Building Southern Distilling: Pete Barger on Engineering, Innovation, and the Future of American Whiskey

Building a Distillery With a Different Vision

Listen to our podcast: Inside Southern Distilling Co. with Co-Founder Pete Barger

Our latest distillery visit took us north of Charlotte, North Carolina to Southern Distilling Co. in Statesville, where we toured the distillery and sat down with co-founder Pete Barger. Pete and his wife, Vienna, founded the company in 2013 with a clear vision: to build a distillery that could succeed as a long-term business. During our conversation, Pete discussed the decisions that have shaped the company over the years, from its original business model and distillery design to regenerative farming, contract distilling, and where he believes the American whiskey industry is headed.

A Business-First Approach to Building a Distillery

Pete began by explaining that Southern Distilling was never intended to be just another craft distillery. While many small distilleries start as passion projects, he and Vienna approached the company with a business plan from the beginning. Pete, who grew up in North Carolina, and Vienna, who is originally from California, both came from entrepreneurial families and wanted to build a family business with an agricultural foundation.

While attending school in California, they watched craft breweries like Sierra Nevada and Anchor Brewing grow into nationally recognized brands. As they evaluated business opportunities of their own, they saw similar potential in American distilling. Rather than opening a traditional craft distillery centered on tasting room sales, Pete envisioned a company that combined contract distilling with the production of its own whiskey. Today, Southern Distilling provides contract distilling, barrel aging, bottling, and product development services while producing its own Southern Star line of whiskeys.

Building a Distillery in North Carolina

Opening in North Carolina presented challenges. At the time, North Carolina was a control state with some of the country’s most restrictive laws governing craft distilling. Because Southern Distilling was designed primarily as a business-to-business operation rather than relying on direct consumer sales, Pete said the company was less affected by those restrictions than many traditional craft distilleries.

Pete and Vienna also became active in improving North Carolina’s distilling environment. Vienna filed the paperwork establishing what became the Distillers Association of North Carolina, and Southern Distilling was among its founding members. Pete believes those early efforts helped transform North Carolina into one of the country’s more supportive states for craft distilling.

Engineering Better Bourbon at Southern Distilling

Pete readily admits he wasn’t a distiller when Southern Distilling was founded. Instead, he brought decades of experience as a mechanical engineer designing and building highly automated manufacturing facilities.

Rather than viewing whiskey production through the lens of tradition, Pete approached the distillery as an engineering problem.

“Having a clean sheet means I bring no bias,” he explained.

That perspective shaped Southern Distilling from the beginning. Extensive automation throughout the distillery allows the team to produce numerous mash bills for different clients while maintaining consistency from batch to batch.

“We are not governed by tradition,” Pete said. “We’re governed by the science.”

That doesn’t mean rejecting tradition altogether. Southern Distilling continues to use open-top fermentation because Pete believes it contributes to the character and “terroir” of the whiskey. At the same time, the distillery embraces newer technologies, such as jacketed fermenters, because Pete believes they provide better temperature control, improved sanitation, and greater consistency than older designs. For Pete, the question isn’t whether a process is traditional or modern, but whether it produces better whiskey.

Regenerative Agriculture Begins with Better Grain

That same engineering mindset eventually extended beyond the distillery itself and into the fields where Southern Distilling grows much of its grain. Although Southern Distilling was originally built to produce the best possible whiskey, not to become a farming operation, Pete said the team quickly realized they needed greater control over the quality of their grain. That led them to expand into farming and adopt regenerative agricultural practices long before they became a popular industry talking point.

Pete is quick to point out that regenerative agriculture isn’t a single farming technique. Instead, it’s a collection of practices designed to improve soil health while reducing dependence on synthetic fertilizers. He described methods such as crop rotation, planting nitrogen-fixing cover crops, minimizing tillage, and returning spent grain and process water back to the farm rather than treating them as waste products.

For Pete, these practices aren’t simply about sustainability. He believes they also produce better grain while making economic sense for Southern Distilling’s operation.

“You can do good and do well,” he said.

Pete also believes North Carolina’s agricultural landscape naturally lends itself to regenerative farming. Unlike the vast, continuous cornfields found in parts of the Midwest, farms in North Carolina are often divided into smaller parcels that require growers to manage each field individually. According to Pete, that makes practices such as crop rotation and diversified planting a more natural fit.

Ultimately, Pete sees regenerative agriculture as another example of questioning conventional thinking. Rather than treating farming as separate from whiskey production, he believes greater control over grain quality leads to better whiskey. For Pete, it’s another example of how producing a better product and running a better business don’t have to be competing goals.

Southern Distilling’s Craft-Scale Contract Distilling

When Pete and Vienna began planning Southern Distilling in 2012, they weren’t simply looking to build another craft distillery. Pete believed there was an opportunity to create something different: a company focused on contract production, but at a scale designed specifically for emerging craft brands.

At the time, Pete said contract distilling wasn’t well understood outside the largest producers. While many whiskey enthusiasts today are familiar with sourced whiskey, in which a company purchases whiskey that has already been distilled elsewhere, Pete envisioned a more collaborative approach. Rather than simply selling barrels, Southern Distilling would work directly with brands to develop recipes, produce whiskey to their specifications, and give them the ability to grow without building a distillery of their own.

Pete described it as giving customers “the ability to differentiate with authenticity” while also giving them “the ability to scale.” However, convincing brands to embrace that idea wasn’t easy. “It was super hard,” Pete recalled. “Just the idea of contract production wasn’t even well understood initially.”

Building the business in North Carolina instead of Kentucky added another challenge. Pete said many potential customers initially questioned whether high-quality bourbon could be produced outside Kentucky, despite the success of other whiskey-producing states such as Indiana and Tennessee.

Over time, however, Southern Distilling’s business evolved beyond contract distilling alone. According to Pete, the company now works with hundreds of brands and has expanded into bottling, co-packing, barrel aging, and product development as customer needs have changed.

For Pete, those additions weren’t part of the original business plan. Instead, they reflected Southern Distilling’s philosophy of growing alongside its customers and providing services that emerging brands increasingly needed.

Navigating a Changing Whiskey Market

Like much of the whiskey industry, Southern Distilling hasn’t been immune to the current slowdown. Pete believes the whiskey industry is working through a period of oversupply following years of rapid expansion. While he expects the market to eventually recover, he also believes companies with diversified business models will be better positioned to weather the downturn.

That philosophy has influenced Southern Distilling from the beginning. Rather than relying solely on contract distilling, the company has expanded into barrel aging, bottling, co-packing, product development, and expanding the distillery’s events program. Pete believes those additional services have helped Southern Distilling adapt as the whiskey market has changed while continuing to meet the evolving needs of their customers.

Pete also believes today’s whiskey consumers have become more selective. Rather than paying premium prices simply because a bottle is rare or difficult to find, he sees many drinkers placing greater emphasis on quality and value. That philosophy has also shaped Southern Distilling’s own Southern Star lineup, which Pete said is intended to deliver high-quality whiskey at approachable prices.

Pete is particularly optimistic about the future of American Single Malt. In his view, many American Single Malt producers model their whiskeys after Scotch. However, he believes the category has an opportunity to develop its own distinctly American identity by using traditional American whiskey production techniques with malted barley taking center stage.

Pete also sees opportunities beyond the United States. While bourbon continues to grow internationally, he believes drinkers in many parts of the world are already familiar with malt whisky. That familiarity, Pete believes, gives American Single Malt an opportunity to reach more international consumers through a style they already understand. Although Southern Distilling currently produces American Single Malt primarily for clients rather than for themselves, Pete said he sees the category as one of the industry’s most promising long-term opportunities.

Tasting Southern Star

Following our conversation, Pete guided us through a tasting of several expressions from Southern Distilling’s Southern Star lineup, including the Southern Star High Rye Bourbon, Southern Star Cask Strength High Rye Bourbon, Southern Star Paragon Bottled in Bond Wheated Bourbon, Southern Star Paragon Cask Strength Wheated Bourbon, and Southern Star Bottled in Bond Rye.

While the tasting provided an opportunity to experience Southern Distilling’s whiskeys firsthand, it also reinforced many of the ideas Pete had discussed throughout the day. Whether talking about engineering, farming, contract distilling, or American Single Malt, every decision reflected the same thoughtful approach to producing whiskey.

Southern Distilling Was Built With A Deliberate Approach

One thing became clear during our visit: Southern Distilling wasn’t built on a whim. Every aspect of the operation reflects deliberate choices that Pete and Vienna have made together over the past decade.  From the beginning, their goal has been to build a successful business producing consistent, high-quality whiskey while continuing to adapt as the industry evolves.

Whether discussing contract distilling, farming, engineering, or the future of American whiskey, Pete consistently returned to the same idea: there is always room to question conventional thinking if it leads to a better result. It’s a philosophy that has shaped Southern Distilling from the beginning and remains central to how Pete and Vienna continue to guide the company today.

Listen to our podcast!

🎧 Listen to the Full Interview: Catch our complete podcast episode Inside Southern Distilling Co. with Co-Founder Pete Barger on Apple Podcasts, Spotify, or Podbean. Prefer video? Watch the episode on YouTube.

We hope you have enjoyed our visit to Southern Distilling Co. with Co-Founder Pete Barger! Next, read these related articles: Southern Star Double Rye Review, Southern Star Cask Strength Bourbon Finished in Honey Barrels Review and Southern Distilling Unveils Statesville Contract Distilling.

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