the plan was to escape the Yukon cold and start a small boutique hotel in Costa Rica.
That’s why Karlo Krauzig and his wife, Sarah, spent four months scouring the Central American country in search of the ideal location.
But when they learned that Sarah was pregnant with twins, the couple decided to head home.
Now, instead of being surrounded by pampered guests in a rainforest resort, Krauzig works mostly alone in a cavernous warehouse on Industrial Road.
His sole companions most of the day are massive, gleaming stainless steel and copper tanks and towers, cookers, coolers and condensers, custom-made in Europe to his own specifications.
Like his German-born father before him, the 45-year-old Krauzig is his own boss. That’s the way he planned it growing up in Whitehorse, and that’s how it’s been thoughout his adult life.
As an entrepreneur, Krauzig began with a pet store, which he ran for 15 years before getting into the real-estate investment business in Vancouver. That’s where he met Sarah, even though she was also a Yukoner.
When they returned from Costa Rica, as Krauzig was exploring new business opportunities, he became aware that Yukon’s liquor laws had changed – “a little bit slower than the rest of Canada, much to the chagrin of many people”.
When he was younger, Krauzig had considered going into the restaurant or bar industry, perhaps starting a pub.
“As I got older, it became less of an interest. It’s a lot of work being on the front end in the public, a lot of late hours. When you have twins at home it’s not very advantageous to not be at home all the time.”
His next thought was to open a boutique wine store offering “all sorts of exotic wines that you can’t get through the typical liquor channels”.
That idea hit a brick wall when he discovered there was no permissive legislation in place for such a venture.
“They haven’t relinquished control over that as of yet,” Krauzig says, although the law now permitted makers of beer, wine and spirits to sell products they manufactured themselves.
“So I began doing my research, before anyone was in the distilling industry in the Yukon.”
Three years ago, Krauzig headed to Washington State to take his first distilling course at an award-winning craft distillery.
It was the first of three US distilleries where Krauzig would learn the intricacies of alcohol manufacturing.
Craft distilling is still a budding industry, he says, much as the micro-brewing industry was 20 years ago.
“The micro-breweries aren’t really competing against each other. They’re competing against the larger manufacturers. The same with the smaller distilleries,” he explains.
“Some small distilleries will help each other out, because they know it’s more of an artisan approach to manufacturing alcohol.”
After finishing his training, and with the equipment he needed finally in place, Krauzig was set to begin operations at what is now called Yukon Shine Distillery
“I made some decisions that may have not been the best decisions financially, but it’s definitely reflected in the quality of my product.”
His plan was to start with a high-end vodka made strictly from locally-grown Yukon Gold potatoes.
“What I didn’t know was that no distillery on the planet uses exclusively Yukon Gold potatoes.”
Yukon Gold, it turns out, has the lowest starch content of any potato, and it’s the conversion of starch to sugar, with the addition of yeast, that makes alcohol.
Even with a reliable local supplier, it would take four times the amount of potatoes to produce the same amount of alcohol he could get from grain. The only viable option was to make his vodka using Yukon Gold potatoes for their unique flavour, as well as rye and barley for their higher starch content.
By next year, Krauzig hopes he’ll be able to save transportation costs by getting his grain from the same Mayo Road supplier that provides his spuds.
Another unanticipated expense came from having to adapt the warehouse roof to accommodate the 23-foot distilling column needed for an efficient yield of 96 percent alcohol (later, of course, diluted to the standard 40 percent alcohol by volume).
Then there was the year it took to find a manufacturer who could perform the “impossible” task of painting the labels on the elegantly-tapered square bottles Krauzig had commissioned and stocked.
Add in the expense and time of fighting off legal challenges to the name of his vodka – YukonWinter- it’s not surprising it took three full years to get his first 500-bottle run of premium vodka ready for market.
Fortunately, there was no such challenge to the name of his second product line – AuraGin – which is still in the fine-tuning stages, but should be available this spring.
Once he starts producing a line of whiskey, however, there will be another lengthy wait while it ages in Hungarian casks for the mandatory three years before it can legally be called whiskey.
“I’ve got a lot of patience,” Krauzig says.
That is obvious as he meticulously walks an observer through the full process of converting potatoes and grain into a distinctive, high-end beverage that sells for a substantial $48.95 for a 750 ml bottle.
Krauzig’s pride in running an efficient manufacturing operation that may see a genuine Yukon product on tables throughout the world is also obvious.
Not to mention the satisfaction of being his own boss in a business he clearly loves.
“I like the idea of being involved in every aspect and controlling what goes on physically.”