USA, KY: Alltech to more than double projected brewing capacity

Alltech, whose Lexington Brewing Co. is Kentucky’s largest craft brewer, is in the midst of a $24.4 million expansion in three cities that is designed to more than double its projected brewing capacity and add taprooms, Lexington Herald Leader reported on March 17.

The brewery is already too big to qualify for a taproom under existing statutes. A bill now in the state House could allow it, but not if Alltech continues to grow.

Mark Coffman, Alltech’s master distiller, said March 17 that in addition to the 40,000-barrel brewhouse in Lexington, Alltech has begun brewing at a 7,000-barrel plant in Bowling Green in conjunction with Western Kentucky University’s brewing program.

Next year, Alltech will open another 40,000-barrel brewhouse and another distillery in Pikeville.

“Right now we’re going up to 87,000 barrels,” Coffman said, “And we’ve purchased a 110,000-barrel brewhouse, and we’re looking at where to put it.”

This would be an additional $15 million investment by the company.

In Kentucky, only microbreweries that produce less than 25,000 barrels a year may have a taproom to serve customers directly.

Senate Bill 11, an omnibus alcohol bill, would raise the cap to 50,000 barrels a year. The bill was approved by the Senate in January and has been sent to the House Licensing and Occupations Committee.

The alcohol bill also would expand production limits for small farm wineries from 50,000 gallons to 100,000, increase the amount of souvenir alcohol sales at distilleries from three litres to nine, allow small farm wineries to make a small amount of brandy, increase the sample size at distilleries, and make many more changes.

Rep. Susan Westrom, D-Lexington, vice chairwoman of the House committee, said on March 17 that the bill could be considered at a meeting the following week.

“I feel certain the bill’s going to be heard. It’s too important not to, and these are very valuable industries to the state of Kentucky,” Westrom said.

Coffman said Alltech was hoping the microbrewery cap could be raised to at least 197,000 barrels so the company could open taprooms in all three cities.

“If it doesn’t pass, it’s status quo — we don’t open taprooms, don’t hire 20 extra people at every location, and the state loses out on revenue,” Coffman said.

He said Alltech is a thoroughly Kentucky company — the flagship brand is Kentucky Ale — but Ohio and Indiana both have higher brewing caps that would allow the company to set up the new brewhouse there and have a taproom.

“I don’t want to say it’s a decision we’d make, but as a business, we have to open the door,” Coffman said.

18 March, 2016