Small Business: The distillery turning bread waste into award-winning spirits

Jenny McDonald and Sue Stockwell, co-founders of Dunedin Craft Distillers. Photo / Dunedin Craft Distillers

Dunedin Craft Distillers’ co-founders Jenny McDonald and Sue Stockwell talk to the Herald about how they are upcycling bread waste into award-winning premium spirits, and how they plan on expanding their output.

Who are Dunedin Craft Distillers?

Built from the ground up to tackle local food waste, we have been brewing and fermenting bread and bakery waste and then distilling it into award-winning spirits since 2020.

Dunedin Craft Distillery is the first distillery in Aotearoa and one of only a handful worldwide to upcycle bread and bakery waste into spirits, with all of the alcohol we produce being crafted from scratch.

Testament to our unique process, our The Bay Gin and Dunedin Dry Gin won gold and silver medals at the 2023 London Spirits Competitions, and we were named in National Geographic’s annual guide of the most exciting, meaningful, and one-of-a-kind travel experiences for 2024.

How did you come to form Dunedin Craft Distillers?

Jenny: So I worked at the University of Otago for several years and I was getting towards the end of my career. Before Covid, I’d been having coffee with a mutual friend of Sue’s and mine, and she was explaining to me the quantity of bread and bakery waste that ends up in landfills each year.

I was horrified and had no idea, so I went away and thought bread’s full of sugar and carbohydrates, so we ought to be able to make alcohol out of it. And that initial idea sent us down a rabbit hole.

There were four of us who began, really as a bit of a trial, and Covid provided an opportunity for us to kind of put things into practice and see if we could actually make alcohol. A few months into that process, we thought we could turn it into a business.

How much bread are you processing, and what does the product range look like after three years?

Sue: We’ve processed since we started nearly 11 tonnes. We aim to be able to do three times that.

We’ve got about eight different products now. We started with just two. We started with our Dunedin Dry Gin and our Cacao Vodka, which we called chocolate vodka initially, but that has a connotation that could be sweet and it isn’t. So we learned our lesson quite quickly on that, and it’s continued to grow.

The business sources some of its botanicals locally. Photo / Dunedin Craft Distillers

What was the biggest challenge you have faced together?

Jenny: Starting from the bread. A lot of distillers don’t make their own alcohol. You usually buy ethanol and then you re-distill it with botanicals or flavourings, whereas we were doing it the hard way and actually making the alcohol from the surplus bread and bakery products.

That’s what we still do, and that’s what we always will do as it’s the whole reason for our business.

It’s a very different model to many other distillers. There are a few around New Zealand who use malted barley, or they might use sugar or something like imported sugar cane. But most of them will buy what’s called neutral grain spirits or neutral alcohol that’s either imported or comes from Fonterra.

Speaking of that fundraising effort, could you explain what that’s for?

Jenny: So the main reason for the fundraiser is up until now the mash, which is the process of cooking the bread up has been literally done by hand in a big kettle that was kindly loaned from Richard Emerson (founder of Emerson’s Brewery), and that was the last time we scaled up. The most we could do in that pot was 250 litres.

Sue: It was manual, very manual. It meant one of us stirring for about three to three-and-a-half hours. Bastien (chief mash stirrer and front-of-house specialist) has done most of that recently, but it’s a very manual process, and the aim is with the new mash kettle that it will have its own agitator, so we won’t be stirring, and it’s three times the size.

Jenny: What we had to do with Richard’s kettle was spend three days brewing. With the new kettle, all that brewing can be done in a single day.

Dunedin Craft Distillers currently mash their bread and bakery products by hand. Photo / Dunedin Craft Distillers

What’s it like working with each other?

Jenny: The really nice thing is that there are two of us. I can’t imagine embarking on something like this on your own. I mean, we’ve got different personal lives and different backgrounds.

Sue: We’ve got different strengths that complement one another.

Jenny: In addition to Bastien, who joined us a year and a half ago, there are various sorts of friends and family who come and help out along the way. So yeah, often quite a nice social time to be had.

You do workshops at the distillery as well, could you tell us more about those?

Jenny: We ran the first workshops as part of the Wild Dunedin Festival, which happens down here every year around Easter time, and found they were pretty popular. It’s a nice opportunity for people to learn a little bit more about particularly the gin-making process, and more to the point, to learn how to make their own.

Starting from the alcohol and including different local or seasonal botanicals, as well as some of the teachings and so on that we can provide here. So it’s a lot of fun and very hands-on.

The business has recently begun running workshops on how to make alcohol. Photo / Dunedin Craft Distillers

What’s been the biggest highlight of the business?

Jenny: I think the highlight is just the quantity of bread that, just by chipping away, we’ve actually managed to just save so far.

One of the other things we’ve realised as we’ve gone on is if you can make a good drop of gin or other spirits out of bread waste, why would you use pristine agricultural products? Because we’re using basically what’s already a sunk agricultural cost. So that kind of aspect has grown on us.

Sue: The awards are nice to have and confirmation that we’re doing something right.

What advice would you give other entrepreneurs like yourselves?

If you think you’ve got a good idea, follow it, but don’t expect it to happen overnight. I think for every massively popular business, there are probably hundreds that get to where they need to be, eventually. You have to just keep putting one foot in front of the other.