The Bardstown Bourbon Co., one of the newest distilleries in Kentucky, is already planning an expansion that will double production capacity to up to 100,000 barrels a year, according to the company.
The $25 million distillery, which began commercial production a year ago, received approval last week from the Kentucky Economic Development Finance Authority for an additional $400,000 in tax incentives for the $18 million expansion, which will take its annual distilling capacity from 3 million to 6 million proof gallons.
The expansion will create an additional 10 jobs with an average hourly wage of $37, including benefits, according to the KEDFA report. The company will be required to maintain base employment of at least 34 full-time Kentucky residents to qualify for the incentives.
The distillery already received two rounds of incentives, one in June 2014 for $300,000 and another in June 2017 for $1 million.
The company plans to install a second 36-inch custom still, another cooker and up to 16 additional fermenters. Two more 22,500-barrel warehouses also will be built this year, doubling aging capacity.
The expansion also will let Bardstown Bourbon Co. grow its collaborative distilling program, which produces custom-made whiskey for other craft labels.
“The Bardstown Bourbon Company’s rapid growth is extremely exciting,” said David Mandell, president and CEO, in a statement. “We’re truly helping to reshape the American whiskey market, and the success of our collaborative distilling program demonstrates the massive demand for custom-made, authentic, Kentucky whiskey, bourbon and rye.”
The distillery’s business model was designed to tap into the custom production market from the start and includes the ability to age and warehouse spirits, and finance the process, too.
Many small labels begin with “sourced” or purchased spirits, often distilled under contract by another distillery. But as the market for bourbon, rye and other American spirits has grown, major distilleries have become less willing to produce for or sell to others as their needs have grown.
Within months of announcing its program in 2016, Bardstown Bourbon Co. sold out of its original 1.5 million proof gallon capacity, so earlier this year it doubled production. The increased capacity already is sold out through 2018, according to the company.
Steve Nally, former master distillery at Maker’s Mark, oversees production and the company recently announced the hiring of John Hargrove, former master distiller and manager at Sazerac’s Barton Brands 1792 distillery.
“We’ve exceeded all expectations,” Nally said of the need to expand. “Our custom production program has attracted some of the best brands from across the country and the world, and we are proud to be producing some of the finest bourbon for them.”
Although much of the whiskey has been produced for other craft labels, not all of it: the distillery is expected to launch its first releases later this year.
Last October, Constellation Brands announced it had purchased a minority stake in Bardstown Bourbon Co. for an undisclosed price.
Bardstown Bourbon Co. also is developing a tourism experience that will feature an event space, full-scale restaurant and bar and a vintage spirits and whiskey library. Pedro Gonzalez, former executive director of food & beverage at the Greenbrier Resort in West Virginia, will develop that side.