Nikki Blank ran an under-the-table subscription switchel service out of the PBS station she worked at in Boston for a year and a half. Venmo made it possible. “I’m sure it would have been shut down if my news director knew it was happening,” she says. “But it was the best part of my day, especially during the  election cycle.”
Switchel is an apple cider vinegar-based drink punched up with ginger and citrus that dates back to Colonial America. Blank describes it as a gut-friendly, daily electrolyte drink with prebiotics that can also be mixed in a healthy cocktail or mocktail.
When Blank moved to D.C. to hunt for jobs, she continued crafting switchel in her kitchen. “Then I did some research and found out about local food incubators and woman-owned businesses and thought, ‘I could probably bottle my stuff and people would buy it.’”
But Blank’s decision to enter the non-alcoholic beverage industry in 2017 with her company, Sip City,was more calculated. “We’re shifting towards a really cool and unique time where people are really interested in non-alcoholic offerings,” she says. “It’s a trend that I’m sure is visible on Instagram … People see beverages as an extension of their personal brand.” She uses the overwhelming popularity and colorful branding of LaCroix sparkling water as an example. “People like to be seen with their cool can.”
She’s also observed the rise of “dry January” and growing sober and “sober-curious” populations. According to the 2018 Monitoring the Future annual national survey, which tracks the values and behaviors of students and young adults, younger Americans are drinking far less than people the same age did 10 years ago. “It’s going to hit bars and restaurants really hard,” Blank says. “They’re going to have to offer something else.”
Blank began producing her beverages in one of D.C.’s many budding commercial kitchens—Tastemakers in Brookland. But not long after her first glass bottles of switchel landed on retail shelves in 2018, she realized she needed a production space with canning and carbonating capabilities.
While commercial kitchens like Mess Hall and Tastemakers lower the entry barrier for beverage start-ups and can support them early on, they’re a better match for food businesses. Beverage producers often have to purchase their own specialized equipment and stress over whether the space they need to put it in will still be available down the road, since these makerspaces experience high turnover.
At the same time, most established shared production facilities, known as copackers, have significantly larger minimum quantity requirements. This makes it challenging for producers to continue experimenting as they grow. Dumping thousands of gallons of product can wipe out small, self-funded businesses. “There’s no one locally able to can at the scale I’m at,” Blank says. She’s brewing 150 gallons at a time, which translates to about 1,500 bottles and cans.
Blank had a choice to make: Should she raise enough capital to build out her own production facility in D.C. or find a copacker elsewhere that meets her specifications for smaller production runs, risking her product’s made-in-D.C. status? It’s a choice she isn’t facing alone.
The District has a burgeoning non-alcoholic beverage industry—creators are making everything from switchels and shrubs and tonics to alternative milks and kombucha—but no perfect place to produce them once companies are ready to scale up. Without a dedicated non-alcoholic beverage production facility, D.C. loses the opportunity to keep these companies within its borders, along with the jobs they create and the prestige that accompanies being a place where an uptrending industry is taking root.
Blank decided to start canning her switchel at Brooklyn Cannery in Long Island City, New York. “It’s the perfect size and situation,” she says. “There are a lot of companies like mine who want this scale and who don’t want to be spending tens of thousands of dollars up front on their first run without the knowledge that it’s going to sell right away.”
She’s now debating whether she can continue to call Sip City a made-in-D.C. business. “While the product isn’t being produced in D.C. right now, I still consider my brand a D.C. brand,” she says. “The goal is to eventually make it in the District or right outside.”
Local non-alcoholic beverage makers support each other, in part because they’re fighting a common enemy. Small producers have to compete for fridge space with giants like Coke and Pepsi. Blank, for example, introduced Andrew Shapiro to Brooklyn Cannery. The D.C. bartender founded K&B Sodas after experimenting with soda- making at Green Pig Bistro in Arlington. His first product is a biting ginger brew made with fresh ingredients.
“I’ve never had to travel for business [before],” Shapiro says. “In an ideal world, the producer would be in D.C. Not being made in D.C. stinks a little … It’s just such a new world. Now that there are enough people doing it, there are investor types that could see this as an opportunity. I think it’ll happen here.”
That said, Shapiro found an upside to producing in New York. “What it did was open up the New York City marketplace and that’s kind of a big thing,” he says. “I never would have been able to penetrate that by myself.”
Like Blank, he tried to work in a few of D.C.’s commercial kitchens but needed a solution when it came time to scale to meet demand and can his product. Working with a copacker relieves a business owner of production duties, freeing him or her up to focus on marketing.
Mache Barwinski, a former architect, founded Brooklyn Cannery this year. He produces about 20 drinks there in addition to his own product, Upruit Sparkling Coffee. “Most copackers expect large amounts—let’s say 10,000 gallons,” Barwinski explains. “That’s hard to meet for most if not every beverage start-up if they’re self-funded. Having done that and pushed it as far as I could, we piecemealed together our own cannery.”
Finding other beverage producers eager to use his equipment, Shapiro quickly learned he wasn’t the only maker staring down the same problem. As a copacker, his job is to facilitate the production of a brand by supplying the equipment, personnel, and know-how.
Barwinski calculates that an entrepreneur could set something up in D.C. for between $200,000 and $300,000 including the facility, equipment, and labor. He and Shapiro are exploring building a network of copacking spaces, but until that happens, D.C.-area non-alcoholic drink companies such as Blue Crate Milk, Cultured Kombucha, and Shrub District will be searching for scaling solutions.
Amanda Claypool and Kristy Halderman make oat milk that they deliver to customers’ homes in reusable glass bottles. The early-stage sustainability-focused company is making small batches every weekend in a Virginia facility.
The pair would like to remain a D.C.-area business. “sweetgreen was founded here and has really taken off,” Claypool says. “If you do the right thing here you can get enough diversity through the transient population and grow a coast-to-coast distribution network. In New York or Los Angeles, you’re really competing in a saturated market.”
Claypool knows they’ll soon confront scaling issues. “We’ll need to produce several hundred gallons a week,” she says. “Right now we can’t do that … Once we get to that threshold, we’ll have to look.”
Milan Durham of Cultured Kombucha will also find herself at a crossroads. Last year she set out to introduce kombucha to a broader audience. Her product, which she makes at Tastemakers, is now sold at Glen’s Garden Market, The Tavern in Georgetown, and Shop Made in DC. She started out making 12 gallons per week. Now she’s up to 40.
“I’ve been fortunate to be able to scale very slowly,” she says. “I’ve seen others scale too quickly and get in all of the Whole Foods and then crash quickly. Demand has been high and I’m trying to meet it responsibly.”
Even if she was able to grow, scaling might not be possible in the Tastemakers space. It’s hard for other beverage makers to share equipment with a kombucha company because of the fermentation involved. Durham may consider teaming up with a coffee roaster or ice cream maker to go in on a space together.
Don Morton’s shrub company is further along than Blue Crate Milk and Cultured Kombucha, having just celebrated its third anniversary. He launched at Mess Hall and has also produced shrubs at TasteLab and Tastemakers. “We are now in the process of commercializing and looking for copackers to solve our scaling challenge,” he says.
Shrubs, like switchels, date back to Colonial America, and contain vinegar, sugar, and fruit. Shrub District markets them as cocktail vinegars to both bars and consumers, but they can also be added to sparkling water. Flavors include pineapple allspice and strawberry dill.
Morton has considered investing the capital to build his own facility but thinks he’d be more likely to find warehouse space in Maryland because of the way development has altered D.C. “A lot of the industrial stuff is being snapped up,” he says, pointing to Ivy City as an example of a neighborhood that’s grown out of an industrial zone. “It’s cool to see all of our friends in the distilling space cluster, but it drives up rents and costs.”
If Morton can’t swing it, he hopes someone with deep pockets will launch a D.C.-based non-alcoholic beverage business incubator and copacker. “There’s a big economic impact that is missing because the capital is not being applied to this problem,” he says.
“Union Kitchen sparked the rest of the incubators and shared production facilities,” he says. “There’s no reason why one bottling facility couldn’t spur the next generation of four or five more … I think the city has done a good job of highlighting the makers. I think we can do more to support the making.”
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