In the midst of the Covid-19 pandemic, while others were making their own kombucha and sourdough, Mark Eltom bought a still and started crafting and maturing liquor. After a few lockdowns he started to get pretty good at it.
Mark is a serial entrepreneur with over 15 years of experience in the alcohol industry and two startups to his credit. And while he wasn’t necessarily planning to start a business this time, he realized that by tinkering in his Auckland garage he had stumbled upon a global opportunity.
He had devised a way to age spirits much faster than traditional methods, while preserving the quality of the final product.
So he doubled down and launched Reactory with a vision to “be the best in the world at maturing spirits”, making great drinks “within days instead of decades”.
Tech and taste testing
Traditionally, spirits such as whiskey and rum are aged in wooden barrels for a number of years. During that time, things like temperature, pressure and climate influence the chemical reactions in the barrel, creating not only the unique taste, but also the tone and character of the last drop.
In Reactory’s stainless steel reactors, temperature and pressure can be carefully controlled to age the spirit quickly and accurately.
Small amounts of certain woods are also added to the batch to achieve those classic ‘barrely’ tones.
“We check the parameters and pull the levers so we can make a slightly aged spirit or a slightly aged spirit,” explains Mark.
“Regardless of what we make, we go out in front of people for blind tastings, to make sure we don’t compromise on the taste or quality of that product.”
These blind taste tests pit Reactory’s spirits against leaders in the market, asking drinkers what they taste, how much they should expect to pay and – crucially – how long they think the product has been aged.
According to Mark, taste testers generally rate Reactory’s whiskeys at the more mature and flavorful end of the spectrum.
Compared to a leading top-shelf Australian single malt, aged more than four to six years, he indicates that more than 80% of testers prefer the Reactory whiskey, which is aged more than six weeks .
Reactory sells its own bourbon, single malt and gin direct-to-consumer, but the big opportunity is in B2B, Mark explains.
In the spirits industry, production costs are rising. Drums are getting harder to find, shipping is getting harder, and labor costs are high. All this squeezes the margins.
Reactory could allow distillers to quickly produce large volumes of spirits, which would help boost their profits. According to Mark, the technology also reduces the environmental impact of bottling beverages.
The traditional aging process uses huge amounts of wood that are not replanted fast enough, he says. It also generates a significant amount of Co2 and uses a lot of fresh water.
Soon, Mark plans to publicly share more about Reactory’s environmental credentials, “and lay down that gauntlet” for alcohol producers.
“I think this will only make our company and our brand stronger,” he says.
Challenge the story
Mark’s background is primarily in wine, although he has been involved in R&D in spirits in the past, and he also holds a degree in chemistry and a PhD in grape growing and winemaking.
When it comes to the booze side of things, it’s safe to say he knows what he’s doing.
However, he admits that this is also a very technically heavy company, and that is not where his expertise lies.
“We have a lot of contractors and consultants who help with those super-technical aspects.”
But the challenges for Mark go far beyond the ‘how’, right into the heart of the business.
New Zealand is the premier wine country of the ‘New World’ – historically a frontier when it comes to innovation and departure from tradition.
“Being in New Zealand and this part of the world gives you an almost inherited license to be innovative and do what you want,” explains the founder.
“You don’t have to apologize for improving a process.”
However, not everyone in the beverage industry is thrilled with this particular innovation – especially in the whiskey world, where connoisseurs are not only passionate about what they drink, but also about the story, prestige and provenance behind it.
In one instance, Mark says he interacted with the owner of a distillery who makes a brand of whiskey that he personally loves. He had hoped to work together, but the owner quickly ended that conversation, saying his company would never age whiskey this way and it would devalue the drink.
“I was so gutted,” Mark recalls.
“We got into a huge discussion about what consumers really care about.
“My argument is that consumers care about taste — they want something that tastes good at a good price with a cool story.”
For Mark, the story behind a drink doesn’t have to be about decades spent in cellars or the specific smell of a barrel. It could be a story of technology and disruption in an industry that hasn’t been disrupted in a very, very long time.
“Once we engage people in our tastings and in liquor stores and bars, you see people accepting the story and passion behind what we do,” says Mark.
Mark has now secured some funding and is in the process of starting proof-of-concept studies, including with “two of the largest alcohol producers in the world.”
“That will scale what we’re doing from hundreds to hundreds of thousands of liters at a time.”
Within five years, Mark hopes to see Reactory-aged liquors in liquor cabinets around the world.
“I’ll be pretty excited if I can ask someone in every continent what they’re drinking and say our technology was used in that process.”
Ultimately, he doesn’t think producers will have much choice. The challenges in this industry are not going away, meaning margins will either become too tight to manage, or drinks will become unaffordable for the average consumer.
“We are now making the technology that will be used in 20 years,” says Mark.