Hey, I’m Casey. Welcome to our newsletter, sharing the startup journey of Kamui Whisky K.K. We’ve been busy, but when we aren’t overwhelmed, we’ll share a story as we craft up a whisky distillery on a remote, frozen, volcanic island in the most northern part of Japan.
After a hard and deeply challenging year, we’ve closed up the distillery for the impassable winter season.
Earlier this week, our dedicated Operations Manager, and our all-star magician, Shiraita-san, took the lead in shutting things down for the winter. Tracks had to be shoveled through the heavy snow to reach the distillery. None of it was easy. But pipes were drained, the boiler was disassembled, everything was locked up, ready to weather the winter, and take us into a New Year.
Bone Tired, Goal Achieved
To get to this point of closing down the distillery for the winter, for the team to disperse to their homes, it was tough.
The last 3 months of the year were very trying for the distillation team. Hell, the whole year was trying, but these last few months saw the team working so hard, putting in long hours, day after day without a break.
All to reach the goal of making sure that we distilled 6000L in 2023. To keep our distilling license, we have to distill a minimum of 6000L a year.
By September, we were way behind. Going into September, we had only distilled 2,566L of hearts, and we had only 3 months left to distill. The distillery had to stop production in May, and we had a whole bunch of other challenges that slowed things down.
But despite the challenges we faced, Javier, our Head Distiller, stepped up and led. He took the team to 6 days a week production. And even past that. We had as many fermentations going as possible; fermentations being our bottleneck. Someone was in the distillery every day of the week for the last few months. Our younger distiller went 9 days in a stretch without a day off.1
Through Javier’s leadership, we came from behind and blew past that 6000L keep-your-license threshold. We ended up producing 40 barrels (yes, our production is tiny) and 650L of Kamui Genshu. In all, about 8500L of 58% abv. Easily clearing the line we had to pass.
A Horrible Low
One of the lowest points of the year was when we unexpectedly had to stop distilling for almost all of May. We only distilled a very meager 162L in May.2
The reason: wastewater.
Even from the early planning of the distillery, trying to figure out how to handle the wastewater was a mystery. A puzzle. Regulations seemed awfully gray, and different distilleries seemed to handle the wastewater in different ways.
From the beginning, as part of our founding ethos, we wanted to be very responsible to our environment. Treat it with respect. We got advice and many comments, even from locals, to just drop the wastewater into the ocean. Not something we ever want to do. The konbu that surrounds us, the world-class sea urchin that eat that wonderful konbu, our neighbors. Much of our human neighbors thrive on that konbu and sea urchin economically, and we’d not do anything to harm that.
There are no wastewater processing facilities on Rishiri, at least that could handle distillation. So we found a way to ship it off to Wakkanai for processing. It was expensive; the ferry costs for a lorry are not cheap at all, and we were sending a big lorry back and forth filled with wastewater every couple of weeks.
All of a sudden, we were told that we could no longer have the wastewater processed in Wakkanai. A higher-level facility had to do it. Along with this news, that had the weight of a solid punch, we were caught up in power games, got bullied, and had to deal with the parties absconding as quickly as they could from responsibility.
The only time I “lost it” this year was when the facility we were using shipped back our wastewater and sent us double the bill for it.
It was an ugly situation, and the team was stressed.
We’d filled up our septic tanks as far as they could go, meaning we wouldn’t be able to distill any more until we found a solution.
It took some time, but the quick initial action of the aforementioned magician, Shiraita-san, and our then operations manager, doing a road trip around Hokkaido to find and meet wastewater processing facilities found the solution. In a couple of days, they clocked up 1500 kilometers of driving. But they came back with a solution. It took time to get contracted, but now our wastewater is shipped all the way to Sapporo for processing.
We had a solution. Scrambled for it, in that startup way, but it is not a lasting solution. As you can imagine, it’s not cheap. Forty percent of the cost to produce a barrel is for taking care of the wastewater.
Worse, it brought out deep cracks in the team.
Team Problems
Recriminations were abound.
Distillers, craftsmen, don’t like standing around with nothing to do. They want to distill, produce what they love.
Building a great team is hard. Bringing together a startup team, that has that flexible mentality, that can work and find solutions without resources, that can handle ambiguity and the unknown, is much, much harder. And to do all of this in Rishiri, where it’s incredibly hard to hire, and just as hard to bring someone from outside the island onto it (no housing, lifestyle challenges, etc.) is exponentially harder.
It became an ugly situation. A lot of negative energy. Very little trust. Poor communication. Low Psychological Safety. It was a rough time for the members to have to go to work in that environment every day.
I, and the team, tried to work through it, but fixing broken relationships is really tough.
Eventually, I had to relearn an old lesson. When you can’t fix attitudes and trust, despite best efforts, you need to say goodbye. The company, and the member, should part ways. It’s best for both sides, but it’s never easy. The best way is to do it early and clearly. Retrospectively, I was too slow in moving; the team had to bear weeks of disgruntlement and a negative atmosphere. I should have made those decisions and had those difficult conversations earlier. It would have been better for the team and the members we were saying goodbye to; freeing them up for someplace they would be happier.
We ended up parting with half our team.
Rumor got around quickly on Rishiri. Word moves very fast locally, especially about bad news. The town was worried for us. I got several calls and messages about whether we would be alright. Could we operate? "Yes, we’ll get through it. It’s been tough, but it is for the best." And writing this several months on, it was. The team operates together well now. There is trust, communication is multiple times better.
Through this difficult period, I also gained a first for me. In 20 years of management, it was the first time that I received a formal Power Harassment claim. Lodged with the local authority. I’ve thought I’m a reasonably good and decently experienced manager, but I still can step on a landmine. Of course, there are two sides to a story, and things I can improve, but I think saying “No” to an internal coup is a reasonable position to take.
A Horrible Low - #2
The hits kept coming.
400,000 yen in the bin3.
Literally.
Well, actually, we don’t know what happened to it, but the best guess is that the cash was put on (in?) a stack of papers and was just thrown away. While we registered the loss with the police, I don’t believe it was stolen. No one in the team, nor around, is that type of person. It was just embarrassingly bad negligence.
This was probably the nadir of the year and happened before we fixed the team. But it is a clear indication of how much we were struggling to mature and overcome issues in our startup journey. We had to operate, manage, and work as a team much, much better. At least, other than May, we were doing one thing very right - making great whisky.
Random Acts of Kindness
While life, and particularly startup life, has its trying moments. When you doubt yourself and your abilities. There is a lot of good.
We were on the receiving end of a lot of kindness.
One day a Mizunara barrel arrived at our distillery like an unexpected guest, its rich, woody character infused with the warmth of generosity. It was sent by one of our neighboring towns in the Soya area, on the mainland of Hokkaido, Horonobe Town.
The Mizunara barrel was beautiful. They are very hard to come by and extremely expensive. We received a very modest invoice for shipping. They’d sent it out of their own initiative and kindness. We’re looking forward to making a very special whisky with this Horonobe Town Mizuhara barrel.
We had several really rewarding new relationships blossom. With chefs. With volunteers that helped out at our event booths in Tokyo (thanks, Kobayashi-san 👋!!). To a special invitation to visit Ikawa Distillery4; the second most remote distillery in Japan.
We had a lot of help from many people. Many people gave us assistance, offered support, and helped us in the struggle to reach this ending of the year, in a much more positive, accomplished place than we were for most of it.
Always Sold Out
And, thankfully, for us as a business, we are always sold out.
Whether it is our Owner’s Barrels, which have a multi-year waiting list, and whose price has increased 3x since we offered our first season for sale (well done to those early believers who took a risk 🥳). From now on, we will only offer 10 Owner’s Barrels for purchase each season, out of a total annual production of 40 barrels.
Our award-winning Kamui Genshu is always sold out as well. Usually, there isn’t much of a market for new make. It’s sold in small quantities. Understandably so, as much of it tastes like tosh.
Often it only takes a couple of hours from when we make a drop to one of our liquor store partners to when they sell out. We really can’t make enough.
At one of our close partners, Sato-kun, in Rishiri-Fuji, they went from a policy of limiting 1 bottle per person to 1 bottle per family because so many people came in with multiple family members to buy as much as they could.
Next year we will be raising the price of our Kamui Genshu to 4500 yen + tax from the current 3000 yen. It’s more in line with the price of new spirit from other Japanese craft distilleries. Positioning our Kamui Genshu pricing, perhaps overdue (see above, crazy wastewater costs).
There are still a couple of places where you can get our Kamui Genshu at the current 3000 yen. At Hokkaido Airport's store in Sapporo:
Or at Sakaguchiya in Yokohama. As of this writing, those are the two places that I know that have stock.
A Strong Core Team
In the face of relentless adversity, our team stood steadfast, facing down challenges with the unyielding resolve of intellectual warriors in the arena of ambition. Frozen warriors battling the elements and psychological isolation to make a distinct single malt whisky that carries the terroir of Rishiri.
Thank You!
2024 will of course come with challenges and surprises for us. But we will overcome. We go into next year with a solid, core team. We’ve overcome a lot in our first full-year of distillation. We can take a lot, and still make some of the most sublime whisky. What we are doing here in this remote, incredibly windy, incredibly challenging environment in Rishiri is imbued with love.
May our spirit strengthen yours.
Happy New Year.
He and the whole team deserve the multi-month rest.
Compared to 1200L in November, our highest production month.
This was all the cash from the sales at our Kamui Whisky festival. Our wonderful moment, followed by pain.
A future blog post is in the works!
Amazing journey Casey. Ups and downs are of norm when you’re in an adventure, but you know that the most resilient teams will win in the end. We fans all know Kamui is one of them. Sending my best to you and the team for another amazing year in 2024. Kampai🥃
Your writing is always captivating, and your sincere passion for success shines - I genuinely admire your honesty in the trials and tribulations of Kamui. Congratulations on a successful 2023 closure and looking forward to reading about more awards in 2024.