Thursday, May 29, 2014
Diageo Announces New $115M Kentucky Distillery
Diageo says it will spend about $115 million on a new, 1.8-million-gallon whiskey distillery in Shelby County, Kentucky. The site will cover 300 acres and include a distillery and six barrel storage warehouses, Diageo North America president Larry Schwartz announced earlier today. The exact location has not yet been determined but Schwartz said they expect to begin construction this year and start distilling by late 2016.
This project will “cement our commitment to expanding our share of the American whiskey category,” said Schwartz.
Journalist Fred Minnick reports that the new distillery will be on Benson Pike and include a 100 acre buffer zone to, among other things, avoid whiskey fungus issues with neighbors.
Diageo’s North American whiskey portfolio includes Bulleit Bourbon and Rye, I. W. Harper Bourbon (not sold in the U.S.), Crown Royal Canadian Whisky, George Dickel Tennessee Whiskey, and Seagram's 7 Crown American Blended Whiskey. Both Crown Royal and Seagram's 7 use bourbon whiskey as an ingredient.
Currently, Diageo has a maturation and blending facility, but no distillation, at the Stitzel-Weller Distillery in Louisville. The George Dickel Distillery in Tullahoma, Tennessee, has distillation, maturation, and hand-bottling. Most of Diageo's bottling for North America is done in Plainfield, Illinois, outside Chicago. Diageo is based in London. Its U.S. headquarters are in Norwalk, CT.
At 1.8-million-gallons, Diageo's new distillery will be the smallest major producer distillery in Kentucky. It will have about the same capacity as the Charles Medley Distillery in Owensboro, which was recently acquired by Terrasentia.
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John Hansell on the Whisky Advocate blog has more details, and pictures.
A note about Crown Royal. Terrible as it may be, it is a 100% Canadian whisky. It is a blend of pure (100% of mashbill) corn, rye, and wheat whiskies distilled at the Crown Royal Distillery in Gimli, Manitoba and contains no American-made bourbon whiskey whatsoever.
Canadian law allows up to 9.09 percent of a Canadian whiskey blend to be beverage alcohol of non-Canadian origin, such as bourbon. If products exported to the U.S. contain alcohol of U.S. origin, they get a tax break, so many brands have U.S. and Canadian versions, and the U.S. versions contain bourbon.
I'll be honest, I wonder where this leaves Stitz. Will it produce again in any serious quantity, or will they leave it as the "Experience", not really distilling anything there except maybe for show?
Time will tell, I suppose.
Ah yes, the export version. I stand corrected, thanks.
Would there be any information on where this bourbon is distilled? Does Diageo source it, or could they be using one of their own, Bulleit or IW Harper?
Diageo's only operating whiskey distillery in the United States is George Dickel. What's not from there is either very old (pre-1999) or sourced.
I don't know Diageo's history. It seems that a lot of their production capacity has been purchased not grown organically. Have they ever built a new distillery? Have they identified a distiller or whiskey guy to oversee the construction of the new distillery? I think this is exciting news but I just wonder about their experience in this area.
One of the flavoring whiskies distilled at Gimli and used in Crown Royal is called a "bourbon" in their terminology. It has a mash bill of 65% corn, 30% rye, and 5% malted barley; is distilled to 64% abv; and is aged in 80% new oak and 20% first-fill ex-bourbon barrels.
Canadian whisky savant Davin de Kergommeaux says Crown Royal won't give him a straight answer about the use of bourbon but he thinks they probably don't since they make so much of their bourbon-like flavoring whisky. But they might in the export version for the tax benefits.
In late May, Diageo announced that it will build a new distillery in Kentucky to make Bulleit and other products.
Due to the small size of the proposed distillery, it is clear that Diageo will continue to have distillate made for Bulleit at undisclosed Kentucky distilleries (believed to include Brown-Forman, Jim Beam and Barton 1792), which it will continue to age at Stitzel-Weller. Diageo will confirm nothing except the new distillery, but the rest is generally understood within the industry.
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