Omid McDonald and Neal McCarten are set to open Dairy Distillery in the fall of 2018

Price of milk got you scratching your head?  Many people are taking advantage of the volatile milk pricing system lately and coming up with some new ideas on how to stay profitable.  This was one we hadn’t heard of before, but thought we’d share.  Thanks to the folks at for allowing us to do so!

Dairy Distillery turns waste skim milk into tasty spirit

Written by Lyndsey Smith
This story originally appeared on, May 30, 2018

What started as a fascination with craft distilling and a chance discussion about dumping skim milk has evolved into a tasty new business at Almonte, Ontario.

Neal McCarten is director of operations for Dairy Distillery, and it was his family’s farm background that led to a discussion with Omid McDonald, founder and CEO, about how strong demand for butterfat has resulted in excess skim milk, and how it’s a huge issue for the dairy industry. Together, they decided that there must be a better solution than disposing of it, and that perhaps using the milk sugars to make alcohol was the ticket.

As McDonald explains, Dairy Distillery uses milk permeate — excess lactose (milk sugar), minerals, and vitamins left behind by the processing of milk, butter, and ice cream — as the base ingredient in a new spirit, Vodkow.

Currently, dairy farmers pay for excess skim milk’s removal and disposal through the blended milk price. McDonald and McCarten see Dairy Distillery’s offering as not just a delicious spirit with a great back story, but also a unique means of turning a byproduct into something valuable. This, in turn, is good news for dairy farmers, as it could mean cost savings and a partial answer to the excess skim milk issue.

Dairy Distillery’s still and tasting room was designed to showcase the towering still.

Following a successful proof-of-concept distillation at the University of Ottawa last fall, McDonald and McCarten moved forward with a funding drive through friends and family and broke ground on the distillery last November. Both are proud to say that dairy farmers are among their founding funders.

The new storefront and tasting room was built to echo the shape and feel of a new barn, complete with a large barn fan for air flow. The all-glass, impressive frontage was specifically designed to house the towering still, bought out of West Virginia, but made in Germany.

McCarten, who has a background in the hospitality business, says that the location and design is specifically driven to attract those looking to take part in food tourism. Within a short walk of the new distillery, you’ll find award-winning Hummingbird Chocolate, a coffee roastery and café, and more.

Establishing Dairy Distillery hasn’t been without red tape tangles, as McDonald says they’ve learned about some rather quirky and quite old Canadian laws surround spirits. In Canada, a vodka can only be derived through grain or vegetables, so while the dairy-derived Vodkow is a delicious vodka-like spirit, Dairy Distillery can’t actually label it as such. In addition, the distillery can’t legally serve drinks at its own location, but can host a tasting room. “It’s a law that’s over 100 years old,” he says.

To start out, the existing site will process about two million litres of permeate per year, sourced from the nearby Parmalat facility at Winchester, but McDonald says that’s just the beginning. There are plans to expand distilling at a larger site, while the Industrial Avenue storefront and tasting room will remain.

“At capacity, we plan to offer about 200,000 litres of Vodcow a year, but the Canadian market for vodka is about 50 million litres per year,” McDonald says. “There’s tremendous opportunity (to expand).”

The distillery plans to have its first product available for sale in the fall of 2018, and, yes, the spirit will be offered in milk bottles.

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