The distillery is located in a historic ice plant built in 1907. Navigating environmental issues was the first of many hurdles St. Augustine has overcome to reach its remarkable success. Photograph by Brady Skye.

On St. Augustine’s Riberia Street in Lincolnville, Florida — the first freed African American neighborhood in the United States — a historic ice plant sat fallow for 15 years.

Philip McDaniel, co-founder and CEO of St. Augustine Distillery, passed the old plant often in his daily travels around the nation’s oldest city, dreaming of restoring its glory, telling its stories. A chance meeting with another dreamer, Mike Diaz, co-founder and CFO of St. Augustine Distillery, started him on the path.

McDaniel wanted to buy the building and install a distillery; Diaz wasn’t so sure. But a distillery tour through Colorado, Washington, and Oregon eventually sold him. In 2011, they attended the American Distilling Institute’s conference in Portland, Oregon. Then they added another ingredient to their recipe: Dave Pickerell, master of rye and whiskey, and often called the “founding father of craft distilling.”

“We told him we wanted to make bourbon in a tourist town in Florida. We had never done anything like this and wanted to see if he thought we could make a business. He had developed several distilleries, but none trying to craft bourbon in Florida. He agreed,” McDaniel says. ”He took us to Kentucky, and we brought him to St. Augustine, and he saw our vision, so we set about making the best bourbon we could.”

St. Augustine Distillery released Florida’s first commercial bourbon on September 9, 2016, just two years after they put it in the barrel. Ten years later, they clock 175,000 visitors annually and continually get recognized as one of the most visited distilleries in the United States.

But it didn’t happen overnight. They faced a host of challenges: restoring a historic building, operating a distillery in Florida with all its regulations and antiquated statutes, becoming part of the historic Lincolnville neighborhood, and finding the sweet spot with their audience.

St. Augustine Distillery’s co-founder and CFO Mike Diaz (left) and co-founder and CEO Phil McDaniel (right). Photograph by Brady Skye.

Thawing the Past

In 1907, the Historic Florida Power & Light Ice Plant was built as the first of its kind in St. Augustine. It served ice to 20,000 residents, kept shrimpers and farmers supplied with ice for shipping, and maintained production 24 hours per day, seven days a week.

Florida Power & Light (FP&L) still owned the building and surrounding land when McDaniel & Diaz started their odyssey. Environmental issues kept FP&L from leasing it, so the building sat unused. “Nobody had cracked the code. We knew it was the absolute right building for this project. So we worked to develop a plan to mitigate and stabilize the land,” McDaniel said.

Over the next year and a half, they engaged engineers and legal counsel and developed a plan for reuse that eventually passed muster. McDaniel and Diaz delivered the Department Environmental Protection (DEP) letter of approval to FP&L and finally bought the building.

The next hurdle came with the property’s designation as a contributing building to the Lincolnville neighborhood on the National Register of Historic Places. Named for President Lincoln, Lincolnville was the first Black community in Florida freed by the Emancipation Proclamation. To honor that history, they ensured they retained the character and authenticity of the building while bringing it up to code with a fire sprinkler system, water, and electricity.

They walked a fine line of restoration and modernization as they engaged the surrounding community. “It was always important to us to run a business that benefits the community. We sponsored the St. Augustine Amphitheater and supported the Lincolnville Museum, and we built homes with Habitat for Humanity because affordable housing is a giant issue in a tourist area like ours,” Diaz said.

Danny Rodriguez, distiller at St. Augustine Distillery, on the production floor in the brand’s landmark refurbished ice plant in historic St. Augustine, Florida. Photograph by Brady Skye.

Polishing the Grain

With the building secured and a restoration plan in place, Diaz and McDaniel shadowed Pickerell to learn about making great bourbon. They hit the Kentucky Bourbon Trail and visited Maker’s Mark, Woodford Reserve, and Jim Beam to see how they handled their guest experience. They needed to figure out how to take what those big distilleries with 100-acre properties did and translate that into their 13,000 square-foot former ice plant.

On Pickerell’s advice, they added sustainability to their recipe in the form of an innovative water reuse program. “When we toured distilleries and saw the water that cools the mash going down the drain, it felt wasteful,” Diaz said. At St. Augustine Distillery, the mash gets cooked and then has to get cooled to below 100°F before pitching the yeast. That cooling water coiling around the edge of the mash tank comes in at ambient temperature and comes out at 100–115°F. From there, it’s pumped into a holding tank that operates as what Diaz calls a “giant Yeti cooler.” When it’s time for the next mash, that preheated water fills the mash tank, saving the energy required to heat it and keeping excess water from going down the drain.

Then came the spirits. Bourbon was first, but it needed time to age, and they wanted something ready when they opened their doors. Enter vodka. However, Diaz and McDaniel wanted something that spoke to place. Sugarcane grows plentifully in Florida, so it became the base of their vodka. Then they crafted their New World Gin using a dozen botanicals, including three types of Florida citrus peels, lending a bright Sunshine State flavor.

Gin and vodka were on the shelves, and bourbon was marinating in the barrels. But to their surprise, as guests made their way through the distillery, they often asked: “When are you going to make rum?”

“We didn’t feel like we had anything unique to say about rum with so many great ones on the market. But our customers wanted rum, so we made it in our bourbon barrels to give it a unique profile,” says Will Hensler, COO. “The breadth of our spirits portfolio comes from our innate curiosity and continuing to try to make great spirits but also ensuring the distillery visit is special for everybody.”

Bottling Success

In 2014, those efforts at restoring a piece of St. Augustine history were recognized. The Urban Land Institute of North Florida gave St. Augustine the Award for Excellence for the Reuse and Repurpose Sector, and they received the Adelaide Sanchez Award for Historic Preservation, Restoration, Education, and Interpretation. The awards continued in 2015 with the Regional Award for Excellence in Culture, Historic Preservation, or Adaptive Reuse from the Northeast Florida Regional Council. And that doesn’t touch the countless awards for their spirits, like 2024’s ADI Distillery of the Year.

Despite the success, however, Diaz and McDaniel had another challenge they wanted to tackle: experimenting with finishing barrels.

Pickerell advised them to try sherry, so McDaniel tagged along on a trip to Spain to meet sherry producers. After six days, he was ready to get some casks shipped, but it wasn’t meant to be. All the barrels were already under contract for years. He came back to St. Augustine deflated.

Relaying the story over lunch to his friend Charles Cox, owner of nearby San Sebastian Winery in St. Augustine, an opportunity for a unique collaboration bubbled up. San Sebastian made an award-winning port-style wine that could function like sherry, and Cox needed some bourbon barrels. The distillery and the winery, just two blocks apart, established a convenient exchange program. “Eight months later, we had our first release, and it was delicious. That was the beginning of what I call our port-finishing, an adventure we’ve had over the last six years. But it all started with that collaboration. It’s unique and local, which is really important to our story,” McDaniel said.

The distillery gets the complexity and flavors from the port-style wine, and the winery gets the same from the bourbon. Plus, the barrels only travel two blocks, keeping the carbon footprint small.

Cutting Through the Red Tape

Touring distilleries did not prepare Diaz and McDaniel for the legislative battles to come. The states they visited already had laws in place ensuring a favorable environment for a fledgling distillery, but Florida had not yet progressed to that point. Producers faced major retail restrictions and could not sell their products by the glass. Established distributors felt comfortable, but the system impeded distillers with public-facing businesses. McDaniel and Diaz made the case for how changing the laws would benefit tourism, agriculture, and other industries. Over the past 11 years, they successfully advocated for numerous legislative updates. First came a modification to the law banning bottle sales in gift shops, allowing two bottles per person. They tracked each bottle sold and persevered through an onslaught of state tests. Two years later, they asked for more. It became two bottles per brand, then six bottles per year.

Finally, in 2022, a big breakthrough landed: no more bottle limits and by-the-glass sales became legal. That single change, spearheaded by St. Augustine Distillery, opened up the opportunity for dozens of distilleries to add bars. They started as the third distillery in the state, and because of these legislative changes they championed over the years, more than 80 distilleries now operate across Florida, many with distillery bars. They elected not to take advantage of the cocktail legislation, instead opting to respect the territory of the restaurant bar which also operates in the Historic Ice Plant.

“We still have some work to do. We can’t ship to other states, and the hardest part for us is saying no to our guests,” McDaniel said. “It’s not just making great spirits and creating a great experience, but it’s also advancing the laws. I’m proud of the work we’ve done.”

Drone view of St. Augustine with the trolley stop that was secured to bring in tourism. Courtesy photo.

Bringing the Crowds

St. Augustine has an incredible location. It makes excellent spirits. They secured the trolley stops that would drive tourist traffic to the distillery. Honing the experience was the last box. Often St. Augustine is visitors’ first distillery experience, which Hensler loves, “They’re in our historic town, hunting for things to do, and we get the opportunity to teach people about craft spirits from the basics onto the expert level.”

St. Augustine has offered a tour since day one, but in the last couple of years, it’s built a library of experiences. Now guests can choose from creating their own custom bottle, tasting through the majority of the brand’s portfolio with the Spirit of Florida Bourbon Experience, taking a craft cocktail class, engaging in a spirits and food pairing seminar, or completing a Certified Bourbon Steward course. “We work with the Stave and Thief Society in Louisville to offer these classes. Initially, we brought it in just for our staff to educate and help them be better at their jobs. Each employee at St. Augustine Distillery is a Certified Bourbon Steward, but we realized our guests were interested, so we launched them to the public,” Hensler says.

Today restaurants, shops, and trolley stops dot Riberia Street, and it all started with St. Augustine Distillery. McDaniel and Diaz saw potential in an abandoned building off the main tourist drag and led the charge, crafting a vibrant district where curious visitors can learn all the sides of St. Augustine’s storied history. In March 2024, they celebrated 10 years of turning the lights back on at the historic ice plant.

“In 2014, Phil McDaniel had a dream to make whiskey and share it with the world. That passion drove him to make connections in his community and overcome every obstacle,” Erik Owens, ADI president, says. “He didn’t just make his city a better place, he engaged in the craft spirits community, laid the groundwork to grow the number of distillers in Florida, and has engaged on the national level to make the U.S. a better place for distillers. With the partnerships he has forged and the team he has built, he’s making spirits that deserve to be recognized on the world stage.”

Guided tasting experiences like the Spirit of Florida Bourbon Experience and Certified Bourbon Steward courses attract serious spirits lovers to St. Augustine as well as casual tourists. Photograph by Brady Skye.