Good bourbon requires long-term investment, which is why many start-up distillers have two choices: either buy whiskey from someone else for the first few years or sell a white or unaged spirit.
Increasingly major distillers have less excess whiskey to part with so would-be small labels often struggle to maintain consistent flavor. Soon, they will have another option: Bardstown Bourbon Co.
The state-of-the-distillery now under construction in Nelson County will offer a unique wholesale distilling option, as well as aging and warehousing and specialized financing to make it possible, something new to spirits but popular in wine, said David Mandell, president of the company.
“Currently in the industry we have the big guys and then a lot of craft distillers and what we call non-distilling brand owners, who buy whiskey, do something to it, and bottle it but are not making it,” Mandell said. “They are limited in their ability to do custom whiskey.”
But Bardstown Bourbon Co. will offer them the chance to work with Steve Nally, former master distiller at Maker’s Mark and Wyoming Whiskey. Nally can help them craft a flavor profile or match an existing one.
“I’ll sit down and work with them, see what their ideas are to developing product, critique to make it a good quality product,” Nally said. “We’re not going to do any genius transformations … but want to continue the trend of making good quality product. ... We’ll let you come in and make it with us. They can be on site when it’s produced, track it all the way through the warehousing, allowing them to do it their way in the warehouse if they like.”
And Bardstown Bourbon’s $25 million, 37,000-square-foot distillery will give other craft distillers a lot of capacity to work with.
“We’re set up to produce 1.5 million proof-gallons — that’s 25,000 to 26,000 barrels annually,” Nally said. “We have built in to the facility the capacity to expand. We can get up to 2.5 million proof-gallons without adding any major equipment — we can stretch fermenting room out — very easily.”
While Bardstown Bourbon Co. plans to have its own brands, now in planning with Mahalo Spirits Group that helped develop Angel’s Envy and Papa’s Pilar Rum, it won’t need all that distilling capacity for a while so they have been quietly talking to craft labels about producing for them.
They said the feedback has been tremendous.
“A lot of established brands that don’t have a home, or craft distillers that have brands out there and are thinking about beginning to try to produce whiskey or bourbon themselves see this as a good option for them to get authentic Kentucky bourbon,” Mandell said. “We have an incredible team who knows how to make excellent product, we’ll make it to your specified needs, so it’s custom ... it’s yours.”
The facility also will have an innovative visitors center and experience that Mandell promises will let tourists see more of the bourbon-making process than ever before. So craft labels will be able to bring their fans — as well as distributors — to the facility as well, he said.
Financing will be available through Live Oak Bank of California, which will allow wholesale buyers to finance production with the aging spirit essentially acting as collateral so that labels aren’t pressured to release whiskey, Mandell said.
“We’re giving great craft distillers and brand owners the opportunity to spend money and invest in brands and not having to tie everything up in producing product. ... What you see is a lot of people rushing to bring product out because they have to have the money to pay this back,” Mandell said.
The distillery, which is in the Nelson County Industrial Park, will be finished in 2016 and Mandell said they expect to begin filling barrels by September. They have room for up to 10 23,000-barrel rickhouses on site. In June 2014 the distillery, which will create 35 jobs with an average hourly wage of $25 including benefits, received preliminary approval for as much as $1.3 million in tax incentives by the Kentucky Economic Development Finance Authority.
Mandell said that they anticipate this will be only the first phase, with plans for a separate events center and boutique hotel.
“This will be truly a destination experience. When you come here, we want this to be the Napa Valley experience in the heart of the bourbon trail,” he said. “That same customer experience for the visitor is what we’re replicating for the wholesale customer. It’s the collaborative process. You’re spending a lot of money to produce this, and we want you to have as good as experience as possible.”