Sagamore

Sagamore Spirit wants to revive Maryland’s rye whiskey heritage

By Dan Mills

The idea for Sagamore Spirit was born from a conversation between Under Armour CEO Kevin Plank and former Under Armour executive Bill McDermond at Plank’s 530-acre Sagamore Farm in Glyndon, MD. As the two discussed opportunities to start something new under Plank’s private-investment holding company Plank Industries, they settled on the idea of distilling their own whiskey.

Their mission was this: to make and sell a world-class rye whiskey that would be accessible to everyone — from connoisseur to casual drinker. It would be working class and high society all in one, and the brand would have the same drive, passion and eloquence — a spirit — as its big cousin Under Armour.

The brand officially launched commercial distribution on May 21, 2016, at the Preakness Stakes. Today, Sagamore Spirit’s operations occupy a sunny, concrete-floored corner of City Garage — another Plank Industries venture — just down the street from the planned future home of Under Armour and the future site of Sagamore Spirit’s state-of-the-art distillery, which broke ground in October 2015.

SmartCEO sat down with Sagamore Spirit’s leaders to talk about business strategy, entrepreneurship and the future of Baltimore. The following is an interview with Sagamore Spirit’s president Brian Treacy and co-founder Bill McDermond, along with Plank Industries CEO Tom Geddes.

NOTE: This transcript has been edited for length and clarity.

SmartCEO: Tell me about the founding story. Were you guys sitting around drinking whiskey and saying, “We could do this”? Where did the concept come from and how was it born?

Bill McDermond: Sagamore Spirit was born on Sagamore Farm. I was on the farm quite a bit with Kevin Plank, who owns [it], and he told me he had been approached more than once to grow grapes and start a vineyard. He kind of looked at me and said, “Billy, I’m not much of a wine guy. I like it, but I really love whiskey. What do you think?” That was really the spark that started the research to see what it is that would go into making whiskey. We found out Sagamore Farm was built on a shelf of limestone, so all the water on the farm runs through this limestone aquifer. We came back and found that we had — not only in this area but maybe in the region — some of the finest and purest, cleanest water. That is really the foundation of the brand, the business having this great water to build the story and build the brand, and certainly come out with the whiskey.

CEO: Why rye?

BM: We did our research and found out that rye was indigenous to Maryland, and there are a lot of whiskey connoisseurs and historians who would argue that Maryland had the original rye recipe going back to colonial days. So we had this amazing story, and this incredible narrative that was building itself, and rye was a piece of that. We all looked at the category, and we weren’t really convinced that anybody was really doing it in a world-class manner. So we took it and we decided we were going to revolutionize this rye, the actual category of rye, and bring it to the modern drinker.

Tom Geddes: There’s a reason why the word rye is very large on the bottle. That’s not an accident.

Brian Treacy: We definitely don’t want to get it confused with bourbon. California is famous for wine. Tennessee is famous for Tennessee whiskey. Maryland is famous for rye. So for us, it was a no-brainer to do rye whiskey. And it’s a really great product. We blend two straight rye mash bills, which I don’t know too many people that are doing that, take two different rye mash bills and blend them together. One of the reasons we did that was to create something that is very unique, and it also does speak a little to the Maryland-style rye that we used to have here.

CEO: So you guys are up and running now. You’re distributing to the Baltimore and DC regions. How has that grown since your launch, and what’s next? Where do you want to be five years, 10 years from now?

BT: We launched around Preakness, early May of 2016, in Maryland and DC, and we’re actually now in Delaware as well. So we’ve trickled over there. But we really consider those areas our backyard. We want to start here, we want to own our backyard and we want to do it really well and service our local folks as best we can before we begin to branch out. Eventually, though, our inventory will grow. Right now, we’re fairly limited by our inventory, but once it does grow, we’ll start extending out to other markets. I think New York is one of those markets that everybody desires to be in. It’s a great way to seed other markets, too, because so many people come and visit that city. From there, we’re not sure exactly what markets might follow after that, but we definitely see ourselves growing accordingly throughout the U.S. Someday, we see it as a global brand.

TG: It’s really statewide right now. It’s not just Baltimore, it’s 1,000-plus establishments across the state. We’re geographically diverse.

BT: It’s been well received in Maryland for sure. So we have a great presence here, and we’ll continue to build on that.

BM: We’ve had incredible support, too. Coming out of the gate, the local support — both Maryland and DC — has been tremendous.


BM:
I’ve been in Baltimore with Under Armour. This is our hometown, and we’re building our distillery down the street. Brian said it best: We want to win in our backyard, and that’s what we’re here for. How big can this brand be? I think it’s up to us, and we’re going to control our growth; we’re going to control our story, and we’re going to continue to educate and elevate the experience of Sagamore. So all these are just great opportunities for us right now. And we’re just getting started. We’ve been in business for maybe four to five weeks now, and it’s been a tremendous success. It’s been unbelievable. And it’s fun, because now we’re introducing a new spirit category to people who potentially didn’t know about it before, particularly women. That was one of our goals, part of our mission. When we started the company we said, “How can we make it more palatable to a bigger audience, a broader audience? The early data, it’s sort of anecdotal now, but people are coming back and saying now that, “I’ve never really been a whiskey person, and I’ve always been a little intimidated by it, but I really love this. Tell me more about it. What is rye? Can you give me more background on it?”sagamore_1

CEO: As far as the investment into growth, what’s it going to take to get to where you want to be? You say you are controlling your growth, but is it more of an organic adoption — people hear about it and you growsagamore_8 in popularity locally — or are you pumping resources into it, hitting the pavement and going out and trying to get into other places? What’s the marketing engine behind it? Talk about those aspects that are helping the brand gain wider recognition.

BM: Yes, yes and yes. Brian is running hard every single day across the board. Right down the street, we’re building what will be a world-class facility. It’ll be arguably one of the best distilleries in the U.S., and I feel comfortable saying that even before completion.

BT: The thing that’s fun about this industry is it’s still very much relation-based, and you kind of get to know your consumer. You get to meet with them. You get to talk with them. You get to learn about what he or she likes about their whiskeys — whether it’s rocks, neat, cocktails. Cocktails. That’s one of the things that’s fun about rye, too, is that it’s great in a cocktail. And I think that’s where we’re finding a lot of tremendous growth with women. It’s also very grassroots, so it’s getting out with local taverns, local restaurants, local retailers. These folks I work with day in and day out work really hard at getting out there and constantly touching the consumer and making sure that they hear our story, we hear their feedback — what they like about it — and just getting to know everybody out there the best we can. There’s a lot of people out there so it takes a little time, but it’s very much a grassroots movement. I think technology is great, but there is still something about this industry, about hospitality, and sitting down and sipping a whiskey and getting to know somebody and talking about it. It’s a lot of fun.

TG: I would add that no matter how compelling the story — and we have a great story with the history of the farm and the water, and we have great relationships among the other brands that we have — it starts and ends with the product. I think what’s been really gratifying and exciting for us is the way the product has been received, not just by people we know locally, but statewide and beyond, and beginning to win awards has been really exciting as well.

BT: We entered into the SIP Awards competition, which is kind of like the consumer choice awards, if you will. I think there were over 500 spirits entered, and we won Platinum Best [of Class] for best rye whiskey. So we’re pretty pleased with that for our first competition, to get the highest-ranking award you can get for a rye whiskey in a blind taste test. We also have very unique packaging that we’re proud of and we won gold for that as well.

CEO: As far as the packaging is concerned, I like the integration of the three diamonds that appear on the racing silks and the Sagamore Farms logo. Obviously that was a strategic decision to make that a fluid brand.

BM: It’s fast horses and slow whiskey. It all ties in, and we were very thoughtful with that. Having the opportunity with the farm and having the water on the farm, we don’t exist unless we had that. And we know that. So there’s a lot of history, and there’s a lot of authenticity, which allows us to do that. And coming out with a world-class product is really the finish to the end game for us.

CEO: So how many of you have gotten down at the spring and drunk the water directly out of it?

All: All of us.

BM: It’s part of the farm tour now.

BT: Absolutely. It’s kind of our version of “kiss the Blarney Stone.” You’ve got to drink it.

CEO: As far as the pricing of the whiskey, what kind of demographic are you going after? It’s kind of mid-range. Is there a certain target demographic you’re going after?

BT: We talk about it every day, and we have a pretty good understanding of who we’re going after. We do definitely go after women, which I don’t think typically everybody does in the whiskey category. But with our cocktail strategy, we’ve had great success there and opened up a lot of eyes to [rye’s] drinkability. And it could be a millennial starting to look to trade up. But I also think that because we have such an amazing product, that we’re finding even the whiskey connoisseurs, who were typically drinking scotches or bourbons, are coming over to the rye category, and they’ve been coming over to Sagamore. We’re working with quite a few demographics with one product, which is really exciting and it keeps you busy, too. We look at that price point, and we think it’s an extremely good value for a great product, great packaging. One of the things, too, that I think people don’t understand is rye is a lot more expensive of a grain than corn. And so naturally rye whiskey will be priced higher than bourbons. Corn is subsidized by the government. Then, sitting in a barrel for years takes time and patience, and so at $40 it’s an unbelievable value. It’s a great-tasting product, and I think people will find that it’s approachable and it’s one of those whiskeys you can drink every Friday evening, and not just for an anniversary because it’s so expensive. That was one of our goals. Whiskey is for entrepreneurs; it’s for people who work hard, and at the end of the workweek deserve to be able to afford a good drink.

BM: What I would add is that Sagamore is an aspirational brand, so you balance that with being approachable. And we were very thoughtful with that because it takes a very long time to get to market. We do think about who our customer is and I think in a lot of ways we’re creating the customer. So when we sit down and we say, “What do you want to do? Here’s our brand. We’re going to do rye.” We say, “How do we own rye as a category?” That’s where we start. And who is that customer? We may not know who that customer is today because we’re bringing them in, and we’re introducing them. One thing that I would add is, rye stands up really well in cocktails. So what we’re seeing now is the mixologists and the professional bartenders, the people whose career profession is behind the bar for x amount of years, they really like it because it holds up really well with the other ingredients that they are trying to make. And it takes some time to make it, and I think that is the passion and the play that we like. It’s the bigger story because it takes a lot of time to get these barrels dumped and bottled and out to the market. It should be something that is savored and enjoyed. Again, we use the words aspirational and approachable and we’re finding that balance, which is a moving target, but that’s why we landed where we did with our price points. And so much of what we’re doing now is finding our consumers and continuing to educate them and giving them the story behind the rye and particularly behind Sagamore. It’s such a compelling story when you hear everything from a limestone aquifer to a spring house, to George Washington used to be one of the largest rye producers in the country, and [rye is indigenous to] Maryland.

CEO: Let’s talk about the entrepreneurial aspect. The nature of what you’re doing here with City Garage, with Port Covington, with Sagamore Spirit, and to a larger extent Under Armour and Kevin Plank’s vision for what he can do here in Baltimore. There’s this scrappy, get-your-hands-dirty, make-it-happen mentality. Talk a little bit about what it means to build something like this and the effort that’s put into it and the support you’re getting behind it, and the mission and the meaning behind what you’re doing.

BM: I think the word entrepreneur is an incredibly meaningful word, especially in this company. And I think Baltimore — Maryland — has arguably one of the greatest entrepreneurs. I think we’ll look back in time and see that [Kevin Plank] was a generational visionary. For me, and I said this at our groundbreaking, I truly believe that America’s secret sauce is entrepreneurship. It’s the ability to create jobs, hope and opportunity to change the world — to change individuals’ path in life. So it’s a deep meaning for us, and the ability to build and create is special. It’s an opportunity. When we started the Sagamore team, it obviously started with Kevin and I. But we started looking around asking, “Who’s going to be our partner? Who’s going to help us run this business?” Brian’s name kept coming up over and over. Brian was a successful entrepreneur for over 15 years running his own business. We were able to continually pitch him on a life change and coming out here and the opportunity of doing this. So when he took it on, we knew we had a true entrepreneur to run the business. So it’s not a loaded word. I think people like to throw it around because it’s an aspirational word. But for us, the ability to do this, and the opportunity, is sacrosanct. It’s special.

sagamore_9
CEO:
Tell us about Plank Industries, its focus and what you’re trying to do on a larger scale.

TG: I think where I’d start is to say that it’s not an accident that the first three pieces to delivering Port Covington are City Garage — a center for opportunity, manufacturing, entrepreneurship — the Under Armour building — the whole goal of Port Covington was to give the company an opportunity to grow — and then the distillery. All of those elements, especially the pieces that we control, City Garage and the distillery enterprise, are exactly what Bill was talking about. It’s about encouraging entrepreneurship. It’s about demonstrating it. And we’re very fortunate as we think of Port Covington and the bigger idea that the distillery is an incredible place-making opportunity to have something that distinctive with such a great story, creating a real product with a whole bunch of jobs right there on the site really before anything else has gotten under way. The bigger picture is the same. It really is about opportunity and entrepreneurship, and it’s about Baltimore. The rye business is going to grow, the spirits business is going to grow, and it’s very exciting. We feel like it returns great value back to Baltimore, having the distillery here in this temporary space for now and moving it over there.

CEO: It’s a level of authenticity. Having Sagamore Spirit here in City Garage doing and creating something is living and breathing exactly what you want this place to be for others, to come here and do the same thing. Same with Port Covington, when you launch over there and launch the distillery, it’s you making a commitment to what you say you want it to be. It’s committing to the vision. Am I correct in saying that?

TG: Exactly right. Here at City Garage, it’s a community of entrepreneurs, and people who have shared issues and shared problems can learn from each other. It builds that culture of entrepreneurship. This is by far the biggest business within City Garage. They’re able to set a great example. They’re able to set a brand standard around what it means to be an entrepreneur in this ecosystem. And Demian Costa has done an incredible job building that in City Garage with Kevin’s support. It’s a very exciting place for the whiskey business to be born.

CEO: What do you like most about running Plank Industries, about creating and executing visions within that realm?

TG: I like to tell people that I have the best job in the world. And I really do. Bill was talking about Kevin. To have the opportunity to work for and support someone with that level of vision who’s also willing to put his own resources behind these big ideas. For me, I’m an adopted Baltimorean; I’m even an adopted American. Usually there’s no one more passionate than an immigrant. To have the opportunity every day to go to work and deploy those kinds of resources and that kind of vision for the growth of our city is really special and exciting.As to what I enjoy the most about it, I learned to love unpredictability. I learned to love exciting opportunities that come out of nowhere. The best part for me is the team we have and working with partners like Brian and Bill, and Demian and Marcus Stephens. And Hunter Rankin, who runs the horse farm, is a terrific partner to Brian on this project. That’s really the most special part: We have incredible people all the way, throughout our teams. And we have a great team culture that I think gets excited about pulling together to launch rye. Even if their job is something totally unrelated, they’re going to be behind it and supportive. Everyone roots for it; everyone’s in bars and restaurants asking, “Do you have Sagamore? You don’t have Sagamore? What do you mean you don’t have Sagamore? C’mon, you gotta get it.” That’s the good part of it.

BM: This is a team that literally goes to work every day with the passion and the mission to change the landscape of this city and of the state. And I think that’s so powerful. It’s hard to describe Kevin and his energy, his focus, his passion, his drive, and really, his ingenuity. Having him behind it as a partner, and having the vision behind it, the idea that we can make a difference. The landscape here is going to be different in five years, in 10 years, in 20 years, and hopefully 100 years from now that distillery is still there. I think that it’s an incredibly exciting story and it’s a period of time that is truly going to be just amazing to look at and dissect. And so much of it was a vision, passion, entrepreneurship.
I’m going to get a little off topic, but I was at Cupid’s Cup, which is a wonderful event that Plank Industries and Kevin started years ago. Kevin brought in Dan Gilbert. So you’ve got Kevin and Dan Gilbert, who are, arguably, two of the most successful entrepreneurs in the world, and I happen to hear a little of their conversation. Basically, both of these guys are doubling down on cities, and what they are doing with entrepreneurship, and jobs, and creation, and they were giddy, like “I can’t believe nobody else sees this the way that we do.” And I really do believe that. I believe that they are ahead of the curve in seeing it. I can speak to Kevin because I’ve known him for over 25 years. He believes in everything he says. He believes in not only the city of Baltimore and the state of Maryland but the region. And he’s a DC guy, too. So being in DC is important to us as well in telling that bigger story. But creating those jobs, and whether it’s the distillery or putting the money into the City Garage to allow other entrepreneurs the opportunity, that had an idea, that otherwise they wouldn’t have the opportunity to have an outlet to make that end product or to network with the right people. I think it’s an incredibly exciting time, and I think it’s really going to be a magical period when we look back on this. It’s hard when you’re in the thick of it. Look, we got Brian pushing barrels and bottles, and we have people coming around — friends and family — to help you meet your goals. But at a top-line level, just the passion and the vision, I think it’s special. It’s really extraordinary.

CEO: You keep bringing up Kevin. He’s the CEO of Under Armour, a large, multi-national public company. How involved does he get with Sagamore Spirit? How many times have you guys sat down and tasted it and said, “Let’s tweak it this way or that way.” How hands-on does he get with it?

TG: I don’t think we should tell his doctor how many times he’s tasted it. So we’ll stay away from that one.

BM: In all honesty, I don’t think anyone works harder or puts in more hours, and he lives and breathes Under Armour. So, part of me, I think having the opportunity to start the company was so that he didn’t [have to], and obviously bringing in a partner, Brian, to run it. Kevin certainly has an opinion and has a vision, and is as involved as he wants to be, but I don’t think you’re going to find anyone who works harder or longer at building Under Armour than he is. He’s completely laser focused on building the brand of Under Armour.

TG: I was going to use the exact same phrase of “laser focused.” He is laser focused on Under Armour, and anything that we’re able to create that is supportive of Under Armour is excellent. And anything we’re able to do that elevates the city of Baltimore is what he wants us to get done. But there is a reason he’s put together a team — it’s so that he can focus on the day job.

BT: He’s obviously a great visionary. But we’re really lucky to be able to tap Tom and Bill. Bill’s still very hands on, which is great. Bill very much got this business off the ground and did all the research. So he’s a great person to sit down with, so we’re really fortunate to have teammates and everybody else that works here too. We’re just really fortunate to be working with the people we work with.

CEO: What’s your favorite way to drink your Sagamore Rye?

BM: I like it neat. And if it’s not neat, just a touch of ice to chill it a little bit.

TG: I like a big, slow-melting ice cube. But neat, nothing else in it.

BT: Old fashioned. But I’ve got seasonality to it; that’s the great thing about ryes. Right now I’m all about the Maryland Mule. It’s a great refreshing summertime drink. Some folks here like a good crush. Get towards winter, and I’ll shift gears back towards the Old-Fashioned, and things like that. But there are some great summertime drinks too.

CEO: Any parting words?

TG: We’re still very much getting started on all of this, working really hard. Brian and his team are doing an incredible job with this launch, but we’re excited to see it grow.

BT: Every day we get in here and talk as a team, and we’re really thankful for the support the community has given to us, local taverns, restaurants and bars, and distributors, and everybody in between in Maryland and DC, that we feel like we go to work for them every day and we really appreciate what they’re doing for us.

BM: Again, I think the story is a little bigger than Sagamore Rye, although that’s the story we want to put out there. But it’s a story of entrepreneurship. It’s a story of passion, and doubling down on our city and our state and our region to bring a world-class brand. So that’s what we do every day, it’s How can we become a world-class brand? So we’re going to do it at our pace, and we’re going to do it right, but we will deliver.

Dan Mills is editorial director of SmartCEO magazine. Contact him at editorial@smartceo.com.

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