SPERRYVILLE, Virginia (Reuters) - Apple and cherry smoke haunts this old warehouse near the Blue Ridge Mountains, working its way into the unique whiskey that steeps in oak barrels here.
That smell, sweet and rich, prompted Rick Wasmund to quit his job as a financial planner and craft a whiskey that gets is smoky flavor from fruitwood rather than Scottish peat.
“I thought if you could put this in a bottle, it would be really good,” Wasmund said as he sifted a handful of barley in his kiln. “It just grabbed hold of my brain and said, ‘Make me a reality.'”
Seven years after this epiphany, Wasmund’s Single Malt Whisky can be found in bars and liquor stores from Virginia to California.
Dozens of start-up distillers are bringing an artisanal, hand-crafted ethic to shelves that have been dominated by giant producers since Prohibition ended in the 1930s.
Like the first beer microbreweries in the 1980s, these microdistillers use local ingredients and innovative techniques to set themselves apart from their established rivals.
The drinking public’s embrace of high-end vodkas like Chopin and Grey Goose over the past decade, which sell for two to three times the price of plain old vodka, has been an encouraging sign for independent producers, who see a chance to compete despite their small scale and high fixed costs.
Like the well known premium vodkas, the local liquors don’t come cheap -- often more than $30 per bottle. But according to the Distilled Spirits Council of the United States, this “super premium” end of the market grew 18 percent in 2006 and 20 percent in 2005, while overall alcohol consumption in the United States has remained flat.
“It seems like the more we charge, the better it sells,” said Holaday, whose Vintage Gold limited-edition maple vodka sells for around $70 per bottle.
The American Distilling Institute, a trade group for independent producers, now counts 95 distilleries in the United States and Canada, up from five in 1990.
Many emphasize local flavors. Cold River Vodka derives its distinctive softness and its Down East pedigree from Maine potatoes, while maple sap gives Vermont Gold vodka its hint of sugar and fiery finish.
Philadelphia Distilling’s Bluecoat Gin emphasizes citrus notes, while San Francisco’s Anchor Distilling’s Junipero Gin doesn’t shy from a strong juniper-berry flavor.
In Virginia, Wasmund adds toasted fruitwood chips to his barrels of whiskey, cutting the aging process from three years to as little as three months. Each bottle is hand-numbered and sealed with wax.
In Michigan, farmers sell clear eau-de-vie brandy made from their home-grown cherries, pears and peaches.
“Capturing local flavor and ambience -- that’s the whole thing,” said Kris Berglund, a Michigan State University chemical engineer and microdistillery pioneer.
Artisan spirit producers have more in common with winemakers, who celebrate local and seasonal variations, than liquor-industry giants who strive for consistency, said Vermont Gold distiller Duncan Holaday.
“We don’t want to be industrial, where every piece is exactly the same as the next,” said Holaday, a former anthropologist.
Easing regulations have helped in some states. Michigan slashed the price of a distilling license in 1996 and allowed wineries to sell brandy directly to consumers in their tasting rooms.
“We’re not seeing a lot of people building grassroots distilleries to compete against Absolut and Smirnoff. They’re playing a game they have a chance of winning,” Berglund said.
So far, artisan spirits amount to little more than a drop in the bucket.
Microdistilleries sold roughly 300,000 cases last year, less than 1/2 of 1 percent of the total sold in the United States, according to the American Distilling Institute.
But huge sales aren’t necessary for success, said association president Bill Owens.
“If you’re in Boston, you don’t have to market your product in New York City. How many bars are there in Boston?” Owens said.
Cradling a glass of his whiskey, Wasmund said he can turn a profit if he sells as few as 24,000 bottles -- a goal he expects to reach soon.
“We’ll be profitable this year, if we sell a kidney. Our livers aren’t worth much,” Wasmund said.