Kentucky Owl Is (Probably) Building A Distillery

SPI Group, the parent company of boutique whiskey brand Kentucky Owl, has plans to build a $150 million distillery in Bardstown, Kentucky, according to documents released by the Kentucky Economic Development Finance Authority (KEDFA). The company is eyeing property in Bardstown, home to several bourbon distilleries, including Heaven Hill, Barton 1792, Willett, and Bardstown Bourbon Company, as well as Lux Row, which is set to open in early 2018. SPI Group’s project has been approved for a tax incentive of up to $2 million, and is estimated to create 77 new jobs.

Kentucky Owl has a long history, and was produced from 1879 until Prohibition. It was revived about a decade ago by Dixon Dedman, a descendant of the original distiller, Charles Mortimer Dedman, and partners Mark and Sherri Carter, who are winemakers in California. Dixon Dedman began blending different bourbons sourced from various distilleries, and released the first batch of 1,100 bottles of Kentucky Owl bourbon in 2014, selling it only in Kentucky for around $160. Despite that high price tag, and the fact that Dedman did no marketing, the whiskey quickly took off as a sought-after bottle among bourbon enthusiasts. Three years later, Kentucky Owl’s cult following is as strong as ever, with bottles regularly appearing on the secondary market priced well above recommended retail.

In January 2017, SPI Group—which also owns Stoli Vodka, Kah Tequila, and other spirits brands—announced that it had acquired Kentucky Owl. It hasn’t taken long for the company to put its muscle behind the whiskey: Kentucky Owl bourbon became available outside the state of Kentucky for the first time this month, with 2,535 bottles available in California, Florida, Illinois, New York, Tennessee, and Texas in addition to the home state. Simultaneously, Kentucky Owl is launching a brand new rye whiskey. Like the bourbon, it is blended from sourced ryes, although there is a lot more of it available, spread across 25 states and Washington, D.C. Kentucky Owl plans to release new batches of rye twice a year, in spring and fall.

The site of Kentucky Owl’s original distillery still belongs to the Dedman family, though all that remains is the foundation of a rickhouse where a cabin now sits. “For there to be another Kentucky Owl distillery would be a dream come true for me,” Dedman told Whisky Advocate earlier this week. Yet he hasn’t been passive about sourcing the brand’s whiskey. For the last six years, Dedman has been contract-distilling at multiple Kentucky distilleries, storing barrels in rickhouses all over the state. “I’m able to develop the mashbill, I’m putting them in barrels that I want them to go in, we’re doing experimental char types, working with different people and new strains, and really doing it from all the way down to the grain to be involved in that part of the process too,” he says. The partnership with SPI Group has undoubtedly helped in that regard, though Dedman emphasizes that Kentucky Owl isn’t going to become a mass-market brand. “It will always be very craft, very boutique, very small, and mid-release. It’ll get bigger as my inventory grows, but it’s not as if—I don’t have to tell you all how inventory grows. It’s not like something that happens overnight.”

The plans for a distillery to make Kentucky Owl aren’t surprising—bourbon is, after all, booming—but the cost of the project puts its likely size and scale well above the average start-up craft distillery. While SPI Group has not offered any confirmation of its plans for construction, a company spokesperson did make this statement:

“SPI Group has received an offer of incentives from the Kentucky Economic Development Finance Authority. The package presented will be reviewed and decided on over the next few weeks. The prospect of expanding our portfolio to new bourbon and whiskey brands with a distillery in Kentucky is an exciting one but remains at a preliminary stage. As matters evolve we will issue the appropriate information.”

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