Chris Sikich

chris.sikich@indystar.com

Indiana's first artisan distilleries have fired up their copper stills and begun serving up a mix of trendy spirits in glass jars, marking the beginning of what promoters hope will become a Hoosier tourism market akin to the Kentucky Bourbon Trail.

Near Louisville, Huber's Orchard, Vineyard and Winery began selling retail vodka in June and is planning to roll out a variety of gins, whiskeys and bourbons.

In Nashville, Bear Wallow Distillery opened Friday, specializing in white lightning — yep, real Hoosier moonshine — among other spirits.

Bear Wallow owners Mike and Susan Spagnuolo believe Indiana is thirsty for home-grown craft spirits. They're distilling both straight up and flavored 'shines, and a variety of cocktails. The distiller also will roll out rye whiskeys and bourbons over time.

Not too long ago, state law would have labeled the Spagnuolos as bootleggers. Distilling alcohol for retail sale had been prohibited since the end of Prohibition, leaving the art of making moonshine, whiskeys and other hard liquor to the purview of little-known wholesalers and, sometimes, daring bootleggers with illegal, makeshift backyard stills.

But spurred by the burgeoning local wine and craft beer industries, the Indiana legislature in 2013 made it legal for Hoosiers to open small, artisan distilleries to offer samples of spirits, and to sell drinks and carryout bottles.

Now, Huber and Bear Wallow are on the forefront of the new frontier that could sprout legal stills throughout the state. The industry, some say, has the potential to put Indiana on the craft liquor map.

"I think distilling has the same potential as wine and craft beer," said Jake Oakman of the Indiana Office of Tourism Development. "Indiana grows all of the right agricultural ingredients, so there's no reason we can't have a bourbon trail, so to speak, in our state."

Brewers, winery, spur change

Restrictions on alcohol sales began as "blue laws" after Prohibition ended. The laws were first passed by Indiana in 1935 and slowly eroded over the next decades. Once aimed at promoting religious standards, the laws are now discussed in terms of economics and public policy.

In 2013, three popular Indiana craft alcohol businesses — Huber's, plus Sun King and 3 Floyds breweries — convinced the legislature that embracing the distilling industry would be a boon for economic development and tourism.

Neighboring Michigan, Ohio and Illinois all have embraced retail hard alcohol to one extent or another. Kentucky, of course, thrives on bourbon.

Distillers have long been making legal booze in Indiana, but they sell it wholesale to stock the shelves of liquor stores. The largest, MGP of Indiana, operates a former Seagram's plant in Lawrenceburg. In Indianapolis, Heartland Distillers has been specializing in wholesale vodka.

But, the ban on retail distilling has frustrated business owners such as Ted Huber for decades. He can see the impact that distilleries can have on the economy and tourism in Kentucky from his nearly 700-acre family farm in Starlight, just across the Ohio River from Louisville.

Huber already draws 600,000 people a year to the farm, which traditionally has made wine and brandy. Many are curious bourbon trail tourists, though, in search of a quarter shot of bourbon — the traditional sample on the Kentucky tours. And Huber has been able to offer only a glass of wine or snifter of brandy.

Now he can cash in, estimating he can lure another 100,000 guests in coming years. With the change in law, he's preparing to open a 12,000-square-foot distillery on the family farm, where he'll produce spirits from several copper stills.

Huber already has begun selling corn vodka, which he describes as smoother, lighter and slightly sweeter than traditional vodka distilled from potatoes. By October, he'll begin selling gin, the first line of which will add flavors reminiscent of grapefruit, dried orange peals and lemon to the traditional juniper.

He's also planning to sell bourbons and whiskeys, but those can take years to age.

"The bourbon, we are playing with," he said. "We are trying to make an Indiana bourbon. Being this close to Louisville, we don't want to follow right behind Kentucky."

While Huber has already filled his copper stills, Sun King and 3 Floyds each say they've been too busy concentrating on their booming beer businesses to open distilleries so soon.

Sun King had planned to distill in a building near its College Avenue brewery, but instead needed that space to expand the beer-making business.

"We are casually pursing distilling," said Sun King co brewer/owner Clay Robinson. "We are in the unique position where our primary business, which is making beer, has continued to grow, expand and explode."

Barnaby Struve, 3 Floyds' head brewer, said his company bought a building in Munster from which to distill but has no time line to open as it, too, concentrates on brewing more beer. The brewery, which is nationally considered one of the best in the nation, has been busy expanding its beer production.

Bear Wallow seizes opportunity

While the brewers and wineries lobbied to change state law, local entrepreneurs are taking advantage of the opportunity to try their hands at the still.

Jeff Wuslich, 33, Bloomington, will open Cardinal Spirits this fall in a 5,000-square-foot building at 922 S. Morton St., Bloomington.

He also has begun forming a distillers guild and is working with hopeful master distillers throughout the state. Many are in the early planning stages.

"I think Indiana is well suited to produce some of the greatest spirits in America," Wuslich said. "Anything Kentucky has, we have more of, and better quality."

The Spagnuolos, both 52, think Brown County, with its mix of eclectic shops, arts flair, outdoorsy entertainment and local eateries is perfect for an artisan distillery. Big Woods Brewery opened earlier this year and has been packing in customers.

Named after the real hiding place of a long-ago Indiana bootlegger, Bear Wallow's 4,000-square-foot building looks like little more than an industrial site from the outside.

But inside, the distillery is modeled with a rustic feeling, constructed with shelves and walls made locally with rough hand-hewed wood and other local materials.

Starting Friday, Bear Wallow will offer straight moonshine as well as moonshine shake ups — mixed cocktails with fruity flavors such as strawberry, cherry, blueberry, peach, rhubarb apple, raspberry and ginger lime.

This fall, they'll add flavored moonshines, including apple pie, blackberry and peach. By next year, they'll begin opening the whiskeys and bourbons currently aging in barrels.

Jane Ellis, executive director of the Brown County Convention and Visitor's Bureau, believes the distillery will emerge as a boon for tourism.

"We are very excited to have it," she said. "We've seen an impact from the new micro brewer, Big Woods, and we really expect the same from the distillery."

Building a lasting industry

Opening a distillery has proven a risky endeavor, and Indiana's new mixers say the state could make it a little easier.

The Spagnuolos say governmental and insurance requirements cost them an additional $25,000, including opening a full-service kitchen, operating in a building 50 feet from other structures and adding materials to dampen potential explosions.

Distillers already face stricter federal restrictions than breweries and wineries, including FBI background checks. The Spagnuolos, and other distillers, are hoping state lawmakers will ease some restrictions in the 2015 session to help spur business, potentially including:

■ Eliminating a restriction on selling carryout bottles on Sunday. Breweries and wineries can sell carryout-out on Sundays in Indiana, but distillers face the same restrictions as grocery stores, pharmacies, liquor stores and convenience stores.

■ Eliminating a requirement that applicants for artisan permits must have either been operating a winery or brewery for at least three years, or apply for a distillery permit and wait three years.

■ Eliminating a restriction from opening an off-site tasting room. Bear Wallow, for instance, would like to offer drinks nearer downtown Nashville.

Changes won't come easily, though. Lawmakers built in many of those restrictions because they think selling hard alcohol directly to customers is risky business.

To ensure distillers stay small and local, the law also restricts distilleries from selling more than 10,000 gallons of alcohol, and to making the majority of the product locally with local materials.

Time will tell, but changes likely could take years. Rep. Ed Clere, R-New Albany, championed the law for three years before finding the right mix of regulations to appease a majority of lawmakers in 2013.

"I'm open to considering changes," he said, "but I also think we have a pretty good framework in place. If we make changes, there will have to be a sound public policy for doing so."

Call Star reporter Chris Sikich at (317) 444-6036. Follow him @ChrisSikich.