Paul Tomaszewski pulls into the local granary every month to pick up 50-lb. bags of white corn, which he then hauls 6 miles down the road, past a scrawled sign touting turnip greens and a printed one welcoming visitors to the town of Pembroke, Ky. (pop. 869). He is heading home to a former Amish dairy farm that is now MB Roland Distillery, where he and his wife are starting out in the bourbon business. "We jumped in with both feet," says Merry Beth, her Southern accent coating the words. "Everything is mortgaged to the hilt."
The Tomaszewskis have company. Seven years ago, there were about 50 so-called microdistilleries in the U.S. Today there are about 250, many of them small, self-financed, sputtering start-ups. But the Tomaszewskis' choice of spirit separates them in the microbooze biz, both in terms of the difficulties they face and the prospects they have as a small company. Bourbon, after decades of playing second fiddle to clear spirits like vodka and gin, is booming. The bourbon business grew faster than any other big-liquor industry in the U.S. last year. Fancy firewaters did particularly well: sales of superpremium bourbons grew just over 15% in 2010 and 2011. Like craft beer in the past two decades, corn-mash whiskey is undergoing something of a rebirth. "What we're really talking about," says Bill Owens, president of the American Distilling Institute, "is a redefining of the word bourbon."
The easy choice for craft distillers is to produce made-today, sold-tomorrow products like vodka or niche drinks like apple brandy. By contrast, bourbon is a type of whiskey that by federal law must be distilled from at least 51% corn and then aged in charred new oak barrels, which gives bourbon its color. Straight bourbon, an industry standard, must be at least two years old, which means you can't start a bourbon distillery one day and sell straight stuff the next. Another challenge is the competition: the old bourbon industry is already dominated by behemoths like Jim Beam and Evan Williams. How giant are they? Though there's no official cutoff, craft producers typically make up to 100,000 gal. of spirits a year. Beam makes 112,370 gal. a day.
The micro rush is especially visible in Kentucky, but there are craft distilleries in 45 states, up from 12 about a decade ago. A number of states have lowered licensing fees for tiny distilleries, and a few have loosened regulations against on-site tasting. "It's sort of like if you're standing at Sutter's Mill in 1849," Frank Coleman of the Distilled Spirits Council says about the microdistillery boom. "You're seeing all these people rushing by you with mining tools."
And because corn grows outside the heartland, micro bourbons are being distilled well beyond the Bluegrass State. Ralph Erenzo, who ran a climbing gym in New York City, originally bought land in the Hudson Valley to start a climbing ranch. When neighbors objected and threatened lawsuits, he and a partner settled on starting Tuthilltown Spirits in Gardiner, N.Y. "We had no experience making whiskey whatsoever," Erenzo says. Not knowing the business, they felt free to ignore tradition with their Hudson Baby Bourbon, a 100%-corn spirit aged for only four months. Business took off after buzz spread among beverage managers at New York City restaurants and bars.