Jim Rutledge Talks Cream of Kentucky Pre-Sales, Breaking Ground on a Distillery in 2019

Jim Rutledge at Castle & Key Distillery
Jim Rutledge at Castle & Key Distillery. Credit Maggie Kimberl.
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Since retirement, Jim Rutledge has shown no signs of slowing down. He’s been contract distilling at Castle & Key while simultaneously launching the J.W. Rutledge Distillery, which includes reviving the heritage brand Cream of Kentucky. The Bourbon Review recently spoke with Rutledge for an update:

Tell us about Cream of Kentucky.

This is a brand name that we’ve had since the start of J.W. Rutledge Distillery. Stephen Camisa first approached me about a craft distillery right about the time I was retiring and his company, Bedford and Grove, already owned the Cream of Kentucky trademark.

One of the things we really needed to do was have a brand in the market to illustrate our distribution abilities and capacity. We already have the team, but it’s all talk unless we show it. We found some barrels of bourbon that were 11-and-a-half-years-old. We bought 150 barrels and we bottled 60 barrels—our target was 1,500 6-bottle cases but we reached 1537 cases. We started bottling on December 12. After we bottled those 60 barrels we immediately purchased another 60 barrels.

Are the bottles already sold out?

The distributors haven’t picked the cases up yet, but every case was pre-sold to distributors before we bottled. We wanted to have a strong showing in our home state, so 500 of the cases are targeted for Kentucky. It is my understanding that the cases have already been sold by the distributor, Southern Glazer Wine and Spirits, to retailers and the retailers have pre-sold the bottles to their loyal customers, so bottles of Cream of Kentucky may not even reach the shelves of retailers.

Can you describe the flavor profile of Cream of Kentucky?

Knowing we needed a brand in the market, we acquired several bourbon samples in the past three years, but the flavor profiles were not in tune with my palate. I like something with a mellow mouth feel and a long and very smooth finish. The bourbon we eventually found for Cream of Kentucky met our goals, and also had a nice creamy mouthfeel with gentle fruitiness a hit caramel and vanilla, plus some soft woody characters. We knew we had found a winner.

Do I recall that you aren’t generally a fan of the older bourbons like this one?

Some of the best bourbons I’ve ever tasted were from older barrels. A bourbon’s peak of performance may generally be between 6-9 years, but there are always exceptions to that rule. But just because it’s old doesn’t make it better, in fact it’s an exception, but when they are better they are really good.

With the popularity of Kentucky bourbon, did you have any problems finding barrels to purchase?

That has been one of the problems. We’ve been trying since we commenced our distillery project to find something to put into the market, but we were having problems finding something we liked. You can lose your reputation in an instant by rushing into the market with a bourbon that doesn’t meet your quality standards. We were looking for nearly three years for something we would like to bottle.

But with the demand on bourbon right now it’s hard to find, especially because Kentucky bourbon was all that we wanted for bottling of Cream of Kentucky. We also have another brand name we will be introducing in the near future, High Plains, which may be a Kentucky bourbon or perhaps a straight rye whiskey that may or may not be from Kentucky. But without Kentucky as a prerequisite, it opens the doors to other really good ryes.

Anything else about Cream of Kentucky folks should know about?

Our original target was three releases of about 1,500 6-bottle cases in 2019. With the purchase of the additional 60 barrels of nearly 12 year-old Bourbon we are now looking at close to 6,000 cases with releases about every three months, or so, through most of 2019. We also plan to come out with a Cream of Kentucky liqueur within the next few months.

As soon as our distillery project is fully funded we will begin contract distilling at a Kentucky Distillery to get a jump start on production so we will have a two year head start on JWR product. I will be working on-site at the distillery as a consulting distiller. We will continue to source bourbon like we have found and other rye whiskeys as long as our targeted flavor profiles are met.

Has the land for J.W. Rutledge Distillery been purchased?

We haven’t purchased the land yet. We are working with county officials to ensure the correct zoning is in place. We have property selected, plus additional options, but we are also making sure we have the water and other utilities needed to operate a distillery prior to a final purchase. We must do it right the first time.

How are things progressing with your investors?

The press release that came out a couple of weeks ago was a premature release by a consulting architect. Our architect is Luckett & Farley. They were working with an out-of-state consultant, who released the first rendering of the distillery, and he was simply showing his design work, but that hit Business First and then everyone picked it up and it was everywhere the first day. That cost us the potential of early incentives from the state to encourage us to build in the Kentucky, but it also had a positive impact of bringing potential investors on board.

We hope to finish fundraising within the next 30-60 days. We are also applying for a low interest loan to do part of the financing through debt so we can ultimately retain control of distillery operations and utilize our many years of distillery related expertise. Our four partners have 160 years experience—a lot of people have referred to our team as “The Dream Team”—and that is why we are financing part of the required funding. We have raised a sufficient percentage of the capital to commence working on acquisition of the loan, concurrently with capital fundraising, versus working consecutively on capital fundraising and then start the loan. This will speed up the total process of acquiring our ultimate goal of distillery funding.

After everything is in place, when do you expect to break ground?

Hopefully by, or near, the end of the first quarter of 2019. We’re ready to hit the ground running. We’re talking to a few investors right now who could provide the balance of required funding, but it takes time for them to run their analyses, and there are investors coming on line almost weekly.

With all the new distilleries cropping up there is a shortage of barrel warehouse space. The first thing we will do when we begin production is build a large single story barrel warehouse for contract barrel storage. I prefer single story warehouses for more consistency in the barrel maturation process.

What else do you want folks to know about J.W. Rutledge Distillery’s progress and future?

We will have a lot of revenue streams coming in after we commence operations, and we will be in the black within three years. We could possibly have another capital raise in three to four years or we may acquire more debt at that point when we want to expand. We will start with a 36” still and have the capacity to produce 34,000 barrels per year after getting to a 24/7 distillation schedule, and 68,000 barrels per year after we add a second 36” still, a second mash tub, and more fermentation tanks. The architecture is designed so when an expansion is made it will look like it was part of the original distillery design, and not just an add-on. A large part of the initial distillation will be contract distillation for others, and growth there, plus JWRD distillation of its own brands, will determine when we add the second still, and additional equipment.