Saturday, June 16, 2012

Brown-Forman To Build New Cooperage In Alabama.

The bourbon whiskey boom has been good for the economies of Kentucky and Tennessee, and now Alabama is getting a taste.

Brown-Forman Corporation has announced that it will invest about $60 million to establish a new cooperage in Lawrence County, Alabama, near Decatur. The company is also about to open a sawmill in Stevenson. The new cooperage should come on line in 2014 and will have about 200 employees.

The location of the new cooperage is based on its proximity to Lynchburg, where Brown-Forman's Jack Daniel's is made. The sawmill project suggests that the new cooperage will receive at least some of its white oak from Alabama forests.

Brown-Forman's existing cooperage in Louisville, which currently supplies barrels for Jack Daniel's and other Brown-Forman products, primarily uses white oak grown in Missouri, Arkansas, Minnesota, and West Virginia. The wood is typically rough cut at sawmills close to the forests before being shipped to the cooperage.

All whiskey is aged in oak barrels but American whiskey is unique because it is always aged in new barrels. It is estimated that half or more of the flavor in a bourbon or rye comes directly from the wood, as does all of the whiskey's color. The new barrel maximizes extraction of tannin, vanilla, caramelized sugar, and other substances. A whiskey barrel is like a tea bag, as far as we're concerned, one and done.

If you want to make more whiskey, you have to make more barrels and build more aging warehouses. That's the only way to do it.

Used barrels typically go to Scotland, Ireland, and Canada.

Louisville has been operating at full capacity for several years and it has long been recognized that a second cooperage, when built, should logically be closer to Lynchburg. Brown-Forman is headquartered in Louisville, operates a whiskey distillery in nearby Shively, and another in Versailles, which is about 65 miles to the west. Lynchburg is 250 miles to the south. Decatur is much closer to Lynchburg, only about 80 miles away.

Brown-Forman is the only distilled spirits company in the world that manufactures its own barrels.

In addition to the barrel-making shop itself, a cooperage typically includes a large outdoor area where wood can be naturally seasoned by exposure to the elements. The Louisville Cooperage simply has no more room, either inside the building or on its grounds.

Up until a few years ago, Brown-Forman's cooperage also sold barrels to other bourbon and rye distillers, a practice they may resume after the Alabama facility comes on line. The only other large barrel-maker serving whiskey country is Independent Stave, which has cooperages in Lebanon, Kentucky, and Lebanon, Missouri. There are also several small cooperages that make whiskey barrels.

Whiskey-making and related industries such as cooperage are great examples of value-added manufacturing businesses that make products for both domestic and foreign consumption, and really can't move their operations out of the U.S. Cooperages are located where the trees and distilleries are, not where the cheapest workers are. U.S. laws, buoyed by international agreements, require bourbon and Tennessee whiskey to be made in the USA, and the strength of the Kentucky and Tennessee brands means whiskey-makers aren't about to move en mass to Vermont.

So drink American, it's good for the economy.


Anonymous said...

I know that Glenmorangie sources a lot of its barrels from Brown-Forman so I'm sure the demand for single malt scotch is also a factor here.

Alex said...

However, Glenmorangie and other scotch producers generally only use the barrel after they've been used to age bourbon. Therefore, I believe Glenmorangie's demand shouldn't add to Brown-Forman's demand for new barrels because the barrels must be used for bourbon first.