Entrepreneurial Spirit: Vodka Venture Offers Real Proof of a Life-long Ambition

By George O'brien

Paul Kozub always knew he would wind up running his own business — he just didn't know what it would be. How the venture turned out to be a label of super-premium vodka is a story that is still in the first chapter.

As a small-business loan officer with TD Banknorth, Paul Kozub seemed well on his way to a long and successful career in banking.

But that was never the plan.

In fact, Kozub told BusinessWest that he entered the financial services field with a singular, somewhat unusual mission — to see the mechinations of small-business management from the "other side," as he called it.

Indeed, Kozub grew up watching his father take Janlynn Corp. from a kitchen-table operation to a thriving business that now employs nearly 100. He knew he wanted to be an entrepreneur himself, and entered banking as a way to ultimately make him better prepared for that day.

"I knew I would eventually start my own business," he said. "I just didn't know what it would be."

How that venture turned out to be a label of super-premium vodka — V-One — that Kozub is now distributing in Western Mass., is a story worthy of a Hollywood script.

That would be the movie Big Fish — sort of.

That Tim Burton-directed film revolved around a dying father and his son, who tries to learn more about his dad by piecing together the stories he has gathered over the years. The son winds up re-creating his father's elusive life in a series of legends and myths inspired by the few facts he had.

Kozub knew a few facts, and had heard more than a few stories, about his grandfather, Stanley, including one that he was a moonshiner during Prohibition. He started thinking about those tales and others — and about the movie — when, on his annual trip to Alaska with his brother in the summer of 2003, he learned his grandfather had passed away.

A few months later, Kozub saw a truck laden with potatoes pass his Hadley home, and he became inspired. Potatoes are one of the many products from which vodka is produced, and as he watched the truck roll by, Kozub put his entrepreneurial mind to work.

Nearly two years of trials, tribulations, and several trips from Springfield to Poland later, he is distributing the product himself in a plain white van, soon be detailed with the product logo. One can now order V-One, which is distilled and bottled in Krakow, in several area restaurants and buy 750-ml bottles (average price $25) at most major liquor stores.

But for now, V-One, or Valley Vodka as the company itself is called, is a local phenomenon. Kozub is carefully measuring the steps needed to take his project regional and then national, and he doesn't want to get ahead of himself.

Kozub believes he has a product that can compete with Grey Goose, Chopin, Belvediere, and the other prominent labels, but he has already learned that crafting a vodka recipe, getting the product produced and distributed, and obtaining the various licenses and permits necessary to do all that is serious, and difficult, business.

Needless to say, he has applied many of the lessons he learned while writing small-business loans and through watching his father grow a small business. And he knows the learning process is ongoing, and will no doubt lead to a few hangovers — figuratively speaking.

Shot in the Dark

Actually, Kozub says his product won't leave you with a headache. That's because of the way it's made — with clean water and a distilling process that yields a super smooth product.

"Some vodkas say they won't give you a headache," he explained. "Mine can actually back it up."

Kozub has learned the art of vodka-making by doing — "you can only learn so much from reading a book" — only ‘doing,' in this case, without a license is illegal. So Kozub uses the word ‘experimenting' to describe his activities after his grandfather died and while he was mulling his first entrepreneurial venture.

At the time, his day job was as assistant vice president of small business loans for TD Banknorth, working out of the Springfield office. He had worked with more than 100 businesses of different sizes and from various sectors, and was storing away knowledge about everything from financing to business plan writing.

By this past April, Kozub was in line for a promotion to vice president of commerical lending — but by then, he had other plans.

He had exhaustively researched the making of vodka, settled on a recipe using potatoes as the main ingredient, and had found a distillery in Poland to produce it for him. He even had a decorative bottle — able to rival those of other vodka makers — ready and waiting.

He was confident enough in his concept and his abilities to leave the bank and pursue his vodka venture full-time.

But getting to this point was a journey, with a number of ups and downs, triumphs and disappointments. And there were several more to come before his first bottle of V-One would hit the shelves in the Pioneer Valley.

As Kozub retold the story, he returned to his grandfather, whom he was close to. He told BusinessWest that he wanted to honor his legacy in some way. That way turned out to be vodka.

Using some of the money his grandfather left him, Kozub, while still reading everything he could find on vodka, purchased a small still from a manufacturer in Canada, and began ‘experimenting' in his home.

The production of vodka, or any spirit, is actually rather simple, he explained. It starts with the fermenting of yeast and some other sugar to create what's known as mash. This heavy liquid is then subjected to distillation, a process by which gases are driven from the mix, thereby purifying it.

There are many factors that separate one brand of vodka from another, he said, listing everything from the base — a variety of products van be used, from wheat to fruits — to the purity of the water used in the production process to the number of times the liquid is distilled.

"Traditionally, people have made alcohol from whatever they have the most of," he explained. "In Poland, they have a lot of potatoes, so that's what they use."

Modern production facilities and processes can yield vodka that is cleaner, and therefore smoother, than was possible years ago, he said, adding that he wasn't having much success in creating a vodka worthy of grandfather's legacy until he started corresponding with a man named Marek Brniak.

Kozub had read an article in Wine Spectator that identified Brniak as a vodka expert. The two exchanged a number of E-mails that were not terribly fruitful, so, in the summer of 2004, Kozub decided to fly to Krakow to meet Brniak.

The visit, which included a tour of many distilleries, eventually led to advancement of Kozub's plans, but also many changes.

He had originally planned to operate a distillery in Hadley, where potatoes and other ingredients are plentiful. However, the logistics, specifically the massive amounts of water that would be needed for the operation, proved daunting — too daunting.

"And besides," said Kozub, "who was going to drink ‘Hadley vodka?'

So he returned to Poland, where vodka and its production are passions — if vodka- making was a religion, Poland would be the cathedral," said Kozub — to complete arrangements to have the product manufactured and then shipped to the United States.

After choosing a distillery, settling on a potato-based recipe, and creating a bottle — efforts into which he sank his life savings — Kozub seemed ready to go. But, at the 11th hour, the distillery backed out of the deal for reasons Kozub still cannot articulate.

At the time — only a few weeks after quitting his job at TD Banknorth — the setback seemed devastating. In retrospect, however, it was a blessing in disguise. He found a new distillery that encouraged him to consider wheat as his base rather than potatoes.

Actually, what he eventually wound up with was something he calls ‘special wheat.' "I tried it, and it blew my socks off."

Distill of the Night

The first bottles of V-One arrived at the docks in Boston in early September. Well before then, Kozub started talking with area bars, restaurants, and liquor stores about carrying his product. His assignment was to convince them — and also the general public — that this is was a product worthy of being on their shelves and in their glasses.

And this, he said, is an ongoing process, made challenging by the number of vodka brands on the market — 300 by some estimates — and the fact that this number continues to grow.

Indeed, Kozub said there is a surge in production of new vodka products similar, in many ways, to the micro-brewed beer sensation of the mid- and late-90s, but on a smaller scale. There are more products coming from overseas, he said, and some new entries to the mix from the U.S.

Hangar One is a recent arrival from California, he said, while Shakers Vodka is produced in Minnesota, where water is plentiful, and Charbay is another entry from California. Meanwhile, there are some contenders from closer to home, including something called Vermont Spirits, which uses maple syrup as the base, and Triple 8 vodka, produced on Nantucket.

"It's becoming an increasingly crowded market," said Kozub, noting that vodka is growing in popularity for several reasons, not the least of which is the fact that it has no carbs.

To succeed in this more-crowded market, and to make V-One a household name, Kozub has mapped out a strategy to be deployed over the next several years. The plan is to form a beachhead in the Pioneer Valley, where, he believes, businesses and individuals will support a local entrepreneur, and then move on to other markets.

"But people here won't support something if it's not good," he explained, adding that he is working with bar and restaurant owners on various promotions and events designed to get people to try V-One. Once they do, he said, they should be hooked.

One tavern in Amherst staged a promotion whereby patrons who tried V-One would qualify to win Red Sox tickets. Meanwhile, Kozub has staged a number of taste-testings to enable vodka drinkers to compare and contrast.

"Ultimately, it comes down to knocking on a lot of doors and doing what you have to do to get people to try it," said Kozub, who is still a one-man band when it comes to V-One. "You have to get your name out, and you have to get people talking about you in a positive way."

Once he's accomplished that mission in the Pioneer Valley, he'll move on, but not until the brand becomes more established. Trying to penetrate larger markets, like Boston, is expensive — especially when it comes to marketing — and logistically difficult, he said, adding that making such a move too soon could have dire consequences. "I don't want my vodka sitting on shelves gathering dust."

Locally, Kozub has been helped in his venture by some area restaurateurs, including Rich Rosenthal, owner of the Max's restaurants in Connecticut and Massachusetts, and also by his former boss at TD Banknorth, Regional President David Glidden.

"I tell him I'm his best, most productive, unpaid sales rep," said Glidden, who told BusinessWest that the bank is providing some financing for the company because it sees enormous potential in V-One. "It's a great product and a great venture."

Pour Reasoning

Glidden told BusinessWest that Kozub was a rising star at TD Banknorth. "He had a career ahead of him, and a great career," he said, adding quickly that if Kozub called on Monday morning looking for a job, he'd have a desk ready for him by Monday afternoon.

At the moment, though, Kozub is otherwise engaged, with the entrepreneurial venture he's planned for most of his life.

He knows how Big Fish ends, with Will Bloom understanding the truth about his father, whom he once considered nothing more than a big liar. Kozub now fully understands the truth about making and distributing liquor. It's hard, grueling work — and that's no lie.

His grandfather would be proud.