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Bluegrass Distillers Expanding in Midway

A relatively new entry in the Kentucky craft bourbon industry is taking a leap of faith with the announcement it is building an $8 million distillery at historic Elkwood Farm in Midway. Bluegrass Distillers, which began distilling operations on West Sixth Street in Lexington in 2013, will install a 36-inch column still and six 18,000-gallon fermentation tanks with room for future expansion, as well as a bottling line and barrel warehouses. The new site is expected to open this fall and eventually create 22 full-time jobs.

“My partner, Sam Rock, and I have always loved the bourbon industry,” said co-owner Ben Franzini. “Growing up in Kentucky, it became part of our upbringing. We love the concept of bringing people together and focusing on a product inside that space.”

Bluegrass Distillers currently produces a traditional 90-proof Kentucky Straight Bourbon Whiskey and a holiday-themed cinnamon- flavored whiskey. Under its Midway Distilling Company label, it also creates rye whiskeys finished in re-charred oak, French oak, vermouth and rum barrels, as well as in Sauternes wine casks.

“At a high level, we are going to continue investing in our primary products and that includes growing our distribution footprint,” said Franzini. “We are now in six states, and we hope to add two or three states a year moving forward.”

The bourbon industry is now a $9 billion industry that touches many aspects of Kentucky’s economy, according to the Kentucky Distillers’ Association. Agriculture is boosted by the growing of corn and other grains necessary for bourbon production. The lumber industry harvests American white oak for new barrels, and the construction industry is kept busy with dozens of new warehouse and distillery projects throughout the state. Bourbon supports 22,500 Kentucky jobs with an annual payroll of $1.23 billion per year. State and local governments benefit by collecting $286 million in taxes each year.

The Midway expansion means Bluegrass Distillers will increase production capacity by more than 100 times and will also be able to o.er contract distilling services to smaller brands or investors, an additional source of revenue. “Our plan is a combination of all those various revenue streams,” Franzini said.

The new facility will also feature a visitors center, gift shop, tasting rooms and event space. In the competitive world of bourbon making, it’s not enough to place a product on shelves. Distilleries must bring customers, tourists and the curious to their properties to show how the spirits are made and to give folks a sip.

The larger space in Midway will allow Bluegrass Distillers to host more visitors and guests for those tours. Franzini said that at its current site in Lexington, the distillery hosted close to 20,000 visitors last year on the Kentucky Bourbon Trail Craft Tour. Operators are excited to increase that capacity at their new home in Woodford County. He added that they are also proud to be located just down the road from legacy distilleries such as Buffalo Trace and Woodford Reserve.

Franzini and Rock were looking for a property large enough to build barrel warehouses and grow their own grains. Midway had a bourbon task force in place to recruit a distiller and visited Bluegrass Distillers’ Lexington site several years ago. The two sides got together and helped each other make a move happen.

Elkwood Farm, built in 1835, was purchased by the distillery in 2020. It is listed on the National Historic Register. The company grows its signature blue corn on-site and potentially will grow other grains there as well. “Blue corn bourbon started as an experiment we did with a group of chemical engineering students,” Franzini said.

“Blue corn is an heirloom grain and creates a flavor-packed distillate that produces a complex bourbon with earthy, nutty and vanilla notes.”

Midway University, which offers programs connected to the state’s bourbon industry, is located a short distance from Bluegrass Distillers’ Elkwood Farm property. Undergraduates can minor in an online Bourbon Studies program to understand the industry’s history, culture and business. The university also offers an online MBA program in Tourism and Event Management, emphasizing bourbon tourism and destination branding.

“We have already talked with the university about multiple internships and collaborations we could do,” Franzini said.

Franzini acknowledges there are plenty of young bourbon brands entering the market. Still, he wants the public to know that among the newcomers, Bluegrass Distillers has been distilling for nine years and will leverage that experience as it expands its facilities in Midway. “My partner, Sam, and I consider this a family business,” he said. “We don’t have any outside venture capital-type investors. We have a close-knit team that is excited to take this to the next level.”

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