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Tuesday, Oct 3, 2023

Spirits, Funds Raised at Surf City Distillery

Surf City Still Works is making waves with its casual, coastal-inspired spirits.

With $2.7 million in fresh funds and an all-star cast of investors with local ties, the 2-year-old Huntington Beach distillery—the city’s first craft distillery—is moving on with plans to expand.

Funds will support a new 25,000-square-foot facility in Huntington Beach behind its existing location in a business park just off Gothard Street. The company hopes to open the new spot by the end of the year.

It will include a distillery 20 times the size of its original one and a 100-person tasting room with a full-service kitchen.

It promises to be the second-largest distillery in Southern California, and will allow Surf City to make nearly 100 times the amount of product it currently produces, the company said.

The rapid growth plans are fueled by widespread demand for the company’s selection of vodka, bourbon, gin, rum and canned cocktails, said Partner Chris Van Dusen.

Surf City neared its goal of $1 million in sales last year, and has seen revenue approach $3 million half way through 2020, he said.

“We believe that our amazing spirits and the high-level brand attached to it is a recipe for success,” said Van Dusen, a local marketing exec who joined co-founders Elena and Josh Korn-of, investing in the distillery with his wife, Sara, in mid-2018.

Supporting Cast

Surf City’s newest investors and advisers have some serious chops when it comes to brand-building in the area.

They include Bob McKnight, founder of Quiksilver Inc. and his son, Robbie Mc-Knight. Together they bring more than 50 years of experience in sports apparel and retail.

Connections run deep; golf apparel firm TravisMathew, which acquired Robbie Mc-Knight’s shoe company Cauter ahead of its own $125.5 million sale to Callaway Golf Company in 2017, is also making contributions to Surf City.

The casual sports apparel firm’s co-founder Travis Brasher and president emeritus Ryan Ellis are both investors and advisory board members, along with the McKnights.

Quiksilver, which now operates under the umbrella of Boardriders Inc., and TravisMathew are based in Huntington Beach, a few miles from Surf City’s operations.

In the beverage department, Surf City has also won the attention of Bart and Dan DeClark, co-founders of artificial sweetener maker Flavor Infusion International. The company has operations in Laguna Beach and Panama. They’re also investors and advisory board members.

“I think I can speak for the advisory board when I say that we’re proud to be investing in our local community and in a product as cool as this,” Bob McKnight said. “We will use our experience to guide the distillery to become one of the most recognizable and enjoyed brands in the space.”

“We believe our story is one of momentum,” Van Dusen said.

“The alcohol business is a difficult one, and finding the right distribution partner and the right advisory board members is really the challenge. We think we’re positioned well in the current environment, as the only distillery in Huntington Beach and one of the few in OC. We are growing extremely fast and we couldn’t be happier to see our brand resonating with the community.”

Sales Afloat

Since the pandemic, retail sales via its distributor Southern Glazer’s Wine & Spirits are up more than 50%, according to Van Dusen.

Surf City’s spirits are available at Costco, Albertsons, Total Wine & More, among others.

Director of Sales Ben Carpenter, most recently the beverage director for Newport Beach’s Balboa Bay Resort, is driving retail growth and brand expansion, Van Dusen said.

Meanwhile, the company has also seen 30% to 40% of its overall sales come from curbside pickup, while its tasting room remains closed in accordance with the state, he said.

Like other area booze makers such as Santa Ana’s Blinking Owl Distillery, Surf City has helped make bulk sanitizer for commercial and personal use during the pandemic. After an initial flurry of sales, that product line has seen slower sales as the year has progressed and larger national sanitizer manufacturers upped their production.

Other new hires include Bill Auxier, who was tapped as head distiller just in time to oversee capacity expansion from 5 gallons per hour to 8 gallons per minute in the distillery. He will bring innovation to the menu in the form of new spirits.

Auxier was previously production manager and distiller at Los Angeles-based Greenbar Distillery.

Van Dusen said consumers can expect to see new canned cocktail flavors and a new category of hard seltzer drinks hit the menu next year.

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