ROBERT SIEGEL, HOST:
Bacardi, Jack Daniels, and Johnnie Walker have some new competition. The number of craft distilleries has surged in the U.S. over the past few years. Mom-and-pop entrepreneurs are making liquor in small batches for local customers. And as NPR's Chris Arnold reports, they are thriving, despite tax breaks that favor some of their larger rivals.
CHRIS ARNOLD, BYLINE: Wherever you live, you're probably not too far from a local microbrewery making beer. Well, the latest trend is the spread of what you might call micro-boozeries. Craft liquor distilleries are now springing up around the country like little well-heads spouting gin, whisky and rum.
At the Turkey Shore Distilleries in Ipswich, Massachusetts, Evan Parker is opening the round, brass door on the top of a 400-gallon copper kettle. Parker boils molasses in this giant kettle to distill what he calls Old Ipswich Rum. So, you're opening up kind of this porthole kind of...
EVAN PARKER: Yup, the manway.
ARNOLD: It's called the manway because in between batches Parker has to climb down through this little hole and into the kettle and clean it.
PARKER: I actually had to measure my hips to make sure they'd fit through there. I'm a 36 waist so...
ARNOLD: You might have to lose a few pounds there. Parker's here with his business partner and friend Mat Perry. The two grew up going to school and playing hockey together. A few years ago, after a clam farm venture that Parker was launching didn't work out so well, his friend called him up and said that he had another business idea.
MAT PERRY: I was a high school history teacher, teaching locally here. And I knew this history of rum in this area and became, sort of, enamored with that story.
ARNOLD: Perry says in the 18th century there were more than a hundred rum distilleries all along the coast of New England, making rum with molasses that was shipped up from the Caribbean. Perry saw the local food movement all around him and he thought why not start a local distillery to make rum? So he called up Evan and they met at a local pub.
PERRY: The theme in our lives tends to be after about two beers we make wonderful decisions and after four they really start to go downhill. So, we only have about a two-beer...
PARKER: Forty-five minutes of power thinking.
ARNOLD: But the two friends did research. They managed to raise about $300,000 from local investors and friends and family. And they quit their jobs and started the distillery. Around the country, there's a lot of other people making local rum or whiskey or gin. Federal permit data shows that just between 2008 and 2012 the number of craft distilleries more than doubled to 471 of these little micro-boozeries.
KELLY RAILEAN: Well, micro-distillery. I like micro-boozery though. I like that a lot too. I might have to use that. Thanks.
ARNOLD: Kelly Railean is the founder and president of the American Rum Association, which is for small craft distillers.
RAILEAN: We have 14 members.
ARNOLD: Railean also runs her own distillery in San Leon, Texas. And she's got bus tours of people coming by all the time. She's meeting with more and more restaurants and bars who want to sell her rum.
RAILEAN: I think a lot of it is people looking for something different, you know. When they find these smaller and being local and being able to actually come here and meet the owners, all that kind of stuff. And it's something, a lot of times these are higher quality products.
ARNOLD: Still, Railean says when your small it's hard to get distribution into bars and liquor stores. Then, with rum in particular, it turns out that there's a 100-year-old tax break that favors rums from the Virgin Islands and Puerto Rico. Those would be rums like Bacardi and Captain Morgan. Railean says that makes it much cheaper for those companies to produce rum. And she says most of her customers don't, of course, know about that.
RAILEAN: They just think Puerto Rican rum is great and, hey, it's cheaper than everybody else. And a lot of that is because of that subsidy that they get.
ARNOLD: But, despite the challenges, craft distillers are still popping up all over.
PERRY: Well, actually, let's start with the white because that's always a good idea. So, as a rule...
ARNOLD: Back up on the Massachusetts coast in Ipswich, Mat Perry and Evan Parker have lined up a few bottles of their different styles of rum: a basic white rum, a tavern-style and a special reserve that's been aged in an oak barrel for a couple of years.
PARKER: Got some darker tones to it. Pulled a little more out of that barrel. It's almost more Bourbon-like I would say.
ARNOLD: And it's actually just the thing to have around when a snowstorm and the polar vortex descends on New England. Chris Arnold, NPR News, Boston.