Business

Alltech suds are surging: Company tripling its Lexington brewery operations

The tripling of output at the Lexington Brewing and Distilling Co. in downtown Lexington will be done within the existing infrastructure with one exception: cold storage.
The tripling of output at the Lexington Brewing and Distilling Co. in downtown Lexington will be done within the existing infrastructure with one exception: cold storage. LEXINGTON HERALD-LEADER

Alltech announced Thursday it plans to triple the output of its Lexington brewery as a vast increase in distribution is slated for its Kentucky Ale family of beers.

This month, the company announced it had received an order for 40 cases of Kentucky Bourbon Barrel Ale from China, where it introduced the drink to the Beijing Horse Association. The company also has struck deals to begin distributing the family of beers in Indiana and Massachusetts.

Other states in which the beers will soon be sold include Georgia, Tennessee, Virginia and Wisconsin.

The tripling of output at the Lexington Brewing and Distilling Co. downtown will be done with the existing infrastructure with one exception: cold storage. The Bourbon Barrel Ale process, in which the beer is placed into used bourbon barrels, takes six weeks, said Kelly Rice, director of business and marketing development for Alltech's beverage division. In order to boost production, the company plans to add off-site cold storage in the short term and potentially expand the brewery to include more space later.

Rice is one of nine employees Alltech has moved from other divisions to focus on beverages. She said she expects the company to hire more salespeople in coming months.

Since launching the brewery in 2000, the Kentucky Ale family, which added Kentucky Light in 2003 and Kentucky Bourbon Barrel Ale in 2006, has been available only in Kentucky and Ohio, where Alltech added distribution about two years ago. The company now sells more in Ohio than in Kentucky, Rice said.

The beers all received a major boost at the 2010 Alltech FEI World Equestrian Games. In November, Alltech founder Pearse Lyons told the Herald-Leader that sales of Kentucky Ale had doubled year over year since the 16-day Games concluded Oct. 10.

"We expected there to be a spike during the Games," Lyons said at the time, "but we didn't expect there to be another spike after the Games."

Besides boosting consumer interest, the Games served as a crucial forum for networking. It was there that Lyons met a leader of one of the country's largest beer distributors: L. Knife and Son Cos., which will distribute the Kentucky Ale family in Massachusetts.

Rice said it's exciting to expand into markets such as Boston that have a reputation of being "beer meccas."

The expansion into such markets will provide some challenges, said Bob Dahlstrom, director of the School of Management at the University of Kentucky's Gatton College of Business and Economics.

"What they're going to experience when they go into larger markets is more microbreweries," Dahlstrom said, while noting that the family of beers "all have some attributes that are going to make them stand out from other beers."

Dahlstrom said the company will need to spend more on advertising in the new markets to compete effectively. Alltech will also need to ensure the beer shipments available there are fresh, as "freshness is a real critical issue with this product."

Alltech plans to open a Louisville office for a brewery salesperson, Rice said.

"It will also be a showcase where customers can come and learn about our Haitian coffee, our bourbon that's coming up and more," she said.

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