Josh Hafner

jhafner@dmreg.com

The label of the whiskey most associated with Iowa will soon list the state where it's distilled: Indiana.

In a wide-ranging interview with The Des Moines Register, Templeton Rye company President Scott Bush and Chairman Vern Underwood said the Iowa-based company will amend the labels to clarify the whiskey's origins in the Hoosier State.

Bush and Underwood also pulled the curtain back on current production practices, confirming reports that the whiskey sold as Templeton Rye is distilled according to a stock recipe from its Indiana distilling partner, not one tied to Templeton's Prohibition era.

The Wednesday interview came the day after the Register published an article in which whiskey industry experts questioned whether Templeton Rye meets a federal code requiring whiskey companies to disclose the state where their whiskey is distilled if it occurs in another state.

Templeton Rye Spirits LLC, the company behind Templeton Rye whiskey, will take significant steps toward clarifying its production process, Bush said. The moves aim to add greater transparency, further defining the differences between the modern day Templeton Rye distilled in Indiana and the Prohibition-era Iowa-distilled whiskey that inspired it.

Bush and Underwood also laid out a timeline for when a distillery will be built in Templeton and when the company hopes to ship out its first bottles of Templeton Rye made entirely in Iowa. If the company can begin building its facility in 2015 and finish by 2017, the first bottles of Iowa-distilled Templeton Rye could be shipped as early as 2020 or 2021 after aging, they said.

"Currently there is some confusion. So all that confusion is going to be cleared up," said Underwood, who is a major investor in the company. "If it implies that the rye whiskey is made in Templeton, then that should be changed. Anything that is misleading should be changed."

Templeton Rye's current labels do not note its origins in Indiana, at a Lawrenceburg factory distillery owned by the food and beverage ingredient corporation MGP, which contracts with dozens of rye whiskey brands across the country. Instead, the labels read "PRODUCED AND BOTTLED BY TEMPLETON RYE SPIRITS, LLC, TEMPLETON, IOWA," according to bottles on the shelf and labels registered with the federal government.

The whiskey inside Templeton Rye bottles is distilled and aged in Indiana before arriving in Iowa. In Templeton, it's blended with other whiskies and water before being bottled and shipped.

While Templeton Rye notes the use of an Indiana distillery in certain pages of its website, industry and legal experts raised concerns about the lack of information on bottles and marketing materials heavily focused on the town of Templeton's whiskey distilling past.

"We have never tried to hide that fact," Bush said of its Indiana distilling. "And, in fact, we're going to take an additional step and amend the label and include 'Distilled In Indiana' just because we want to be transparent and we don't want any confusion in the marketplace."

Bush said the new labels should begin appearing on bottles in about 60 days, pending approval by the Alcohol and Tobacco Tax and Trade Bureau (TTB), which enforces regulations related to spirits in the United States.

The Federal Code of Regulations, in Title 27, Section 5.36, states that "the State of distillation shall be shown on the label of any whisky produced in the United States if the whisky is not distilled in the State given in the address on the brand label."

Printing on a label where a whiskey was distilled is significant because many consumers make purchasing decisions while scanning labels on store shelves, said Wade Woodard, a certified spirits specialist. Woodard, a whiskey world equivalent of a sommelier, said he reported Templeton Rye and more than 50 other spirits companies he believed did not comply with the labeling rule in April.

When asked about the regulation, Templeton Rye's chairman and president noted the label had received approval without qualms from the TTB. The motivation for the label change came purely from a desire to address confusion, they said, not after inquiries from the TTB.

Underwood said the decision not to state the whiskey's Indiana distillation on original labels wasn't an attempt to mislead consumers.

"Why we didn't do it, I can't answer that," he said.

The rye whiskey currently distilled comes from an MGP stock recipe at the distillery, which was originally owned by Seagram's and used in spirits including Crown Royal, Underwood confirmed, referring to an article on the distillery published by the Atlantic this month.

The same rye whiskey from the distillery also has been purchased and sold by other popular brands, including Bulleit and High West, the article noted, both of which declare its Indiana distillation on their registered labels.

As a major investor in the early days of Templeton Rye, Underwood said the company decided to buy the other distillery's whiskey instead of making its own to assume less financial risk, a practice not uncommon among major whiskey brands.

"When we got involved in this thing, I thought, 'I'm not going to spend millions of dollars on the distillery not knowing if I'm going to get booted out of town or never sell any of this stuff,' " he said.

Key to Templeton Rye's marketing materials is the story of Meryl Kerkhoff, a now-deceased co-founder who learned how to make Prohibition-era Templeton rye from his father, Alphonse, and saved the recipe on a decades-old scrap of paper.

"Now available for the first time, the infamous small batch rye whiskey returns," the bottles' back label reads.

But Underwood told the Register that reproducing the Kerkhoff family's recipe is impossible because of federal rules regulating the proof and production of rye whiskey.

"There are certain laws about how bourbon has to be 51 percent corn. Rye whiskey has to be this. Fine," Underwood said. "It's very simply put: We buy the whiskey in barrels from (MGP)."

When Templeton Rye eventually builds a Templeton-based distillery capable of handling all of the production, Underwood said the company would try to replicate its current MGP-sourced whiskey as closely as possible.

"That's going to take some doing, to be honest with you, but we'll just work on it until we get it right," Underwood said.

Though Templeton Rye is not distilled according to the Prohibition recipe, Bush and Underwood on Wednesday framed their whiskey as a tribute to and celebration of the town of Templeton and its legendary bootlegging past, not a product from it.

"The whiskey is not the most important thing," Underwood said. "The town of Templeton is the most important thing, and the state of Iowa. The whiskey almost is the afterthought. It helps. It brings this to life."

Templeton Rye's planned Iowa distillery, announced this month in Templeton, would enable the company — which currently produces 60,000 to 65,000 cases of whiskey annually — to distill, age and bottle 150,000 annually, Underwood said.

"We want the pot stills to really make this," Underwood said, referring to the old-school stills associated with bootleggers. "I want this to tie into the community and what this story is about."

Underwood traveled to Templeton this month to celebrate the grand opening of the town's community center, a $1.7 million facility to which Templeton Rye donated $250,000. At the gala, the company also announced plans to build a museum collecting the history and stories of town residents with ties to its bootlegging past.

The goal, Bush and Underwood said, is to make Templeton a tourism mecca for the same whiskey fans who flock to distilleries in Kentucky, creating jobs and encouraging commerce in the process.

"Our product is all about Iowa and all about Templeton, and it celebrates the state of Iowa," Bush said. "We want to continue to celebrate all things that we love about our state, but we want to be transparent and we want to make sure things are clear with consumers."