Reactory founder Mark Eltom has a bonus incentive for investors who chip in $100,000 to his latest capital raise: a bottle of whisky that was accidentally left maturing for eight months.
Now eight months isn’t usually a long time for whisky to mature, but Eltom claims his specialised maturing vats can make a whisky taste 10-years-old in a quarter of that time.
When he pulled the tarp off his first reactor and found it had been running for most of the year, Eltom expected the lost whisky would be ruined – instead, he said it was comparable to a top shelf drop.
“We don’t know what happened in that reactor,” he told Startup Daily. “It’s 57 per cent alcohol and there’s almost no burn.”
The Auckland-based Reactory is heading toward a $4 million capital raise and Eltom wants to find a cornerstone who can foot half the bill and help connect him with a network of alcohol producers and distilleries.
“We finished our pre-seed in November and closed with enough to show we can get this out of my garage and scale,” Eltom said.
“We’ve got a bigger reactor coming which I want to leverage and increase throughput.”
The aim is to get to the point where large quantities of pure spirits come into Reactory and come out a week later tasting as if they’ve been sitting in a barrel for 10 or 20 years.
For distillers, this is a big deal. Brown spirits – rum, whisky, tequila – get their colour and lots of flavour from the time they spend in barrels.
Storing spirits in a barrel is costly and time consuming, especially for younger companies that don’t have the runway to have their product waiting in storage for years on end.
“The goal is to make something that people will taste and go ‘that tastes like a 10 year or a 12 year’,” Eltom said.
“We’re not saying that ageing in barrels is bad, just that we have another way to do it. It’s faster, more environmentally friendly, and less capital intensive.”
But while Eltom’s adopted New Zealand home is happy selling alcohol exclusively matured in a stainless steel reactor, other countries like Australia don’t look so kindly on spirits that haven’t spent time in barrels.
A law from early Federation – the Excise Act 1901 – specifically says whisky, brandy and rum must have “matured by storage in wood for at least 2 years” before it is sold in Australia.
Some startup distilleries have gotten around the law by calling their product ‘single malt’, not whisky, creating something of a row between distillers.
Eltom is looking to Australia’s larger pool of VCs for his $4 million funding round and said he is working with people to try and get the old laws updated for modern times.
“Change comes with resistance,” Eltom told Startup Daily. “If this was going to be easy, it would have been done already.”