Chip Tate built Balcones into one of the country’s most innovative whiskey distilleries. But last year he lost the company in a bitter clash with his investors. Now he’s starting from scratch—again.
Chip Tate, one of America’s most acclaimed craft whiskey makers, opened the door to his new distillery, an 11,000-square-foot warehouse standing between a paving company’s landfill and the Waco Regional Airport, and surveyed the mess inside.
It was a dreary late-February day, overcast and just below freezing. A few pale rays filtered through the grime-covered skylights 21 feet above, but otherwise the room was dark. Accompanied by his newly minted operations chief, Terry Vanderpool, Tate stepped into the building and flicked on his flashlight. There were deep cracks in the concrete floor, haphazard piles of pipes, and the occasional steel beam thrusting forth from the ground like a medieval pike. “Terry says we’ll be up and running by the summer, but life will disabuse him of that notion,” Tate said. His expectations were more tempered. He hoped to be making his first distillation by this fall.
Forty-year-old Tate—sturdy and balding, with a beard so meticulously groomed it might as well have been topiary—was bundled up in a peacoat. A few weeks later, while Tate and his small team were cleaning out debris from the warehouse, they would stumble upon a two-foot rattlesnake. And now, as Tate trudged up to the small second floor where the distillery’s management would one day have its offices, he illuminated a corner that looked as though it had been occupied until only recently—a lost man’s winter home.
Not too long ago, it would have been inconceivable that Tate would be reporting to work in such a place. His talents were too rare to be spent on months of sweeping. Tate had been the president and head distiller of Balcones—a Waco distillery that he had founded in 2008—and under his direction, it had become the most celebrated whiskey producer in Texas and one of the unquestioned leaders of the national craft whiskey boom. When he started Balcones, Tate had announced himself boldly, setting out to make what he called “Texas whisky,” a heretofore nonexistent category (using the Scottish spelling) that, he would later write, was designed to capture the state’s “maverick tendencies, its climate, its restrictions and its freedoms, and its fierce notions of independence.” And in 2009 he made good on it, releasing a Texas-made whiskey into the market for the first time since Prohibition: Baby Blue, an aged corn whiskey named for the George Strait song. In the years after Baby Blue’s debut, Balcones spun out new, wildly inventive products, and it succeeded beyond even Tate’s outsized ambitions, winning 140 awards between 2010 and 2014. Tate hadn’t tried to ape the big Kentucky distilleries by making bourbon, the most popular type of American whiskey; instead he made other kinds of whiskeys and spirits that tasted like nothing else, using ingredients like Hopi blue corn and Mission figs to create rich, earthy flavors more often associated with great wines. Whiskey writers around the country were gobsmacked, likening Tate to Michelangelo, Kurt Cobain, and Steve Jobs.
But just as the rocket ship known as Chip Tate was close to achieving escape velocity, it got knocked off course, overheated, and then fell back to earth. Tate was standing in this empty warehouse because last year his run at Balcones had come to an acrimonious end. Not long after signing a multimillion-dollar deal with a small private-equity group, Tate had started butting heads with the investors, first over the escalating cost estimates of an expansion, then over whether he was fit to manage the company. In August 2014 the feud spilled into court, and after three and a half months of fighting over alleged threats, the legality of restraining orders, and the ambiguities of contractual language, the parties settled. On December 5, Tate departed Balcones for good.
With his flashlight, Tate now tried to conjure what would soon be the throbbing heart of his new operation, Tate & Company. (“I wanted to avoid any confusion in the future about who’s going to be working here for a long time,” he said.) He pointed to one wall, where a pair of gleaming two-thousand-gallon copper pot stills would soon transform fermented grains into a crude distillate. He nodded toward another wall, where four smaller stills would further refine that liquid into a high-proof spirit, which would then be aged in oak barrels for years. Tate moved his flashlight along the floor to the spot where giant tanks would hold the raw materials of distilling—malted barley and corn and fruit. “This will be the copper works,” Tate said as we passed from the main distillery floor into an adjacent room where he planned to weld stills for himself and select clients. “We’ll have a power hammer and a bunch of torches and the ability to cut and manipulate, weld, bend, and roll.”
If you squinted just right, you could see the future lurking in the shadows. In a year or two, a dozen scruffy employees would be shoveling out the mash from the stills and filling up wooden barrels by the roomful. Standing there, Tate could see it more clearly. “This is so much more space than we had last time,” he said. “But I’m telling you: in five more years, it’s not going to feel that way. Probably two years from now, it’s not going to feel that way.”
“I was a nerd,” Tate told me a few months later over wood-fired oysters and a bottle of Sancerre. “I won’t say I read the entire World Book Encyclopedia, but I at least made it to F, and if you make it to F, you get to B, and in there is ‘beer.’ The World Book is very detailed about enzymes.”
Tate was born in Lynchburg, Virginia, the son of a nuclear engineer father and a critical-care-nurse mother. But when he was two years old, his family moved to Germany, where he received an early crash course in Old World connoisseurship. “When I was six, we used to go on what are called wandern, sort of countryside strolls,” Tate said. “We’d eat dark bread and chocolate and I’d have a sip of wine from skins.”
The experience proved formative. At age twelve, back in Lynchburg, Tate fell in love with cooking, and soon cooking led to baking, baking led to yeast, yeast led to fermentation, and fermentation led him to the B volume of the World Book. At age fourteen, Tate began his first experiment in home brewing, making a primitive beerlike substance from “wheat germ and flour and whatever else,” and as the years passed, his experiments only grew more elaborate.
At the College of William and Mary, where Tate went to study physics before deciding he was a philosopher, the brewing grew from a hobby to an avocation. (He hardly ditched science, though, spending summers working at his father’s nuclear engineering firm.) By the time he started his graduate studies in religion at Union Theological Seminary, in Richmond, making beer was nearly a full-time pursuit. “I’d like to think I spent as many hours reading theology as I did brewing in graduate school,” Tate said, “but I’m not so sure.”
For the next decade, Tate worked a series of office jobs—insurance salesman, graduate admissions dean, IT consultant—as he followed his first wife, an academic, to Notre Dame and then to Baylor. When the marriage ended, in 2007, Tate realized just how long he had been deferring his dream. By that point his obsession with brewing beer had evolved into a passion for making whiskey, and although his experience in the field amounted to some experiments in a “friend’s” garage (distilling spirits at home is a criminal offense), he thought he could do it on a commercial scale. Tate saw in distillation “the intersection of art and science”—physics, philosophy, wandern, and wheat germ mixed into a potent mash.
Soon Tate, along with a small team that included a friend from brewing circles, Jared Himstedt, and an Austin-based investor named Stephen Germer, was building a distillery inside a cramped brick building in downtown Waco. “I said, ‘This is my raison d’être,’ ” Tate told me. “I wasn’t even going to clean the pile of crap left over from the divorce, I would get to that next year. It was: I’m building a distillery. How? I don’t know. You weld? Nope, not yet. It was just an all-or-nothing kind of thing.”
Texas does not have a long whiskey tradition. According to bourbon historian Michael Veach, the state had no registered distilleries prior to Prohibition (moonshiners are another story). And it wasn’t until 1995 that Bert “Tito” Beveridge secured Texas’s first Distiller’s and Rectifier’s Permit for his company, Fifth Generation Inc., and soon began to produce Tito’s Vodka.
Beveridge was a pioneer not only in Texas but nationally. In 2000 the U.S. had only 24 craft distilleries selling product—the spirits-world equivalent of microbreweries—according to industry research by Michael Kinstlick, CEO of Coppersea Distillery. By 2008, when Tate founded Balcones, there were 143. Over the next five years, the number of craft distilleries quadrupled, to 588 (in Texas the number grew from 1 to 26 over the same period), and national sales of super-premium whiskey (a category that includes most craft outfits as well as mass-market brands like Woodford Reserve and Knob Creek) doubled.
When microbreweries had started to boom, in the eighties and nineties, the movement was widely seen as reclaiming beer from the watered-down industrial hegemony of Miller, Coors, and Anheuser-Busch—a war of craft against crap. But the new whiskey makers didn’t receive the same support. Savvy spirits consumers didn’t view major distilleries like Jim Beam and Heaven Hill as peddlers of undrinkable swill; they generally saw them as makers of fine, sometimes even transcendent products. (It’s likely that every American whiskey you’ve ever imbibed—whether it’s bargain-bin Old Crow or cult-art-object Pappy Van Winkle—was produced by one of a handful of “legacy” distilleries, most of them based in Kentucky.)
No sane person would have argued that a bottle of Sierra Nevada Pale Ale was a less sophisticated beverage than a can of Bud Light, but as craft distilleries began to emerge, in the mid-aughts, plenty of highly knowledgeable people judged nearly all their whiskeys to be vastly inferior to a shot of Jack Daniel’s. The reason had to do with age.
Unlike their big-time Kentucky counterparts, craft distilleries simply couldn’t wait for their products to mature in barrels for a decade. They needed cash flow much sooner. So they tried to age their whiskeys faster, employing barrels that were much smaller than the standard 53-gallon tubs. (Because small barrels have a higher surface-area-to-alcohol ratio than large barrels, they allow more of the spirit to interact with the wood, which, in theory, should accelerate maturation.)
The established whiskey world tended to view this process as the equivalent of a teenage boy dressing up in his dad’s pinstripe suit. A young whiskey could be made to look like an older whiskey, but it would be transparently immature—too woody, off-puttingly grainy, and far less smooth. As the veteran whiskey blogger Chuck Cowdery succinctly put it, “Small barrels still produce lousy whiskey.” The issue seemed fatal for the craft movement.
But when I called Cowdery in July, he told me he felt that the problems of craft whiskey were both more fundamental and more surmountable than the conventional wisdom would suggest. “The challenge for craft distilleries hasn’t been little barrels,” Cowdery said. “The challenge has been, Can you make something that is different that also tastes good? Across the board, craft distillers have been more successful at ‘Does it taste different?’ than ‘Does it taste good?’ But Chip has been successful at both.”
Some so-called craft distillers have, in truth, sidestepped these challenges entirely. Instead of laboring over small barrels, they “source” whiskey, buying aged product from big industrial distillers. Then they blend it, slap a cool label on it, and minimize any mention of where their product was distilled. (One such company, Iowa-based Templeton Rye Spirits, recently settled three class-action lawsuits brought by consumers who alleged deceptive marketing.) Tate had no interest in such a shortcut, though, and his extreme brand of authenticity became one of Balcones’s key selling points. He was a muck-under-the-fingernails master distiller in an industry with more than its share of fakers.
The building that Balcones purchased in 2008 was no one’s idea of an ideal space for a distillery. A former welding shop crammed next to the support pylons of a bridge spanning Waco Creek, it had low ceilings and a leaky roof, and it was tiny—not much more than two thousand square feet. But limitations can sometimes free the mind, and Tate already had a plan for how to crack the code of craft.
His first insight was to avoid imitation. “You’re never going to out–Maker’s Mark Maker’s Mark,” he likes to say. “So don’t try. Do something different.”
Major American distilleries primarily used column stills, so Tate decided he would use Scotch-style pot stills, a more-labor-intensive technology that afforded him more control over the final product. First, Tate bought two 1,000-liter devices from a small Portuguese company, then he re-welded and refashioned many of the parts. “I got scars that I could show you and scars I shouldn’t show you,” Tate told me.
The big American whiskey producers base their recipes around industrial yellow corn, so Tate scouted for rarer ingredients. “A vintner wouldn’t just get any grape that he could get, he’d look for the one that had the right taste and the right structures,” Tate said. “So I thought, ‘What if we looked at it like that?’ ”
Balcones’s first distillation took place on May 29, 2009, and in September of that year, the company unveiled its first two products: Baby Blue and Rumble, a “wildflower honey, turbinado sugar, and Mission fig spirit” that was, more or less, Tate’s whimsical, flavor-bomb take on rum.
The spirits were promising and unusual, but they were very young and a little rough around the edges. Selling bottles was a struggle. “People purchased our products because they felt sorry for me,” Germer, Tate’s original investor, told me. “The only thing that was selling was when my wife and I were standing outside of Spec’s on New Year’s Eve, saying, ‘Hey, I’m Steve, this is the whiskey that I make with my buddy Chip. Want to try it?’ ”
In those first months, Balcones would release bottles not necessarily because they were ready but because the company needed to pay bills. But the product quickly improved. Six months after releasing Baby Blue and Rumble, Tate entered them in the March 2010 San Francisco World Spirits Competition, one of the industry’s most prestigious events. Rumble was awarded a silver. Baby Blue came away with a double gold.
Soon Balcones was experimenting with innovative aging techniques. Instead of just using standard-size, virgin American oak barrels, Tate adapted a technique from French brandy production. He would move Balcones’s spirits between big and small, and new and old, barrels to help remove the astringent tastes common in young whiskeys and create a more balanced product. The technique produced more award-winning results: there was True Blue, a woodier and more mature version of Baby Blue; Brimstone, a corn whiskey that is smoked with scrub oak and can taste so charred as to be almost undrinkable; and Texas Single Malt #1, Tate’s brash take on traditional Scotch.
“In those days, there were a lot of quasi-moonshiners, but Chip was actually thinking in terms of individuality, thinking in terms of terroir,” Dave Broom, the Scottish author of The World Atlas of Whisky, told me. “The most important quote that Chip ever gave was ‘I don’t want to make whiskey in Texas, I want to make Texas whiskey.’ He was making something attached to the land.”
Balcones was hardly the only craft distillery making worthwhile products. There was Koval, in Chicago; Corsair, in Nashville; Tuthilltown, in New York; and Garrison Bros., in Hye, to name a few. But no one played the part of the master distiller better than Tate. He had the swagger to tell Whisky Advocate editor Lew Bryson that he made the best whiskey in the world. He would go to New York, and the little distiller from Texas would mesmerize a roomful of national distributors with his exuberant stories of still welding. “That’s what I loved about Chip,” Germer said. “He had that wildcatter mentality—he was fearless.”
In late 2012 Balcones submitted Texas Single Malt #1 to the London-based Best in Glass competition, which selects the finest whiskey released in the world that year. In a blind taste test, judges sipped entries from the redoubtable Scottish houses Macallan, Glenmorangie, and Balvenie, but when they rendered their verdict, they named the upstart Texan the winner.
The award and, especially, a New York Times article that followed skyrocketed demand. The only solution was expansion, and the kind of expansion that Tate envisioned required an influx of capital that Balcones, a bootstrapping business that had been on the verge of bankruptcy several times, just didn’t have. In spring 2013 though, it looked as if Tate had found his ideal partners: a group called PE Investors II, headed by Greg Allen, a Charlottesville, Virginia–based businessman who had made a fortune transforming his family’s food-processing company into a $520-million-a-year empire. Allen was investing in Balcones, he told the Times, because he was excited by the “romantic concept of helping these people build their dream.” The deal seemed phenomenal: Tate’s base salary would nearly triple, to $175,000 a year. Balcones would be able to move into a much larger distillery, and Tate would remain completely in charge of the day-to-day operations and strategic decisions, or so he thought.
“I said to Chip, ‘You get someone to give you eight million dollars and have someone leave you with twenty-five, thirty percent of the company, it sounds like a great deal,’ ” recalled Thomas Smith, an East Texas–based investor and friend of Tate’s. “But I also told him, ‘Be aware that people who are in private equity are tough customers. Maybe it’s best to underpromise and overdeliver. It’ll bite you in the ass if you don’t.’ ”
Before Tate and I toured his new distillery in February, we met at his home, in China Spring, about twenty minutes northwest of downtown Waco. Tate lives with his second wife, Nicole Field, a painter and teacher, and their five children, three teenagers from Field’s first marriage and their two young children together. The place is grand and just a touch macabre: a 5,400-square-foot nineteenth-century plantation-style house with fourteen-foot ceilings, a massive wood-burning stove, a fully stocked humidor, two human skeleton models, and, of course, a vast whiskey collection.
“Do you want lunch?” Tate asked me as soon as we’d shaken hands, moving toward the kitchen without waiting for an answer. Soon the distiller was standing over a stove, deftly preparing soft-boiled eggs and crispy bacon, and darting into the pantry for spices while carrying on a conversation about the end of his time at Balcones.
“I felt like England in World War II,” Tate called out. “The last thing I wanted to do was be at war with the Germans, but I had to decide: Do I want to learn to speak German, or do I want to fight?”
People who meet Tate are often struck by his inability to stand still. His friends Robert and Jonathan Likarish, the founders of Ironroot Republic Distillery, in Denison, told me they were initially confused by Tate’s habit of walking away in the middle of a conversation when an idea seemed to strike him. (“At first I didn’t know whether to be offended, but that’s just Chip,” Jonathan laughed.)
The constant movement perhaps only amplifies Tate’s skills as an absorbing, and at times rambling, raconteur—a distiller-in-motion whose ability to expound authoritatively on any aspect of the whiskey trade seems bottomless. Ask Tate about the history of distillation or maintaining a proper barrel program or, if you’re in the mood for poetry, the high art of blending, and he’s liable to launch into reveries.
“You’re not just combining flavors—it’s a lot more like composing music,” Tate told me. “There is a progression when you’re tasting whiskey: there’s the nose, the initial flavor, the mid-palate, the finish, and how that moves is important. It’s like you’re determining the way chords flow from one to another, what the bass line is going to be, who’s carrying the melody line, and just how the whole thing flows.”
As we stood in his kitchen, it was only two months after Tate’s settlement with Balcones, and the distiller still felt defiant and wounded. In the days following the end of the lawsuit, Balcones had released employee affidavits to the press that claimed that Tate had acted aggressively in his final months at the distillery, and Tate had responded by filing a defamation suit against Jared Himstedt, his longtime production manager and Balcones’s current head distiller. In the suit, Tate and his attorney had lashed out, calling the laid-back, well-liked Himstedt a “Judas” and accusing him of “conspir[ing] with the Investors to push Chip out of his own company.”
But Himstedt and the others were all in his past now. Tate needed to staff up his new operation, and even though he was months away from anything resembling distillation, prospective hires were already dropping in on him.
“There are always people coming by trying to get a job,” Tate’s wife told me later that day, a little exasperated. “We’ll see if they can put up with his temper.”
“I don’t have a temper when things are done right,” Tate protested. “Or when they’re done wrong—for the first four times.”
Field smiled at her husband. “It’s fine for you to be the mad scientist.”
Sometimes a mad scientist is what you need to create a magical elixir. But alchemy can take its toll. “The whiskey business is very romantic,” Tate told me, “but more than that it’s really hard and dangerous and sweaty. It’s a little like Saving Private Ryan” (Tate is fond of World War II analogies).
Employees at Balcones had a motto: “We’re Balcones, we do shit the hard way.” The work was grueling and physically taxing, especially as production ramped up. The distilling staff shoveled the mash by hand, a laborious process that is mechanized at larger facilities. Tate welded and pounded copper into new stills in the middle of the small building, driving some employees nuts with the noise and sparks. Assistant distillers who came in for the 1 p.m. shift could find themselves working nonstop until well after midnight. “You didn’t have downtime,” Trenton Smith, who worked as a production intern from November 2012 to late 2013, told me. “Your break was driving a forklift.”
Part of doing shit the hard way was dealing with the boss. No former employee that I spoke with doubts Tate’s talent as a master distiller and blender, with a rare palate and capacious creativity. But all of them said that Tate was demanding and micromanaging and he could come across as condescending and pedantic, especially when he felt something wasn’t being done to his specifications. The approach left many employees on edge. “I would go up there and walk in the door and I would feel a pretty dark vibe,” said Germer, who eventually clashed with Tate and sold his share in the company. “We lost a lot of good, talented people.”
Tate had built the distillery from the ground up, and he had a hard time delegating. He needed to inspect every barrel when it came in, and he could get bogged down lecturing experienced employees on the “right way” to do everything from distillation to bottling.
To some employees, Tate’s penchant for long disquisitions on the science and history of distilling could be helpful, even riveting. Smith, who is now planning on starting his own distillery in the Hill Country, fondly remembers connecting with Tate during a twenty-minute conversation on the molecular science of distilling. But to others at the distillery, Tate could come across as a blowhard. “He’d wow us and confuse us with this technical crap without giving us the practical knowledge to actually do our jobs,” said Alex Thomas, an assistant distiller who left in 2014. “Then he’d lord it over us when something went wrong.”
Sometimes, Tate would seize dramatically on small mistakes. The Likarish brothers remember visiting the distillery one day when Tate saw one of his employees pouring water into a barrel that had already been conditioned with whiskey. Tate bounded across the floor, picked up the barrel, and tried to shake out every last droplet while bellowing, “The essence! The essence!”
Other times, Tate’s temper could have a more menacing cast. “I have seen him take an eighteen-inch monkey wrench and beat it against a large metal trash dumpster in fits of rage,” Himstedt stated in one of the Balcones affidavits.
“I’m not easy for anyone to work for,” Tate said when I asked him about his former employees’ difficulties with him. “When I’m in my zone, it’s mystifying to me when there’s somebody who doesn’t get it. It’s like, Why don’t you understand? For people who didn’t have my hunger and passion, I’m sure it felt like Nazi rules.”
Thomas Smith, Tate’s investor friend, had done work financing Hollywood movies, and when he met Tate, he saw the distiller as being a kindred spirit to some of the film directors he’d worked with. Tate was a passionately committed artist. He had “worked his ass off” to build his business and reputation. And he was uncompromising in his vision, even if realizing it meant not playing well with others. For Tate, “the end was everything,” Smith judged, and if he wasn’t easy to work for, he certainly wasn’t going to be easy to oversee, especially for a group of MBA types who expected a certain level of control and input.
“I told them from the beginning, ‘I want it to be understood that I run the company, period,’ ” Tate told me. “ ‘If something comes up and I think you can help, then we’ll have that conversation—not if you think you can help.’ ”
In retrospect, the clash to come seemed not only inevitable but entirely predictable.
After taking control of 58 percent of the company, Allen’s group established growth targets that spoke to its ambitions. In 2013 the revenue goal would be $1.47 million. By 2017 that figure would rise to $4 million. Two years later it would double to $8 million. And by 2023 Balcones would be taking in $15 million or more annually. By then Balcones would be a cash cow, with a likely valuation of over $100 million. If they ever wanted to sell, Tate would be a very rich man.
But such goals required a much larger capacity than was possible in the old welding shop by the bridge. Balcones had already bought the 65,000-square-foot Texas Fireproof Storage building that would be the distillery’s new home, but the company needed to renovate it and install much bigger stills. Tate and his partners decided that, this time, they would purchase them from the greatest still maker in the world, the Scottish company Forsyths.
Initially, Tate told the board that the new distillery would likely cost in the neighborhood of $4 million. But when it became clear that a special cooling system would be required to combat the Texas heat, the cost estimates, according to Balcones, began to creep up, first to $8 million, then, in April 2014, to $12.6 million.
The potential cost escalations set off an increasingly hostile push and pull over Tate’s role and future at the company. Allen told Tate that he wouldn’t be receiving a bonus in 2014 and that the board was appointing Keith Bellinger, the head of distribution, to be the company’s vice president and chief operating officer. Tate could remain “the face of the company outside the building,” Allen suggested in an email, but he should surrender his management role within it. In early July, Allen gave Tate a “highly critical” performance review and asked that he file expense reports and a twice-monthly travel schedule. The oversight was necessary, Allen would tell the podcast WhiskyCast, because Tate “had trouble with budgeting, he had trouble with organization, he had trouble, frankly, with culture.”
This wasn’t the kind of arrangement Tate thought that he’d struck. He felt ambushed, and he wondered if the investors were planning to get rid of him to flip the company for a profit. Moreover, Tate believed that Allen’s group just didn’t get it. “You need revenue, but more than anything else, we have to captivate the world’s attention,” Tate told me. “If we don’t, it doesn’t matter what friggin’ goals we meet. I think a bunch of guys whose basic business experience is making frozen chicken nuggets, they can’t hear that.”
Meanwhile, Allen and the rest of the board members were moving forward with a plan to raise an additional $15 million to fund the expansion, a capital infusion that could have diluted Tate’s stake in the company to below 10 percent. (Allen had offered Tate a loan to maintain nearly all of his ownership stake, but Tate found the terms—which included relinquishing his management role—onerous.) Tate’s presence was required for the board to have a voting quorum, so, incensed, he simply stopped attending meetings. In July Tate was increasingly convinced that the partnership was doomed, and according to a memo written by Allen that was released to the press, he became increasingly erratic at work, engaging in “ranting and ravings . . . about how he would destroy the facility and the company before he would ever let someone else run [it].”
On August 5, Allen and the other investors decided they’d had enough. With two privately hired off-duty officers waiting in a car outside, Allen confronted Tate and told him that he needed to take a sixty-day leave while they sorted out his future at the company. The next night, according to a police report filed by Allen, Tate called the investment manager of another board member and said that Tate’s wife wanted to see the distillery burn to the ground and that “he should have put two bullets in Greg’s chest.” (Tate has consistently said that his words in both the phone call and the affidavit were misrepresented. “It’s a good story that I’m the Walter White of distilling,” he told me, “but that’s not the case. I know I live in the real world with consequences.”)
Whatever the nature of the perceived threats, the battle soon moved on to its next phase. On August 22 Balcones filed a lawsuit in McLennan County’s 170th District Court, asking for an injunction against Tate, which would effectively bar him from the facility and forbid him to talk to the media.
The judge granted Balcones the requested restraining order, and three weeks later, Tate and his lawyer filed their response. The board’s actions, it read, were “an attempt to purloin the plump ripe peach that is Balcones from the founder Chip, who built it with his own two hands from scratch. . . . Somewhere, Vladimir Putin is smiling.” (“Did we know that we were poking the bear?” Tate said when I asked him about the flamboyant language. “Absolutely.”)
As soon as the litigation spilled onto the pages of the Waco Tribune-Herald in early September, the whiskey community made its allegiances clear. An online campaign in support of Tate began, with the hashtags #ISupportChipTate and #nochipnobalcones earning support from whiskey luminaries like Dave Broom and Lew Bryson. “The @BalconesWhisky issue is like an art gallery thinking they still have a business without artists,” read one tweet from the whiskey blogger Curt Robinson. Tate favorited it.
But there was no saving Tate at Balcones, even though he won the fight’s major legal battle. In early November, Judge Jim Meyer ruled that the board could not recapitalize, reorganize, or even discipline Tate at a meeting at which the “founder manager”—in other words, Tate—was not present. But Tate was still a minority shareholder, and the bridges had all been burned. On December 5, 2014, the sides settled. Tate sold his 27 percent stake in Balcones, agreed to a fifteen-month noncompete clause that barred him from producing whiskey (but not building a distillery), and either quit or was fired, depending on whom you ask.
Still, there was an upside for Tate: he was now in possession of more money than he’d ever had in his life, and he had become unquestionably the most famous craft distiller in the country. If you believed that Tate could repeat his success with his new distillery, as most whiskey experts whom I spoke to emphatically did, then it seemed as if he might have come out of the situation in very good shape. He would be in charge of a big new venture, and, with a plan to lock up the company’s Class A voting stock for himself, he would make sure that he stayed in control. Meanwhile, Balcones wasn’t doing badly either. There was no doubt that it was a “fundamentally different company” without Tate, as Cowdery wrote, but with Himstedt as the new head distiller, it had continued to win awards (albeit, Tate would add, with his whiskeys), it was planning to launch several new products, and it was going forward with plans to move into the new distillery.
“The rumor mill was that Chip was brilliant enough to have orchestrated the whole thing,” Jonathan Likarish told me. “It was like a Hollywood Instagram naked selfie staged for publicity. Now everyone knows who Chip Tate is, and everyone knows what Balcones is. I realize now that there are grudges, but at the outset I really wondered if it was staged.”
When I asked Tate about this theory, his lips curled into a slight grin. “If I were that Machiavellian, I wouldn’t admit it,” he said.
In February Tate had told me that he would be welding his new stills by the first half of April, but when I visited the Tate & Company distillery in late June, the sheets of copper had just arrived. The signs of progress, however, were undeniable. The warehouse no longer looked like a horror-movie set. Daylight beamed in through giant roll-up doors. The tanks and vats and mixers, purchased from Baltimore’s Heavy Seas brewery, were now in place, dominating the main room. Inside a trailer next to the warehouse—Tate’s makeshift office—I found the distiller wearing his uniform of leather suspenders and canvas work pants, looking through an online version of The Art of Coppersmithing: A Practical Treatise on Working Sheets of Copper Into All Forms, a guide, he proudly told me, published in 1911.
Tate couldn’t start making whiskey until March 2016 because of the terms of his settlement, and because he planned on having a two-year aging process, he wasn’t expecting to sell any of it until 2018. But sooner than that, he would begin distilling the state’s native grapes into a potent brandy, the start, Tate hoped, of a “Texas brandy tradition.” The Tate & Company team that would help him was beginning to take shape. Vanderpool, Tate’s original operations chief, was gone (“Things just didn’t work out in different ways,” Tate said), but two former Balcones employees, Arnulfo Aguilar and Curtis Grabowski, had joined Tate, and he had hired a Seattle-born distiller and welder named Etti Bane, who quickly assumed Vanderpool’s role as the de facto number two. (“When I met Chip, he gave me a business card with his cellphone number on it and he said, ‘You seem like the right kind of pain in the ass,’ ” Bane told me.) Bane seemed to have already figured out Tate. On a lunch break, as they looked online for anvils, he began to correct her on a minor technical point. “You’re right, I’m wrong. You’re big, I’m small,” she snapped. He backed off with a smile.
Later, inside the warehouse itself, Tate, Aguilar, Grabowski, and Bane began to work the copper for the first time, using a heavy-duty metal rolling machine to shape what would soon be part of the massive pot stills. Tate had never used the equipment before, and it showed. Feeding the first sheet of copper—the future neck of one of his stills—into the machine, he remarked, “It’ll be somewhere between really good and miraculous if we make this work right.”
The work was slow, painstaking, and largely improvised, with Tate and his crew lifting the piece up and down as he adjusted the height and pitch of the machine’s four rollers. After an hour, an awkwardly shaped cone had been molded. Uneven and tilted, it looked like a Richard Serra sculpture; Tate would hammer it into finished shape.
It was hard to imagine that Allen’s group would have taken kindly to the two-month delay or to Tate’s idiosyncratic approach to shaping highly valuable pieces of copper. But Tate has always seen what he does as an art—consequences be damned—and he knows that mistakes and inefficiencies are just the raw material of happy accidents and the key to unforeseen innovations, the kind of things that made Balcones a success in the first place.
A few weeks after the arrival of the copper, Tate was kicking back in his suite at the Hotel Monteleone, in New Orleans, detailing the future of his new distillery to an elegantly dressed Mumbai-based spirits distributor named Keshav Prakash. Tate had come to the Crescent City for the annual Tales of the Cocktail convention, and while he wouldn’t have any whiskey to sell for a few years, he was still much in demand. Writers like Broom met with him to hear about his plans and be regaled by his stories; beverage consultants eagerly pressed business cards into his hands as he prepared to speak on a panel titled “What’s the Right Deal to Take?”; younger distillers sought him out and Tate sampled their wares, staying up until midnight to talk with them about chill filtration and the dangers of fusel alcohols. (“He’s the first celebrity distiller in our conference,” Jonathan Likarish told me. “People just follow him around—it’s like a Pied Piper effect.”)
Prakash, though, was an unexpected companion. India is the world’s largest whiskey market, but Indians don’t drink American whiskey, much less limited-production craft whiskey from Texas. And craft spirits makers are generally advised to focus distribution and outreach tightly on their local markets. Strategies that involve conquering New York City, to say nothing of the entire Indian subcontinent, are generally considered unsound. But the world had consistently embraced Tate’s whiskeys, and he had always been too recklessly ambitious to heed industry dogma anyway.
“I first met Chip with another amazing distiller, Patrick [van Zuidam], from the Netherlands,” Prakash said as I joined them. “Patrick has an amazing, pristine, very Dutch distillery.”
“We have a working toilet,” Tate quipped.
“Tell me, what do you plan?” Prakash asked.
“We’ll do thirty to fifty thousand cases—that’s the first stable orbit,” Tate said. “At Balcones we were doing five thousand. The only thing that kept people from burning us at the stake is that I promised I was building new stills. You could say we were a huge success, but Dewars does nineteen million cases.”
“With vested interest, I’m interested in hearing more about the whiskeys,” Prakash pressed.
“We’ll be making very similar things to what I made before,” Tate said. “If other people continue to make that, then that’s their decision.”
“Good,” Prakash said. “Why reinvent the wheel? Too many people are doing too many different things. India isn’t ready for the weird stuff.”
Tate smiled. “If you ask the average person in a bar today which craft whiskey they like, I’m not sure if they could tell you. Five years ago, I know that no one would be able to tell you.” He paused. “Five years from now, I think some of them will be able to tell you.”
Prakash nodded. He needed to be on his way, but he said he was looking forward to a future collaboration. The men agreed to talk in two years. Tate had seen how fortunes could rise and fall, how control could slip through your iron grip, how dreams could blow up in your face. It was never too early to begin laying a new foundation.
“I’ve realized that you’ve got to plan for success,” Tate had told Prakash. “If you don’t, when you have success, you’re screwed.”