Success of Ky. Bourbon Barrel Ale surprises even its company

The success of its brews, especially Kentucky Bourbon Barrel Ale, has Alltech planning for national distribution

bfortune@herald-leader.comMay 6, 2012 

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Kentucky Bourbon Barrel Ale, a local brew produced at a quaint brewery in downtown Lexington, is enjoying surging sales and developing plans for national distribution.

This is the success the ale and Alltech's Lexington Brewing and Distilling Co. has enjoyed in the past 12 months:

■ In late 2011, Alltech began selling Kentucky Bourbon Barrel Ale in China, where it introduced the brew to the Beijing Horse Association.

"Dxcel Distribution is the leading importer of American craft beer in China," said Matt Cordle, general manager and national sales manager of Lexington Brewing and Distilling. "The owner, Dean Lim, told us that selling one container of Bourbon Barrel Ale a year in China would be considered a success."

This week, the brewery is set to ship its third container since the first order was received.

■ Wal-Mart in China recently expressed interest in selling the ale, starting by stocking it in 28 stores. "Wal-Mart is considered a high-end grocer in China," Cordle said. "More than anything, it would legitimize our name in the China market."

■ Alltech's beverage division is mapping out an aggressive plan for Bourbon Barrel Ale to be sold nationally. It now is available in nine states: Kentucky, Georgia, Illinois, Indiana, Massachusetts, Iowa, Ohio, Tennessee and Wisconsin.

■ Bourbon Barrel Ale consistently ranks No. 1 or 2 in sales at Liquor Barn stores in the Lexington area. In the past 18 months, it has ranked among the Top 10 beers at Liquor Barns in Louisville.

"Bourbon Barrel has been a humongous success for us," said Brad Williams, director of merchandising for the 12 Liquor Barn stores in Kentucky. "It's exceeded anyone's expectations — ours and Dr. Lyons'," he said, referring to Alltech founder and president Pearse Lyons.

■ Alltech expects to triple its output at Lexington Brewing and Distilling for its Kentucky Ale family of beers. The brewery produced 250,000 cases in 2011. "We should double that capacity this year, and keep the ball rolling," said Ken Lee, brewery manager.

"Our increases are exceeding 20 percent growth a year," said Matt Coffman, engineering manager for Alltech.

Alltech bought a 300,000-square-foot commercial building on Angliana Avenue — formerly headquarters for Eagle Beer Distributors — exclusively for storage of Bourbon Barrel Ale.

■ The company hopes to join the Kentucky Bourbon Trail and become a downtown Lexington tourist destination.

■ Alltech is making plans to import rum from Haiti. The company will partner with Royal Caribbean cruise line to build a rum distillery in Labadee, Haiti, the cruise line's resort area on the north side of the island, Coffman said. "Royal Caribbean's interest is the same as ours: to develop a sustainable business and give back to the Haitian community," he said.

The success of Lexington Brewing and Distilling has surprised even company leaders.

"Growth has been off the charts," Cordle said recently while giving a tour of the brewery. "What started as a marketing tool for the core (Alltech) business has snowballed in self-identity, locally and regionally, and it's poised to go national."

Alltech makes three ales — Kentucky Ale; Kentucky Light, a German kolsch-style ale; and Kentucky Bourbon Barrel Ale, plus Bluegrass Sundown, an after-dinner liqueur.

The distillery also produces Pearse Lyons Reserve single-malt whiskey. Its newest product is Town Branch Bourbon, named for the waterway that runs under downtown Lexington.

Lyons, the chief of Alltech, an international animal health and nutrition company based in Nicholasville, opened Lexington Brewing and Distilling in 2000 at 900 West Maxwell Street, site of the former Lexington Brewing Co.

A native of Ireland, Lyons began his career in the 1970s working for Irish distillers. He has a master's degree in brewing and distilling and a doctorate focusing on fermentation. His family has a long history as coopers, or barrel makers, for the Irish whiskey trade, Cordle said.

Lyons' timing for entering the craft beer business was perfect for what has followed.

During the past five years, national sales of craft beers have soared, Cordle said. "We were positioned correctly to take advantage of that growth. It was the perfect storm."

Cordle is carefully creating a national distribution plan. "We don't want to kick the door open on 50 states and not support them properly," he said. "We plan to have one warm body in each state that would be the sales representative to tell the story of Alltech beer in bourbon country."

He expects Kentucky Bourbon Barrel Ale will be a national brand in the next couple of years, and Lexington Brewing and Distilling will become one of the Top 10 brewers in the craft beer industry.

At a news conference in August 2010 when the first batch of Pearse Lyons Reserve was ready for bottling, Lyons announced plans for a $4.5 million distillery.

The 20,000-square-foot distillery, under construction at 401 Cross Street, behind the brewery, is on schedule to be completed in September.

Lyons has said it will be the first bourbon distillery built in Lexington — once the center of bourbon production in Kentucky — in more than 75 years.

Initially, the new distillery will produce 1,000 cases of bourbon, but production could be ramped up to 40,000 to 80,000 cases, Lyons said. The bourbon is stored in hundreds of barrels in a bonded warehouse in Bardstown.

Beverly Fortune: (859) 231-3251. Twitter: @BFortune2010.

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