Monday, October 16, 2017

Heaven Hill Is Now the World's Biggest Bourbon Distillery


Heaven Hill's humble beginning in Bardstown, Kentucky.
As reported today throughout the Louisville media, Heaven Hill's Bernheim is now the World's Biggest Bourbon Distillery. To quote Louisville Business First, "Today, at a press conference held on the premises of the Heaven Hill-owned Bernheim Distillery in West Louisville, representatives from the company, as well as local politicians and media, gathered to celebrate the latest news of the distillery’s $25 million expansion, which the company says will make it the largest single bourbon-producing site in the world."

The slight hedge is necessary because Jack Daniel's in Tennessee is larger, but Jack is not technically bourbon, and Jim Beam is larger if you count everything produced at DSP-KY-230, but that license covers two facilities, ten miles apart.

Hedges aside, this is a remarkable achievement for a family-owned company founded in Bardstown more than 70 years ago by Joe Beam and a group of investors that included Ed Shapira, father of current company president, Max Shapira.

The five Shapira brothers (Ed, David, Mose, George and Gary) were in the dry goods business, running a chain of small department stores called 'The Louisville Store,' although they had no locations in Louisville. The business was started by their father, an immigrant from Eastern Europe. The stores did well during the Depression, selling everyday necessities at bargain prices. That gave them money to invest when Prohibition ended in 1933.

Ed Shapira, who ran the Louisville Store in Bardstown, assumed it would be an arm's length investment, as the other founders were, like Joe Beam, all experienced whiskey men. After the distillery was built and in production, Beam and the others lost money in another venture. They gave Shapira a chance to buy them out. It was either that or close the doors. Ed conferred with his brothers and they agreed to take the plunge. Joe Beam stayed on as Master Distiller, along with his youngest son, Harry.

While Beams made the whiskey, the five brothers ran the business. Ed's son, Max, came on board as did David's son, Harry. They had a unique business model, in which distributors bought the whiskey when it went into the barrel, instead of when it came out. The distributors got a deal and so did Heaven Hill, because that meant less capital was tied up in aging inventory, which allowed them to grow. As with their retail business, value was the secret to their success. The objective was to make the best whiskey their customers could afford.

At first, it was a commodity business. Their first brand was a two-year-old straight called Bourbon Falls. It did okay. Old Heaven Hill Bottled in Bond, launched a few years later, did much better. Soon it was the best-selling bourbon in Kentucky.

Other bourbon brands followed, and Evan Williams Bourbon became the company's flagship. They built the brand by steadily promoting the claim that it was older and higher proof whiskey, for less money, than the leading brands. Today, Evan Williams is third in sales after Jack Daniel's and Jim Beam, and Heaven Hill is a major, international, diversified distilled spirits producer. Its actual size is unknown because the company is still private, owned by the descendants of the five Shapira brothers.

There is no 'Heaven Hill' in Bardstown. William Heavenhill was the name of the farmer who owned the land before the distillery was built. Although its distillery is now in Louisville, the company is still based in Bardstown. Its Bourbon Heritage Center there is one of the best distillery visitor centers in the world.

Heaven Hill is a remarkable and quintessentially American success story.

22 comments:

Mark said...

"Jack is not technically bourbon..."

Oh man, this again. Haven't you stated elsewhere that Jack meets each and every requirement to be called a straight bourbon? In the link below, you state "So is Jack Daniel's a bourbon or not? The answer is yes."

http://chuckcowdery.blogspot.com/2015/07/we-find-jack-daniels-is-bourbon-smoking.html

Chuck Cowdery said...

Jack Daniel's is not technically bourbon because it doesn't say 'bourbon' on the label, but the product in the bottle is bourbon in all but name. Nothing inconsistent, I'm just explaining the hedge in Heaven Hill's claim. Unfortunately, not everyone follows me as closely as you do.

Josh B said...

Great article, thank you

Erik Fish said...

So actually, Jack is TECHNICALLY a bourbon because it meets all the technical and legal requirements, but it isn't LITERALLY a bourbon because its producer makes a point of calling it something else. Right? Sorry, couldn't resist... :)

Anyway, great article. Didn't Heaven Hill's original distillery burn down at some point, and that's how and why they acquired New Bernheim? I probably read that in one of your books.

Brian (AKA The Dean) said...

I'm not sure why some have such a hard time getting a handle on this Jack Daniel's thing. It could be called a Bourbon (according to most "experts") but chooses not to be called one. So technically, it's not Bourbon--by choice of the producer.

Remember

Now here's my "devil's advocate" inquiry on the matter. Has a Lincoln Process whiskey ever been labeled as "Bourbon"? If the answer is "Yes", then I think the issue is pretty much settled. If the answer is "No", then I think the best one can say is "Jack Daniel's (or George Dickel) seem to meet all the criteria for Bourbon, and could be labeled as such." But should a company attempt this, could it be challenged by the Bourbon establishment? I can envision a legal challenge where the Lincoln Method is defended as "subtractive only" by one side, and as "possible additive" by the other---with warring experts, of course. I guess my point is, at some point this could end up being a TTB, or court, ruling.

Now, I'm not sure there would be much of a challenge/controversy, as perhaps it's a non-issue to the big Bourbon brands. Obviously the TTB doesn't seem to be that concerned about labeling, these days.

That aside, very nice article on Heaven Hill. One of my favorite distilleries for delivering excellent whiskey and HUGE value.

Chuck Cowdery said...

The 'Lincoln County Process' is a nebulous term for a type of charcoal filtering. Virtually all bourbons are charcoal filtered. The regs are silent on the subject of charcoal filtering. Those are the facts. Everything else is speculative about a hypothetical that no one is motivated to make a reality, making the whole question moot.

Richard Bostan said...

Mr Cowdery, please don't take this as an attack, because I know that people often take offense when corrected/instructed about grammar or vocabulary, but given that the legally specified TECHNICAL requirements for bourbon are fulfilled by "Tennessee Whiskey," and the US government regulator takes the position that the Lincoln County process is only subtractive and does not add anything to the whiskey, Jack Daniel's is TECHNICALLY bourbon. The fact that Jack Daniel's does not use the NAME "bourbon" for their whisky means that the appropriate word for you to have used was "nominally." Jack Daniel's is not nominally bourbon. It is technically, but not nominally, bourbon.

Chuck Cowdery said...

Since you want to get technical about it, you made your case with false assumptions. The 'U.S. government regulator' has never reached the question of whether or not the Lincoln County Process is additive or subtractive. We're not really talking about the definition of 'bourbon' here, we're talking about the definition of 'technical,' and in the choice of that word I probably could have been more precise.

Jim Laminack said...

My understanding of the JD situation is that they petitioned the TTB to have an official classification of "Tennessee Whiskey" that held to all the specs to be a bourbon and included the requirement of The Lincoln County Process. They were told no to the new classification and to just call themselves a bourbon. Obviously they have enjoyed incredible success as a Tennessee Whiskey so they then petitioned the state of Tennessee to set they regulation. Tennessee did so and now, with the exception of Benjamin Prichards, in order to be called a Tennessee Whiskey, one must follow the Bourbon guidelines and undergo the LCP.

Oscar said...

This is quite an accomplishment, bravo to Heaven Hill and to think we are coming up on the 21st anniversary of the Bardstown distillery fire next month.

Wnsnearly said...

Here's my simple logic. I like bourbon. I don't like Jack Daniels. Therefore, Jack is not bourbon. Simple. :)
And, back on topic, congrats to Heaven Hill! At least they make some good stuff.

Richard Bostan said...

Perhaps my memory is faulty in this regard, but I thought that it was actually here, at your blog, that the statement was made that the TTB had made a ruling that the charcoal filtering process is only subtractive and does not add anything to whiskey. If not, fine. My possibly faulty memory aside, surely the TTB has a verdict on record for what classification Jack Daniel's Tennessee Whiskey falls under -- a record that can be consulted? If the classification on record is "Straight Bourbon" or even just "Bourbon," I would take that as at least implying that the Lincoln County process is not adding anything to the whiskey, and not violating the prohibition against additives in Bourbon. Do you know what the official TTB classification is, or have a way of finding out that information?

Brian (AKA The Dean) said...

"The 'U.S. government regulator' has never reached the question of whether or not the Lincoln County Process is additive or subtractive."

That really was my point, Chuck. And you are correct in your response to Mr, Bostan.

But I will say the Lincoln Process is a bit different than regular "charcoal filtering", in that it is done at a different stage of the process---and the whiskey mingles with the charcoal for a much longer time. With that said, you are might very well be right. We may never have that question fully answered.

I'm fine with that.

Jon Hamre said...

Why does everyone always want to argue whether or not Jack Daniel's is a bourbon? I think between the big three (BF, HH and Beam/Suntory) it's great that they all have a good representation in the market in remarkably different fashions.

Sam Komlenic said...

As I said in the earlier post, as far as I'm concerned, if it doesn't say bourbon on the label, then it isn't.

Just my two cents, but really worth less than one.

Chuck Cowdery said...

Is Jack Daniel's bourbon? Yes and no.

Chuck Cowdery said...

Seriously, if you sincerely want know the real story about JD and b-o-u-r-b-o-n, click here and read the link.

Chuck Cowdery said...

P.S.: The comments over there are really stupid too.

DLArismendi said...

Chuck, you don't need to defend your statements. You're writing was clear and succinct. Most of these comments are just trying to stir the pot. Thanks for the well-written article about a great American brand. Best of luck to you on your endeavors.

Brian (AKA The Dean) said...

Jon Hamre posted, "Why does everyone always want to argue whether or not Jack Daniel's is a bourbon?"

Is anyone here arguing about whether JD is a bourbon? I don't really see that. I think some are arguing over the definition of "technically". Ha!

Sam Komlenic said...

God Chuck, I laughed my a** off over your last comment. You're starting to take up where Steve Ury left off. Well done!

Charles_in_TN said...

Interesting and informative article as usual. I am not going to wade into the Jack Daniels discussion. I prefer Dickel when I want TN whiskey anyway.