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      Distilling companies:  “Five years from now, the best bourbon in the U.S. will probably be from a state besides Kentucky.” Steve Heilman, CEO, Charleston Distilling Company.

Poor Carrie Nation is spinning in her grave.

The enthusiastic (some would say radical) temperance advocate must be wondering how far South Dakota will go in its continual search for economic development.

The explosion of craft beer and micro-breweries in our state is yesterday’s news. And the bulging grocery store shelves displaying hundreds of wine labels have become commonplace to shoppers.

But what about spirits, that popular but well-worn euphemism for whiskey, gin and other alcoholic beverages? The number of those brands and types has increased markedly, as well.

The difference is that the growth of home-grown distillers has been much slower to develop than your hometown beer-brewer or wine-maker.

And yet, it’s coming.

Phillip Klein and his wife, Cyndee, of Watertown, started their distillery in
Watertown a little over three years ago and it is still one of only nine in the state.

They saw what happened in the beer and wine industries, and wanted to be on the front end of what surely will be an emerging market trend.

Unlike many distiller start-ups, the Kleins focused on vodka, which doesn’t require aging, as does whiskey, and so the turnaround is quicker.

Now, because of the early success, they plan to expand into corn-based beverages, and also beer and wine.

And probably a cocktail room, Phillip said.

Despite the growth (they are now shipping to Minnesota and North Dakota), both have kept their day jobs. Phillip is an electrical engineer and Cyndee works at a bank.

“We can see a profit on the horizon, but not yet. It is a volume based game.”

What accounts for all the activity in beer, wine and now, “spirits”?

For one thing, more favorable laws governing this economic sector.  Ever since the failure of Prohibition, alcohol consumption has been a growth industry. The laws restricting the production – it is heavily regulated by federal law – have been relaxed, and this friendlier attitude has been reflected in the state Legislature, as well.

According to Dan Scofield, publisher of Distillery, there has been one distillery start-up each day nationwide over the last three years. That’s 1,600 distillers, and it is expected to rise to 2,000 by 2020.

Given this trend, I should not have been surprised when I stopped for fuel the other day in Kadoka, population 650. Looking west over my pickup’s tailgate, I saw a sign on a building that said: “Badlands Distillery.”

Which is another name for economic development.

April 4, 2018