|One of the existing warehouses at the MGP Distillery in Lawrenceburg, Indiana.|
“This investment is consistent with the ‘invest-for-growth’ initiative of our five-year strategic plan. Increased capacity will help us better support the rapid growth of the whiskey category, as well as support our own brand development efforts."
The brand development comment officially reverses a company pledge that it would never compete with its customers by creating its own brands. The reversal is not surprising, as house brands are simply too important for long term profitability to be dismissed that easily.
Griffin also said this:
“American whiskey is in the early stages of a long term growth trend. Thanks to our strong reputation for quality and innovation, and our production capacity, MGP is uniquely positioned to benefit from this trend. This investment allows us to expand our ability to mature product for both our customers and our own future needs.”
There has been much private discussion in recent years about the staying power of American whiskey's current boom. Many companies are speaking through their investments but few senior executives have been willing to predict a bright future this directly. As the U.S. producer most dependent on the non-distiller producer market, MGP needs this prediction to be true. Much depends on robust growth in export markets such as India and China.
MGP has been in and out of the whiskey game for decades, getting back into it with the acquisition of Lawrenceburg's old Seagrams distillery in 2011.