Ageing spirits in days, not decades, with Reactory: Small Business

Reactory, founded by Mark Eltom, creates spirits and whiskeys in a fraction of the time of traditional beverages thanks to a unique technology.

Mark Eltom, founder of Reactory, talks to Tom Raynel about building distilling technology in his basement, and how his technology impressed some of the industry’s biggest players. Each Monday, we interview a small business owner, which is now a regular feature of NZME’s editorial campaign On The Up, showcasing uplifting stories of success, inspiration and possibilities.

What is Reactory?

I would say Reactory has made a process to age spirits in days instead of decades. The core of the business, the intellectual property and what started in my garage a couple of years ago, is really the spirit reactors. They’re the magic behind it.

What inspired you to start the business?

I guess it started because it was something that’s always been in the back of my mind for, for many, many years. I’ve been in wine and spirits for 16-17 years in various R&D type of roles and I just started talking to a bunch of mates at distilleries about their challenges when they’re making and producing spirits.

They came up with 100 things and most of it didn’t excite me, but then they brought up barrels. The barrels have to sit in a warehouse for 10 years, they evaporate and lose liquid and it’s this magical marketing thing, but it’s the most cost ineffective thing in the entire world, so you know, can you do something about that?

I said probably not, but we’ll try. It just spun out from there, really just making the first reactor technically under my house in case I caused a fire in the garage. My background’s in originally grape growing and winemaking, sort of chemistry, doing some techy stuff, but never what I would call like advanced technology at all.

In the two or three years, Reactory has completed over 100 trials for different whiskey flavours and profiles using its unique technology.

How did you fund the business?

Initially yes. It was because I really didn’t want to pick on investors and, I’ve done that before in different companies when I was leading other tech companies. It was when I think the entire world was tired and I just wanted to enjoy the next thing I was going to do.

We have really good investors, so Outset Ventures came on, Startmate, which is kind of Blackbird. Some good family office people in New Zealand and Australia, angels, they all came in. We destroyed 600 years of tradition, so unless you’re kind of in that mindset of like, we are going to rewrite history on this, you’re not going to join and invest.

How does the technology work, and how can it be adapted?

If you were to traditionally make a whiskey, you know, it would take 10 to 20 or 30 years or whatever. You get what you get out of a barrel traditionally, it just kind of sits there and you can’t control it. We studied what went on during that period of time from other people’s work from discussions, from our own internal kind of work.

The only important things that happened during that period of time goes on in the barrel, so we compress that period of time. If getting stuff out of the barrel is important, we can do that, transforming it to the next group of delicious compounds is the next important thing.

In the two or three years we’ve been going, we’ve done over 100 different trials. We’re rapidly iterating, every 10 days we come out with a different flavour, a different profile. Nobody really cares how long it’s been a barrel for, they just want something that tastes good and it’s easy to drink.

The team at Reactory studied what goes on to a spirit as it ages in a barrel to see what they needed to do to recreate it in a fraction of the time. Photo / LinkedIn

What is the plan for the next few years, and what has the reaction been like?

I think there’s two parts to it. The best thing we’re doing now is our business model for the tech is business to business. So we install reactors at other distilleries for them to produce their alcohol and charge a licensing fee. We’re just about to kick into our next capital raise to support a trial in Europe with one of the biggest spirit companies in the world, which is also incredibly exciting.

The biggest highlight was when I spent a couple months in Paraguay of all places. I was installing our first scale up reactor at the world’s first and largest fair trade organic rum distillery, which happened to be in Paraguay. Having someone also believing in what we’re doing and is totally down for trying it, when we we’re just in the garage a year ago, that was amazing.

Mark Eltom spent months in Paraguay installing Reactory's first scale up reactor at the world’s first and largest fair trade organic rum distillery. Photo LinkedIn

What would be your advice to other budding entrepreneurs wanting to start a business?

It sounds so cliché but just go and do it. But go and prove a little bit of your tech or a little bit of your company before you go talk to investors, like get that first $1 from a customer, then go from there.

Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.