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Bourbon Keeps Blowing Up

I just returned from a Kentucky Distillers Association press conference in Frankfort, Ky., where there were more politicians than actual distillers.  The KDA and politicians were announcing the economic impacts of Kentucky’s distilling industry.

Bourbon now gets people elected in Kentucky. In fact, Senator Mitch McConnell met with KDA members two weeks ago at Four Roses, where one source told me he questioned his opponent Alison Lundergan Grimes’ leadership for the bourbon industry. However, the KDA says McConnell did not talk about Grimes and only spoke about his support for bourbon.

Meanwhile, Governor Steve Beshear said at the presser: “Bourbon is our heritage. It’s a part of our DNA in this state.” While this is true, Beshear is the only governor in my lifetime to make the state’s tax structure more friendly for bourbon distillers.

Governor Steve Beshear delivers the economic impact to the media at the new Jim Beam distribution center in Frankfurt, Ky.  Standing behind Beshear is KDA president Eric Gregory.

Governor Steve Beshear delivers the economic impact to the media at the new Jim Beam distribution center in Frankfort, Ky. Standing behind Beshear is KDA president Eric Gregory.

An interesting bourbon political piece to the presser, Senate President and Kentucky Republican Majority Leader Robert Stivers offered an anecdote about an Indiana senator visiting the Buffalo Trace Distillery. The Indiana senator wrote Stivers about the “Kentucky Bourbon Trail” and said that future State Senator forums should be held at bourbon facilities. Of course, Buffalo Trace is not on the Kentucky Bourbon Trail, which is ran by the KDA.

Here are the key points referenced in the press conference, which were also in the KDA press release.

  • Distilling now contributes $3 billion in gross state product to Kentucky’s economy every year, up from $1.8 billion just two years ago, a 67 percent increase.
  • More than 15,400 people owe their paychecks to the Bourbon industry, compared to 8,690 in 2012, a 77 percent increase.
  • Payroll for those workers has skyrocketed to more than $707 million from $413 million in 2012, a 71 percent increase.
  • Average salary for distillery employees is $91,188.
  • Distilleries plan to spend $630 million in capital investment over the next five years as the ad valorem “barrel tax” is offset by a corporate tax credit that distillers are required to reinvest in their Kentucky operations. This will create an additional 1,500 jobs, $43 million in payroll and $5 million in tax revenue.
  • Total capital investment will surpass $1.3 billion in projects over a 10-year period starting in 2008.
  • The number of licensed distilling companies has tripled – from 10 to 31 in two years. That’s the most distilleries in Kentucky since the repeal of Prohibition.
  • Distilling remains one of the state’s top job creators with a 4.35 spin-off factor. It now ranks second, behind animal processing, in total employment and job multiplier out of 245 industries.
  • Distilling industry employment is up 21 percent since 2000, while the rest of Kentucky’s manufacturers lost 26 percent of their jobs.
  • New craft distilleries employ 127 people with salaries totaling more than $4 million. They have invested $30 million and plan to spend another $25 to $30 million in the next five years.
  • Total property tax assessments have jumped to $2 billion from $1.3 billion in 2012, a 54 percent increase.
  • More than $166 million in tax revenue for local and state governments is generated by spirits production and consumption, up from $126 million in 2012 (a 32 percent increase).
  • Bourbon and Tennessee whiskey account for $1 billion of the total $1.5 billion in distilled spirits exports, up from $768 million in 2012. It is, by far, the largest export category among all U.S. distilled spirits.
  • Barrel inventories are at their highest levels in 40 years, with more than 5.3 million aging currently in Kentucky. Production levels are up 53 percent in the last two years and 150 percent in the last 15 years.

Master Distillers: A History, The Truth & Fake Bourbon

Master distiller is a commonly used term with no consistent definition.

Michter’s Willie Pratt and Bulleit’s Tom Bulleit are referred to as “master distiller” even though their companies are just now building their respective distilleries. (Note: Diageo does not market Bulleit as a master distiller, but he is commonly introduced as one in media and at events.) MGP Ingredients’ Greg Metze and Four Roses’ Jim Rutledge use the same title, but their duties are drastically different. Greg only makes distilled spirits, while Jim spends much of his time marketing Four Roses to consumers and media.

Craft distillers who started making distillate less than a year ago, former marketing managers and converted small business owners all call themselves master distillers right now. Perhaps, after taking a distilling class or receiving on-the-job training, they consider themselves qualified. But even if you disagree with their using the title, show me the contemporary position announcement that defines the job.

For such a specific title like master distiller, the duties range from talking to media and taking distributors to dinner and from smelling corn for mold to actually turning a knob for distilling. Hell, I could call myself a master distiller right now, buy six cases of bourbon and blend them for the “Old Minnick, America’s Smoothest Fake Bourbon” and nobody would stop me. Just for argument’s sake, let’s say I get away with the illegally making such a product, I assure you every newspaper story would title me as “master distiller” because they don’t know better. And why would I stop them? My master distiller title could help sell Old Minnick, America’s Smoothest Fake Bourbon.

Whiskey Women AdMaster distiller is catchy and authoritative. But it may surprise you that it is not new.

Believe it or not, master distiller goes back much further than the modern guys and gals signing bottles at WhiskyFest.

In my research, I’ve found several 1800s references to so-called master distillers. None were more poignant and defined than in the 1867 “Arts & Sciences” section of The English Cyclopaedia (Note: UK English spelling): “He tests the specific gravity of all the liquids as often as he pleases; he requires that the numerous pipes shall be painted, some black, some red, some blue, and some white, in order that he may know which is for the conveyance of wort, which for wash, which for the first spirit, and which for the finished spirit; he demands the aid of ladders and passages to give him access to every part of every piece of apparatus. In short, the master distiller is so thoroughly controlled in all the operations, that nothing but the prospect of large profits, arising out of a large business, would induce a manufacturer to wear such shackles.”

Even though it’s been more than 140 years, the above definition could still work today.

In the bourbon world, master distiller was frequently used before and after Prohibition. In the mid-1930s newspaper ads, trying to win over new post-Prohibition customers, Nicholas O. Blair championed himself the master distiller of The Blair Distilling Company in Chicago, Kentucky. “Nick Blair….was practically born a distiller,” a 1936 ad stated. “….Blair had been a full-fledged master distiller for ten years and was ready to carry on the business….”

Of the legendary Dant distilling family, Michael J. Dant’s December 27, 1956, obituary refers to him as the “oldest master distiller in Kentucky when he died….”

When Joseph L. Beam passed away, the former Heaven Hill distiller’s obituary lede: “A master distiller for more than 58 years…..” Interestingly, Joseph L.’s cousin, Col. Jim Beam, is referred to as the “oldest practical distiller” vs. master distiller in his 1947 obituary.

Nonetheless, the term existed in the olden days and was widely used.

It goes without saying that the average 1930s master distiller was more qualified than today’s. Back then, from what I’ve been able to gather in historical archives, Kentucky companies referred to their distillery hierarchy in this order: distiller, head distiller and then master distiller. They were actually distilling, too. Today, anybody can use the title, cheapening its meaning and worth on a résumé.

Popular brands like Jefferson’s, Pappy Van Winkle and Black Maple Hill are either contract distilling or purchasing warehouse barrels to blend their respective products. That doesn’t take away from their juice; it simply means they don’t have a true master distiller. (In all fairness, Julian Van Winkle informs people he’s not a distiller, but he’s commonly referred to as one.)

So, it’s just a suggestion: Maybe you don’t call yourself a master distiller if you’re not a master distiller. There’s no shame in mingling barrels together. In fact, I encourage all brands not distilling their own whiskey at their own distillery to create a new title–Master Mingler. That has a nice ring to it.

 

What does Scotch Whisky Association think about Scotland’s referendum vote?

From David Frost, Scotch Whisky Association chief executive, regarding Scotland independence vote.

“The people of Scotland have made a historic choice against the background of the most profound national debate.

“We welcome the stability that this choice brings and now urge politicians of all parties to work to bring our country together.

“The referendum debate has shown the need for government and business to collaborate to address long-term economic challenges. We will be looking closely at plans for further devolution within this context.  There must now be a renewed focus on improving the business environment so that Scotland’s economy can grow to everyone’s benefit.

“The Scotch Whisky industry is determined to play a leading role in shaping discussions that are fundamental to the future success of our industry and our nation.”

Who Wants to Meet the MGP Master Distiller?

When I became the Kentucky Derby Museum’s bourbon ambassador, I had two goals. 1) Educate new consumers about bourbon. 2) Introduce enthusiasts to industry legends.

Last year, I was able to reintroduce Ed Foote, former master distiller at the Old Fitzgerald Distillery (Stitzel-Weller). Modern whiskey enthusiasts loved the whiskey he made, but Ed has enjoyed retirement too much to do many public appearances. On that night, we honored his legacy and drank some of his whiskey.

This year, I’m proud to announce that the Kentucky Derby Museum’s Legends Series continues to honor unknown legends. For the first time in his career, MGP Ingredients master distiller Greg Metze will have a spotlight shining on him. Today, the current master makes the distillate for Templeton, Bulleit, High West, Redemption and many other rye whiskeys, as well as several bourbon brands. He doesn’t have anything to do with the marketing. He just makes the stuff, and I believe he’s the most underrated U.S. distiller.

During the Legends Series, I interview the guest, we drink some whiskey and folks can purchase special bottles for the distiller to sign. Metze has never signed a bottle. Never. So, if you can make your way to our Legends Series, you’ll have the distinct privilege of having the first Metze-signed bottles.

Buy tickets here. The event is October 2.

The other legends include: Jimmy Russell, longtime master distiller of Wild Turkey, December 4, 2014; Harlen Wheatley, master distiller of Buffalo Trace, February 5, 2015; Bill Samuels, chairman emeritus for Makers Mark, June 4, 2015; and Mike Veach, renowned bourbon historian and author, August 6, 2015.

 

The Pappy Van Winkle Dilemma at Bulleit Stitzel-Weller Experience

At the Bulleit Frontier Whiskey Experience at Stitzel-Weller, I wondered if Bulleit’s parent company, Diageo, has a branding problem. Stitzel-Weller is the house Pappy Van Winkle built. They know it. The media knew it. And even the Shively, Ky., mayor knew it. At the long-named site’s ribbon cutting, Mayor Sherry Sinegra Conner said: “I wonder if old Pappy would have dreamed what this (Stitzel-Weller) has become today.”

When Tom Bulleit spoke, he talked about Pappy Van Winkle, too, reciting the story of how Pappy gave Bill Samuels Sr. the recipe for Maker’s Mark. On the tour, they talked about Pappy’s office, the original still and the rickhouses that Frederic Stitzel patented way back when. Pappy mentions were so frequent in my 1.5 hours there I lost count.

I asked Diageo VP Guy Smith if they were trying to take advantage of Pappy, the brand’s popularity. “We’d never encroach on another brand,” Smith said. “Whatever we do will be tasteful and historically accurate.”

As he was telling me this, I couldn’t help but wonder what a Van Winkle would think about the converting of the Stitzel-Weller distillery into a visitor center for Bulleit. I asked Sally Van Winkle Campbell, Pappy’s granddaughter, and she thinks Pappy would appreciate the Bulleit facility.

“I think he would have been okay with this,” she told me. “When changed happened, he was okay with moving on.”

The Van Winkles sold the distillery in 1972, but the family contracted with the facility’s new owners, Norton-Simon, to continue making whiskey. After a couple owners, the distillery stopped producing in 1992, and it’s been aging products for other distilleries since then.

Campbell, author of But Always Fine Bourbon, remembers playing at the distillery as a child. She’s happy Bulleit’s moved into her old playground. (I interviewed Sally at the distillery and have not spoken to other Van Winkles, but she wouldn’t shy away from criticizing anybody for misrepresenting her cherished family name.)

The ribbon cutting for the new Bulleit Experience. The facility is now on the Kentucky Bourbon Trail.

The ribbon cutting for the new Bulleit Experience. The facility is now on the Kentucky Bourbon Trail.

“It’s just great to see the place live again,” she said. “It’s been dead for a long time.”

Diageo certainly improved the place. I’ve been to the distillery when it was grimy and riddled with snakeskins and tin cans. Diageo’s landscape and interior improvements deserve sincere recognition.

The Stitzel-Weller Distillery in Shively opened on Derby Day in 1935.  Stitzel-Weller is now owned by Diageo.  The Bulleit Frontier Whiskey Experience at Stitzel-Weller will be open to the public Wednesday through Sunday from 10 a.m. -3 p.m., with the last tour beginning at 2 p.m.  Admission, which includes a tasting, costs $10 for adults of legal drinking age.

The Stitzel-Weller Distillery in Shively opened on Derby Day in 1935. Stitzel-Weller is now owned by Diageo. The Bulleit Frontier Whiskey Experience at Stitzel-Weller will be open to the public Wednesday through Sunday from 10 a.m. -3 p.m., with the last tour beginning at 2 p.m. Admission, which includes a tasting, costs $10 for adults of legal drinking age.

Yes, I’d like to know what the hell took them so long. Yes, I want to know whose whiskey they’re aging because they sure don’t own all 412,000 barrels in the warehouses. Yes, I’d like walk past the tour’s 12-foot rope that keeps me from going inside the warehouse.

But those are concerns for another day because nobody is letting me past that rope.

One day, Bulleit will be a name as big as Crown Royal and Johnnie Walker—other brands owned by Diageo. With the family’s bright youth (read my Whisky Advocate story on 21-year-old Tucker Bulleit), its recent investment and its current growth rates, Bulleit is Diageo’s darling North American brand. Five years ago, they didn’t knowingly let my kind into Stitzel-Weller. Now, they let us walk around and take pictures. Baby steps….

Today, a new destination was added to the Kentucky Bourbon Trail. And at least one Van Winkle appreciated the attention her grandfather received.Stitzel Weller 4 Stitzel Weller 5 Stitzel Weller 6