By Luis Ruuska
Photographs by Patrick Murphy-Racey
Originally published in Tennessee Law, Fall 2016
“I remember when it was 30 states.”
Joe Baker (’01) pauses in thought for a moment. “I remember when it was 30 people.”
On a sunny June morning on the main drag in downtown Gatlinburg, Joe is talking about the rapid growth of Ole Smoky Moonshine, which he co-founded in 2010. It’s obvious that even he can’t believe the brand’s success six years later. “We’re selling moonshine now in 30 countries,” he says. “It’s funny how it’s taken off. We had a sales and marketing team in Australia this past week. I got an e-mail from France this morning.” He chuckles and shakes his head. “It’s pretty cool.”
Moonshine began in the mountains of Appalachia as an illegal alcoholic beverage with a prominent role during Prohibition. Today, it’s the newest trend in legal spirits, blossoming from a Southern mountain specialty into an international favorite. After Tennessee legalized moonshine in 2009, Ole Smoky was on the ground floor and became the first federally licensed distillery in East Tennessee.
[pullquote-right]”For anybody on the outside looking in, it looks easy. It’s easy to see this as just a wildly successful business that anybody can do, but I think the more realistic assessment would be: Damn, that’s hard.”[/pullquote-right]
Almost immediately, it was clear the distillery had struck an untapped vein. Within its first year of operation, insatiable demand required the acquisition of an entire warehouse for sourcing materials in response. Today, the company occupies more than 80,000 square feet of property in several locations, a far cry from its starting footprint of 2,500 square feet.
To the public, Ole Smoky’s lightning fast growth looks more akin to a Silicon Valley startup than a distillery, but the growth hasn’t come without challenges. “Everything that went into the licensing during the first year was a challenge because we were the first to open and operate under the new laws. It was a challenge not only to navigate the rules and regulations, but to also be a part of that evolution,” Joe says. “It was really a learning process for us and the state.”
Within that first year, Ole Smoky Moonshine made its first million and finished 2011 with more than $5 million in domestic sales. That kind of success doesn’t go unnoticed, and partnerships with Walmart, NASCAR, Harley-Davidson, and others have helped domestic sales of Ole Smoky’s moonshine grow to more than $46 million in 2014.
“For anybody on the outside looking in, it looks easy. It’s easy to see this as just a wildly successful business that anybody can do, but I think the more realistic assessment would be: Damn, that’s hard,” says Joe. “We did it, but none of it has been easy. It seems like it was always a challenge. The only easy part has been that people like the product and buy it.”
People don’t just like the product—they love it. The self-guided tour of the distillery and samplings at “the Holler” are among Gatlinburg’s most popular attractions. Folks line up daily from all over the world to sample favorite flavors like apple pie, which goes down smooth as butter, or the more adventurous, unflavored ’shines like the 128-proof “Blue Flame,” which leaves the tongue tingling.
However, it took Joe, his wife Jessi Edwards Baker (’03), and his co-founders—Tony Breeden (’02) and Cory Cottongim—“many late nights in kitchens” to perfect the million-dollar recipes that have catapulted Ole Smoky to international success.
“Each country seems to have its own version of moonshine, but I think the story and history of it in America, especially in Appalachia, is a story that resonates with folks,” Joe says. “If you go back far enough, everybody’s done a little drinking or making of it.”
In Joe’s family, which has lived in the mountains for more than 200 years, you only have to go back as far as his grandfather, who figured out he could make more money from a bushel of corn by turning it into whiskey instead of selling it by the ear. “Growing up, my dad exposed me to moonshine a little bit, and I did projects about it in school and even in college,” Joe recalls. “I think just being proud of my heritage and having family who participated in the rich history of what moonshine is to this area perpetuated my continued interest in it. So when people say, ‘Why moonshine?’, it’s because I was born here and moonshine is a part of my history; in many ways it’s in the blood.”
[pullquote-left]”When people say, ‘Why moonshine?’, it’s because I was born here and moonshine is a part of my history; in many ways it’s in the blood.”[/pullquote-left]
Jessi’s family has equally strong, if slightly sweeter, ties to Gatlinburg. Her grandparents, who immediately recognized the potential of Gatlinburg as a growing motor tourist destination, founded the Ole Smoky Candy Kitchen in 1950. “During elementary school, I walked every day after school up to the Candy Kitchen to work for my grandmother packing taffy, running errands, and learning about the business,” says Jessi. “As the oldest child in my family, I always dreamed of running the business one day.”
Joe and Jessi met in high school and attended Georgetown University and UT Law together. Joe later opened his own legal practice, and Jessi worked as assistant district attorney in Sevierville. “Joe’s practice was successful, but also emotionally draining. I’ll never forget the morning in 2009 when he told me that he thought he would start a moonshine distillery,” Jessi recalls. “We had three young children and two mortgages and I was seriously worried he was trying to quit his day job. When he read me the new law, however, and I considered the possibilities with Gatlinburg tourism, I knew we would try it.”
After launching Ole Smoky in 2010, Jessi stepped further into the distilling industry through Gatlinburg Barrelhouse, which she founded with her brother, Chuck Edwards, and a friend, Cammy Cottongim, in 2011. The Bakers never predicted Ole Smoky’s success, but it couldn’t have worked out better. Earlier this year, Ole Smoky acquired Gatlinburg Barrelhouse and its signature line of Davy Crockett’s Tennessee Whiskey, rebranding it as Ole Smoky Whiskey. “We believed it was a logical step to broaden the base of the Ole Smoky brand to include an aged and flavored whiskey component,” explains Jessi. “It’s important to always be evolving and developing new ideas to stay ahead of the curve.”
In recent years, the Bakers have recognized opportunity to expand beyond moonshine and whiskey. The Bakers’ most recent venture, Yee-Haw Brewing Company, opened its doors in 2015 and arose from their shared passion for beer. “I’ve been accused of being a serial entrepreneur, and we had always wanted to produce a beer,” says Joe. “Yee-Haw was born from us wanting to make a product we could be proud of, and so we’ve gotten deep into the beer works.”
[pullquote-right]”It’s important to always be evolving and developing new ideas to stay ahead of the curve.”[/pullquote-right]
After visiting Johnson City in 2011, the Bakers fell in love with the city and its historic East Tennessee and Western North Carolina train depot, also known as the Tweetsie Depot. The pair eventually renovated and restored the depot to its former glory and made it the Yee-Haw headquarters. And they brought something else to the area: community. “We fell in love with Johnson City and saw an opportunity to create a gathering spot for folks in the Tri-Cities,” Joe says. “The community has been revitalized. The folks of Johnson City and the local government have worked together to create a special downtown area in the past few years, and traffic has really picked up. It looks a lot different now than it did even three years ago.”
Despite being a relatively young brand, Yee-Haw has already garnered international acclaim, winning bronze at the 2016 World Beer Cup in the European-Style Dark/Muenchner Dunkel category. “It was unexpected,” Joe says. “I never thought I’d want to be third place in anything, but I was really proud that we won a bronze medal in a worldwide competition.”
A Family Business
Between the successes of Yee-Haw and Ole Smoky, it’s clear the Bakers’ serial entrepreneurialism has paid off in a variety of ways.
“I think the greatest joy in what we do is the value and jobs we create for the community. This is very much a family-run enterprise, and a lot of families outside of our own have benefited,” says Joe. “Being close-knit in this industry—having family involved and really embracing that—has served us well.
[pullquote-left]”Law school taught me how to prepare, how to think critically, and how to be gritty in the face of adversity. Most importantly, my legal education taught me to recognize opportunity.”[/pullquote-left]
And it looks like the Bakers’ son, Joseph, is ready to join the fold. Smiling proudly, Joe recalls, “One day he asked me if Yee-Haw was ever going to make an IPA, and I said, ‘No, everyone makes one of those.’ And he said, ‘Dad, you know why there’s so much IPA? Because people are buying it.’ So the next morning I called up Brandon Greenwood, our COO and brewmaster, and said, ‘It took my 10-year-old to convince me, but we need to make an IPA’…I think that just like anything else, whatever trade your parents are in, you start thinking about it. So he’s ready—he wants to be in the business.”
Though Joe and Jessi have mostly left their lawyering days behind, they agree that the education they both shared at UT Law has played a key role in their success. “Law school taught me how to prepare, how to think critically, and how to be gritty in the face of adversity. It also helped me develop a confidence that has been extremely important in my career,” says Jessi. “Most importantly, my legal education taught me to recognize opportunity.”
“For me,” Joe says, “the best thing I learned in law school was how to think like a lawyer. I learned to explore issues, confront challenges, and solve problems in the business, whether they were regulatory or just regular issues…There’s a lot of good accomplished in our profession. I’d be awfully proud for my kids to get that same type of education.”