A microdistillery is a small, often boutique-style distillery established to produce beverage grade spirit alcohol in relatively small quantities, usually done in single batches (as opposed to larger distillers' continuous distilling process). While the term is most commonly used in the United States, micro-distilleries have been established in Europe for many years, either as small cognac distilleries supplying the larger cognac houses, or as distilleries of single malt whisky originally produced for the blended Scotch whisky market, but whose products are now sold as niche single malt brands. The more recent development of micro-distilleries can now also be seen in locations as diverse as London, Switzerland, and South Africa.
Throughout much of the world, small distilleries operate throughout communities of various sizes, mostly without being given a special description. Due to the extended period of Prohibition in the United States, however, most small distillers were forced out of business, leaving only the corporate-dominated megadistilleries to resume operation when Prohibition was repealed to produce small batch brands. Most microdistilleries in South Africa ceased to exist when legislation was introduced in 1964 that made it almost impossible for small, private distilleries to operate viably. The legislation was relaxed again in 2003 and although most distilling expertise was lost, it was recovered by a new generation of microdistillers and has grown since.
A recent trend in this segment of the distilling industry is for megadistillers to create their own micro-distillery within their current operation. The Makers Mark distillery is owned by Suntory and the Buffalo Trace distillery is owned by The Sazerac Company (which also owns the A. Smith Bowman microdistillery) are now producing specialty bourbon brands with small stills.