Templeton Rye founder Scott Bush said the demand for his company’s whiskey is so high in Iowa that the distillery can’t keep pace.

Bush spoke to the University of Iowa’s Tippie College of Business last week, telling the history of his company, which began with his great-grandfather Frank Schroeder’s pre-Prohibition-era recipe on a Templeton, Iowa, family farm. After Schroeder died, Bush developed an interest in micro-distilling and decided to take up the family business in 2002.

However, during his speech, Bush didn’t mention that the company’s distilling partner in Lawrenceburg, Ind., has produced all the Templeton Rye sold in Iowa since 2006. The company’s Templeton distillery — built in 2005 — only ages and bottles the whiskey.

But lacking local production still doesn’t affect his business, Bush said — 4,000 cases of Templeton were sold in Iowa in 2006, jumping to 23,000 in 2011.

"Our product is in such high demand in Iowa that we’re on an allocation," he said. "We don’t have enough product to supply to hit demand."

John’s Grocery wine manager Wally Plahutnik said Templeton Rye has a brilliant marketing strategy.

"They began it with a huge demand for a product in Iowa and marketed it as an Iowa product," he said. "They are very careful with the language they use. When anyone asks, it’s always ‘pre-Prohibition.’ What he’s doing right now is telling people ‘No, we don’t have any more whiskey.’ "

Every business in Iowa with a Class C liquor license is able to buy one six-bottle case of Templeton per week.

Seth Wenger, the assistant manager for wine and spirits at the Waterfront Hy-Vee, said every case of Templeton the store receives is sold by noon that same day. Each bottle sells for around $40.

"A lot of people do know [it’s produced in Indiana]," he said. "Some don’t. It’s all about the name. Those who know don’t care."

Although Templeton Rye is sold at bars in Illinois, New York, and San Francisco, Bush said, Iowa’s three-tier liquor distribution system — where alcohol distribution is controlled by the state — does not allow him to directly sell Templeton to bars. As the supply of Templeton grows, he said, it will be easier for bars to get the product. But some bars buy the whiskey from local liquor stores when it’s available.

Short’s Burger & Shine bartender Chance Kleist said the bar has been out of Templeton Rye for a few days.

"It is a little tough for us to get, but when it’s on the shelf, it flies right off," he said.

Bush said while Templeton probably won’t be sold in any other states until 2014, his goal is to establish it as a well-known national brand and eventually produce the whiskey only in Templeton.

"We are working on plans right now to expand our distillery in Templeton," he said. "What we have there currently is not nearly big enough to produce the amount we are going to need."

While some people have a problem with whiskey producers who call themselves distilleries but produce liquor elsewhere, Plahutnik said, he speaks for many Iowans when he supports Templeton Rye marketed from Iowa.

"There is no admitting. In terms of saying this is an Iowa product or not, there are no rules," he said.

"If it’s just some whiskey that they distill in Indiana, that’s not a story. [Bush] heard a story, came up with an idea, and figured out how to sell the story."