef’s choice in a restaurant.”

Since 2007, Ehrmann has purchased around 18 barrels of whiskey from various distillers — typically bigger distillers, he says, because they have the facilities to do this.

“If you can get [these products],” he says, “they create a unique offering for whiskey lovers and they show off your skill in selecting exceptional products.”

Ehrmann orders the barrels through his distributor and everything goes through the three-tier system as usual.

The downside of this: There’s a big upfront cost. Ehrmann has paid between $4,000 and $10,000 per barrel. He tends to have about six private label whiskeys on hand, and orders a new one when one barrel’s half finished, to stagger the expense.

But there’s a side benefit, too: Ehrmann gets to keep the bourbon barrel. He then gives these to local brewers who age beers in them for him.

Elixir currently offers a Calicraft Brewery Oaktown Brown aged in the brewer’s Wild Turkey Kentucky Spirit barrel, which is the second beer he’s brewed in the barrel. The third and final beer, with most of the whiskey effect in the barrel gone, will be a sour beer. These beers sit in the barrels for typically half a year to a year, and must go in while the barrel’s still wet from the whiskey, to get the full flavor.

In 2006, Ehrmann partnered with Sudwerk Brewery in Davis, Calif., to create a custom IPA that he called Elixir Snake Oil IPA. However, he didn’t trademark the beer, and, he says, “it was so good [Sudwerk] began serving it at their brew pub and selling it to others.” On the plus side, “we did not lay out any capital to do it, and we can still get it.”

Next up for Elixir will be a private label vermouth, which Ehrmann plans to serve from a tap, as is done in Spain, and to serve it neat, chilled. He’s working with a winery on this. He’s also working to make a private label gin, which will be available next year.

“These drinks,” Ehrmann says, “allow me to create unique, bespoke drinks just for my customers and allow me to exercise my culinary creativity outside the realm of just creating cocktails.”

And serving private label drinks is also saving him money — about a dollar on some bottles, he says — since he’s buying in bulk, but there are no additional costs.