SHOREHAM – Raj Bhakta is standing on high ground in the middle of a rye field here, surrounded by the bright green clumps of a new crop covering the rolling terrain of WhistlePig Farm, the former Norris dairy farm. On this roughly 500-acre spread, Bhakta plans to distill what he says will be the world’s first farm-to-bottle straight rye whiskey.
Bhakta will grow the rye for the mash that begins the distilling process and see that process through all the way to bottling, something he says isn’t happening anywhere else. He believes adding value to his rye crop in the form of distilling it into whiskey will prevent his farm from failing as the Norris farm failed and as thousands of dairy farms in Vermont went out of business.
The Vermont Agency of Agriculture estimates there were 995 dairy farms in the state in 2012, down from 11,206 in 1947.
On April 7, Bhakta received the Act 250 permit he needed to build a distillery in a historic barn on his property, but not before he tried to move forward earlier without a permit by converting farm buildings to offices, a bottling room and storage space for whiskey barrels. He was fined $18,750 by the state.
Established in 1970, Act 250 gives the Natural Resources Board the authority to manage the environmental, social and fiscal consequences of development, ranging from housing projects to gas wells. Farming and forestry are exempt from the Act 250 permitting process.
Bhakta says in addition to the fine, he spent $250,000 in legal fees over the two years it took him to get his Act 250 permit. Bhakta maintains his entire operation, including the distillery he hopes to begin building soon, should be exempted from Act 250 as a farming enterprise. Only then, he says, will his farm and other farms in the state be able to survive and thrive, free to pursue whatever entrepreneurial path will keep them in business.
Dressed in bright green pants, a knit navy sweater, yellow plaid shirt and polka-dot tie, Bhakta is Vermont’s most unlikely farmer, with a prep school smile and dark sculpted hair that brings to mind a Dewar’s ad. The son of immigrants — his father is Indian and his mother is Irish — Bhakta grew up privileged in Philadelphia, his father flourishing first as a car dealer, then as a hotelier. Bhakta attended private schools, and joined a boutique investment firm in New York City after graduating from Boston College.
Jumping into the dot.com boom in 2000 at age 25, Bhakta and some partners developed an online platform for trading in used cars, ultimately selling out when the dot.com bust came.
“We got the investors paid back, but didn’t make a nickel out of it,” Bhakta said.
Bhakta joined the family business next, finding, gutting and renovating an under-performing lodge in Vail, Colo. That was a success. Bhakta bought the property for $5.5 million and estimates the hotel’s value today at $25 million. But he found it increasingly difficult to be in a partnership with his father, a dynamic, self-made man who had come to the United States in 1969 with $68 in his pocket.
His way out of the family business was to take a run at The Apprentice, the television show where Donald Trump fired people after giving them a series of humiliating tasks to perform. Beating tremendous odds, Bhakta was selected for the show in 2004, but was canned in fine Trump fashion, ironically enough, for the job he did gutting and renovating a house.
“I had a bad contractor,” he said. “In the real world you would fire the contractor.”
The Apprentice sucked up six months of Bhakta’s life, but did give him a measure of fame which he turned to running for U.S. Congress representing the Philadelphia area as a Republican against Democratic candidate Allyson Schwartz. Bhakta says the liberal Philadelphia press ignored him, or wrote him off as a lightweight, so he concocted a plan to get national attention.
Bhakta rode an elephant across the Rio Grande at the Mexican border to make the point that illegal immigrants had a free pass into the country.
“We nearly lost the elephant,” Bhakta said. “A Mexican farmhand said the water was six feet deep but the elephant disappeared entirely into the river.”
Schwartz won 66 percent of the vote to Bhakta’s 34 percent.
Now Bhakta was really at loose ends. In a decision even more improbable than running for Congress, he traveled to India to look for the next Steve Irwin to build a television show around. Irwin was the famous television “Crocodile Hunter” from Australia who died in 2006 in a freak stabbing by a stingray in the ocean near Queensland. When that failed to work out, Bhakta hit a low point.
“I felt like I had suffered a series of public defeats,” he said. “I couldn’t win a TV game show. I run for office and get thumped. Then I go to India figuring there are 600 million men, I should be able to find one to replace Steve Irwin, but I can’t find him.”
Facing bankruptcy
Bhakta was 31 years old. He had run out of ideas. That’s when a friend in Vermont suggested he buy the neighboring farm. And that’s how Bhakta found himself standing at the picture window of the farmhouse he now owned on a defunct dairy farm in Shoreham, looking across his land toward the hills beyond, still unsure what to do.
“I was wracking my mind and soul for inspiration,” Bhakta said. “It came in the form of the financial crisis in 2008. The checks stopped coming in from Vail. I was faced with the fact that if I didn’t make this farm work, I was going to be bankrupt.”
Bhakta had been drinking fine whiskey since he was 18 years old. The thought of making the drink appealed to him. He sat down with Lawrence Miller, former Vermont secretary of commerce and founder of Otter Creek Brewery, and talked about the brewing business. Miller advised him to build a market before he built a brewery, Bhakta said.
“My dad thought I was crazy buying a farm,” Bhakta said. “He said, ‘Raj we left the farm in India, now you’re going back to the junky old farm that we left in India.’ He thought he had obviously over-educated his son.”
Bhakta spent two years investigating the possibility of investing in an existing whiskey, vodka or beer company, burning through the money he had raised for the purpose with some investors. Out of money again, he at least knew what he wanted to do. He would distill his own premium rye whiskey. The name came from a strange encounter he had with a French mountain biker on the trail in Colorado, who stopped to ask repeatedly, “Is it a whistle pig?”
For the record, a whistle pig is Appalachian slang for a woodchuck.
Borrowing as much as he could against the farm, and securing a $275,000 loan from the Vermont Economic Development Authority, Bhakta launched WhistlePig whiskey in mid-2010 by buying a huge batch of premium Canadian 10-year-old rye whiskey in western Alberta and bottling it in Vermont. The Canadian stash was discovered by Dave Pickerell, former master distiller for Maker’s Mark, straight Kentucky bourbon whiskey made primarily from corn.
Pickerell left Maker’s Mark to become a consultant to the industry. He was trying to interest one of the big U.S. distillers in buying the Canadian whiskey, but was having no luck. Bhakta sought out Pickerell for advice on building a distillery, and learned about the Canadian rye. Here was a way for him to launch a business that requires a product that is 10 years old — without waiting 10 years.
Bhakta bet the farm.
“Suffice it to say that many millions were invested in cornering the old rye whiskey market on a global basis by WhistlePig,” Bhakta said. “Basically we have a seamless supply of what is widely considered to be the best rye whiskey in the world at 10 years and above.”
A fifth of WhistlePig whiskey costs $70 in Vermont and $80 everywhere else, Bhakta said, putting it in the same category as Scotch whiskys.
Sales have grown by more than 50 percent every year since WhistlePig’s launch in mid-2010, and the whiskey has gotten good reviews in publications ranging from Wine Enthusiast to the Wall Street Journal.
In 2013, WhistlePig sold 375 barrels of whiskey, up from 150 barrels in 2011, the first full year of bottling. To put that in perspective, Jack Daniels, the Tennessee whiskey favored by rock stars everywhere, ships about 550,000 barrels annually.
Bhakta says he has enough Canadian supply to grow 25 percent per year for the next decade. By then, he plans to have the first WhistlePig whiskey both distilled and bottled in Vermont, from rye grown in the surrounding fields of WhistlePig Farm.
The fear of black fungus
George Gross and his wife, Barbara Wilson, are Bhakta’s neighbors and owners of Solar Haven Farm, a small berry farm started four years ago. Gross said he has a couple of acres planted in blackberries, blueberries and raspberries.
Wilson and his wife objected to Bhakta’s plans to build a distillery because they were afraid a black fungus that can form as a result of the aging process for whiskey would infest their berry bushes.
“We had made a large effort to show the science behind whiskey mold, technically called Baudoinia compniacensis,” Gross said. “Basically they age their whiskey in oak casks, ethanol oozes through as part of the process, the hotter it gets the more ethanol is released, which triggers the mold to adhere to sides of buildings, cars, or in our case, berry bushes.”
In August 2012, the New York Times reported Kentucky residents were suing three Louisville distilleries over the black mold dotting their deck furniture, home siding and more. Gross understands WhistlePig is very small, but says the company will certainly grow.
“If you did realistic predictions of growth, the model could put tens of thousands or even hundreds of thousands of barrels in this valley if they’re successful at marketing their Canadian whiskey,” he said.
Geoff Green is the District 9 coordinator for the Natural Resources Board which oversees Act 250 permit hearings in Addison County, where WhistlePig is located. Green said the Act 250 process specifically allows for neighbors to get involved.
“Listen, there are some times we get these projects where people are very principally opposed to them,” Green said. “We’ve had projects that create a lot of public interest and a lot of opposition but by far — and this is what’s important for business to know — 90 percent of these permit applications go through the process in a very timely and efficient manner.”
WhistlePig, Green says, is the 1 in 100 that generates controversy. He says nearly 85 percent of Act 250 permits are done as “minors,” which means without a hearing, and that two-thirds of permit applications are completed within 45 to 60 days. Over the past five years, Green said, only 1 percent of Act 250 applications have been denied.
Green believes Act 250 is good for business.
“Act 250 is not a process to deny business opportunities in Vermont,” Green said. “Most of the time, businesses and neighbors work out problems and conditions, hours of operation, landscaping, access, a lot of things. I think that’s really good.”
A vision taking form
WhistlePig’s Act 250 permit limits the storage of whiskey to 6,000 barrels to address the concerns of George Gross and Barbara Wilson. The District 9 Environmental Commission determined there would be no threat of fungus to Solar Haven Farm from that level of whiskey storage.
WhistlePig Counsel Leo Gibson, a college friend of Bhakta’s who left his practice in Detroit to join the company three months ago, said WhistlePig can live with the storage restriction for now.
“That’s what they’ve given us at this point,” Gibson said. “Depending on how the business goes, we can work through the process to seek additional leeway. We’re happy to do that.”
Bhakta spent $80,000 stabilizing the Old South Barn where WhistlePig’s still will go. The faded red boards of the barn are no longer sagging, and freshly poured concrete is ready to receive the stainless steel fermenting tanks, about 20 feet long and 12 feet high, and rising column of the still, which will go through the ceiling into the second story of the barn.
“You can see the vision starting to take form,” Gibson said, stepping outside the drafty barn. “This view as you step out through this barn door and get a look down at the mountains and you’ve got the Lemon Fair River there in the foreground. It’s a beautiful place.”
The Natural Resources Board took Act 250 jurisdiction over Bhakta’s entire farm, the former Norris dairy operation, under the theory that the rye that will be grown is connected to the distillery.
WhistlePig’s operations, including offices, barrel storage, bottling room and still, covers about 8 acres of the farm, but Geoff Green said previous court decisions show that when there’s a relationship between what going on with the farm and the commercial business, Act 250 jurisdiction attaches to the entire farm.
Bhakta has appealed the overall jurisdiction provided in his permit to the Environmental Court, a division of Vermont Superior Court.
“Frankly we think the whole thing should be viewed as a farming operation and we preserve our right to make that argument,” Gibson said. “But even if you take the position that distillation, bottling and aging are insufficiently connected to farming, we don’t think the other 492 acres should be subject to the requirements of Act 250.”
For Raj Bhakta, the best-dressed farmer in Vermont, the question is whether the state wants to continue to watch dairy farms disappear.
“I made the claim of being a family farmer,” Bhakta said. “I may not look like one or talk like one but this is a farm I own and I live here with my family. We’re building out a very agricultural mission here.”
Bhakta says the sales and marketing effort that goes along with WhistlePig whiskey allows him to bring money back to the farm for further development.
“In that sense I think we have a model for many farms in the state,” Bhakta said.
Contact Dan D’Ambrosio at 660-1841 or ddambrosio@freepressmedia.com. Follow him on Twitter at www.twitter.com/DanDambrosioVT.
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