A microdistillery is a small, often 'boutique', distillery established to produce beverage grade alcohol in relatively small quantities. While the term is most commonly used in the United States, micro-distilleries have been established in Europe for many years, either as small cognac distilleries supplying the larger cognac houses, or as distilleries of single malt whisky originally produced for the blended Scotch whisky market, but whose products are now sold as niche single malt brands. The more recent development of micro-distilleries can now also be seen in locations as diverse as London, Switzerland and South Africa.
Throughout much of the world, small distilleries operate throughout communities of various sizes, mostly without being given a special description. Due to the extended period of Prohibition in the United States, however, most small distilleries were forced out of business, leaving only the corporate-dominated megadistilleries to resume operation when Prohibition was repealed to produce small batch brands. Most microdistilleries in South Africa ceased to exist when legislation was introduced in 1964 that made it almost impossible for small, private distilleries to operate viably. The legislation was relaxed again in 2003 and although most distilling expertise was lost, it was recovered by a new generation of microdistillers and has grown since.
A recent trend in this segment of the distilling industry is for megadistillers to create their own micro-distillery within their current operation. The Makers Mark distillery owned by Suntory and the Buffalo Trace distillery owned by The Sazerac Company (which also owns the A. Smith Bowman microdistillery) are now producing specialty bourbon brands with small stills. It is anticipated that other megadistillers such as Bacardi, Brown-Forman, Pernod Ricard and Diageo, will soon join the parade.
The modern microdistilling movement grew out of the beer microbrewing trend, which originated in the United Kingdom in the 1970s and quickly spread throughout the United States in the following decades. While still in its infancy, the popularity of microdistilling and microdistilled. spirits is expanding consistently, with many microbreweries and small wineries establishing distilleries within the scope of their brewing or winemaking operations. Other microdistilleries are farm-based. Anchor Brewing Company, Ballast Point Brewing Company, and Dogfish Head are examples of American craft breweries that have begun expanding into microdistillation. Leopold Bros. is an example of a microdistiller that began as a microbrewery, and now operates as a distillery alone.
Some of the newer microdistilleries produce only spirits. Plain and seasonally-flavored vodkas are popular products. As with the emergence of microbrewing, California and Oregon have experienced the highest number of microdistillery openings. Significant recent growth has also occurred in the Midwest. Microdistilleries for gin and vodka have also now started to re-emerge in London, England, after being restricted and effectively banned for over a hundred years due to UK government restrictions on still sizes, which have now been partially relaxed. There are now five licensed distilleries in London: Beefeater, and Thames Distillers, and four microdistilleries: the City of London Distillery, The London Distillery Company, Sacred Microdistillery and Sipsmith. At the same time, European micro-distilleries have been a key element in the absinthe renaissance in several countries, including Switzerland.
South Africa has experienced a relative big growth in microdistilleries and produces mainly pot distilled brandies, fruit brandies, fruit based eau de vie (locally called mampoer), husk based spirits (like Italian Grappa) and a wide range of liqueurs and flavoured vodkas. A local microdistillery training academy, Distillique, is one of the few training academies worldwide which provides craft and microdistiller training courses on a regular monthly basis for microdistillers. Microdistillers include the Jorgensen's distillery, Dalla Cia Distillery, Nyati Jjj Distillery, Schoemanati distillery, Tanagra distillery  and Wilderer Distillery.
In the 1990s the liquor industry established the notion of super premium spirits offering a higher-quality (and usually more elaborately packaged) product at a higher price. The higher prices created an opportunity for small distilleries to profitably produce niche brands of exotic spirits that did not need massive economies of scale to maintain profitability. The first decade of the new millennium saw the creation of hundreds of such distilleries producing products that were designed and marketed in a way that resembled celebrated restaurants more than alcoholic spirits marketing. Numerous competitions and publications were formed to support the burgeoning sub-culture of spirits.
It is no longer the case that microdistilleries are producing at the premium end of the market only; the established brands are under threat from local microdistilleries at all price points (with the possible exception of the ultra discount supermarket brands such as Sainsbury's and Tesco's "value" brands, which are close to loss leaders).
Microdistillers often experiment with new techniques to produce new flavors. Tony Conigliaro uses a rotavap (i.e. glassware not copper pot) on a small scale to produce distilled spirits which change from day to day in his bar, and Ian Hart uses vacuum equipment to conduct distillation at much reduced temperatures, resulting in less cooked aromatics.
The U.S. Government regulates distilleries to a high degree and currently does not distinguish its treatment of distilleries in terms of size. This stringent regulation has prevented microdistilling from developing as rapidly as microbrewing which enjoys relatively more relaxed government control. A number of states, such as California, Indiana, Iowa, Kansas, Michigan, Utah and Washington, have passed legislation reducing the stringent regulations for small distilleries that were a holdover from prohibition. The Bureau of Alcohol, Tobacco, and Firearms (BATF) and the Alcohol and Tobacco Tax and Trade Bureau (TTB) are responsible for enforcing Federal statutes as they apply to all manufacturers of beverage alcohol.
South African regulations
In South Africa, microdistilleries are legally defined as distilleries with an annual capacity of less than 2 million litres of spirits. These microdistilleries are regulated through provincial laws rather than the national liquor laws (as prescribed in the Liquor act of South Africa, Act 59 of 2003).
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The distillation of spirits has its roots deep in American history, however the terms "craft distillery" and "craft distilling" are becoming more common in the nomenclature of American society. The term "craft" brings to mind the idea of smaller batches of distilled liquors being made in a family setting. Although the family aspect may come into play some of the time, the term "craft distilling" refers mostly to the concept of starting with raw materials and creating distilled liquors with the same attention to detail that was normal in the earlier history of the United States.
Craft distilling is a catch phrase for some, used for marketing purposes. However, many craft distillers consider that in order to be true to the art of making distilled liquors one must not only care about the end result, but also about the process and the impact of its production. In this way craft distilling sets itself apart from the larger, more established distilleries.
A craft distiller is actively involved in every aspect of the distillation of the spirit, from ingredient selection to bottling and labeling. Some Craft Distilleries take this one step further and even grow the grains they use to produce distilled liquors. One, Mad Buffalo Distillery, a farm distillery in Union, Missouri, controls every aspect of their product, from growing and harvesting their grain, fermenting, distilling, aging, bottling, labeling, all on their family farm.
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