As Indiana marks ten years since the introduction of craft spirit licenses, local distillers are witnessing a steady rise in business and see potential for further growth in alcohol tourism.
Although Prohibition ended in 1933, it was not until 2013 that Indiana lawmakers allowed distillers to establish craft spirit businesses and sell directly to consumers. This legislative change has paved the way for numerous distilleries and tasting rooms to emerge across the state, many of which aspire to become destinations for tourists. Currently, Indiana’s Alcohol and Tobacco Commission has granted over 70 active permits, allowing around three dozen distilleries to manufacture and sell vodka, bourbon, whiskey, and other spirits to the public.
Many of these distilleries were previously focused on beer or wine before the artisan permits were introduced, while a good number of newer distillers have started in recent years.
“Distilling has been a part of Indiana’s history for a long time, but modern craft distilling has really taken off in the last decade, thanks to the General Assembly. Since then, we’ve seen tremendous growth in this market,” explained Jeff Wuslich, co-founder of Cardinal Spirits. He emphasized the supportive ecosystem built around the industry, which includes local farmers and manufacturers.
Historical context shows that during Prohibition, only a few distilleries in Kentucky and Tennessee could operate, primarily for medicinal purposes. After Prohibition, Kentucky gained dominance in the whiskey sector. However, Indiana has served as a key producer of various spirits, centered around the Ross & Squibb Distillery in Lawrenceburg, once known for its whiskey production.
The significant legislative shift occurred in 2013 when Indiana approved the Artisan Distiller’s Permit, enabling local distillers to sell directly to consumers without going through distributors. Early adopters included notable distilleries such as Cardinal Spirits and Hotel Tango Artisan Distillery, which has developed a substantial operation producing a variety of spirits.
There are distinct advantages to the new permits, such as reduced costs associated with eliminating distributor fees, which has made it more feasible for newer distilleries to enter the market.
Despite the successes, industry leaders like Jeff McCabe of Hard Truth Distilling articulate that there remains considerable potential for growth. He noted the importance of improved marketing strategies, similar to initiatives in neighboring Kentucky, to increase Indiana’s visibility as a spirits-producing state.
McCabe and others express the desire for changes in laws that would allow distilleries to ship products directly to consumers, noting that while wineries can ship, distilleries still face restrictions. This could help drive tourism and bolster the local economy.
Owner Susan Spagnuolo of Bear Wallow Distillery highlights the demand for shipping spirits, stating that despite being in a high tourism area, the lack of shipping options limits sales.
Barnes emphasized the need for additional support from the state to help Indiana establish itself as a competitive player in the craft spirits market against Kentucky.
Looking ahead, distillers are advocating for smoother regulatory processes and legislation that could facilitate market access. This includes requests for more permits for public events, direct-to-consumer shipping, and collaborative spirit production among distilleries.
Wuslich voiced a desire for Indiana’s craft distilling industry to gain the same recognition for quality that Kentucky enjoys, underscoring the importance of nurturing relationships with local agriculture to ensure a thriving and competitive spirits market in the state.