We’re excited to introduce you to the always interesting and insightful Heather Manley. We hope you’ll enjoy our conversation with Heather below.

Heather, thanks for taking the time to share your stories with us today Let’s start with what makes profitability in your industry a challenge – what would you say is the biggest challenge?

A small, woman-owned, self-funded craft distillery faces numerous challenges when competing in an industry dominated by large, well-funded corporations. These challenges span financial, regulatory, market access, branding, and operational aspects. Below are some key hurdles and how we navigate through them:
1. Financial Constraints
• High Initial Investment: Distilling requires expensive equipment, ingredients, and aging facilities, which can be difficult to finance without external investors.
o Our solution was to embrace contract distilling for our launch, minimizing capital investments while allowing us to embrace innovation.
2. Regulatory & Compliance Barriers
• Complex Licensing: Distilleries must navigate federal, state, and local alcohol regulations, which can be costly and time-consuming.
o Our decision to contract distill put all this reporting pressure back on to the manufacturer, minimizing our need for operations resources.
• Distribution Restrictions: Many states have strict laws requiring distilleries to work with distributors, limiting direct-to-consumer sales. Larger companies often have pre-established relationships with distributors, making it harder for small brands to gain shelf space.
o Our solution was to grow initially with small distributors, so we mattered and then scale with success to more robust distributors. This has had mixed results and a lesson learned is that one of the distributors we moved to was actually too big for us and we were lost within their portfolio quickly as we didn’t have enough sales to command the attention. We then switched to a smaller distributor to try and reclaim the attention, which worked, but transitions are costly in time and dollars, the opportunity cost of this mistake was significant regarding our velocity in the local market space.
3. Market Access & Brand Visibility
• Competition for Shelf Space: Large corporations use extensive distribution networks and retailer incentives to dominate liquor store shelves, leaving limited space for small brands.
o Our solution was to position us as a premium brand that doesn’t play the kickback game. I’ve never asked businesses for free goods or services, I’m not sure why that happens so frequently in the beverage world. We are all businesses trying to grow, lets come up with a solution that works for all of us.
• Consumer Awareness: Without large marketing budgets, small distilleries struggle to build brand recognition against major brands with national advertising campaigns.
o With our strong philanthropic commitment, we decided to lean into a different brand awareness strategy that leveraged sweat equity vs dollars for exposure.
4. Production & Supply Chain Challenges
• Scaling Limitations: Increasing production while maintaining quality is difficult without significant investment in equipment and skilled labor.
o Contract distilling was the natural solution for us to launch. Allows us to innovate and quickly bring products to market while managing our costs.
5. Gender Bias & Industry Gatekeeping
• Male-Dominated Industry: The spirits industry has historically been controlled by male leadership, creating barriers to networking and mentorship for women entrepreneurs.
o I believe it’s better to be the one that doesn’t fit in vs the lemming. We lean into the fact that we are one of the very few women owned/led/financed distilleries in the US.

Heather, before we move on to more of these sorts of questions, can you take some time to bring our readers up to speed on you and what you do?

Our Story: Crooked Water Spirits (CWS) is a Minnesota based certified woman-owned and financed micro craft spirits company. Owner and CEO, Heather Manley, created CWS in 2013 based off an infatuation for spirits and love for growing idiosyncratic brands that radiate life, values, quality, and passion.
What problems are we solving? Creating spirits that don’t exist in the craft market currently that align with our 3 pillars: Innovation, Quality and the Experience.
Our Distinctions:
First spirits company in the US to become certified as WBENC women-owned
Official Old Fashioned on Sun Country Airlines
Heather Manley – Whisky Sommelier Certified
Recognized as an Innovator in Spirits in Minnesota via Mpls/St. Paul Magazine, 2019 Top 10 Women Pioneering within the Spirits Industry via Rachel Ray Magazine, 2019 rated and highlighted via the Whiskey Advocate, Vouge in 2020, and 2021 Rackhouse Roundtable Series
Multi Award-Winning Portfolio across the country – over 60 Double Gold/Gold/Silver Awards from San Fran to New York
100% owned and financed by Founder, Heather Manley
Rotarian Commitment: Responsible for over $250k raised with 100% of the funds going to multiple local charities with our experience-based donations
All profits to date have been reinvested back into CWS to grow the brand

Can you open up about how you funded your business?

Not unlike the book, Lean Start-Up, I began with a handful of barrels and a contract distiller. We did a very small bourbon release to test the market and when it sold out within 72 hours, it was affirmation we should continue to move forward and make bigger investments. In the beginning, I self-funded it and after about 4 years, it became 100% company funded. To the day, I still reinvest 100% of the profit back into the business.

We often hear about learning lessons – but just as important is unlearning lessons. Have you ever had to unlearn a lesson?

The biggest lesson I’ve had to unlearn is thinking I needed to do it all. In the very beginning of CWS, was doing everything – from financials to sales. At the end of the month, it would take a lot of energy to put together the financials and it led me down a rabbit hold of feeling incompetent and like a failure. I started feeling like my tech company was a failure and my distillery was a failure – despite both growing over 20% that year. What I realized was that my feelings towards preparing the financials started to put me in such an unhappy place that started to morph my perception of reality. This showed its self on a Sunday afternoon work day when I just broke down in tears and let out all the feelings of failure. After I calmed down, I started to assess reality and begin peeling back the onion of where that was coming from. I was trying to do it all, hustling too much at the sake of my own happiness (thinking I could splurge in hiring an accountant), and was obviously spending too much time in the wrong seat – finance/operations. Once I started to see clearly again, that Monday I called a woman-owned accounting services firm I knew and hired them immediately. Now I continue to stay hyper aware of what seats I’m spending most of my time in and, if they are the wrong ones, hiring to them.

Contact Info:

• Website: https://www.crookedwaterspirits.com
• Instagram: crookedwaterspirits
• Facebook: https://www.facebook.com/CrookedWaterSpirits
• Linkedin: https://www.linkedin.com/company/crookedwaterspirits/?viewAsMember=true