Available in the cocktail lounge, the Classic Whiskey Old Fashioned features State Line's Light Whiskey, Muscavado sugar, and Angostura bitters.
First, the local food movement ushered in a return to sustainable, farm-to-table cuisine. Next came the microbrewery boom, which extended the same locavore ethos to the beer industry. Now, craft distilling appears poised to become the next major trend, and it’s expanding on Madison’s near east side.
State Line Distilling, a grain-to-glass distillery and tasting room, opened Sept. 14 at 1413 Northern Court. Another beverage production facility, Imaginary Factory, is under construction next door at 1401 Northern Court and is set to open in the coming months.
With Old Sugar Distillery less than a mile away, the trio of businesses are part of a rapidly growing U.S. craft spirit industry, which reportedly achieved $2.4 billion in retail sales in 2015.
State Line started making and bottling its first batches of gin and vodka even before the business opened to the public, using grains and botanicals predominantly from the Midwest. Owner John Mleziva is excited to introduce his products to the Madison and Milwaukee markets, and he sees plenty of potential and “a tremendous amount of room for growth” in the fledgling industry. “We’re kind of in our infancy,” he says. “If you look at the explosion in breweries and the interest in craft brewing and local beer scenes, we’re about 8 to 10 years behind.”
There are a number of reasons that explain the gap, but perhaps most important is the fact that home distilling has been illegal since the Prohibition era. Former President Jimmy Carter legalized home beer brewing in 1978, which helped usher in the craft beer boom of the 1990s, but there was no such cottage industry to give the same boost to craft spirits.
The reason for the enduring ban has a lot to do with federal excise taxes (distilled spirits are taxed at a much higher rate than beer or wine), but there are also safety and regulatory concerns — mixing alcohol vapor with heat can be explosive, and there’s a risk of heavy metal contamination if a home distiller uses the wrong kind of material for the still.
Old Sugar Distillery, known for its honey liqueur, opened in 2010.
“That certainly has slowed down the exploration into home spirits,” Mleziva says of the prohibition. “You hear about moonshine, you hear about people soaking botanicals to make a gin, but people having stills at home doesn’t exist, and probably shouldn’t exist.”
The existing market for booze also presents a unique challenge. While microbreweries found success by offering customers a more interesting alternative to big beer companies like Miller, Coors and Budweiser — which, for years, offered nearly identical-tasting products at a similar price point — competing with established liquor producers like Tanqueray or Johnnie Walker is a different kind of challenge, Mleziva says. “When you walk into an industry that has really good products already, it takes a while [to become competitive],” he says. “If you’re going against the Scotch whisky industry, your Scotch had better be good.”
Imaginary Factory proprietor Hastings Cameron agrees that the craft distilling industry expansion is a “natural extension” of the trends in food and beer. But the specialized equipment, high startup cost and longer production time associated with making spirits are among the reasons it’s taken longer to catch on. “Spirits producers have a similar ethos [to local food and beer producers], but the technical reality is that you have to ferment, then further concentrate through distillation, so turnaround time is unavoidably longer,” he says. “It’s not just the red tape, it’s the fact that there are more steps.”
While the demonstrated success from farm-to-table restaurants and microbreweries provides a compelling case that consumers will get behind craft liquor as well, it won’t happen unless establishments offer the products. “When the food and beverage scene is evolving and people start to care a lot more about sourcing, sometimes that doesn’t always get extended to the bar,” he says.
Imaginary Factory, which is still under construction, will focus first on producing liqueurs, potable bitters and aromatized wine and later bring in collaborators to make small-batch contract production of their own recipes. State Line will eventually venture into seasonal gins and rye whiskey in an American single-malt style, which will be aged in 53-gallon barrels sourced from northern Minnesota.
“You talk about the idea of a distillery district on the east side of town, and there’s absolutely room for something like that,” Mleziva says. “As an industry as a whole, there’s a lot of room for growth and a lot of room for people to get excited about producing some interesting things that are uniquely Madison.”
